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Skeptic theories thread

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Sun Apr 22, 2007 8:48 am PostPost subject: Skeptic theories thread
Ping1400
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(Note to all possible investors: don't invest in Steorn. All theories that can still make money don't need new investment or involve crime)

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The motivation as has been posted to the administrator drichardson to start a 'Skeptics, sceptics, and Cynics' subforum (10 April 2007):

In the Steorn forum is no longer room for the cynical skeptic.

I define the cynical skeptic as a person who refuses to even consider the possibility that Steorn really found a technology that breaks the law of CoE. Most probably with a scientific or engineering background and a curious nature (else no time would be spent on Steorn).

The cynical skeptic is following the discussion because he wants to know what the real story behind all is. He looks at it like an alternate reality game (like we used to do at university when we were young), and is intrigued by the players and their interaction.

Because the law of CoE is taken as a fact by the cynical skeptic, the claims of Steorn can only be a mistake or a lie. All holistic theories and scenario's are evaluated as long as perpetual motion is no part of it.

Two statements I personally believe:
1) Steorn have no OU technology
2) Steorn know that

The first one is logic result from my cynical skeptic viewpoint.
The second one is deducted from the fact that Steorn are way too professional to have made such monumental mistake.

From this position on the cynical skeptic can go two main directions:
1) It is a scam and they want to make a lot of money with it
2) It is not a scam, and for some reason a show is being performed

I requested a forum subtopic for the cynical skeptics (like me) to post theories and discuss them. Just to see as the Steorn saga continuous who was right in the end. I will donate a nice bottle of 12 year old Irish whiskey to the poster who had the story right first, after it's unravelled!


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Skeptic theories.

Many have been posted. Initially they concentrated on the typical short term hoaxes and scams. Lately the theories focus on long term scams, long term hoaxes and possible schema's where the window of opportunity already has passed. In some Steorn are more or less criminals, in others they are acting (that is different from lying!) or even some kind of victim.

There is also one theory left that still is based on Steorn acting in good faith, where they really believed to be able to build a machine, but failed. This theory forks into the version where they still believe they can do it, and the version where they realised the truth, but just don't know how to stop the running train.

Under this post I'll try to collect some of the theories as have been posted on the fora. Be free to add others, just make sure they all end with a victory for the CoE!


Last edited by Ping1400 on Wed Jul 11, 2007 11:29 am; edited 3 times in total
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Mon Apr 23, 2007 6:05 pm PostPost subject:
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Eventually we will be able to put together a "top ten" list of why Steorn cannot be correct in their claim. saner has already listed some general points that should give everyone pause when considering the validity of Steorn's general process and specific items therein.

But here is my candidate for the Number One reason that Steorn are wrong:

The Men In Black have not broken into their lab and stolen/destroyed their prototypes, confiscated all lab notes, and taken pot-shots at or abducted the principals to undisclosed locations! After all, this has happened to all other discoverers of genuine free energy systems in modern history! Hasn't it? Well, hasn't it?

Of course I am always ready to be proven wrong--just show me a device that functions as Steorn (or Bedini or Bearden or Farnsworth or Roznyay or Methernitha or Minato or Godin&Roschin or Tseung or ....) claim. Yes, I've seen the Searl motor videos, but I seem to remember that Searl's main claim is not that he has an interesting motor design (a homopolar and/or Minato variant, as far as I can see) but that his device functions as a self-running antigravity engine of some sort. No holes in the lab ceiling yet, as far as I can see.

Lack of Well-Designed Control Experiments Leads Out Overinterpretation of Experimental Data.
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Tue Apr 24, 2007 6:51 pm PostPost subject:
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Theory I
Category: Documentary or reality TV
Origin: Posted by an anonymous person on the FreeEnergyTracker forum

------------------------------------------------------------------------------------------------

Steorn are doing a movie about gullible, Uneducated populations that believe anything.

Sean has been consistent about One point. That's it. That Point is: "DO NOT BELIEVE ME"
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Tue Apr 24, 2007 11:02 pm PostPost subject:
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I always thought Sean was consistant on:
" I wouldn't have believed it either" ( not "do not believe me")
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Sat Apr 28, 2007 2:05 pm PostPost subject:
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Theory II
Category: Documentary or reality TV
Origin: Posted on SteornTracker some months ago

------------------------------------------------------------------------------------------------

Remember the first 'big-brother' show? It has been a huge success, making the Endemol media company owners billionaires. A psychiatrist I know told me she was fascinated by that first show. There was this group of ordinary people that had no clue of the popularity they had outside of the big brother house. The succes of that first show was never repeated in the later shows. In all the later shows the contenders were very aware of all the camera's and the freshness of the original was gone.

Recently I discussed with her about the Steorn phenomena. She became very enthusiast and started to make a comparison with that first big-brother reality show. Such reaction I had not expected. That's why I made up the following story (warning: fiction, any resemblance with existing situations or people is coincidence)

-

Suppose you're contacted by some media mogul. They're investing in some experimental new media ideas (just look at the strategic content roadmap of these media companies, there is loads of money to spent). The new project needs to be a mystery/reality creation, with interaction between the real world and the internet (preferable global), mixing traditional and new media.

Suppose your company is on the brink of bankruptcy. And you are given a chance. One year of preparation and one year of running the show. To collect a small team of people that can create a fictional world. A core team with all the needed knowledge of no more than 5 or 6 people, directed by the media company.

First brainstorm sessions. How many subjects would have passed the white-board? Then a subject passes that has it all: free energy. Violation of the conservation of energy. To make that subject into something credible, that is a true challenge!

A really good story is needed. We need to be able to create at least some doubt into the minds of even the toughest engineer. So it needs to be a whole better than the OU crap already circling around. To do so a real scientist is needed that can help to define a technology based on a complex theoretic background (maybe even with some discussion in the scientific community itself), but with simple mechanics. Magnetism is a perfect candidate, for most people a bit mysterious, and after introducing some 'latency' or 'viscosity' effects rather confusing for the academics either. Enter the 'Steorn' effect.

I believe that has been the role of that magnetism and spin electronics dr. from the Trinity College, who is consulting Steorn. He brought in the know-how. I think he is the only real scientist involved in the whole Steorn show. He has been often referred to by Sean and has a role in creating the needed credibility to persuade the inner circle around the core Steorn team. Together an explanation was made up how the Steorn effect was discovered from some measurements on a mini wind-turbine generator. This is still one of the weakest parts of the background story.

