A conversation with the aviator, trial lawyer, and founder of Beyond the Edge.
Question: Starting from the beginning, what have been the stages of your career?
Richard Schaden: I graduated from the University of Detroit in Aeronautical Engineering and went right to Boeing. I had been through Air Force ROTC, but never really did receive a commission. I went to Boeing to work as a Civilian Engineer primarily – a lot was on military aircraft. In those days, we B-52’s and KC-130’s, and C-130 Transports, and the first airplane that I flew at Boeing, not as a pilot; as an engineer, was the prototype of the Boeing 707, which was called the 367-80. And at that time, we were putting a Pratt-Whitney Engine on the side of it, which was known as a JT8D and was going to be the engine for the 727, which at that time was on the drawing board. And so we did blight tests to see how that would work strapped on the side of a 707. And that was the first job I had.
I actually went to Boeing with great fear that I was assigned to a drawing board and to do analytical work and to solve equations, and I wanted to be in the air. And so, fortunately, I was able to connect with the Chief of Flight Test and I moved into flight test very early and spent a short career at Boeing as a flight test engineer, and got to do a lot of flying and a lot of piloting, and also it was a great experience for me.
I liked the aircraft industry because they had great toys and great equipment, and they had the best equipment in the world in those days. I didn’t like the idea of having to work for a corporation. My father had never worked for anybody but himself, not too successfully, but always for himself. And when I realized that I couldn’t really accomplish what I wanted to accomplish within the confines of a corporation, I looked for another place to go and went to law school at nights. However, in between I did go to graduate school in engineering at Wichita State; Boeing sent me there and suggested I go there, and I did. And then later on I finished law school at night.
Question: What drew you to the law?
Richard Schaden: Well a couple of things. Early on, I thought Barry Goldwater was running for President in those days, and he was a conservative. I didn’t understand the differences between the Democratic Party and the Republican Party. But I liked Barry Goldwater. And he said if you want to be a politician, you’re going to have to get a law degree. I said I could never get into law school and I was told that you can get into law school; you just have to talk to the right people.
So I went to law school and I asked them whether they ever had an aeronautical engineer apply for law school, and they said no. I said I’m going to give you a chance to try. And I found that in short order, I was in court rooms designing things, aircraft things primarily, with felt tip pens on easel boards in front of juries. And when I was getting large verdicts against the industry, all of a sudden they were listening to me and making changes that I was never able to make as a young engineer in the industry.
Question: Did you foresee the era of big verdicts that you helped pioneer?
Richard Schaden: I had never really looked at it from the standpoint of money. It was very difficult for me to get a million dollars out of my mouth because I had never seen it in the context of the real world. I had to learn to stand in front of a jury and say, “In conclusion, I want you to send a message back to the aviation industry and I want you to find a verdict for my client in the amount of,” and then I’d have to kind of choke hard and “$2 million.” And then after I got my first $2 million verdict. I was in the elevator and the operator of the elevator had been the jury foreman on the case that I had just tried. And I asked him, I said, “Why did you give my client $2 million.” He said, “That’s all you asked for.” So, I thought, well, next time maybe I’ll ask for a bigger number.
I one time asked shortly thereafter asked for $10 million and the defense lawyer got up and stuttered and said, “He, he, he. Just ask for $10 million.” I couldn’t have paid him to say that again. I wanted to get that number up there twice. So, he gave it to me again and they punished me and only gave me three. So, I found that that system in those days worked well to get the messages to the industry, and we made a lot of changes that saved a lot of lives.
Question: Are there any vital reforms needed in the United States justice system today?
Richard Schaden: I think it’s gradual. We’ve went back 15 years ago, you would say that the Democrat Party, the liberal side of the country was very much in favor of people’s access to the courthouse. I don’t see that at all anymore. I think with the latest administration, their Tort reform people the same party we looked at as being the people’s party will support tort reform today.
Question: What is the essence of a great attorney?
Richard Schaden: Well, I think there’s a big difference between those concepts, a great attorney and what makes somebody effective in the courtroom. Very few lawyers actually try cases, and especially jury cases. In big law firms, what we call the “silk stocking” law firms, they call the people who go to court, litigators. Trial lawyers of the type was my own personal experience is a small breed of people and they usually aren’t the lawyers from the fancy law schools, from the Ivy League law schools and what have you. Those, we call the “litigators.” The real trial lawyers that did the kind of thing that I’m talking about, the kind of thing that Ralph Nader supported substantially, to a large extent, are the street fighters. They’re the people who went to the night law schools, they’re the people who know how to talk to people and live in the people’s world as opposed to the corporate world.
