Thank you for taking the time to speak with us today. I'm sure that you're very busy, especially after the last couple of weeks--
I've had better weeks.
Yeah, I would imagine. But before we actually get started talking about the technology [Orbo] or anything like that I think that a lot of people would probably like to know a little bit more about the company. So what can you tell us about Steorn that we don't already know? I mean we know that it was a company that was founded not to break the laws of thermodynamics but rather technological means.
The company was founded by myself and three other guys back in 2000 and it was basically three of us had come from a company that I had been working with for a year and the Irish economy was doing well so we decided we'd set up a tech company with no real objective. We started working in the early days just helping people manage some of their big e-commerce spend. So it would primarily be contract management, so for example where corporate would be spending vast amounts of money on e-commerce projects.
But that day was over so we came in to restructure the contracts and try to manage them into a more realistic burn rate. So we did that with probably some of Ireland's biggest corporate e-commerce sites including people like Banks of Ireland and so on. In 2001 we were asked to get involved in the development of some anti-counterfeit technology for credit cards and basically that became the mainstay of our business both in terms of developing anti-counterfeit systems for optical disks and for plastic cards and also doing an awful lot of forensics and expert witnessing for law enforcements across Europe.
I see. So then you stumbled upon this technology by--
An awful lot of the work we would have done would have been done in ATM fraud, which is a very widespread fraud in the UK and in Ireland and across Europe, and from working with the police they have quite a different view on the crime than for example a bank, and the police's prime objective is to catch the bad guys. So we started looking at covert surveillance equipment to monitor high risk ATMs, because clearly what the law enforcement wanted to do was to get evidence of a person physically committing a crime and it was during the development of some covert CCTV cameras that we were looking at basically very mobile devices -- so we wanted wireless image transmission and also not to have to worry about wiring them up to anything. So we initially looked at solar cells and we looked at augmenting solar cells to extend the battery life of the system with winter at the top of these were lamp post sized devices. So it was during that we started really playing around with magnetic systems and that's where we began to notice some strange anomalies and got caught in this weird and wonderful world OU. [Over unity, aka free energy.] Sometimes we wish we hadn't but we have.
So we know you stumbled upon this supposed technology. How long did it take you guys to realize what you thought was going on here?
It took us an awful long time to be honest, because the first thing when you get an anomalous reading on a system in a lab, the first thing that you do is obviously question your test equipment. We obviously went out and we looked out and looked at the way we are testing it and systems we were using to make analysis and so on. And after a fairly extended period of testing in different ways -- I should make the point that when we discovered this we weren't generating, the systems didn't run away with themselves. What we noticed was at certain speeds the speed range for magnetic systems that we were getting substantially different energy results -- which is unexpected.
So we spent a good six months ourselves just looking at the systems and not full-time six months. We wouldn't jump on it and say, you know, this is the solution to the world's energy crisis. We did it in a fairly calm, rational manner and over a course of the six months we began to realize that hey this, these readings are not due to some measurement anomaly and that these readings are real. There are these energy anomalies at certain speed ranges with certain magnetic configurations and that's pretty much how we managed to convince ourselves that it was worth pursuing.
You just mentioned, to quote, that this is the solution to the world's energy crisis. Do you think that is actually the case? Do you think that this will end the world's energy crisis?
I don't... I mean... My own background just to explain to you is providing technology into the UK Royal and gas industries. So I know the energy industry pretty well. I don't think there is a single solution to the energy crisis. I think that certain energy demands have certain needs. We have no doubts that what we have can play a very significant role. However, there is one thing sitting in Dublin here with a claim on a technology that nobody believes. Making that a commercial reality is a long and difficult road. So we are not naive enough to say that we will have a massive impact in the short frame of time, but we can see that it's possible and that's what we're dedicated to.
It's interesting that you mention that it's a technology that no one believes and I've seen some of the videos where I think it was you or one of your colleagues refers to the technology as being "absolutely impossible."
That would be me. [laughs]
Why do you think that this is so difficult to pitch to people?