Some tools and demonstration machines were created, based upon the experiments one should perform to measure the Steorn effect. Not too expensive and not looking too complicated. Adding to the reality feeling and visual effect.

A real company is build, hiring people to show some meat on the bones. These people are mostly working on marketing and multi-media. The technology is said to be outsourced to a company in the Netherlands. So for the employees it is not strange to have nobody doing actual technology research at the company.

These media and marketing people start to build their part of the reality. Slick web-site, professional video editing, and the introduction of a filming crew (the documentary team, with only very little surprised reactions). To build credibility to the Steorn claim, all non-technology content is openly communicated in a way that it can be controlled. The company and the people are enthusiast and nice.

For making the reality-show work it needs to have different stages with interaction of the public. A long lasting validation procedure would fit. And extensive internet and media presence (some people did correctly question why a CEO is spending so much time in a forum). Also it is very important to have a flavour of membership and secrecy. The NDA of the SPDC membership is a joke. It is so weak, that everybody can sign it without any problem. It is not supposed to protect anything, just to create an inner circle feeling.

To sell the story some drama is needed. Enter the Steorn party. Enter the forum 'fights'. Hairykrishna was asked to visit Steorn, but first he was to accept the fact to be filmed (the NDA was just a distraction from that fact). Tension is created by keeping people uncertain. The less information is fed the more people want to believe. At the same time the Steorn claims were attracting all the OU scammers in the world that warm themselves on the credibility of Steorn. More drama!

Slowly the situation is also eating the nerves of Sean and the other of the core team. Every time Sean keeps telling the world to maintain at least some skepticism. Almost as if afraid for the blind faith of the followers. But the show director is pushing it further.

How it will end?

Maybe there will be invitations for a gathering. Maybe a validation convention. Some people will have the deception of a life-time, but only with a film camera nearby. I also think the scientific jury just doesn't need to exist for making this show.

It could be great television. Maybe some kind of documentary series. Some marketing guy will make promotion if it works. And it can be good for the popularity of science.
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Sat Apr 28, 2007 10:46 pm PostPost subject:
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Thanks for putting that together.

If it turns out to be the kind of film project you suggest, it
would explain the lack of any evidence for a scam, and even the
participation of the engineer who supposedly built and ran the
kinetica video. Any scientists who shows up at the spdc or
elsewhere, and claims to have vetted the device and believe it is
OU, could likewise be dismissed as being part of the legal and
fairly benign plot.

I wonder though what Steorn will do after this is over. According
to you, the company is a front for this film, with 5 or 6 people
in the know, and the other 20 or so employees working on
the media part of it, thinking the OU is for real.

Sean McCarthy will spend, according to you, two years doing this
film; his 'real' work being neglected. And it's not just him: the
other principals of the company are in the same boat.

When this is over, Steorn will be defunct. The people in charge
of it must be making a fortune to sacrifice such a chunk of their
careers.

According to the Irish government records, Steorn have taken in
over 10 million pounds in the last 4 (I think) years. This would
seem to pre-date the film preparation as you describe it, though
the planners may have been far-sighted and confident that Steorn
were the ones to do the job. And if the money Steorn are spending
is small enough compared to that, they will, in fact, make a
fortune.

Also, according to the records, a couple of the biggest investors
are well-known Irish firms, one a trucking company. I suppose that
could have been juggled in some way however, to confuse the trail.

Your speculation is as plausible as any I've seen, but I don't
believe these people are capable of lying that well; I don't
believe that this is a front for some movie; I think it is for
real.

On the one side, you have an astonishing claim, with almost no
evidence given for it; on the other side, you have attempt after
attempt to spot the scam or hoax, and nothing to show for that.

It's the lack of success that the skeptics have had that makes me
think it's real. That, along with the transparent honesty (to me)
of McCarthy and the others in the company who have made public
statments.

If McCarthy is lying when he says Steorn have what they say
they have, and that he doesn't care for money, which would have to
be his motivation from what you say, then from what I have seen
of him, he is an actor of the prowess of Olivier, and should start
a career with the Abbey players when this is over.
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Sun Apr 29, 2007 8:03 am PostPost subject:
Ping1400
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@couldbe

You may be right. The weak performance on April 13 is not what you expect from a media company that wants to create big drama. Also the slow pace of new developments of the last months is not what one would expect either.

On the other hand. You mention the careers of the people involved. As far as I can see the Steorn career was over anyway three years ago (the company was technically bankrupt). It was a slow period for people in technology and one needs to have an income to live. I don't see the sacrifice. They already lived the lives of entrepreneur technology gypsies for many years (look at the history of Steorn).

But still, the filming project theory is loosing momentum.

One suggestion I read some time ago, is about Steorn really thinking they have something, but for some reason just not being able to make it work (of course that reason is CoE). The testing and experimenting is dragging on and running out of the original time-tables. One day the investors will pull the plug.

-

An anonymous posting on FreeEnergyTracker forum put it in this way:

"I think the boys at Steorn made a mistake. Some deep pocket investors invested with them based on an error and in order to keep them happy or follow some timeline Steorn created this elaborate PR campaign. Sean may have been telling the truth when he said they weren’t seeking additional funding because they already had the investors on the hook. In addition, it is a fallacy to assume wealthy investors wouldn’t be stupid. I work in the financial world and wealthy individuals come to me all the time asking advice about slick, but idiotic and outlandish, investment schemes. Some fall for it hook, line and sinker before I can talk some sense into them. The more outlandish the scheme the more they believe. Even the wealthy believe you can get something for nothing. Steorn has developed a slick PR campaign; I think they did this for their investors. Perhaps it was an honest mistake; in any case, my guess is it is going to end badly for Steorn and their investors.

If they had a device, they would have taken it to market already. Most of the great inventions of in history never went through peer review BEFORE they where unveiled to the public. The Wright Brothers didn’t…they just flew their plane. Bell showed the world the voice phone. They are going to draw this out as long as possible because they have to.

Let’s face facts. A simple mechanical watch type mechanism if constructed in the correct way might look like a perpetual motion machine to an untrained eye. No, Steorn may not be a fraud, but I would bet the farm that they do not have an OU device.