One could argue, what is a great lawyer, but from my perspective doing what I was trying to accomplish, it was the latter. It was the more street fighting people’s type of lawyer, not the smooth extremely academic, well-educated, not that we shouldn’t be well-educated, but the kind of lawyers that can communicate with people. And that’s a small group of people.
If I try a lawsuit in the United States against the aircraft industry today, I could tell you probably within in 12 lawyers who was going to be on the other side, not matter what state I’m in.
Question: Which great trial lawyers do you admire?
Richard Schaden: Well, I would say were, is where I would go. Clarence Darrow, I read everything Clarence Darrow; of everything Clarence Darrow ever tried. What was great about him was he could speak to people in people’s language. He used to say he used one cylinder words. He could speak in a very people’s way. It’s very difficult for many lawyers to get kind of down in the jury box and get grassroots and be able to really communicate with people on a level that can be understood. Especially when we’re talking about mathematics, chemistry, physics, aerodynamics; that’s very difficult. So, it takes being a kind of high school physics teacher, a Mr. Wizard, Mr. Science sort of approach. And that’s what I always tried to do, myself.
Question: Do you have faith in the U.S. jury system?
Richard Schaden: Of all the systems I have seen around the world, and I’ve been in many legal systems in addition to the United States. I think it’s the best I have seen. There is some argument for, instead of having Judges be lawyers that either came from the political arena, or from the practicing arena, to have judges actually educated as judges. I know in Korea, they do that. You go to judge school or you go to law school. And there’s a difference between being a judge and a lawyer.
As far as, in our system, trying a case in front of a judge as a finder of fact as compared to in front of a jury as a finder of fact, I’ll take the jury anytime over the judge. The judges have their prejudices as anyone does, as the jury does. But at least with the jury, you have six or 12 people to spread those prejudices along. You don’t know when you are talking to a judge what he’s thinking, what his prejudices are, what he likes, what he doesn’t like, who he was mad at that morning, or who he’s planning on being mad at the next day. It’s a very scary system when you only have one finder of fact. And you can’t ask the judge; well what’s your religion? What do you believe in? What do you hate? What do you dislike? In a way, you can find those things out from juries and you can make at least a selection process. And again, you get to spread it out over a group of people in stead of only one person.
So, the jury system, I think, works much better for settling disputes and for understanding what the facts really were in a way that are they’re understood by a good cross-section of the peers of the people who are in the trial where, as I say, just a judge trial, you have to live with the prejudices that go along with that one particular individual.
There could be a case made for more of a blue ribbon jury in the case of technical cases. But that has a lot of problems also. I’ve read about it a bit and I think that this system we have for civil cases, which are rare, because not very many countries use juries in civil suits; conflicts between people, or between people and corporations. I think it’s probably the best system I have seen. And even though the juries may not be very sophisticated in mathematics, chemistry, physics, or medicine, they understand the impressions, and that’s important.
Question: How does an attorney’s approach differ before a single judge versus a stable of jurors?
Richard Schaden: Well, you have to really look at the dynamics of the particular courtroom. You have to think, how did the judge get on the bench? If you’re in Federal Court, the judge was appointed by basically the executive branch, the President that was in office at the time he was appointed. And that is what’s called an Article III Judge. It’s based on the United States Constitution, Article 3. Article 3 judges have their job for life. So, that extent, it makes them a bit more objective because they know that if they say something or make a ruling that is unpopular, they don’t lose their job. They’ve got that job for life. And that’s a good thing, and a bad thing.
The bad part of it is, it become kind of a power trip and they realize that they’ve got that power for life and a lot of times, Federal Courts are not very sensitive to people’s needs and people’s conflicts. They believe that they were ordained when they got their robes somehow to deal with more sophisticated issues, like corporations and patents and federal issues. And it’s sometimes hard to get a federal judge to really be sensitive to people’s issues.
Now, on the other hand, in the state court systems, the judges are either appointed or elected and they have a political connection somehow and you have to look and see what that is. And they usually have to get re-elected. They don’t want to say things that irritate people, they don’t want to do things that irritate people, or irritate the corporations that help put them in office. So, you’ve got to look when you get in a particular case, or courtroom.
