In May, I packed myself into the San Francisco Forts Football Stadium with forty other middle aged rockets to watch YouTube perform. Bonno did a little intro before the music began. Here we are once again with the cars. That's when I knew Silicon Valley's mania for this technology who gone truly mainstream. When techs aren't complaining about President Trump, flying cars often come up. Ubers working on a sky taxi project.
Google co founder Larry Page is funding two startups, and a flock of other companies are working on their own version of this technology. Here's the vision. A vehicle that looks like the love child of a helicopter, drone and a light airplane will zip people around the urban areas, unclogging commutes and transforming cities. There will be an app, of course, for your smartphone, so you can heal these vehicles. And it will all happen in the next five or
ten years. But what many people in Silicon Valley are too young to remember is that flying car euphoria has already gripped the world, way back before iPhones, drones, and even the Internet. I did grew up in a checkpoint, like you said, and and and some hommy birds got trapped in one of my father's sheds. The vision of this vertical takeoff capability just struck me, and it's never
left me. That was inventor Paul Mueller, describing how a chance encounter more than seventy years ago began his lifelong dream of making a flying car. It's turned into a nightmare though, involving hundreds of millions of dollars lost, regulatory investigations, allegations of fraud and bankruptcy. Hi am akito and I'm at and this week on Decrypted, we're telling you the story of Paul Moehler's unwavering, even crazy optimism in the
face of dancing, technical, and financial challenges. There are lessons for today's flying car devotees who are busy proclaiming that this time is different, sounding really similar to Paul decades ago. Okay, we have to start by asking what might be a stupid question? Aren't flying cars just helicopters? That is, um not a stupid question. That's alex As Silly, an entrepreneur and partner at one of Europe's top venture capital firms, Atomico.
He's backing a German flying car startup called lillium. He says there's already a ten to fifteen lion dollar market for this technology, which is the market for conventional helicopters. There is a difference, though. Helicopters are expensive and noisy, with huge rotors that limit where they can land. Flying cars are designed to be smaller and cheaper and combine what backers hope are the best qualities of helicopters and airplanes.
Some use electric power, making them potentially quieter, Others use a comba of battery and traditional gas power, and of course a key feature is the ability to take off and land vertically while also flying pretty fast to cover longer distances. Some designs look like large drones, while others look more like airplanes with multiple propellers that tilt up and down. The cost of these things um is going to come significantly down, I think, just as the starting
point will be considered really less expensive than helicopter. And the vision, of course is that you know these will be this will be a form of the market time of their transport for kind of short media range. And to tell the story from the beginning, we need to go back to Paul Mueller's family farm back in the nineteen forties, long before Alex and most other flying car
backers were born. After Paul saw those hummingbirds you heard about earlier, he began building all sorts of things that either flew, moved fast, or held people through the air in other ways. For example, at fifteen, he tried to build a helicopter based on illustrations he saw in a book. I didn't get too far before I realized I had. I didn't have the materials, I didn't have the money, I didn't have the machinery, but I didn't build part of it. He spent all his time tinkering with tools
in his dad's shed. So he was a pretty poor high school student. So he attended trade school in Canada rather than college and emerged as an aircraft mechanic. Then came his big break while taking grad courses at McGill in his spare time in walks his famous aeronauticle engineer. Then you won't know a little bit about me. You
know who the hell are you? According to Paul, Dr Barry Newman wrote the reference that helped him land a job as an acting assistant professor at the University of California, and Davis You couldn't many more in the lead level than that, But I did get ten year within five years, and I left the university shortly after I got ten year on a full time basis, started my company in Davis. And that's the beginning of the story. By seven, Paul
Test flew his first vehicle with the press watching. It was the shape of a flying saucer with a single pilot sitting in the middle and fan blade engines around the cockpit. What you're hearing here is the sound of an early Modi flying car, the M two hundred X, hovering above a field, attached to a crane by a long cable. Then Paul made the new Era two hundred, the Firefly, the sky Car two hundred and four hundred, an air abouts, which was in early form of a drone.