Those that believe are demonstrating an almost religious zeal for Steorn. They want so badly to believe that OU exists that they seem to have abandoned all reason."
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Mon Apr 30, 2007 5:46 pm PostPost subject:
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There are lots of potential theories. My current favorite one goes like this.

Sean McCarthy and perhaps Michael Daly are drawing big fat salaries from Steorn. These salaries are paid for by Steorn investors. As long as Steorn can keep the investors investing, Sean will drag this gravy train out as long as possible.

It hardly matters if and when Sean realized that the free-energy technology didn't work, as long as that pay cheque keeps coming.
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Mon Apr 30, 2007 7:42 pm PostPost subject:
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Thicket wrote:
It hardly matters if and when Sean realized that the free-energy technology didn't work, as long as that pay cheque keeps coming.


Most times the truth is in the simple things.

But it would be so much more entertainment if the plot turns out to be more complex.
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Fri May 04, 2007 6:47 pm PostPost subject:
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Just as a hypothetical case.

A small technology company finds out to their own surprise a configuration of permanent magnets and brass and aluminum disks that rotate on an axis without external energy source. The engineers are confused and the physicists they approach in the academic world prefer to not be involved. The business owner doesn't care at all about physics, looks at the opportunity, and he understands the huge impact such find can have. Both on the energy supply in world as we know it, but also on his personal financial situation. Let’s name this company "Calimero".

How can this small "Calimero" business make money with the phenomena they discovered?

First we need to extrapolate to the future. How will the money be made in 10 or 15 years? Looking at the existing market for low end small electric motors and generators, it is a mass production market. Low costs and high volumes. And the small "Calimero" company cannot compete there. On the high end of the market it is the ABB, Siemens, GE and Mitsubishi's that build the big plants. No way can this small company compete with them in size, price and delivery scale.

The market for this new technology is gigantic. Companies like Exxon and BP have turnovers bigger than the BNP of most countries. It is naive to think "Calimero" can play a big role in that market by creating the physical products. It is just too big and there are too much experienced competitors. It may even be a problem to just survive the first years.

What if the intellectual property is protected? Patent a new law of physics? Nope. But the technology can be protected by patents. However, forces will be unleashed that will find ways to go around the patented details or will ignore them and fight them out in decades of legal wars (which will financially bleed "Calimero" to death).

It could be very difficult for the director of "Calimero" to make the big money on the technology he is thinking of. What about selling the whole technology and/or the "Calimero" company? The price he will get can be very nice. Millions. But compared to the real world value of the technology it is a very small fee. And who can you trust?

There should be another way for "Calimero" to go. How can he make the max possible profit? They should not try to compete in the field of production itself, not even in the field of research and knowledge. But "Calimero" could try to have a trademark on a name everybody in the world will identify with the technology. Think "Intel inside". First they should build up the brand recognition, even without any product on the market. After that they can ask a very small percentage of the turnover of the production companies to use that trademarked name that is recognized by the public. Even a fraction of a percent will still create the most profitable company ever. No need for competition. And the company can stay small, except for the marketing and legal department.

- don't focus on the technology itself, it's a race you cannot win
- focus on creating a brand with a general public recognition
- license the brand-name to all willing producers for a small fee, and sue all others

That’s how a hypothetical "Calimero" should be run.


There is one last challenge to overcome. The technology must indeed work.
But even without working technology the business plan can be very persuasive to potential private investors. Much more believable and better than a pure technology company or (even worse) a product company.
Find them, feed 'em, hook 'em, and then bleed 'em.
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Fri May 04, 2007 7:24 pm PostPost subject:
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There'd be easy ways to make money. If the CEO of Calimero was a charismatic public speaker (hypothetically speaking of course Wink ) then lecture tours would rake in a lot of cash. Book and movie rights would pay big time. Public endorsements and advertising revenues would reap in tens of millions. Directorships in big companies would earn more cash. The inventor of free-energy would have enormous fame and money.

Residuals from products labelled 'the original Calimero' would be a gold mine. Heck, the opportunities are almost limitless.

... 'If' it worked.
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Sat May 12, 2007 6:38 pm PostPost subject:
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Quote from the Steorn forum: "The only ones that truly have their a++es in the fire line are the fellows of Steorn. I think they truly believe they have what they claim, otherwise they would not have started all this (which amounts to a career sucicide if proven wrong)."

Real question should be: "How many people would risk a non-existing career for a few MEuro?"

Until recently the total amount of investment money was not public. With 14 MEuro it was way more then most here expected and with the current burn-rate they could last until second halve of 2009. Very easy to make up scenario's where the company is 'milked' some millions by the executive board. Another development of the last few months is that Steorn are slowly loosing that 'professionals' flavour of the first months.

So lets follow Alice down the rabbit hole ...

-----

Rabbit hole level 1:
Group of professionals that discovered OU and are building a company based on brand value. Goal = get rich by making Orbo work, both technically as commercially. Result = most profitable company in the world.

Rabbit hole level 2:
Group of amateurs that made a measurement error and are acting like professionals that discovered OU and are trying to build a company based on brand value. Goal = get rich by making Orbo work, both technically as commercially. Result = it doesn't work, the investors loose, but accept the loss as a lesson learned knowing the executive board didn't win either.

Rabbit hole level 3:
Group of amateur swindlers, that are acting like professionals that discovered OU and are trying to build a company based on brand value. Goal = get rich milking the investors. Result = investors loose, find out about the scam, get seriously pissed, lawsuits will continue for years and the scammers don’t win in the end either.

Rabbit hole level 4:
Group of professional swindlers, acting to be a group of amateurs that made a measurement error and are acting like professionals that discovered OU and are trying to building a company based on brand value. Goal = get rich milking the investors. Result = investors loose, realise it were just a bunch of amateurs, and accept the loss as a lesson learned thinking the executive board didn't win either.

-----

Right now a confused Alice thinks she has tumbled down to level 2 or 4.
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Mon May 14, 2007 5:31 pm PostPost subject:
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To find out if the financial and investment information of Steorn are justifiable for the things they are doing, I made up the Calimero sister company and calculated a very rough budget scenario based on few assumptions.

