Austin Russell
Luminar CEO
Capping off an already unbelievable trip around the Sun, December 2020 saw wall street introduce the world’s youngest self-made billionaire, twenty-five-year-old CEO and founder of Luminar, Austin Russell. The company he started as a teenager attending high school engineers cutting edge lidar technology paramount to the development of fully autonomous vehicles that can be realistically priced for mass-market appeal.
“It is totally surreal and it totally makes sense and it is hard to explain the dichotomy of it, but this has always been the goal,” he told CNBC’s Squawk Box in an interview following the news of his recently struck fortune. “We set up the company to be a long-term sustainable business and power the future of autonomy for all of these automakers. We are in it for the long-term.”
Shares in Orlando-based Luminar closed with a value of $22.98 on its IPO day, up 28% from a closing price of $18 just twenty-four hours earlier, when the shares traded as Gores Metropoulos stock. Russell has impressively managed to hang onto a personal stake worth nearly a third of his company, all things considered in Silicon Valley’s shark-infested venture capitalist environment, and maintains 83% of the voting power whilst functioning as chairmen of the board, according to filings with the Securities and Exchange Commission.
Luminar touts a market cap north of $10 billion and trades at over 350x projected 2021 revenue, making Russell’s rise into the billionaire ranks entirely based on the value of his holdings in the high-tech sensor manufacturer. If we peel the curtain back, over the course of 2019, Luminar had $12.6 million in revenue while also reporting a net loss of $94.7 million. Then they hauled in $15 million of revenue in 2020, however, that’s paired with operating losses of $72 million.
So you might be wondering, how does somebody who owns a company that actually posts annual net losses by the millions of dollars become a billionaire? Basking in the marvelous magic of a capitalistic society, we’re happy to humbly retort, it happens much more often than you’d think. Regardless of the fact that the foundation of his wealth is pretty much exclusively on paper at this juncture, it’s important to observe the brilliance of Luminar CEO Austin Russell and thoroughly analyze the steps he took in life to procure such a promising future after only a quarter-century’s existence on Earth.
Childhood
Austin was born on Pi Day in March of 1996 and grew up along the sparkling, sun-drenched shores of Orange County’s famed Newport Beach. His father, Michael, brokered commercial real estate while his mother, Shannon, was a model who occasionally dabbled in public speaking. Taking into account these career paths, this tech prodigy may have more professionally in common with his paternal and maternal grandfathers as the former invented our modern-day electric blanket and the latter once built a raceway.
What some would call genius made an appearance at a time toddler Austin was but two years old, he memorized the entire periodic table of elements. “When I was in preschool, I was experimenting with water and prisms, and also spent many weekends at the Discovery Science Center,” he remembers. “Our class was asked by the teacher, ‘who do you admire most?’ When I answered ‘Bill Gates,’ most of the students looked confused and said, ‘who is that?'”
Of course, it’d be negligible to forget that he worked as a software consultant by the seasoned age of ten. While the other kids played jump rope, Austin would take a jump rope and swing it overhead, wondering why the rope didn’t come down, his mother revealed to the Orange County Register.
“I guess, I did memorize the periodic table – I think I was around 2 or so,” he says. “I was just obsessed with learning certain things … just independently learning and understanding a lot of new types of scientific fields, among other things.”
His parents enrolled him in St. Margaret’s Episcopal School in sixth grade, hoping the preK-12 private academy would be able to provide a more challenging educational atmosphere. Their desires were fulfilled that same year as a science teacher named Mr. Dylan assigned a project to his classroom requiring them to create an earthquake-proof building. Utilizing newly learned math skills and architectural research, Austin’s group won the challenge by collaborating and designing a structure that would indeed withstand the force of recordable seismic activity.
St. Margaret’s Episcopal School
He asked his parents for a mobile phone in seventh grade, to which they promptly replied, no and then joked that he was free to invent one. Well, after a healthy dose of fine-tuned studying, three months later Austin called his mother on the bus ride home from a converted Nintendo DS device. “At first my mom didn’t believe me, but then I explained to her how I wrote some code to modify its functions,” he recounts.