By the late eighties, the media had fully caught the flying car bug. CBS Evening News announced their imminent arrival to the nation report that was mostly about Paul's exploits. It's one of those American dreams that just won't go away. Behind every garage door, not a car, but a personal flying machine. It's a dream more widely pursued than you might imagine. In There was another tethered test flight for an updated M two in front of an even bigger audience,
and we had blades fly off on occasion. And we knew that if we went how long, one minute, two minute, five minutes, the blades were going to fly off. But I needed a show of something. I had to show that I could do this. So I went that flight. It was a two minute flight, and I thought there was a reason, possibly I would die. Just so you know, he didn't die. I'm up there and our qualite fly around.
The flight is great. I run into the end of the tether with a big bang and the plane stabilizes beautifully. It's a beautiful picture. If you see the thing I comment, you'll see that I'm so excited. Can hardly speak just the fact that I managed to live foods my Sonia said run a series we were on Discovery shot at least four or five times as we were on CNN. I mean, I was sitting one day doing a story
for What's the British magazine like Blueberg I'm doing. I'm doing a story on the phone with the economists, and Michael Jackson calls up. He wants a flying car and That was probably the peak for Paul's flying car dreams. Despite the early promise of flying car inventor Paul Mulla, today none of his manned aircraft have flown far enough to be commercially viable. We visited him at his new, smaller headquarters near you see Davis in California's hot Central Valley.
It felt more like a museum than a tech company. Prototype aircraft were arranged on a carpeted entrance area near Paul's office. He gave us a tour and so you hit that and then it'll drop down. Don't hang yourself out the side when and then you've been the front one close to that les too close, So I pressed, I can Yeah, this is this is quite comfortable. That's ACTI climbing into a red Molla flying car that looks like a ite jet and being enclosed in the glass
dome of the cockpit. Yeah, I felt like such a badass, like a military pilot. Six fan like engines about two ft in diameter surrounded her. It has two seats, a controller that looks like a joystick in the middle, and a control panel with a tight cluster of about thirty cream colored buttons. Can you turn one on, can we No, No, that's that the f A and I I mean the f A is very demanding or where they let you go on what you do and when you can do it.
And that's where we're in right now, is working with the f A. Much of the stuff you see flying around is totally illegal with real man flights always out of reach. Paul's inventions generated little revenue, and the project was constantly bleeding cash. Paul says, the engines are the really expensive challenge. Engines are luck at like a bonamous of money. I've spent you know, probably two day's dollars
a hundred million on the damn engine. You can invent any kind of weird design and get it patent and get people pouring buckets of money in it before they realize it's it's not thermally efficient, it's not reliable, it's not any number of things. An engine, after all, is key to a person's product. If it's a hybrid car or an airplane, your life's going to depend on it.
Whatever it is, it's it's really important. Still, he tried to feed that bottomless pit by making money on all these other related inventions that he sold on the side. Paul's super trapped mufflers became a hit accessory for bikers and motorcycle races. He developed a successful real estate project called Davis Research Park. Those two projects made him millions of dollars, which he plowed back into his rehel obsession.
It still wasn't enough, though, so Paul tried to raise money from investors directly and through the internet by to Don't Two shares in the flying car company, Mueller International, were publicly trading in the US over the counter market, which is kind of like a second tier stock market. Things look great at first. He said he was personally worth four hundred million dollars at one point, but in two thousand three, the SEC sued Paul in his company.
The SEC alleged that he was misleading investors by making bold predictions that never came true. For example, they claimed he said the stock would list on the Nastack the top tech market, but it never was. They said Paul projected sales of ten thousand flying cars by two thousand two, Actually they didn't sell any. The SEC also said he raised money from unsophisticated, less wealthy people without the right
public disclosure. That's also a big known it. The company ended up settling for fifty thousand dollars without admitting that it broke the law. Paul says he can't talk about it, but he can't seem to stuff himself. If you read the legal document everything else, we were not convicted or anything or even suggested the end. If you read the letter from our attorney and all the other things that appeared on the internet site, we were never charged with anything.
