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Crowdsourcing the Car of the Future
  • January 10, 2013 : 23:01
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Rogers’s intense drive to remake American business began when he was a teenager and his father experienced, as Rogers puts it, “an event that defined me.” Rogers was a scion of wealth and privilege. He looks like one: athletically trim, erect and handsome in a boyish Neil Patrick Harris way, with short sandy hair, even features and a patrician air of implacable confidence. He sounds like a patrician too, speaking in precise sentences and full paragraphs, each word carefully enunciated. It comes naturally. Ralph Rogers, Jay’s beloved grandfather, was the business-savvy son of a Russian immigrant. He earned his first million in a small Boston finance company by the time he was 30, then parlayed that into an even greater fortune in an aircraft company before the Indian Motorcycle debacle ruined him. He then picked himself up, headed to Dallas for his rheumatic fever and made his second fortune in cement and steel. Ralph’s son and Jay’s father, John Sr., attended Harvard, went to work for his father and then set out for Houston, where he befriended a wealthy widow who owned a large chunk of the downtown area called Westchase. John Sr. borrowed money, bought the property, developed it and rapidly became one of the richest men in the city, with more than $100 million in assets.

Around the time Jay was born, John Sr. decided to hand over the running of his real estate empire to a younger man and moved to Palm Beach, where he had spent much of his childhood. The Rogerses lived in a mansion once owned by the granddaughter of Henry Morrison Flagler, the 19th century oil baron who was responsible for turning Florida into a recreation retreat. They lived like maharajahs. The children—Jay, his two older brothers and their sister—dressed for dinner every evening, and the servers wore white gloves. They were raised by an English governess. They all attended Groton, where Franklin Roosevelt and other children of the American aristocracy matriculated, and then went to Yale, all except Jay, who, in an act of defiance, decided to attend Princeton instead.

“It was a charmed and wonderful way to grow up,” Rogers says now. But in 1986, when Jay was 13 and at Groton, his parents convened a family meeting in a suite at the Ritz-Carlton hotel in Boston. “We have some things we need to talk about,” his father, then 53, said solemnly. “Life is going to change.” The savings-and-loan scandal had erupted, and John Sr., who had bought his properties by leveraging his resources, was highly exposed. His assets were reduced to nothing. In addition, the government sought restitution for the loans he had gotten from various banks that had gone into receivership.

And just like that, everything changed for Jay Rogers, exactly as his father had said. The homes were sold, the jets were sold, and finally the Mikado, a 150-foot yacht John Sr. had built in Japan to sail with his family around the world—a “voyage of denial,” Jay calls it—was sold. Disgraced, the family had to make excuses to friends about why they no longer lived as extravagantly as they had. “My mother went into a black hole for a decade,” Jay says now. He could go to Princeton only because his tuition was footed by his older siblings. “My journey started at 13,” he says. And he remembers thinking, How can I get back to where I was? That was the flame that ignited Local Motors—a flame of vindication for Jay Rogers and for his father.

But it was also a flame of rebellion. Rogers wasn’t going to do things the way everyone else in his family had, the way American elites typically had. That was what had undone his father. Rogers wanted to swim against the tide. Still, it took a while for the rebellion to brew. It was a measure of his uncertainty that when a friend challenged him to do real public service and join the armed forces, Rogers promptly called a recruiter, who was shocked that a Princeton student would want to join the Marines. That plan was derailed when he broke his hip training for the Philadelphia Marathon and couldn’t pass the physical.

So Rogers reluctantly returned to the traditional path. After graduation he went to work for his father, who, in his own attempt at vindication, had raised money from friends to start a company selling diabetes meters overseas. (After a 10-year legal battle, Rogers says, John Sr. had been exonerated of wrongdoing.) Rogers wanted to assist in the comeback. The company failed, and Jay wound up working as an analyst at an investment firm in Dallas. Rogers hated the job, and when one of the partners, a former general, asked him what he really wanted to do with his life, Rogers candidly answered that he wanted to run his own business and be a “great leader of people.” The general suggested that if he wanted to learn how to lead he should join the military. When Rogers told him about his medical disqualification, the general promised to get him into the service.


That’s how Jay Rogers wound up in the Marine Corps at the age of 26. He admits it was a peculiar thing to do. His family was bewildered, and he took a fair amount of abuse from his fellow cadets for being an Ivy Leaguer. But joining was Rogers’s declaration that he wasn’t going to play by the old rules. His life had always been “extremely regimented,” as he put it. “It was time to do something that was my own.” And as Rogers says now, “I loved it, loved it, loved it, loved it,” especially the physical and psychological toughness of it. He finished the Basic School first in his class and had just taken over his first platoon when 9/11 hit.

Rogers did a tour of duty in the Philippines and another in Iraq as an aide to a general heading up a strike group. When he left the corps after seven years, the general asked him what he wanted to do next, and that is when Rogers revealed his plans: He said he wanted to start either a global intelligence-gathering agency deploying mercenaries to provide information to private businesses and governments, or a car company. The general told Rogers he needed to transition out of the Marines and into business and advised him to apply to business school.