It looks like the figures of Steorn do fit the company they claim to be. It explains the urgent need for new investment in Feb/March 2007 (was also a silent period of Steorn in the media) and shows that the theory of the Steorn management 'milking' the company is not a realistic one. With the current burn-rate they can continue until the second half of 2009. But few questions remain: what did those 15 R&D people do all the time? And why so many individual Irish private investors (gives mixed feelings)?

As a skeptic I slowly tend to think that the guys at Steorn at least initially did believe they found an OU technology. Maybe they just cannot stop the train anymore, but it does indeed look like they still believe. At the same time I think they have major problems turning the proclaimed OU phenomena into something that produces useful energy. As we all know, that just won't happen. And it is frustrating them (and explains the needed continuation of the validation process into 2008). Very high probability that the July demo will be not what we expect from it (scam options excluded).


Calimero company budget
------------------------------------------

Assumptions:

Personal:
- 2 FTE management
- 15 FTE own personal
- 5 FTE hired R&D

Outsourced:
- Marketing
- Accountancy
- Legal

Dublin is an expensive region.


Management & Marketing
- Management fee (2x) [400k]
- Marketing
-- Consult [50k]
-- Website [100k]
-- Adverts&Media [150k]
-- Community [50k]
TOTAL [750k] (Euro/Year)

Admin costs
- Building [100k]
- Acountant [50k]
- Legal support [50k]
- Services [50k]
- Expenses (travel&dine) [200k]
- Personal [300k]
-- Finance 1FTE
-- Secretary 1FTE
-- HR&Ops&IT 2FTE
-- Sales support 1FTE
TOTAL [750k] (Euro/Year)

R&D
- Personel Internal 10FTE [700k]
- Personal External 5FTE [700k]
- Material costs
-- Equipement [100k]
-- IT&licenses [100k]
- Patents [100k]
TOTAL [1700k] (Euro/Year)

TOTAL Calimero Company: 3200k (Euro/Year)

------------------------------------------

Conclusions:

1) High overhead (30%).

2) High cost ratio: over 150k/FTE (about 50% more than average consultancy companies). It should be possible to do the same for just over 2MEuro.

3) New investment was very much needed in march 2007, as the first 6 MEuro was finished.
Year Cash Cum.
2004 0800k 0800k - first 6M tranche
2005 1800k 2600k
2006 3000k 5600k
2007 3200k 8800k - second 8M tranche
2008 3200k 12000k
2009 2000k 14000k (until September)

Maybe the share and money transfer of the second tranche took place in Feb/March 2007, but the commitment of the investors in the form of contractual side-letters that don't show in the fiscal balance could be from much earlier. I've seen this with financial constructions before.

4) The management could try to 'milk' the company by having a part of the costs and the hired R&D personal being paid for to a second company owned by the management. In this budget it could be done for a max of 1 MEuro per year to stay under the radar. But the services still need to be delivered and they could keep a margin of 50% at most. That is only 500k per year (250k per person). When comparing that with the management fee the 'milking' theory becomes very improbable.

5) The investors are a relatively large and mixed group of wealthy Irish people. There is no big company behind (like Microsoft), reducing the chances of a viral campaign. But it gives the feeling of an 'inside job', which could be a good or a bad sign.

6) What are all these R&D guys doing? A group of 15 people on R&D is a lot. The test-rigs and toys we have seen cannot explain this.
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Tue May 15, 2007 1:35 pm PostPost subject:
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@Ping1400

You’re probably right; Steorn is likely to be a very sophisticated scam. But, as you also pointed out, what if it’s not?

What throws me off is that this and the Steorn fora seem to welcome, and at times even promote, skepticism and the open discussion of the possibility of fraud or other illegal behavior. Blatant or overtly negative behavior is generally quashed, but that’s a simple matter of good manners.

If it’s a fraud –

There are a number of scenarios, none of which work well for anyone, but are based on keeping the whole thing going for a long time and tucking away as much money as possible. There will be lots of court battles and missing or misspent money and some very angry, powerful and vengeful investors. Not a place for Mr. McCarthy or his employees to be in the long run.

If it’s real –

1. Small company fights off big competition like, BP, Exxon, GE, Boeing, et al. The small company is not likely to succeed in production or promotion competition, eventually losing to the big groups.
2. Small company plays the promotion game, gaining the “Orbo inside” label and the ability to control at least a part of the branding process. Considerably more successful and pays fairly well in the longer run. (Your scenario.)
3. Small company threatens big groups to release the technology if they don’t play nice – like follow a defined schedule for release, proper licensing of technology to support “Calimero,” and proper branding, including promoting “Calimero” and its employees as “Saviors of the World.” Best chance of success. If the big companies won’t play, it doesn’t matter. Public release simply makes the technology available; “Calimero” retains “Savior” status, branding and fairly large income, and the big companies look like bad guys again and fight amongst themselves.

(Yes, there many variations on these presented and others besides – just trying to keep it simple.)

The point is that if the tech is real, it’s desperately needed and can be the most successful enterprise ever created. I can only begin to guess at future ramifications.

If not…just another silly scam. We should be ashamed of ourselves, and what are we doing here?
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Tue May 15, 2007 6:31 pm PostPost subject:
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(same thoughts were posted before in the other forum)

The July demo could be a landmark in the Steorn skeptic theories. I like to give an example of a demo that will be up to public expectations. Just see it as a reference of the 'base' level. Everything better will bring more market exposure, everything less will be a bad performance.

The public wants to see a machine with moving parts, including a rotating wheel. Size may be anything bigger than 20 x 20 x 20 cm, preferably less than 100 x 100 x 100 cm. There must be an open structure so the moving components can be observed well. There may be some additional objects or structures that are not of practical use to obfiscate the real workings of the machine. Of course there must be shiny components in brass and mysterious components in black.

The machine is placed on a transparent platform and can be encapsulated within a transparent enclosure. The public shall be able to walk around it. The mechanic motion of the machine shall never stop and it would be nice if it makes some noise (think Finsrud). It is not needed to produce useful work, maybe it's even better to do not so. Don't show electric wires and don't have (non functional) components that could be used as a battery storage. The machine should be well lit.

The demo should take at least 10 days, during which the exposition can be visited 24/7.

Of course this demo is no proof of OU. There can be numerous ways of feeding energy into the system. But it will make one thing very clear: after this demo there are no vague options left. Or Steorn have found a true OU technology, or Steorn are a real scam. The final verdict will become clear in time.