Winning first place at the California State Science Fair in the eighth grade was simply par for the course. He designed an underground water recycling device that connects to a municipal water supply and can be operated remotely. The system recycled more than 95% of the water tested while simultaneously controlling drainage runoff to environmentally sensitive areas.
The bright young boy had two patents pending by his sophomore year of high school, one invention in particular absolutely baffled Dr. Ross-Viola, a teacher at St. Margaret’s. “When he brought it in to demonstrate it to the science department, we were all completely astounded,” the doctor shares in their school yearbook. “He projected a virtual keyboard onto the classroom desk and then began typing on it. The words he was typing began appearing on the screen of his Bluetooth-enabled phone. It’s really quite amazing.”
Most teenagers are preoccupied with excelling on grass fields or hardwood courts, not this one, he preferred spending countless days in the makeshift electronics and optics lab he set up in his parent’s Southern California garage. There, he assembled a customized super-computer, built a cancerous-mole laser detector, and developed long-distance wireless power transmission systems.
Austin Russell Learns About Lidar
“The kid’s mind is so broad that he literally always has 50 ideas going at one time,” Tony Jordan, his high school Physics teacher told Bloomberg. For fun, Austin Russell used to head over to work as an independent researcher at the Beckman Laser Institute of the University of California, Irvine.
“Eventually [I] ended up evolving into building computing systems, supercomputers, other things on hardware, and then ultimately evolving into lasers, optics, and photonics — those kinds of things,” says Russell. Photonics is the science of creating and “harnessing” light and other energy whose base unit is the photon, according to The National Center for Optics and Photonics Education.
Desperately wanting to be a part of what he considered a “whole new frontier” in photonics, around 14 or 15 years old, he started experimenting with lidar, which stands for “light detection and ranging.” lidar is a remote sensing method that uses light in the form of a pulsed laser to measure ranges (variable distances) to the Earth. These light pulses – combined with other data recorded by an airborne system – generate precise, three-dimensional information about the shape of the Earth and its surface characteristics.
Austin skimmed through roughly 1,000 articles or papers a day and confesses to learning most of what he knows about the world from avid Wikipedia and youtube explainer consumption, cites the Beckman Laser Institute. “I’ve always had a lot of curiosity, wanting to understand the ways of how things work, asking way too many questions, just being an information sponge,” he says. “I had that bug to always want to build and create early on.”
At age seventeen, he launched Luminar with an intention to use the lidar sensors he was developing to not just improve, but make possible totally self-driving cars – in the process, saving lives by decreasing the frequency of fatal automobile accidents. His technology, fundamentally comprised of a laser that bounces off surrounding physical objects, a scanner, and a specialized GPS receiver could help give vehicles a longer-ranged, more precise three-dimensional view of the road and its surroundings.
“It’s very hard to have an appreciable impact on the world with just an idea if you can’t build an economic engine behind it to actually have it have real-world application,” he determines. However, a slight obstacle that had the potential to stifle Luminar’s business plan loomed in his own personal future as high school graduation approached that Spring of 2013: college.
Stanford University
Unsurprisingly, Austin Russell earned himself the right to attend any ivory-towered institute of his liking, thus he chose the west coast’s prestigious Stanford University. Before enrolling, he visited the campus and dropped in on a physics professor to talk about photonics. The professor, who intended to chat for just a few minutes, ended up engaging in an hour-long discussion with the young man.
Only six months into freshman year, yearning to focus on Luminar, Russell dropped out of Stanford after applying for and being awarded the famous Theil Fellowship. PayPal co-founder and early Facebook investor Peter Thiel provides students a $100,000 investment to ditch school and work on their start-ups. His parents were skeptical of this whole experience at first but eventually came to grips with the once-in-a-lifetime opportunity.
“Dropping out is definitely right for some people and can work really well if you’re very clear on what you want to do and how you want to go about doing it. And clear about just life goals in general,” Russell says, unhesitant about admitting his lack of interest in academia. “A lot of it just has to do with timing.”