Whatever lessons Rogers eventually learned in pursuit of an MBA, Local Motors is very much the product of his Marine Corps training, and he says he could never have run the company without it. Obviously LM isn’t buttoned-down, but it is combat ready. Marine jargon and dicta pepper Rogers’s conversations on the company’s principles: the OODA loop (observe, orient, decide, act); shoot, move, communicate; what did I do yesterday, what did I do today, what’s in my way; the emphasis on decentralization and on responsibility. He clearly still has the discipline of a marine. When he isn’t on the road raising money—which is half the time now—his days begin early, often at 5:30, and don’t end until eight or nine in the evening when he makes the half-hour drive home. He gets more than a thousand e-mails a day. And his military training has helped him deal with the pressures of building a new company. “I never really had heartburn until I was a marine in combat,” he says. “But I never had heartburn like I had in my life until I was a CEO about to run out of money. It’s harder than being in combat.”

When he left the corps, in 2005, he entered Harvard Business School. Just as he was an oddity in the Marines for being an Ivy Leaguer, he was an oddity in the Ivy League for having been in the Marines. At 32 he was the oldest person in his class, and he never socialized. Instead he spent nearly all his time working on two business plans—one for his intelligence-gathering service, the other for his automobile company. When he broached the idea of starting a new car company to his fellow students, they thought he was nuts. Rogers thought they were too blind to see they were missing out on the future. But there was one student, older like Rogers, who had grown up in Dearborn, earned an engineering degree and worked at Ford, and he was intrigued. Rogers and the student, Jeff Jones, became confederates.

Rogers knew he wanted to start a car company, but he hadn’t nailed down most of the details. So he and Jones took two grants Harvard had awarded Rogers for his business plan and began their tour. This is when they visited the Dearborn truck plant. They also visited Tesla Motors; the Art Center College of Design in Pasadena, which trains industrial designers; an electric bike factory; a kit-car company in Massachusetts named Factory Five Racing; race car impresario Chip Ganassi’s NASCAR garage in North Carolina, which inspired LM’s own immaculate micro-factory; and Brammo, a small company headquartered in Ashland, Oregon that makes eye-catching light electric motorcycles one by one.

If Rogers had had his first eureka moment in Dearborn watching the factory shut down, he had his second late at night on his flight back from Ashland. The Big Three were committed to steel-bodied cars built on an assembly line, he thought. Rogers’s own company would be committed to cars without steel intensity—fiberglass cars—and it would assemble them the way Brammo assembled its motorcycles: individually, by hand, on the company’s premises. In fact, the buyer would, under the tutelage of a builder-trainer, construct a car himself. “That was the whole concept right there,” Rogers says—or at least that was the whole concept before he decided to crowdsource the design of the car.

Over dinner he and Jones formed a partnership to create a new automotive company. Rogers’s die had been cast.

At least that’s what he thought. But on the morning of March 16, 2007 he answered a knock at his door and found Jones with tears in his eyes. Jones said he couldn’t do it. It was too big a risk. It was a risk for Rogers too. He had received two extremely lucrative offers, from McKinsey consulting and a philanthropy, and they had given him an ultimatum. That night Rogers fell ill. He couldn’t sleep. The next morning, on the day of decision, he desperately called Mark Smith, co-owner of Factory Five, the kit-car company, and asked what he should do. Smith jumped on his motorcycle and met Rogers in Harvard Square. If Rogers wanted to start a new car company, then he should, and Smith would help him.

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read more: lifestyle, News, cars, issue january 2013

5 comments

  • Anonymous
    Anonymous
    Funny that Rodger's doesn't even drive his own car - he has a 1971 Mercedes. I guess he was too busy working to find the time to build one.
  • Anonymous
    Anonymous
    To insult Henry Ford and suggest that you are the next coming of the automotive messiah is much more than a bit dilusional. Local Motors is a neat little company for sure, and John Rogers sounds like a talented guy. Still, in 5 years he has designed and built about 25 custom cars (Brizzio does more Hot Rods) BUT to do this he has burned 12 million dollars in the process! To imagine that he will, in the next 5 years, build not 25 cars, but 8,000 cars AND in four all-new facilities, and to find someone to actually print that without laughing out loud, explains why this article is in Playboy Magazine and not the Wall Street Journal. I think Local Motors will probably make money (that's what Harvard MBA's do) but the next Henry Ford? Please. My guess is that with Hubris like this from doing almost nothing, he is destined to be more like the next Paris Hilton rather than Henry Ford.
  • Anonymous
    Anonymous
    A car that is build for The Army res. a Urban assault Vehicle (UAV) No particular job for that car I guess -Michael
  • Anonymous
    Anonymous
    You should look into a company called EV West in San Marcos, CA which has a similar business model and builds a dune buggy looks very much like this one, also with extraordinary performance, except it's 100% electric! They are the same people who drove an incredibly fast electric BMW M3 up Pikes Peak.
  • Anonymous
    Anonymous
    Very eye opening Neal! Thank you. -Jenna
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