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The emperor has no clothes

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Sat Jul 07, 2007 1:50 pm PostPost subject: The emperor has no clothes
Ping1400
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For most people it should be clear by now that Steorn does not have an OU technology. Question remains if it has been a scam schema from the beginning. Looking at the financial and investment history it really looks like Steorn was a company that was going to build up a brand-name with a focus on marketing and intellectual property. From business viewpoint they were doing exactly the right thing to be able to make the most of the technology as possible from such a small enterprise.

They hired professional business and marketing consultants that helped to make the plans, the investment prospectus and all the public expressions. But all of this was based on one simple assumption: somewhere Steorn did have the knowledge of a unique technology. The whole castle was founded on just one tiny rock. Maybe only two or three people inside Steorn really knew the properties of that little rock. With the help of these professionals and on their own experience of the dot-com era they were able to secure 14.5 million Euro of private investment.

I donít think the hired professionals ever saw something about the technology itself, just like I believe there were only very few Steorn employees who were involved in the technology. Of the 20 people working there most were busy with marketing plans, house-style, web-pages, organising parties and making all kind of arrangements. Sounds a lot like the dot-com companies that did not survive the reality of business. Maybe the employees were also guessing sometimes how the company could work like that, but as long as there is money they play their role. The lack of technical, scientific and engineering staff was explained by having that work Ďoutsourcedí. Of course there were never companies named (secret!), but they made indirect references in interviews, like the company that is supposed to be working with them in Holland.

The Steorn company was build on secrecy. The secrets were guarded and different security and clearance levels introduced. In the end even the public forum was separated between the chosen ones (with a signed NDA) and the outsiders. In three years time this habit of secrecy grew into a company culture that became more or less a cult. And in a cult all internal criticism disappears or changes into unconditional believe. On this point I think that Grimer (disappointed spud member) is right. I believe him to be wrong that the cult environment was intentionally created, it just happened in the chemistry of the people involved (specially the charismatic Sean).

Like all cults that run out of control (or are pushed to deliver by external forces, like in this case investors), there is a building up towards a certain climax. All people involved are enthusiast and the leader(s) cannot back off anymore. By that time they might even start to believe the impossible will happen themselves. So the marketeers arranged the demo at the Kinetica museum, designed posters, created a special web-site with streaming video, printed 1000 T-shirts, invited the press and secured tickets and hotels for all involved. The technology was to be arranged by one or two specialists from Steorn. The failure to deliver at the start of the exhibition was a classic. The moment of truth for the cult leader. The ease at which they cancelled the whole demo tells there is really nothing else to show.

So, was Steorn a typical scam? The people behind the scam were so much self deluded that they started to believe in the technology themselves. That did help in persuading the investors, but it did hold them back from taking the max possible profit. They seemed to have believed to be able to sell the company for hundreds of millions or even billions. Maybe it is also an act to have a better position in possible future lawsuitís.

When I watched the video that was shot yesterday at the Kinetica where Sean Ďexplainedí what happened, I saw a person with something like a split personality. He was obviously lying, but he was also still under the spell of his cult. When looking back at the videoís of last year, you can notice the same behaviour (also with Seamus). It looks like they are not yet accepting the reality. Deep inside they always knew: Sean kept insisting everybody to stay skeptical.

Yes, it was a scam. But the initiators were not screwing the investors 100% rationally. They started to believe their own story and built a castle founded on nothingness. And in that process they screwed almost everyone. The investors, the employees, the forum, the spudclub and the scientists that did invest their time.

Time will tell how it will end. There is still some cash remaining. There will be lawsuits and the Steorn company will disappear in oblivion. There is one thing however thatís still left: the always present documentary team. I think the Steorn saga could become a very interesting story and the documentary could be nice material for psychologists, investors and science-consultants. It could be BBC material and I for one would really like to see it!

It has been a pleasant time, almost pity itís about over.


NB - Iím planning to write a last piece about the people that actually made money with Steorn where Iíll also decide who gets the bottle of whiskey.
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Sat Jul 07, 2007 3:07 pm PostPost subject:
Thicket
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Very nice summary, Ping.

I still puzzle over the extent of Sean's self-delusion. I've seen many examples of Sean's glib lying without conscience. I don't know whether he rationalizes and believes his own lies. There are many twisted minds out there and lots can seem outwardly totally normal.

Steorn's list of investors includes some successful and influential professionals. It remains to be seen whether they fade away in embarassment or get angry enough to take legal action.

I'd love to see a documentary on the Steorn fraud. I'm not sure that it's unique enough to warrant one. There are lots of frauds and scams out there.
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Sat Jul 07, 2007 6:00 pm PostPost subject:
exco
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I don't think the affair warrants any more attention. In terms of scams, self delusion, and sheer quantity of cash its pretty minor in comparison to many.

I clearly recall the Marconi collapse, for instance, when tens of billions of pounds carefully amassed by weinstock were blown away in under a year.

Enron, where money was apparently conjured out of thin air with similar justification to that of steorns 'free energy'

There are many others. The world is full of crooks and idiots. I guess the final words must come from the philosopher Homer:

"In this house, boy, we obey the laws of thermodynamics!"
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Sat Jul 07, 2007 6:31 pm PostPost subject:
Ping1400
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Ticket, exco,
you are very right about this scam to a pretty minor compared to others. The media covered the failure with minimal interest and it will be forgotten soon.

But different to most other scams, there has been the continuous presence of a documentary team filming the events both inside and outside. It gives the opportunity to follow the psychology of the individuals and the group during the periods of success and failure. I think it could be great material.

NB: I saw a documentary once of the rise and fall of a small internet company that was followed by a documentary team for 18 months. They planned this documentary to be about the success of internet entrepreneurial initiative. The fact that the company failed made the documentary into a complete different story, with a lot of personal drama. The result was quality television, which I enjoyed a lot.
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Sat Jul 07, 2007 7:47 pm PostPost subject:
Quanten
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What will be more interresting is to see if it evolve like many of us predict, that it will die a slow death in a whimper or stops with a bang (forum closed, web site down, light stopped at Steorn). I bet on the 2nd once investor start smelling blood.

Also the real reaction of 007 , eman8 , babcat as believer. My best bet is that they will stay silent. They have the ball to insult everybody before the first failed demo, they had the ball to insult everybody after. I wonder if they will now be a bit more MEEK after a second failed demo, or if their faith will still support them.

I think I will stay until the end to see how it developps socially.
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Sat Jul 07, 2007 8:16 pm PostPost subject:
exco
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Well, it would be interesting, perhaps, to know what the feelings of the spud-brained club members are. But they are essentially a stupid lot who seem to believe that hundreds of years of painstaking study of the universe by - in many cases - geniuses can be overturned by someone who hasn't taken the trouble to study it. This ignorance, they seem to think, is a an advantage, as it allowy you to have original thoughts.

Well, perhaps, but it is a pity that the thoughts of many of these 'dogma-free' people seem to follow those of the very people they criticise often some hundreds of years later.

I recall one of these characters dismissing calculus as 'merely another way scientists have found to blind themselves' there were appreciative comments from a number of spud-brainers. At that point, Any sympathy I had for them evaporated. They deserve everything they get, including the barmy grimer's 'gamma atmospheres'
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