Theil’s funding and mentorship, along with no classroom responsibilities, assured him the time and resources he’d need to develop a vehicular lidar sensor worthy of manufacturing, a process that’d ultimately require testing some 2,000 versions over several years. “Yeah, so it definitely is a shift going from the core technology development to being able to have a scalable operation that can build an automotive-grade product into series production,” he explains.
Luminar Chief Executive
Let’s be crystal clear for a moment here, Luminar is not in the business of building autonomous vehicles, or any kind of car for that matter, they are simply focused on creating the highest quality lidar sensor system to help driverless automobiles, regardless of the maker, best understand, analyze, and accordingly, react to their surrounding environment in real-time while traveling on the road or freeway.
Metaphorically speaking, there’s a gold rush and they’re selling pickaxes to jaded miners. Or, a more appropriate comparison might be Bill Gates: as the world’s largest tech companies fought tooth and nail to bring to market a streamlined personal computer for consumers, Gates’ Microsoft was focused on developing exceptional software that had the ability to be utilized by any manufacturer. Therefore, when one, along with any combination of them got it right and won out, he won too.
Under the leadership of Austin Russell, Luminar spent its first five years in “stealth mode,” avoiding the media spotlight for the sake of maintaining secrecy around its lidar sensors. Additionally, there were a variety of devices that needed in-house engineering like lasers, receivers, scanning mechanisms, and processing electronics. Uniquely priming these gadgets for their own products, as opposed to using “off-the-shelf” parts, produces a competitive advantage, along with top-tier performance.
“And that’s basically what we spent the first five years doing. Deep down in stealth mode, building out the core product and technology and getting to a stage where we could actually launch the company and scale this up,” he shared with The Verge in an interview. “That’s really what we did starting in 2017, five years in, after we had developed the laser, the receiver, the scanning mechanism, processing electronics, all of our own chips that we had in the system. And it came together, it all worked. Somewhat miraculously, somewhat unexpectedly, at the same time.”
All things being equal, lidar is a fairly accessible trade and there are alternative players in this field, such as Velodyne, who is working with Ford, Volvo, and Mercedes-Benz, or Innoviz, whose technology is being used by Beijing-based automotive electronic products company HiRain and BMW, among others. However, Luminar reports that its sensors “see” at 50 times better resolution and have a tenfold range compared with industry competitors (thanks to the use of different materials and light frequencies).
“It should not be a sixteen or seventeen, and then subsequently a twenty-five-year-old that can build a business like this,” Russell adds. “We’ve been able to accelerate this because no one has really done this before.”
Business Milestones
In October 2020, Luminar struck a deal with the world’s largest commercial vehicle manufacturer, Daimler Truck AG, securing a strategic partnership that will enable highly automated trucking, starting on highways. Autonomous trucks are expected to yield dramatic improvements in efficiency and safety of logistics, with an initial focus on long-haul routes, what’s more, these commercial vehicles have a nearer-term deployment time frame than urban vehicles.
“Our partnership with Daimler Trucks is spearheading the next era of commercial transportation, taking the multi-trillion global trucking and logistics industry head-on,” says Austin Russell. “The business case for autonomous trucking is incredibly strong, and now is seeing the first OEM [Original Equipment Manufacturer] program to bring it to the world.”
The following month, Intel’s Mobileye division clarified, after two years of working together, that they’d be using Luminar’s technology for its Autonomous Vehicle (AV) Series solution, enabling uncompromised safety and validation for level 4 autonomous driving. According to Reuters, this is related to a planned fleet of so-called robotaxis, which are commercial vehicles meant to ferry around passengers, slated for rollout in at least eight cities by 2022.
Then, in the Spring of 2021, they negotiated a deal with the self-driving software subsidiary of Volvo Cars to offer a combination hardware-software system to other automakers. Zenseact, a subsidiary of the Swedish car company, has a self-driving decision-making software system called OnePilot that, in combination with Luminar’s Lidar sensors, the amalgamation will power autonomous features for Volvo’s vehicles. Not to mention, when the two technologies are paired and synchronized, that pioneering product could potentially be sold to Volvo’s autonomous competitors, opening up a whole new stream of revenue for them.