From the simple point, we're all believers up to the notch of pretty well qualified engineers. You know, we have very classical university training and we've worked months of our lives in a classical engineering and technology environment. And so, the only way I can describe how I would feel about this technology is that if I'd be looking at this technology from the outside I'd be going, "Hocum! This is complete and utter rubbish! This is the most incontrovertible law of physics and if this was untrue then the universe wouldn't work." So I understand the skepticism, I would be very much and like everybody else. I've seen these kind of claims come and go over the years. So I understand it and an awful lot of what we're about is to try and at least erode people's disbelief. Because we can't make this a viable commercial technology without obviously people accepting that it's real.
Right, and in the US the USPTO, our patent office, actually requires people to send in physical working samples of supposed perpetual motion machines because they have historically received so many claims for patents to this system.
[laughs] We work with a pretty large U.S. patent firm. We took the decision that because of the company, we have so many battles to fight, and the last thing we wanted to do was to fight a battle with a patent office. So from the patent perspective we don't make claims that would violate classic Newtonian dynamics. However we have constructed a portfolio of patents that do protect us. So we're making claims that protect the technology... So we're not concerned about our patent position or having to fight because even that statement about the patent office is not necessarily true according true according to our patent agents. But again, we haven't felt the necessity to make claims in our patents of you know overunity or anything that could be deemed scientifically controversial. That doesn't mean that we don't believe in the claim, it simply means that we can protect the technology without having to go through that step.
How many people do you have working on this Orbo technology right now?
Head-count in the company is 21 full time staff and we would have anywhere between probably 5 and 15 people working on the contract at any one time and they would be in partner organizations or direct contracts to the company. It's very substantial for a very little company's operations.
You guys are operating strictly on VC right now? Or what are your other means of income?
Since we went public last August we stopped all works with the forensic and expert witnessing simply because we would not be credible, we'd be too easily -- we're presenting obviously to the prosecution. It would be too easy to be discredited with a claim like this publicly in the eyes of the court. So it's currently no revenues at all and we will attempt to make no revenues until the technology is validated.
How are you paying your employees for the time being? Is this from cash reserves?
We're operating via private investment, which we took through this all last year.
So that's the company, let's talk a little bit more about the technology that you guys have supposedly developed here. Laws of thermodynamics basically state that you can't achieve 100% efficiency in any apparatus and that there are always transfers of heat and energy in any system. But obviously you guys are claiming 100%+ efficiency. Do you have a statistic or number of what you estimate the energy efficiency level of your machine is? Is it 110% or 150%?
It varies from configuration to configuration. I think the largest efficiency that we would have physically measured would be about 485%. These numbers can be misleading. For example we might be getting 485% per joule, which means were getting 4.85 J out, but there could be a configuration that's could be delivering 130% efficiency yet delivering 10 joules. So, the technology itself is pretty well researched in terms of punch line efficiency it's 485%, but that wouldn't be the optimum output of the system. Obviously we're more focused on direct power output of a device than the punchline numbers. 485 to 1 is 4.85, but we could easily say, 10 to 12 joules off of a system is going to have a lower punch line efficiency. And power output is obviously the key factor, energy output is obviously the key factor.
So you guys have been trying to bring the scientific community into the fold. Obviously kicked off by the full page ad in The Economist and there's the open invitation...
[laughs] It was a brave decision.
Well, it definitively opened you guys to a lot of criticism. My publication is definitely not excepted from that. I think it's one of those claims to where you're just going to have to put up with the lumps.
We knew it. Again, the only way I can describe this is that we didn't set out to do this. We stumbled upon it. I wouldn't believe a word of it if I wasn't working here and so in deciding the best route for the company was to go and do this, what they call a slap in the face of science. We had no illusions at all of how it looked or how it would be conceived, what we would be called and so on. But at the end of the day we have to face that, but it's a relatively easy thing to face when you know what you have is real because, you realize there is an end to it and we can get on with the business of business.
I think part of the reason why people didn't and don't take it seriously is partly because there is no [credible] university affiliated with the research. The fact that you guys were not out to actually invent this new science and that there was no big name physicist behind it at the time is, I think, what is most damaging to your credibility.