Any demo that does less than expected (or even cancelling the demo), will be interpreted as that Steorn just cannot produce useful energy from their theoretic claim (as predicted by CoE) and fail. But then at least they are not a scam, just an error.
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Thu May 17, 2007 12:02 pm PostPost subject:
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Thicket's posts about the Steorn shares challenged to do some financial math. There is this interesting sheet with some Steorn investment data. Google spreadsheets:
http://spreadsheets.google.com/ccc?key=pwtWM-p3XIKyaGg6no6xkbg

The sheet is at least 99% correct, but there may have been some errors in the public filings. It tells a story, confirming Thicket's findings.


1) Shares and funding history

The Steorn company was originated by Sean (37,5%), Francis (37,5%), Micheal (5%) and Shaun (20%) in 2000. In 2001 Tom bought himself in for 10% (for 127k). Next three years there were no transactions and according to the books Steorn was a typical small company with little profit. Then early in 2004 something happened. There probably were some internal rumblings in the summer of 2004 and a lot of shares were transferred between the original shareholders. Francis and Shaun liquidated most of their positions and Micheal became from the smallest the biggest shareholder with about 35% (looks like two of them didn't agree or believe the new strategy, and Micheal took over). I don't believe much money was transferred, maybe Euro 5 per share and Francis and Shaun made something like 100k with that transaction only. Nobody sold all of the shares (so there must have been still some trust in the future of Steorn).

Few month later some shares went also to the first external shareholders: Barry, Patmore Group and Sadbury Pension. The price may have been more, maybe Euro 50 per share (Tom made some 275k with that and Sean some 25k).

In December 2004 there was the first serious funding round. In three batches between 23 and 30 December (merry Christmas!) with prices between 224 and 885 per share Steorn raised 2,4 MEuro for 7176 shares (6%).

The second funding round was in October/November 2005 with prices up to 1606 Euro per share where Steorn raised 3,3 MEuro for 2045 ordinary shares. In October there was also a minor transfer of shares from Tom and Sean to Patmore Group, which I believe was according to earlier agreements (and therefore for a relative small valuation of maybe Euro 50 per share, which made them 25k each).

The third funding round was in March 2007 where 8,4 MEuro was raised for 5284 shares with a price of Euro 1585 each.


2) Shareholders categories 2007

* 80% = Original shareholders: Tom (6,5%), Micheal (30,1%), Francis (9,7%), Sean (29,6%) and Shaun (4,0%). Except for Micheal (who paid some 300k) they likely already made a small profit.

* 10,4% = Early investors: Barry (2,3%), Patmore Group (3,6%) and Sadbury Pension (4,5%). They paid about 1 MEuro.

* 9,6% = The later investors that paid over 13 MEuro.

Even when the company is sold for over 200 MEuro, some of the later investors would still make a loss on their investment. For them to make an acceptable profit (and with the risk they are taking it needs to be a multiplier, not just a percentage) the value of Steorn should be at least 1 billion Euro when sold.


3) Conclusion

At least until 2007 they did believe they found an OU technology. Micheal did even buy some additional shares in March 2007 for over 150k. The value they think the company has is huge compared with the absolute size of the company. The only exit-strategy for them in such case is to sell the whole company to a multinational. This should happen before 2009 and is expected by them to bring at least 1 billion Euro. I think that figure is also used in the investment prospectus.

Even with this conclusion the scam-option is still possible, but you need to think big. The transaction can be result of a closed bidding procedure between some big (oil) companies. They just need to create the right momentum and find a legal way to get away with it. There is enough money in the market from private equity, hedge funds and multinationals.


Last edited by Ping1400 on Mon Jul 09, 2007 5:50 pm; edited 1 time in total
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Fri May 18, 2007 10:42 am PostPost subject:
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On August 16 2005, Steorn established the Steorn Nominees Ltd daughter company. The shares of this nominees company are 100% owned by Steorn, and has the same directors.

Some interesting objects for which the nominees company is established are:

(o) To lend the funds of Steorn with or without security and at interest or free of interest and on such terms and conditions as the Directors shall from time to time determine.

(s) To make gifts and grant bonusses to officers or other persons who are or have been in the employment of Steorn and to allow any such persons to have the use and enjoyment of such property, chattels or the assets belonging to Steorn upon such terms as Steorn shall think fit.

(z) To apply for, purchase or otherwise acquire any patents, licenses, trade marks, industrial designs, know-how, concessions and other forms of intellectual property rights.

(cc) To amalgamate with merge with or otherwise become part of or associated with any other company or association in any manner permitted by law.

-------

Objects (o) and (s) can be interpreted many ways. Could result in ugly mixing of private and company property.

Objects (z) and (cc) look like they will try to assign all the IP to the nominees company. In that case they won't have to sell Steorn, but only the Steorn Nominees when they want to cash. That way the profits of such deal can be paid out to the shareholders of Steorn as dividend, instead of selling their shares. It's a smart construction and it avoids the need to sell Steorn itself with it's complicated shareholders configuration.
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Sun May 20, 2007 5:43 am PostPost subject:
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Well, I just thought of another possibility that may have been mentioned before.
Steorn may be victims of a scam rather than perpetrators!
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Sun May 20, 2007 4:59 pm PostPost subject:
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There is certainly some supporting evidence for this, but why would they claim it was a home-grown device?

There is also the compelling argument that someone who had invented perpetual motion would really not need a company like steorn. He could simply walk into the US patent office with his working model, and walk out with a patent which he could license for almost unlimited cash to any energy-hungry industry in the US (and there are plenty!)

If I were a financially ambitious leprachaun, I would ask myself why he was bothering to sell such an enormous financial asset, and not part with a penny until I saw it actually doing it's stuff. Your man has admitted that a 'continuous output' variant doesn't actually exist yet.

My bet is that they (wrongly) thought they had the holy grail, went public and realised they had a tiger by the tail. When it has proved to be more difficult (even impossible) to get it working continuously, they went into denial and are desperately treading water in the hope that it'll all come right.
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Sun May 20, 2007 5:47 pm PostPost subject:
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@Nikola

I do like your new theory. It opens a lot of new possibilities. And it could connect some loose dots.