Yet we still paid a fifty fine to decease and desist or whatever term they have it of something we never did. Still, the more we dug into Poul's funding efforts for the last twenty years, the more questions we had. Are you Are you a huckster? You? You are you an inventor? Like most entrepreneurs, you you operate in and world we're Optimism is your number one driving criteria, and I am, I must admit, extremely optimistic about how quickly
things can happen. So if I'm a huckster, I'm diluting myself. We also quiz job and ever, founder of one of the hottest new flying car startups, job Aviation, and a former student of Paul's job been describes Paul as a visionary and an incredible engineer who poured his fortune into flying cars time and time again, and then ran a foul of securities laws through passion and lack of financial
sophistication rather than malice. But he had a warning to Yeah, Joe Bend stressed that we shouldn't do a podcast that encourages regular people to invest in Paul's project. He didn't say why, but I got the message and I mentioned it to Paul. Well, that's sure enough, that's a fair comment. I have no problem with him saying that Paul's flying car business never really recovered. Fast forward to and shares of his public company, Moller International, are treating well below
one cent down for more than five dollars. In two thousand two. Paul has also had a file for personal bankruptcy. One thing that has seen a come the hype over flying cars. This idea of consumer vehicles with vertical takeoff and landing capabilities is just as hot as it was back in until nine seventy eight, when airlines were just deregulated. The idea getting on an airplane and popping across the country, you know, to go somewhere, was you know, people dressed up.
It was a very special thing. That was Rob Racket, co founder of a mobile charter aircraft booking service. So we've already made that leap, right, so it's not it's not terribly crazy to think that we can continue to make that leap. He spoke to a reporter Justin Bachman, on the sidelines of a conference Uber organized in April where Uber unveiled its ambitions to develop electric sky taxis
that fly over cities. And that announcement came less than a year after our boss Brad Stone, who, as many of you know, co host this podcast, broke the news that the pages backing to flying car startups z Arrow and Kittie Hawk. We asked Paul about the sudden enthusiasm for flying cars again, because this is someone who's been working on this technology his entire life, and now these much younger engineers are coming in and dominating the headlines.
I think it's the best thing in the world. And I and I know that we're going to join forces at some point with some of them, you know. Yeah, and maybe we joined forces with some of the companies like oh, We're Lived for example, or other ones were I'm willing to work. And I'm not one of those guys to say I want to have control of this company. I like to have some say in the company, but I've never success for me is having our vehicles in the air and and and and getting it making some
some impact on on transportation. But then he still went on to criticize almost every single competitor out there. It's as stupid as design is never gonna work. It's absolutely need how not to do things. But it shows you can do anything if you want, if you don't really understand or an artis that's pulled. Dissing Lillium, a German flying car startup backed by Alex as Sale, the investor we heard from earlier. Alex says Lillium knows exactly what
it's doing. One of Paul's major grapes is noise. He says most designs are still too noisy for cities, even if their electric engines are quiet, because they still need propellers. He specifically called out startup E Hanks four battery powered aircraft. You see the hand, big open propellers, then you're you're you're gonna have noise. You know, helicopters for over you hear that boo, that's that engine, that's blades. He Hank
didn't respond to a quest for comment. Mark Moore, head of Uber Sky Taxi Project, chastised us for profiling Paul when there's so many exciting new flying car startups using more modern technology. He called Paul's rotary engines dinosaurs of the past, but Paul argues his hybrid approach is best using batteries and rotary engines rather than just battery power. Rotary designs are smaller, lighter, and more powerful than traditional
internal combustion engines. Paul says battery technology isn't capable of providing both the intense short term thrust needed to get cars airborne and the steady umph to make them fly reliably for long distances. We have a very difference of opinion what batteries gonna do. He his vision if he's setting up Uber, is that batteries is gonna do these magic things, and they're going to have flying cars to
moral going every which way it is. Mark Moore said Uber is focusing on gridlock cities where flying cars need no more than a sixty mile range. He predicted that advanced batteries will be able to handle vertical liftoff and those shorter ranges in the next five years. So this future of skipping traffic in sky taxi is still always away. The biggest difference between Paul and Mark is their access