To be fair, I don't think of there's an awful lot of what we could have done with respect to credibility. But the other thing to recognize in terms of the August thing [running the ad in The Economist] is that we achieved our objective, and our objective was to get qualified scientists engaged. As much as we get an awful lot of criticism, and obviously the event the last couple of weeks haven't helped, the bottom line for us is that process has started and that process will end with very qualified people doing the analysis. So were quite happy to sit here -- happy is the wrong word -- but we're quite willing to sit here and take the smirks or the laughs or the cries of fraud and so on because August was a big victory for us because our biggest concern in doing all of this, is, well, what if no scientist responds? That would have been a disaster for us. The fact that we got ridiculed, that was going to happen anyway.
Since this open invitation to invite scientists to review the technology under their own means and their own circumstances, that they see fit--
We're obviously covering all of their direct costs and paying them a nominal fee to do it. But they're deciding the details of the process. It is and will be seen to be at the end of it, a fair process. We're not paying them massive consulting fees, which is one of the concerns that we had. We tried to structure it in such a way that when the results arrive, and obviously we are very confident in what the results are going to be, that people could look at the process and say, it was a fair process. Although we're obviously keeping it pretty non-disclosed, but in the end of it when these guys report, people will be able to see how much they were paid, the level of testing, and where they've gone through. And so they can see that the report, whatever it says, was fair.
I understand that some 5,000 scientists applied to be a part of this.
No, we had 5,000 total applicants. It was an online thing. So when you rule out the Bart Simpsons who had applied we had 1,000 qualified people, of which about 500 who would be qualified scientists, and 500 qualified engineers.
And so how many people have actually accepted this challenge and are currently working on this?
We've signed contracts with 22 of them. There is a copy of the contract on the website, and 22 of them are involved in an analysis of the technology.
Do you know when they are expecting to publish their results? Because I know that was one of the requirements as well, that they publish once they've made their conclusions about it.
The straight answer to it is no. We're not in control of the process. All we can do is facilitate it. So, while I think a lot of people will say, well this should easy, it actually isn't a simple process and also it's not a simple process on the technical level. There are a lot of energies that need to be looked at. It's also such a big claim that these guys need to be 100% sure about what they do, whether they prove us right or wrong. It's a thorough of process, it's a slow process, and we haven't set a time limit on it, and neither do we know how long it's going to take.
So, I'd like to talk about the demo.
I wouldn't. [laughs]
Yeah. Well you knew this was coming. [laughs]
[laughs]. I've done nothing but talk about it, but go on...
I'd like to know why you think it failed -- and not the reasons that you've already given. We've definitively heard that it was ball bearings, or it was mechanical failure, it was the heat from the lights. We heard all that. We know. I want to know why you think it failed, in the sense that why did the other two backups that you guys brought not work? Or why were you not able to relocate the demo to another location that didn't have these issues? Or why was it not thoroughly tested enough, and so on...
I'm not going to tell you anything that if you have read some of this stuff that you haven't heard. The simple fact of the matter, just to state, is that this is not production technology and so you know anybody who works in the prototype world will understand that there are always issues. But with respects to what happened, we brought three systems to us from Dublin, three component systems, we don't move them in their operational way, we stripped them down. They are very, very simple and there is not huge configuration to them, but they are very sensitive configurations because there are lots of magnetic loads and so on. We got one of the systems working on the Tuesday night which was the Tuesday before we were going live on Wednesday evening. We started to install that in the demo case and began to notice problems. It wasn't working. That being the prime problem.
We then took the classic engineering process of stripping it down and testing, testing, testing, and what we found was that in that prototype was that the bearings, while not visibly damaged but the friction had more than quadrupled in them, which would have been a killer in a this type of system that we were planning to show. And under pressure we just kept plugging in all the spare bearings we had. Now, these are not standard bearings you might buy from your local hardware store. These are very, very low friction bearings used in the watch industry. Our analysis of what happened is that the heat allowed play in the system that damaged the bearings to the point where the extra friction in the bearings didn't allow the technology to happen. Whether people believe that or don't believe it, there isn't a lot that I can say other then that's what happened.