I think in this theory the scammer should be a private person or a very small group of external people. They will walk away with just one or two million, while ruining the Steorn investors AND the Steorn company for much more. Could explain some of the clues we get:

- The invention was just in time to save a near bankrupt company
- Steorn seems not to be in charge of the planning of deliverables
- "It's the lawyers that made me do this"
- Could explain making up the unbelievable micro-windpower story
- The Dutch engineer, building stuff (not the 10 researchers of Steorn)
- The frustration of Sean for not being able to show something for real
- Repeated comment of Sean to "stay skeptical" (legal issues?)
- The history of the mag-gen.com domain
- Why Ireland? Closed community, lot of nouveau riche

Maybe it isn't even a classic scam.

It has happened before. One smart engineer 'invents' a technical hoax, that (maybe even unexpected and unwanted) mobilised some fast boys from the marketing and venture capital scene. The story grows out of control of the inventor and it becomes impossible to stop it. He doesn't care about the money, and becomes paranoid about being caught lying. All the others interpret his behaviour as being very serious about his invention. Sometimes a terrible thing happens to the inventor, creating new conspiracy theories (http://www.cs.unimaas.nl/p.spronck/Sloot.htm).

One last thing: how would this theory effect the July demo? I think there would not be one.
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Sun May 20, 2007 9:38 pm PostPost subject:
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exco wrote:
My bet is that they (wrongly) thought they had the holy grail, went public and realised they had a tiger by the tail. When it has proved to be more difficult (even impossible) to get it working continuously, they went into denial and are desperately treading water in the hope that it'll all come right.


This theory slowly is becoming most people's favourite, including mine. Several forum members also mentioned it before. It's a sad story, and it would show not only their stupidity, but also the power of greed. We all would have waisted our time, but we had some entertainment, learned some new things and had a nice time in Dublin.
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Sun May 27, 2007 7:06 pm PostPost subject:
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Theories of the Steorn OU claim being a criminal scam are getting less popular. With the time passing (and more information available) an intentional scam looks less likely, but still is not an impossibility.

I repost here some posts from the Steorn public forum that make a point about the type of investor that is being scammed in such case. It looks like the only remaining realistic scam scenario right now is one where Steorn is going after the real big money. In this (hypothetical) scenario they will try to rip off a multinational (like a big oil company) or private equity fund for hundreds of millions.

(reposts ...)

Michael and Sean own 60% of shares of the company. The investors own only 20% of 'ordinary' shares. There is no 'hidden' steering committee, no 'big money' behind the scene. Sean and Michael decide everything. So "if" there is a scam plot it is planned by them and the current investors are not necessary involved.

"If" it is a scam they could be trying to personally get away with a few million of the invested money. It looks like they are not going for that option to the max right now (a lot of money is wasted on the operational costs of Steorn). But it could be a smart move to not act greedy (and take a 'little win' of only 2 or 3 million of the invested 14) to prevent lawsuits of the investors after it all collapses (and they realise that they have made 'a tragic scientific mistake'). It will make them look silly and they will be remembered for it a long time, but hey, who cares for 1.5 million Euro in the pocket (the Steorn business before has never been a big commercial success).

"If" it is a scam they could also be trying to go for the 'big win', maybe with involvement of the first group of investors (bringing some professional approach). In this scenario they try to sell all the company IP (maybe through the Steorn nominees company) to a multinational or private equity fund. The price will be set for at least 250 MEuro. The show must be played very well in this case, creating a sense of urgency (almost panic) across possible take-over candidates. The bid procedure will be valid for a short period, making 100% validations almost impossible. After the money-transfer to Steorn there will be a fast dividend to the shareholders, maybe followed by liquidation of the Steorn company. By the time the take-over candidate finds out things just don't work as promised it's too late. Formally no illegal actions took place and besides, there is no company left to sue.

----

>fpg: interesting scenarios, but they all have problems. One is that fraud pierces the corporate shield. The other is that fraud is a crime.

1) Fraud needs to be noticed to be a fraud.
In the "little win" scenario, they could get away with it if all involved accept the fact there has been made "a fatal scientific error" and believe that everybody, including the Steorn management, lost. Pity, bad investment. Problem is when the investors find out it was a scam after all, because I don't believe the private Irish investors will get even by trying only legal options.

2) Fraud is only fraud when it is legally a fraud.
There have never been hard statements by Sean, he even promotes skepticism. They have very good legal advice and I'm sure they know their legal borders precisely. This points to the "big money" scenario. And because of the nature of the take-over candidate here is little risk of other than legal repercussion. Which they may win.

The risk involved with both scenario's tends me to believe that the "little win" scenario is unlikely (as was concluded earlier by the analyses of their company budget).

----

>fpg: IF they did it to rich people, they are more likely to get caught and suffer for their deeds than IF the same thing were done only to people with less means.

I only partly agree to this point.
There is three levels (not two) of money that can be involved in the scam.

1 = Mom & pop investors. You can rip them off for few tens of thousands. They don't have the resources and stamina to get it back. But it won't make you rich either (and the public will hate you).

2 = Private millionaires that can invest up to few millions. These are dangerous to rip off, because it may become something personal and they have the resources. This group of people is currently the typical investor in Steorn. Ripping them off will make you millionaire, but at a very high risk of loosing all again (and the public won't care).

3 = Multinationals (like big oil companies) or private equity funds that can invest up to billions. They are used to take high risk decisions and will accept a loss. But they will sue for years when the chances of winning are high enough and the costs are positively balanced by the possible payback. Nothing personal. At the same time ripping them off will bring you so much money (hundreds of millions), that you in return can hire heavy legal artillery yourself. Chances are high you will not end up empty handed (and the public will laugh at the private equity fund).

"If" Steorn would do a scam well, they should go for number 3.
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Mon May 28, 2007 6:57 pm PostPost subject:
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If it's a scam, I don't think Sean is competent enough to pull off number 3. The best he can hope for is number 2 (bodily function double meaning intended). Big multinational companies and equity funds have a base level of knowledge and competence. Sophisticated bullshit is required to scam them. Sean's limit is naive and gullible private individuals.
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Fri Jun 01, 2007 9:28 pm PostPost subject:
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Suppose it is not a scam, but just an honest error. A well written scenario describing that option was posted on the other forum by N4Apound, a background SPDC member, in an answer to Alsetalokin and Lister:

---

"The SPDC has very admirable and intelligent people doing many interesting things, but my sparse perusing of its happenings hasn't moved me from my skeptical position. But maybe I'm just stubborn. Once again, it would be great to be wrong so we could enjoy the benefits of free energy!

