Pagani, Successful Automotive Startup

I was fortunate enough to spend an afternoon hanging around the Pagani factory a couple of years ago.  Actually, to call Pagani’s facility an automobile factory is quite misleading, as the term conjures up visions of dirty wrenches, flying sparks, and piles of sheetmetal.  If anything, the Pagani factory resembles an Intel chip fab — clean, quiet, and orderly.  And the cars produced inside are exquisite.

Located a short drive outside of Bologna, Pagani sits but a stone’s throw from the headquarters of Ferrari and Lamborghini — part of the high performance internal combustion industry cluster that’s existed in Emilia-Romagna since the 1920’s.  The factory is very compact and sits, almost invisible, in a quiet suburban neighborhood.  It is divided into three main areas, each sitting side-by-side: a carbon fiber fabrication area with several autoclaves, an assembly area (big enough to fit three cars on jack stands) and an entrance lobby/museum.  The design offices sit above the museum, and the entire facility oozes quality and attention to detail, as do the fabulous cars that roll out the front door.  For example, most Pagani owners choose to have their car painted, but one car being assembled during my tour had been left in its natural carbon fiber finish.  Why?  Because the carbon fiber layup at Pagani is done with care and workmanship worthy of fine jewelry; every adjoining weave pattern met up with its neighbor with the unwavering precision of a Savile Row pinstripe.  Simply gorgeous, technically superb, utterly and completely to the hilt:

How to the hilt?  Well, when you order a Pagani Zonda, you also receive, at no additional cost, a pair of achingly beautiful leather shoes crafted in Bologna out of the same custom leather used to cover the interior of your car.

Amazingly, Horacio Pagani has been able to buck the odds (I reckon the last successful automotive startups were Honda and Ferrari, and those started in the unusual economic circumstances of the aftermath of WWII) to create a real, going automotive concern not unlike the famed atelier of Ettore Bugatti.  Conventional wisdom tells us that it’s impossible to start a new car company.  Perhaps.  But Horacio Pagani built his venture in a smart, calculated way not unlike that of Burt Rutan at Scaled Composites: first, he paid his dues (learned the trade at Lamborghini) to pick up tacit knowledge, then started a composites fabrication business to get some cash flow and create option value.  Only once those steps were successful did he begin making cars with the passion of someone doing what he truly loves. 

Pagani is a great example of designing a venture and building it via an iterative process.