As this is supposedly scientific phenomena that -- by your terms -- redefines the laws of physics, shouldn't this be demonstrable consistently? Of the machines that you brought, which by all appearances looked like a very simple closed system, why did only one machine work?
First of all, we only planned to get one machine working just in the time frame. The spare bearings that we had we took from the other systems, so at the end of the day we ended up on Thursday morning with six bearings of which we had damaged five for whatever reason. We were pretty sure we know the reasons whether people believe them or not. I then had to make the decision to defer because the reason that actually happened has nothing to do with the bearings, the reason it happened was just the ridiculous time frame that we were doing it in. So we will be doing a demo, again. Obviously people will believe it when they see it and I can understand the skepticism about that. It is a deferral, our guys are currently in the process of rebuilding some more robust systems and changing some parts to prevent the engineering thing from happening again and we'll be back out in the near future with it.
So do you have a time-frame that you're looking at for the next demo?
What we've decided to do this time, is rather then beating ourselves with a stick, we're going to get it running in a location and then we are going to announce that people can watch it online. So we are actually physically getting it operating, it will be the same. The principle behind London, which was clearly a failed demo, was that it wasn't for for a sequence of webcams to people to watch, but it was equally physical, so that people could go there. We put in some PCs so they could chat about it and so on. So the principle will be identical, that it's both a physical location where people can go view it. Obviously not everybody can do that, so people can watch it online and chat directly with people there and discuss theories of where batteries might be hidden and so and so on. It's a deferral, we have decided that we will only announce it when it's actually live and in place this time which is a mistake that we made last time. We should have done that but didn't.
I think another thing that might have raised some eyebrows about the London demo was that it was taking place in an art gallery of sorts. And, again, as I mentioned earlier, this kind of level of scientific community credibility that I think maybe some people had expected this demo to show up in the university setting with a far more controlled environment then what you would think of as your normal London art gallery.
I mean the thing about Kinetica is that it's a kinetic gallery. So that the stuff they do is kinetic art, and obviously our technology is kinetic in nature. The other thing about it is that is very open plan. It's glass on three sides, the demo case was suspended five feet in the ceiling, and we had invited some skeptics to come along and test it because if you've seen the device there is virtually nowhere to hide a battery, and there are obviously ways to transmit energy, but they are relatively easy to resolve. So the intention was to be open, and that intention will remain. The other thing that people need to understand is, to be honest, if it had gone as planned I would be expecting to have the conversation with you now and you going, "How did you trick us? How did you hide the batteries?" So, no demo is ever going to be deemed as conclusive proof of this kind of requirement and neither should it be because it doesn't answer all the questions.
But for us it's only a process of erosion where we're saying, look we will demonstrate the technology. Obviously we didn't last time, but we will be doing it. We don't expect that to be a slam dunk for anybody. We do expect it to at least erode some people's views of why we're doing this, and how we couldn't possibly have what we claim to have. But at the end of the day, our general analysis was that at the heart of the Steorn general watching community, the people who think that we're a fraud would use it as a definitive proof we're a fraud, and the people who believed us would use it as definite proof that they believed us. The audience was intended to be wider then that. But there is no demo that is going (and neither is it designed by us) to be perceived as conclusive evidence. Conclusive evidence is the views of the scientific community and that's an issue that's in hand with us and that's ongoing.
You mentioned inviting skeptics to come to the demo and I've actually read one of the reports of one of the skeptics that you invited, someone who identifies himself as Doctor Mike.
Doctor Mike, yes.
His quote about the technology was: "My conclusion..."
I believe that it was all spinning my head. [laughs]
Right... what he said was that, "My conclusion after going through all this is that Steorn is neither hoax nor scam. It is delusion. The reason it seems surreal is because it is surreal -- we are the real part of someone else's imagination."