In the absence of what I consider to be proof, there is one problem for me that trumps all other considerations: It is just INCONCEIVABLE to many of us that Steorn would not go all the way to making a true electrical generator out of their discovered over-unity effect. IMMEDIATELY. It is just that simple. To me (and others) this is the single largest issue after the claim itself.

MIT engineer Seth Lloyd has a quote I like about science and ultimate proof:
"I believe in science. Unlike mathematical theorems, scientific results can’t be [ultimately] proved. They can only be tested again and again until only a fool would refuse to believe them. I cannot prove that electrons exist, but I believe fervently in their existence. And if you don’t believe in them, I have a high-voltage cattle prod I’m willing to apply as an argument on their behalf. Electrons speak for themselves."

The quote applies to CoE, it has been "tested again and again until only a a fool would refuse to believe" it. But, if you claim to be able to break CoE, it also clearly shows THE ONLY WAY TO DEFINITIVELY PROVE IT (as much as anything can be). A stand-alone over-unity generator lighting up Sean's house is the cattle prod. Nothing more is needed, all doubters would go away when faced with a SINGLE PROTOTYPE generator that powers a house. This FORCES them to go away, there is no other choice. It is the ONLY way and the EASIEST way to put it beyond question.
Instead, there seems to be some ambiguity by Steorn as to exactly what they have; not theory or construction or details but just on what their prototypes actually produce and for how long, somewhat obscured by the plausible need for protection of IP.

Per alsetalokin's scenario: Imagine for a moment that you have discovered a single-shot mechanical effect which seems to show over-unity. And you have developed it into a pendulum-like mechanism that runs for a long time. But somehow, for some reason, despite your every effort, you can't quite tweak the delicate and subtle configuration to build a generator that outputs useful work. An electical generator that powers a house or a refrigerator or just a string of bulbs.

But that's OK, your company has talented and thorough engineers, you have tested it every way you know how and the single-shot shows over-unity by every test you have devised. And in the process you have become specialists in magnetics and calorimetric measurements, making you even more confident. The more research you do and comprehend and the more experimental data you reproduce, the more expert you become. And you know from all your experiments and from generator-building attempts that the necessary configuration is just at the edge of your (and anyone else's) abilities to put it into over-unity, requiring extremely precise timings and construction.

So it is very easy to say "OK, let's quit wasting time and contract someone ELSE to build a generator, someone that specializes in this sort of thing. Meanwhile you will focus on developing even better configurations that aren't so "twitchy," not so quite "on the edge." Because clearly just a little more work will yield a configuration that will easily be lendable to being a generator.

[Note that all of the above is purely imagined speculation, I have no knowledge of what Steorn actually has.]

But, somehow, it never quite gets there. And, in fact, it may take years of research to understand why, because it may be subtle and difficult. But in the end, it's discovered that CoE cannot be violated. Just like every other time before.

This is my guess for what's going on and how it will end. But I hope I'm wrong! I have good will and best wishes for Steorn and Steornites and do not think they are committing fraud, I think they are just unfortunately mistaken."

---

Further did N4Apound remark:

"Lister: You have stated "Steorn claims to have ... created an overunity generator." Are you sure? I realize that many overunity statements have been made, but I thought they were all ambiguous as to whether it was a true GENERATOR as you and I mean it, or instead a single-shot. Or a self-running toy, with no useful output (exactly as alsetalokin described in his/her example). I may have missed it, but I am a card-carrying member of the SPDC (well I had to make the card myself, but still)."


I think he is right. Sean has always been very careful in his claims. It doesn't prove anything, but it shows less than 100% confidence and an eye for legal consequences.
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Fri Jun 29, 2007 7:23 pm PostPost subject:
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Question on Steorn forum: "What makes you so sure that the investors have actually invested in the 'OU technology' and not in some other more mundane product/project/whatever that Steorn may be doing?"

Question on FreeEnergyTracker: "Could the whole purpose of this exercise in Free Energy be something as simple as attempting to scale up online security? Could Steorn have raised 14 million euros over the past three years to develop a product that can monitor online contractual agreements or something along those lines?"

---------------

Some time ago I had the same ideas about the real Steorn company business. But after checking the financial figures of their investment history, the number and size of the investments, and the type of investors, I tend to think there is no explanation other than that Steorn are really spending money on trying to develop an over unity technology.

Some of the investors paid 3 million Euro for less than one and a half percent of the Steorn shares. The company needs to be sold for over 200 million Euro just to make a profit! What mundane product/project/whatever can do that? Looking at the commercial history of Steorn nobody would invest with such multiplier in the company, except for an extreme and fantastic opportunity. I'm sure the business plans that have been presented to the investors show a near future value of billions (it would be nice to see those presentations after it's all over).

The way the B-shares were used as 'options' to the new management / company consultants shows that also Steorn insiders seem to believe it is all true (these 'options' will be worth 1 million Euro when the company sells at 1 billion). Same can be concluded from the first financial injection in 2004 and the transfer of shares to Daly. It supports the theory that Steorn, at least until recently, did believe they have what they claim.

The typical investor in Steorn is a private person. There are over 30 investors, that invested between 10.000 and 3 million Euro (looks like Steorn accepted any investment). Normal business plans require only one or just few professional investors. I think the business plans of Steorn were difficult to sell to the professional investors, therefore they needed the focus on smaller less professional private investors. Again this supports the OU scenario.

The real question is: do they still believe what they say?
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Fri Jun 29, 2007 11:51 pm PostPost subject:
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If your numbers are actually acurate ( I really don't know if they are as I haven't bothered researching the financials for myself),
You do realize that they would only have to sell the first run of the "validation" product for $2000 euros, in order to make a profit.

And I am not saying that it will be sold for that, as I have no idea what value will be placed on it.

You need to understand that, not only is the first run of the product a "done deal" , but their original plan was to sell licensing.

Steorn will have no problem bringing a return to their investors
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Sat Jun 30, 2007 4:59 pm PostPost subject:
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Magnatrix wrote:
You do realize that they would only have to sell the first run of the "validation" product for $2000 euros, in order to make a profit.