to money. Mark is backed by Uber, which has raised billions of dollars in recent years, while Paul can barely scrabble together the money needed for a single regulator approved test flight. Paul even had to sell his large flying car headquarters to raise money to keep his project alive. The lost I had to ranch properties. I had my facility in Davis, which was a thirty five square five thousand facility, and I just borrowed so much. I guess
it was better to just let it go for auction. Uh, to get rid of, you know, of my personal debt. Get reliable about five million dollars a personal debt. By letting get be sold. A couple of his flying cars were still at the old location, so we drove over there. This is the site of his former glory. He even built a racquetball court there. To stay fit today, he has to sign in at the front desk, just like
anyone else. It looks a little different in here, doesn't of all everything I got through, I know, returned this area into a little kind of dinet kitchen area. Yeah, and your old office is now a baby conference room. Right is one of my original employees. He worked from from years started and do you work for and he works for us? Do when you bring we're more consultant position. Once past security, he led us through the main hanger, which is about the size of a football field and
multiple stories high. There two of his creations gathered dust beside old machinery and newer equipment belonging to the current occupant. Time is running out for pool, at least by traditional standards of human longtivity. Paul is eighty but looks a lot younger, with light brown hair and a brown beard which he had missed the coloring occasion, and he's planning to outlive most of us. There's a white board in his office with a list written in large green letters. Exercise,
water pills, clear squats, powder and sardines. Well, that's that's my daily list that I have to make sure that I that I deal with it. Exercise, water pills. And when I say pills, there you know, as I said, I take probably sixty different pills a day. Made up of maybe a hundred different things that are in it. Still, I had to ask about succession plans, and I've had really good people working for me, and I know what to look for so I can build up a team.
They could do that, and I really want to do that. I particularly want to build up a management team because there's something happens to be The question is your how is the company process to go forward? And so I clearly have to make it within this year. This is my this is my year to make this happen. He's pinning his hopes on the rotary and in technology that
we mentioned earlier. The engine is gonna go It's gonna go big, and I've got a contract that theoretically is thirty forty five days away million dollars to put the engine into mass production. This was in May, and Power Source Creations, which is the company Paul said was providing these millions of dollars, was not very forthcoming. When our reporter Isabelle Gottlieb called to ask about its planned investment. A Power Sols executive Christine Pereira, described it as an
agreement rather than an investment. Then she said she wasn't at liberty to give any more information and abruptly hung up. We checked in July and the power Source steel hadn't happened yet. The company put out a statement on June saying that unspecified bank cyber attacks had caused delays. The very nature of the investment. It's quite a complex and quite uh confidential program for reasons that we don't entirely understand. But we're very comfortable. But again, I can't say it's
going to happen the next fifteen days. I could say we're pretty comfortable is going to happen the next forty five days, But that's the best I could say at the moment. About a week after the power Source update, we spotted another bad sign. Paul's original M four hundred sky car was offered for sale on eBay for five million dollars. The listing described it as a quote true
museum piece, and it had a major caveat. It said, in this original form it does not have f A A approval, and a condition of this offer is that it cannot be flown where you need the flexibility to land and take off at other than conventional airports. Then this is the future, but the road to this future has been long and winding, and one man has kept following it longer than most. I've always had this desire to build this vehicle and make it working only one.
It's sticking me a bit longer than I planned, But Moehler will be back in pursuit of one version of the American Dream. John Blackstone, CBS News, Davis, California. And that's it for this week's Decrypted. Thanks for listening, and if you haven't already, subscribed to our show wherever you get your podcasts, and while you're there, leave us a rating and a review. This helps us so much to reach more listeners and tell us what you thought at
today's episode. You can email us at Decrypted at Bloomberg dot net, or you can reach out to me on Twitter. My handles aki eto seven and I'm Alistair m bar. This episode was produced by Peter get, Carrie, Liz Smith and Magnus Hendrickson. A special thanks to Isabel Gottlieb, who helped us with the research and reporting for today's show. Alec McCabe is head bloom Berg Podcasts. We'll see you next week.