How can I criticize. We invited the guy to come from Canada to see something. He didn't see it. It's his opinion. He has no other basis, he has nothing else to work on, other than sitting and having a chat with us. I can't possibly criticize, Doctor Mike for what he said. It's exactly what I would have said, I probably would have been harsher if I had been in his shoes.
I don't necessarily want to talk specifically about Doctor Mike, but I feel that is probably what a lot of people feel at this point. You've been very open about your process, which is more than what you can say about a lot of snake oil salesmen who might try to peddle a perpetual motion machine. But at the same time that I think that a lot of people just seem to think that what it really comes down to is that you guys have convinced yourselves that these are true phenomena, and that you actually believe it, whereas it's not necessarily the case.
Again, obviously if I'm delusional, whatever answer I give is going to be based on my own delusions. The only thing that I can say -- I can say a couple of things about it. First thing is that the answer that anybody looking at us and wants to know will ultimately be delivered contractually. It's going to happen whenever it happens from a bunch of scientists. So unless they're delusional as well, if they agree with us then we deal with that at the time. If you stand back from the failed demo and say ok, I don't think anybody should believe this -- I wouldn't believe this in the circumstances, demo or no demo -- there is a process that's in place that's a real process where real scientists are going to draw a conclusion and that conclusion will be made public.
The other side of it which I think is why people have taken the delusional route is because an awful lot of people had expected us to rig the demo. They expected us to have a hidden battery or whatever it is. If we were in that business, believe me, there would have been a spinning wheel. But we're just not in that business, the business of scamming people or rigging demos. It failed, it's prototype technology. Huge disappointment to us. We'll redo it. But the answers to the question -- the demo doesn't answer the question, it provides some thoughts from supporting evidence when it happens. But the answer to the question will be done by professionals and then were either be found to be delusional or not.
So what happens--
I mean, I was expecting a lot more criticism [from everyone] to be honest.
So what happens if you can't prove this supposed technology? If you can't figure out a way to convince people.
But we have. We have. There are lots of tactical things that we'll be doing, such as demos -- and obviously we'll have to respond to the failure of that demo and probably do more than we've intended to. We're a small company and maybe we're slightly overstretched in doing it, but we have to do it. But the jury process is happening, they will have to report -- they will either have to say yay or nay. Ok, so you can say how long will it take? I don't know. But the point of the matter is that there will be an end to the process and an answer will be provided. Now that answer, if it's what we think it will be, will obviously raise more criticism and so and so on. But we've got lots of other things that we are doing to address that. There is going to be no defining moment in my opinion where people go, "It's true!" Even if these 22 scientists -- who are really top scientists -- turn around and say, "By Jove they've done it!". We as a company will still have to drive that message home in other ways.
The purpose of the London demo -- which has clearly backfired on us -- was part of that process. We're going to have to do more things like that in a more creative way and a more convincing way. But none of these things and themselves are going to convince anybody. People are still going to think we're delusional or scam artists, or whatever the latest theory on it is. But, again, the answers will come. I know an awful lot of people have said to us, that's an excuse to raise more money and drag this out. We haven't raised a dime since last August and we've said quite simply we will commercialize this is no way, we are not going to sell film rights or book rights whatever the latest scam theory on it is. We're sitting here like everybody else waiting for the results of the jury and we will do other things to try and support the premise that we've made -- understanding completely how ridiculous it sounds.
So then assuming that your technology does then proves itself to be true. What happens then?
What happens then is that's in many ways is the smallest hurdle for us because obviously we believe it's true -- whether we are delusional or not will be found out ultimately. What we have to do then is actually make money from it and get it into the market. We've chosen a kind of open-source model. We do have a developer forum for people, were putting in learning modules about how you go about doing this. The concept is very simple, but once it's validated this released in an open-source way with a very comprehensive database of e-learning, designs and so on.
So people can go off and do this for themselves from a hobbyist level through to a commercial entity level. And the purpose of that is just to understand is to ensure widespread adoption. Typically if you believe this kind of stuff is possible you expect people to run off to the biggest company in the world and to do big fat licensing deal and retire off to the Maldives. We believe that there is a far more effective way to get it into market which is to release it to everybody in exactly the same way. Whether you are the biggest or the smallest company in the world you get access to it, and if you can go off and you can develop products to market fast, then you'll win, we'll win.