That's a classic "how to become a millionaire for dummies":
> step 1: Buy 1000 objects for $1000 each
> step 2: Sell these objects for $2000 each

It is a very naive approach. They may sell few thousand toys, but not for $2000 each.
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Mon Jul 09, 2007 7:16 pm PostPost subject: The emperor has no clothes
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Copy from "The emperor has no clothes" post (7 July 2007):

-------------------------------------------------------------

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 don’t 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 ‘outsourced’. 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 lawsuit’s.

When I watched the video that was shot yesterday at the Kinetica where Sean ‘explained’ 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 video’s 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 that’s 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 it’s about over.


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Mon Jul 09, 2007 7:18 pm PostPost subject: Who made the real profits on Steorn
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Copy from the "Who made the real profits on Steorn" post (8 July 2007):

--------------------------------------------------------------------

Some time ago I tried to make some budget estimation of Steorn, to check their ‘burn-rate’ and determine when they would need more investment to continue. The budget calculation was based on the situation where Steorn is a sincere company, building up brand-name and intellectual property. It showed the figures of Steorn to be accurate.

By now the true nature of the company is getting clear, and the budget estimation should be adjusted. In this new budget the total numbers don’t change (the burn-rate keeps up between 3 and 4 million per year), but now the money is milked from the company to the profit of some individuals.

--------------------------------------------------------------------

New budget (total 3.5 million per year):

Management and marketing costs go up from 750k to 1000k per year. The management fee of the two directors is kept the same at 200k per year per person. The increase of budget is from increase in marketing spending. This additional 250k goes to the ‘marketing partners’ and some additional employees.

Admin costs go up from 750k to 1000k per year. The legal costs which are spend on the ‘legal partners’ increase from 50k to 200k per year and the expenses (travel, wine & dine) go from 200k to 300k. The declarations are in favour of the management, but other employees profit too.

The R&D and technology budget goes down from 1700k to 1500k. The number of employees that are working on technology internally is decreased from 10 to 5 (600k budget, including materials). The number people being external technology consultants, outsourced research and development workers and patent specialists goes from 5 to 7 (900k budget). In reality there are only a few contractors with a workshop, with a cost of 200k per year max. The remaining 700k is spend on the ‘technology partner’.

--------------------------------------------------------------------

In total around 14,5 million Euro was raized from the investors. Until December 2006 they spend about 5,8 million Euro. By the end of 2007 some 9,3 million will be gone and an estimated 5 million in cash will still be left. It is clear who are losing: that are the investors. But who made the real profits until now?

(disclaimer: these estimations are educated guesses, they are certainly wrong)

1 Tom Byrne
Thomas is a venture capital and financial consultant. He has been involved with Steorn from 2001 and was also a leading investor in Orbo Technology Ltd before it bankrupted. Tom has been director for numerous companies like TravelFAT, Yard Media, Alatto Technologies, EVP Management, EVP (GP), Oglesby & Butler Group, Ledorat, Irish Takeover Planet, Abaris Corporate Advisors, Tourism Accomodation Approvals, Micro Focus International Holdings, Gresham Hotel Group, Telekinesys Research, Davy Corportae Finance, BES Fund Management, Premiere Holdings Ireland, Video Library of England, Kart Security Systems and Airotat. In august 2004, just after the new OU technology strategy was started, he cashed half of his Steorn shares for a modest price (estimated profit around 300k), which makes him probably the most successful shareholder of Steorn ever. Besides that it can be assumed he was involved in most of the financial investment transaction hereafter (including all the possible bonuses from that). The estimated consult and bonus fees exceed 500k.

2 Legal & Marketing partners
The total expenses on legal and marketing exceed 1500k. Partners could include:
- Unison Consultants (financial, market and strategic consultants), closely associated with Steorn through Roger Hatfield
- Brown Rudnick Solicitors
- dr. Bari, Technology strategy consultant
- O’Donnell Sweeney Solicitors (Francis Hackett, distinguished lawyer and 10% shareholder in Steorn)
- Marketing advisors and partners

3 Technology outsourcing partner
Unknown partner that supplies with engineering, scientific, patent and machine construction power. At least some workshop has been contracted to build the toys, like the kinetica toy (by the Dutch engineer ) and the plastic ‘thing’ that was shown at the museum. The amount of money that was spend exceeds 2000k, of which 1500k seems to be lost somewhere.

4 Steorn directors
Sean McCarthy (Chief Executive Officer) and Micheal Daly (Chief Operations Officer) had their management fees for three years (since 2005), estimated at 200k per person per year. The other managers Roger Hatfield (Chief Financial Officer), Michael Moriarty (Corporate Finance and Strategy) and Richard Walshe (Marketing Manager) arrived later and seem not to be into the technology, they are just hired professionals. As the Steorn directors Sean and Micheal together own 60% of the shares of Steorn they can decide which companies are selected as partner. The kick-back fees that could be paid directly or indirectly from these external partner companies could be up to 2000k by now. A milking strategy could have brought them (added to their management fees) something like 3000k.

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But I don’t believe that the Steorn directors were trying to milk the company for personal profit. They were too much self deluded. In the end they were milked by all the financial and marketing consultants and partner companies surrounding them. There was going to be so much value in the technology of Steorn, nobody would care after all. It really was a dot-com 2.0 thing.

Conclusion:
- Investors lost
- Consultants won
- Money gone

[9-aug-07] Minor edit to remove 'exact' numbers (to address Crank's legal fear)


Last edited by Ping1400 on Wed Aug 08, 2007 10:07 pm; edited 2 times in total
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Mon Jul 09, 2007 7:50 pm PostPost subject: BBC News: The perpetual myth of free energy
Ping1400
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Reply with quote

From the BBC website, the conclusion of an interview by Professor Sir Eric Ash:

"I believe that Mr McCarthy is truly convinced of the validity of his invention. It is, in my view, a case of prolonged self deception.
I ended our conversation by giving totally unsolicited advice: to drop Orbo and get back to software engineering."


Professor Sir Eric Ash is an electrical engineer. He is a fellow of the Royal Society, the Royal Academy of Engineering and the Institution of Engineering and Technology. He visited the Steorn Kinetica demonstration for BBC News last friday and was fortunate in that Mr McCarthy agreed to see him (even after the demo was cancelled).

I think Professor Ash got it right at first sight.
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