In October 2020, state officials and Sir Richard Branson announced with great fanfare that Branson’s Virgin Hyperloop company had chosen a site in West Virginia to build a research and testing facility.
The center, to be located on 800 acres in Tucker and Grant Counties, would test how the hyperloop system could connect cities and transport people and products in vacuum tubes traveling at speeds of 600 miles per hour.
The planned one-half billion dollar investment included the promise of several thousand jobs in construction, manufacturing and high-tech sectors. West Virginia University was identified as an important partner in the project.
The fact that West Virginia was chosen out of every other state, and that the project had a high-tech “wow” factor, was intoxicating, especially in a state that has had more than its share of economic disappointments.
I wrote at the time that the announcement “felt different” from the others because of Branson’s involvement and the unequivocally optimistic endorsement by state officials and representatives of West Virginia University.
Now a-year-and-a-half later, that optimism must be tempered by a reality check. Hyperloop was over-hyped.
As the Financial Times first reported, Virgin Hyperloop laid off about half of its staff, as it makes a major shift it its goals. “The U.S. company said 111 people were laid off on Friday as it refocuses on delivering a cargo version of the experimental transportation system.”
According to the Times, “But since its inception, critics have cited the high costs of bringing the system to market even if it wins regulatory approval. Internal turmoil followed the departure of Virgin Hyperloop co-founder Josh Giegel last year, triggering a massive talent flight.”
Governor Jim Justice, when asked about the news, put on a brave face. “We won the battle, did we not?” Justice said. “They announced they are coming, and they have spent a bunch of money here. With that, things are going to change.”
“I hate to say it this way, but poop happens,” Justice said.
Gen. Jim Hoyer, WVU’s senior associate vice president for economic development, has not given up on the project. “They needed to make some adjustments. We still believe in Virgin Hyperloop and the technology,” he said on Talkline Thursday.
What was not emphasized—or perhaps conveniently ignored–during the initial announcement in 2020 was that Virgin Hyperloop is a startup concept, and startups involve a higher level of risk than the expansion of an established business or technology.
National Business Capital and Services reports that about 90 percent of startups fail, and the innovation advisory firm Startup Genome reports that the pandemic has made it even more difficult for new businesses with staff layoffs and shortages of financing.
Regardless of what happens with Virgin Hyperloop, West Virginia cannot give up on startups or be fatalistic about every economic development opportunity. As the figures show, there will be many more misses than hits, but what matters most is staying in the game.