They got into YC by refusing to solve the hardest 10% of driving. In 2015 they abandoned the constraint themselves.

YC Winter 2014 · Accepted · Read the original below

When Cruise filed this application, the work was two weeks old. The company had been incorporated in Delaware the month before. It owned one Audi S4, chosen because it had electromechanical steering and looked cool, and the demo did not exist yet.

The pitch was smaller than the company it became. That is what makes it worth reading. Cruise did not propose solving self-driving. It proposed skipping the hard part and sold that constraint as an advantage:

We constrain the problem by using commodity hardware, proven algorithms and only solving 90% of driving scenarios‑‑we still leave the trickiest 10% up to you.

The plan was an aftermarket box that bolted to a car you already owned, "like a roof rack", with a target build cost of under $3,000 a unit. The application was equally candid about its status: "We are not launched, and don't plan to until after raising much more money. This is a capital‑intensive business."

The people who pitched the box announced it, priced it, then killed it. Cruise unveiled the RP-1 in June 2014. It handled highway-only lane and distance keeping on 2012-or-newer Audi A4 and S4 models, in California only. Cruise priced it at $10,000 including installation — against an application that had sized its $100 billion market on drivers paying about $3,000. Pre-orders were capped at fifty units, with a $1,000 deposit. In 2015, the company changed strategy and started building a fully autonomous platform. The RP-1 was never released.

When General Motors acquired Cruise in 2016 for a reported sum of over $1 billion, the constrained product was already gone. GM bought the version with nobody left to hand the trickiest 10% to. It then spent nearly a decade finding out what that costs.

For a while, it worked. Cruise held a California DMV driverless deployment permit from 30 September 2021. By 2022, it was carrying public passengers in San Francisco with no safety driver. Then, on 2 October 2023, a human-driven car struck a pedestrian and threw them into the path of a Cruise vehicle. The Cruise vehicle struck the pedestrian and then dragged them roughly 20 feet while pulling over. The DMV suspended the company's permits, saying Cruise had misrepresented the safety of its robotaxis. Kyle Vogt resigned as CEO on 19 November 2023.

On 10 December 2024, GM stopped funding robotaxi development altogether. Mary Barra put the number on the record: "Launching and operating a robotaxi business is expected to require a significant amount of incremental time and capital beyond the $10 billion we have already invested." Two months later, on 4 February 2025, GM cut nearly 50% of the remaining Cruise workforce. The cuts affected about 1,000 people, including chief executive Marc Whitten. The surviving operation was folded into Super Cruise, GM's hands-free highway driver-assistance product for cars people own.

Vogt responded to the shutdown on X: "In case it was unclear before, it is clear now: GM are a bunch of dummies." He now runs The Bot Company, a household-robotics startup he co-founded in 2024 with Paril Jain and Luke Holoubek. It raised $150 million at a $550 million valuation, followed by a further $150 million at a reported $2 billion. It later raised a reported $250 million more at over $4 billion. As of the most recent reporting, it has revealed no product.

One detail is worth noticing before you read: the equity section splits the company 50/50 between Kyle and Jeremy. Jeremy is Jeremy Guillory, who built LIDAR systems at Graymatter. By the application's own account, Graymatter was the first company ever to raise venture capital to build self-driving cars. The Cruise the world came to know had a different public co-founder line-up.

Read it knowing how it ends. The constraint is the most confident thing in this document. It was also the first thing to go.

The application

Batch: 2014 Winter · Status: Successful · Source

A self-driving service designed for the cities we love.

Company

What is your company going to make? Please describe your product and what it does or will do.

Cruise builds a system that inexpensively turns your car into a self‑driving vehicle.

We constrain the problem by using commodity hardware, proven algorithms and only solving 90% of driving scenarios‑‑we still leave the trickiest 10% up to you.

The product is an aftermarket add‑on for certain vehicles that bolts on like a roof rack. It contains cameras, radar, GPS, and other sensors, and we plan to build these at a cost of under $3,000 per unit.

Where do you live now, and where would the company be based after YC?

SF.

Founders

Please enter the url of a 1 minute unlisted (not private) YouTube video introducing the founder(s). This video is an important part of the application. (Follow the Video Guidelines.)

youtube.com/watch?v=YLydMAAIJFE

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.

We haven't worked together on any other projects, but it turns out we have competed against each other twice. Once about ten years ago when building fighting robots (Battlebots, on Comedy Central) and more recently during the DARPA self‑driving car challenges.

Battlebots:

battlebots.wikia.com/wiki/Decimator

battlebots.wikia.com/wiki/Bot‑a‑Bing

Self‑driving cars:

facebook.com/photo.php?v=10100100951758668

dropbox.com/s/t48lfkzsy1gq5va/AVS09.pdf

Please tell us in one or two sentences about something impressive that each founder has built or achieved.

kvogt: Built various devices that were the first ever to crack certain kinds of high‑security safes. One can even open the "unbeatable" X‑09 lock currently in use on DoD safes. This is one of them: youtube.com/watch?v=69g_ieT3Wes

jebagu: I helped to build a self‑driving car. My team finished alongside Stanford and Carnegie Mellon to finish the 2007 Grand Challenge: graymatterinc.com. Networked my way into Founder's Fund F50, reportedly the most exclusive tech conference ever.

Please tell us about the time you most successfully hacked some (non-computer) system to your advantage.