So then I guess the only other thing I'd like to know is what you have to say to everyone in the technology community who feels as if they have been toyed with or led astray.
I don't think that anybody in the technology community ever believed it. So I don't think we've been toying with them. I think it would be an unfair assessment, I think people in the technology community would probably scoff at how naive we were trying to do the demo in such a short time frame and we failed the thing. But we haven't toyed with anybody. If we were toying with people we would have rigged the demo and we were never going to do that. We're genuine about this. We fundamentally believed in what we have and we fundamentally believe in it's impact and what it can do. We just move on, it's as simple as that. I don't think that anybody in the technology community will believe this until it is validated and until they can build one themselves or buy one in stores.
Well whether or not they believe it -- and I do agree that almost everyone does not believe it and that everyone has been extremely skeptical about it. But the fact between the ad, the demo, and the PR campaign that has gone on inbetween those two bookends, Steorn has raised a lot of awareness and attention--
I don't think we have done any PR in between. To be fair, I have no problem marketing what we believe in. I'm not going to be apologetic for August because it was hugely successful for us. We went out to attract the attention of a critical world of science -- a rightly critical world -- we got it and now they are off doing their job and they'll deliver an answer. With respect to the demo, yeah we can't complain. When you shoot yourself in the foot, you don't ask yourself was the gun loaded, you just ask what were you aiming at. We can have no complaints.
But I don't accept that we were toying with people. We have a technology, we're putting more than our money behind this. We're putting everything behind this, our reputation and everything behind it, because we believe. That doesn't mean that other people believe, but we do believe, and we do believe in the medium term that this technology will make it to market and that is what we are interested in. The rest is noise.
So what are you guys planning to do going forward that will improve this process for the general public who is paying close attention to what you're up to?
Obviously we are going to have to redo the demo. There is no question that we are not going to do the demo. We will, as I said before, not pre-announce it this time. We will get it set up properly, but the ground rules will be identical. The ground rules will be physical public access to the device, online webcams so it will be as open as possible. If anybody has seen the intended device and then realizes that it's, well, not impossible obviously to hide a certain energy source, it becomes quite a convoluted process. So we are going to try and demonstrate the technology in it's simplest, simplest format in a place with public access where people can watch online and talk to people there.
That will be one thing we have -- and to invite skeptics along. We have to do that. We have to embrace the skepticism. But equally to understand, these are not intended to be slam dunk results, because they won't be. There will always be issues and rightfully so a simple demo, no matter how long it lasts, isn't proof of the claim. Proof of the claim is scientific analysis. But we are going to have to do other things as well. I won't go into details, but the biggest mistake that we've made and obviously we have to learn from our mistakes was to pre-announce the London demo. We've paid the price for that, we won't do it again. But we will be doing probably an awful lot more than we had intended. Basically when it happens we'll be letting people know. It will not be that far away.
Sean, I really appreciate taking some time to talk to us. And I appreciate you being very candid in speaking about this stuff.
No problem Ryan, I know how crazy all this stuff sounds. [laughs] I don't know what to say to people other than... I guess all that I can really say is that at the end of the day the key issue outside the demo and marketing and all that stuff, the answer is coming and we'll know. And it is never our intention to toy with people, and that's the first time I've heard that said. It just doesn't make an awful lot of sense.
I don't want to accuse you of toying with people. But I think that people feel as though they have been toyed with, and I'm asking on account of that.
Which is a fair point, I guess. I've met an awful lot of disappointed people. People who came, who believed, who wanted to see history made. Disappointed skeptics, people like Doctor Mike who we dragged half way around the world -- and all I can do is apologize to them and say look it didn't work, but we are going to do it again. It's not the end of the Steorn story. Unfortunately, I'm sure that many people wish they've never heard of us again but we'll be back and we'll be back in the not to distant future.
Well, we'll be waiting.
Alright. Cheers Ryan.