“Lidar is a key technology for enabling autonomous cars to navigate safely in complex traffic environments and at higher speeds,” said Henrik Green, senior vice president of research and development at Volvo Cars, in a statement. “Our collaboration with Luminar allows us to learn more about its promising technologies and takes Volvo Cars one step further to the highly autonomous cars of the future.”
The Future of Autonomous Vehicles
A report from the U.S. Securities and Exchange Commission reasons that while Luminar will likely post sales of just $15 million this year, it has the potential to generate at least $ 1.3 billion by 2026. Nevertheless, Luminar has said it sees its total addressable market growing from about $5 billion currently to $150 billion by 2030.
This brainchild of Austin Russell is also beating competitors on price, a revolutionary engineering feat in and of itself. Velodyne, for example, has largely focused on high-performance, high-cost lidar sensors. Forbes points out, the company’s sensors (such as the 360-degree units that are placed on a vehicle roof) are typically used in prototype self-driving cars and other relatively lower volume applications such as research and development. Cumulative shipments and revenue data from the company’s form S-1 indicate its sensors cost an average of $14k per unit.
“That’s the most advanced stage that they’re at today, with like $100,000 roof racks full of sensors and stuff, versus building something for a production vehicle in a more constrained application,” Russell explains. “The whole point is to have a solution. You take that $100,000 roof rack full of stuff, or $200,000 roof rack, and effectively put it into a package that’s more on the order of $1,000 than it is $200,000.”
In the end, he believes, in theory, you could probably buy a car without a steering wheel, which’d take you from point A to point B in a more limited geographic capacity, by between 2025 and 2030. As far as his business goals go, the world’s youngest billionaire states, “when this [Luminar lidar] becomes a new modern vehicle safety technology that is integrated into every vehicle produced globally, that is when I would strongly say that we have achieved the goals we set for ourselves.”
Austin Russell Feuds with Elon Musk
What seems long ago now, Tesla took on the self-driving vehicle challenge by installing eight cameras (three up front, two on each side, and one in the back), a front radar, and some ultrasonic sensors. Although Elon Musk’s SpaceX Dragon utilizes homemade lidar components, he is of the mindset that for a car’s it’s “freakin stupid.”
“Lidar is a fool’s errand,” Musk proclaimed at Tesla’s first Autonomy Day event. “Anyone relying on lidar is doomed. Doomed! [They are] expensive sensors that are unnecessary. It’s like having a whole bunch of expensive appendices. Like, one appendix is bad, well now you have a whole bunch of them, it’s ridiculous, you’ll see.”
Russell had a few choice words for Elon Musk when he addressed the controversy in an interview with Market Watch, declaring, “our 50 other commercial partners and seven of the top 10 largest auto makers in the world would probably disagree with Elon along with pretty much every expert in the industry. I think he’s kind of on an island there. Back when Elon started with his anti-lidar ideas, he promised the world he could deliver this full self-driving stack off this basic camera solution.”
The public markets do give some credence to his perspective, based on this youthful upstart’s stake in Luminar alone, Forbes estimates Austin Russell has a current net worth of $2.6 billion. He added, “What Tesla has today, what they call full self driving you don’t need lidar for. The problem is that it’s not full self driving (laughs), it’s actually not self driving at all. That’s where I think they have drawn huge criticism in the industry with this rogue branding approach to what is being delivered.”
Truth be told, the writer of this article is no childhood physics prodigy nor is he vying for universal recognition as the greatest inventor in human history, at least not consciously, therefore, there is nothing more to be added to this discussion beyond: if interested in more complex analysis, there are plenty of experts on the internet who are more than qualified to dissect the issue.
For starters, below is a video of Elon Musk and Tesla’s Senior Director of AI, Andrej Karparthy, explaining their position on the matter:
If you enjoyed this story on the life of Luminar CEO Austin Russell, we encourage you to check out our biography of self-made tech Billionaire, Sean Parker.
