Hi Creston. The plan to raise money through selling licenses was, to me, always one of the more incredible features of a totally unrealistic business plan.
As I recall, the licensee not only had to pay for the right to build the Cyclone engine (assuming there was such a thing) but also had to pay to protect the patent from infringement. Given that steam technology has been pretty mature for the last 150 years, it's almost inconceivable that you are going to be able to write an effective patent for anything more than a very narrowly defined product. For example, there are literally hundreds of ways to build a valve other than the one Cyclone employed. Personally, I think a number of them are better. Why would anyone in their right mind want to exactly copy the Cyclone product when there are a vast number of alternatives? Of course, maybe they were planning on suing anyone using something vaguely similar, especially if they could contractually bind licensees to pay the freight.
Every basement inventor figures that they have the next big product at hand and will sell it for a fortune. That has happened, occasionally. It's vanishingly rare, however. What normally happens is that bigger companies in an industry maintain larger research and development facilities than do smaller ones (the more money you make, the more you can afford to invest). They thus tend to crank out a greater number of valuable patents. Smaller competitors can't afford the facilities but they want to keep up technologically. The smaller company takes out a license and gets the technology they couldn't afford to develop themselves while their larger competitor uses the funds to partly offset their R and D costs. It's a win-win situation.
Cyclone was making the argument that by just brainstorming, without a well-developed capability to test and refine a product, they had developed technologies far ahead of everyone else. Apparently a lot of people bought into the idea that they were vastly more capable than all those professional engineers having years of practical experience teamed with well stocked labs and excellent fabrication resources.
It seems pretty obvious that the reason no one was trying to build modern steam engines is that there is no perceptible market. Cyclone engines were always seen burning liquid fuel; an this gave them exactly what advantage over a gasoline or diesel engine? Obviously, no major player in the industry would want to license from Cyclone. Big auto companies, for instance, don't need a production line to build a hundred engines for testing. They have shops for that. They wouldn't want Cyclone's test data, one of their dyno cells is worth more than all Cyclone's assets. That doesn't include all their other testing resources. As for engineering expertise? They have people who do little but design cranks, cams, blocks, heads and so on. With years of solid experience and a large vendor network, they don't need anyone in a garage telling them how to design parts. If any major manufacturer thought there was money in high pressure, high temperature, high rpm steam engines, they would be able to design their own and do it better due to their organic in-house resources.
So, who would Cyclone be selling to? You got it, the companies that can't afford such a sophisticated development capability. The only real customers are people who are very small and don't have a lot to invest.
Where the plan REALLY hits a snag is that Cyclone seemed to expect that they could turn their patents over to these partners and the partners would utilize their relatively superior capabilities to take the product development to final completion. See the problem? You're aiming for the really little guys who can't afford to engage in development and depending on them to complete your development. How was this supposedly going to work?
I keep coming back to the conclusion that they decided that steam engines were neat and that it followed that other people would also think so ..... and thus be willing to put up money to get into the field. Well, people think all kinds of things are neat but they usually stop short of actually putting money into it. Lots of people think jet fighters are neat but when's the last time you saw them scrounging around junkyards trying to piece an F-104 Starfighter together? It appears all their market and economic analysis was dedicated to confirming how brilliant the concept was rather than accurately calculating revenue and expenditure.
All the above is what I think happened, I'm not claiming any degree of inside information though I think it fits the observed facts reasonably well. Cyclone is stuck in a holding pattern because the huge rush towards steam engines still isn't materializing and because they don't have any capabilities worth offering to those companies actually large enough to make a difference. All this should have been obvious to the principals but I think it was all matter of self-deception running rampant.