Due to a weird California law, I couldn't apply for a real estate license since I dropped out of MIT and hadn't earned a college degree. I was told I'd need to earn my degree or spend two years as an apprentice. Neither of those options worked for me since I was busy with Justin.tv.

So, I found a way to get a brand new Bachelor's degree by spending just four weeks on actual coursework. I now hold a degree in Information Technology (basically just how to install Windows).

The loophole was to use a competency‑based online university (take the test, pass the class, repeat) rather than a semester‑based university.

Amusing side note: I am both an MIT dropout and a college graduate.

How long have the founders known one another and how did you meet? Have any of the founders not met in person?

We met in early October 2013 after being introduced by Danielle Fong (Chief Scientist, LightSail Energy).

If we fund you, which of the founders will commit to working exclusively (no school, no other jobs) on this project for the next year?

All of them.

Do any founders have other commitments between X and Y inclusive?

No.

Do any founders have commitments in the future (e.g. finishing college, going to grad school), and if so what?

No.

Progress

How far along are you?

In our first two weeks, we've already met with many of the smartest people in the industry to learn everything we can about what's already been done. We've acquired an Audi S4 (has electromechanical steering + looks cool) to use as our demo car, and have started fitting it with cameras and drive‑by‑wire equipment.

We hope to have a demo ready it by Demo Day, but it will be just a demo. We are not launched, and don't plan to until after raising much more money. This is a capital‑intensive business.

How long have each of you been working on this? How much of that has been full-time? Please explain.

We have been working for about two weeks (started roughly mid October).

Idea

Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?

Self‑driving car technology has so many positive effects on society that it sounds absurd when you start to list them (but I will anyway). It can reduce carbon emissions and oil consumption, unluck billions of hours of lost productivity, save hundreds of billions of dollars lost due to auto accidents, and save tens of thousands of lives. I can't think of many other ways to have this kind of impact on the world.

We have both built self‑driving cars before. Kyle built a wifi‑controlled Ford F‑150 at MIT. Jeremy built the LIDAR sensor systems for Graymatter Inc, the first company ever to raise venture capital to build self driving cars. We personally know many of the smartest people working on this stuff (it's a small circle) and we will get them on our team.

People want this technology. A study by KPMG shows car buyers are willing to pay a 20‑25% premium for a vehicle that can drive itself. But people also really need this technology. One million people are injured in car accdients in the US every year and 33,000 of them don't survive. 90% of those accidents can be attributed to driver error, so this technology will save thousands of lives.

What's new about what you're making? What substitutes do people resort to because it doesn't exist yet (or they don't know about it)?

1. It costs at least an order of magnitude less than what is being built today.
2. It's designed to work on existing cars.

Americans drive 37 miles per day on average. They sometimes drive while texting, drive while intoxicated, or simply drive while being distracted. People seem to be trying really hard to do other things instead of driving, but so far there aren't many good ways to accomplish this.

Some newer vehicles have advanced cruise control systems that keep the vehicle in the lane during ideal highway driving situations, but drivers aren't supposed to do anything else or even take their eyes off the road. This seems like a band‑aid solution.

Who are your competitors, and who might become competitors? Who do you fear most?

Google currently has the most impressive self‑driving cars. Elon Musk has announced Tesla's plans to have cars that drive 90% of the time in 3 years. Most major auto manufacturers have already demonstrated self‑driving R&D prototypes and have partnered with various universities. OEM's like Bosch and Continental have large teams working on self‑driving technology that could end up in future generations of new cars.

We are most afraid of Google. Their systems potentially have access to Streetview and Maps data, which is extremely hard to replicate. Their current technology is too expensive to sell directly to consumers, and their commercialization strategy is unclear, but those things could change very quickly.

What do you understand about your business that other companies in it just don't get?

1. First‑mover in this market will gain a large advantage in datasets, maps and branding. We aim to be that first mover.
2. The best way to differentiate a car is with new technology (like self‑driving systems). Existing car companies are adept at charging more money for leather and chrome, but that approach is pretty much dead.

How do or will you make money? How much could you make?

We will make money by selling and installing our equipment on existing vehicles. Over time, more of our revenue will come from subscriptions fees.

J.D. Power surveyed 17,000 drivers in 2012 and found that 20% would"probably" or "definitely" buy self‑driving technology in their next vehicle at an estimated market price of $3k.

If that survey is even remotely representative of the rest of the country, those drivers who are ready to buy today will create at least a $100 billion market in the US alone.

How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?

There's already quite a bit of buzz around self‑driving cars, but nothing is on the market yet. This has created an enormous $100 billion shadow demand that we'll tap into once we launch.

Equity

What kind of entity and in what state or country was the entity formed?

Cruise Automation, Inc. is a Delaware C corp created in September 2013.

Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders. If there are multiple founders, be sure to give the equity ownership of each founder.

50/50 split between Kyle and Jeremy. $100K convertible note from Kyle.

Legal

Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.

No.

Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please explain.

No (it was not done by a non-founder)

Others

If you had any other ideas you considered applying with, please list them. One may be something we've been waiting for. Often when we fund people it's to do something they list here and not in the main application.

Turbotax for mortgages

DNS for snail mail

Github for CAD

Please tell us something surprising or amusing that one of you has discovered.

I spent a week as a tourist in Iceland and never had to touch a piece of physical currency. It was amazing. Everyone took debit cards.

Yet I still have to fumble through my pocket for some wadded up dollar bills to get across the Bay Bridge.