In the federal system, as I said, the judges are appointed by the sitting President, the Executive Brands of the United States government, and they have that job for life. And it’s very difficult to ever be removed as a Federal Judge. You can say and do some of the worst things against people, against corporations, or offensive things, and you still are there for life. So, that gives them a little level of arrogance, which is difficult. I often say about Federal Judges that they think they were ordained then they got their robes. Not to say there isn’t some very good and very sensitive Federal Judges, but to a large extent, Federal Courts see themselves as very sophisticated and they really don’t see themselves as courts for people. They see themselves as courts for corporations and patents and federal trade issues and what they would consider more high-powered and sophisticated things.
So in the federal system, you have to realize that and oftentimes it is necessary to play to the jury, which is a jury of people. And it’s difficult; you have to assess the whole situation because no matter how much the jury may be on your side, the Federal Judge has a lot of power to totally destroy your case. A Federal Judge can say things out of the side of his mouth to the jury that makes you look like you’re violating justice, it looks like you’re being a bad person and that you’re trying to go in a wrong direction. So, you have to be able to manage that. That’s a whole different thing.
When I try cases against the United States Government, which I have many times, you do not have a jury. It’s always better to have another co-defendant in the case where you have a right to a jury, at least against one party, for example, against the United States for air traffic control, for example, and at the same time against some corporation or airline, so you have a jury at least in the courtroom. And then the judge is under pressure of having to pay attention to the jury and not look like he’s offending the jury, and not totally inconsistent with the jury. So, a jury is a great safety valve in that context. So I always try to do that if I can.
If you don’t have a jury in the federal system, you’re going to have to have to play to the prejudices of the Court, and of the Judge. So, you’re going to have to learn those quickly. And there’s a few tests that I use, for example, to find out where I think that judge may go if I reach a little far on behalf of my client, or push some particular issue. So, it’s much more sensitive.
In the state court system, judges are elected and they are elected by the community, or by the corporations that are in that community. And so they are much more sensitive to being offensive and are much more likely to be people’s courts. So, that’s usually my preference.
I walked in front of a multi-district litigation panel recently where they were trying to remove my case to federal court and the senior Judge on the panel said when I walked up to the podium, “And here comes Schaden again with his never ending quest to stay out of federal court.” So, I have developed that reputation.
Question: What have you learned about the art of reading juries?
Richard Schaden: I never have used a jury selection system. I’ve never used jury consultants. I’ve read novels about them, I’ve seen them in movies, I have always just kind of gone with it from, I guess I would say a “seat of the pants” approach. I find that most of the cases I try are long cases, they aren’t things that would go on for one or two days, they typically would go on for two weeks to two months. I try to wear well with the jury. Learn never to over reach, to confront everything, to avoid nothing, and to be really straight and honest about it. Never over reach. After a couple of days, the best of worst of people understand that and they tend to listen, and they do the right thing. I mean, you might find a difficult person on the jury, but the rest of the jury tends to bring them around.
Question: What is the history of plane crashes, and how has the industry evolved over time?
Richard Schaden: Well, one very interesting way to look at what happened in a plane crash, why the plan crashed, is to follow the history of the National Transportation Safety Board. That board, governmental body, has been assigned the responsibility to investigate, along with plan crashes, all types of transportation crashes. I understand that from the prospective of plane crashes because I worked on it for many years. The National Transportation Safety Board investigative team usually ends up being a team made up of the airplane manufacturer, the engine manufacturer, the avionics manufacturer, and sometimes the operators. In case of an airline, the airlines are fairly involved. There is never anybody on that team that represents the passengers, the people, or the pilots other than in the context of the pilots for the airlines and being employees of the airlines.
So, to an extent, they’re looking at the accident investigation as preparing to defend themselves should a claim be made against them. So, the investigation is kind of like the fox watching the chickens. Right from the beginning, it’s bent in the direction to take the blame or the cause off of the manufacturer of the engine, the airplane, the avionics, or in the case, maybe of the air traffic controllers. In that sense, the FAA is always part of the investigative team, the Federal Aviation Administration. So often you’ll read a National Transportation Safety Board Report as to the cause of an accident. And when you investigate the facts and that’s what we do from a technical standpoint. We do a lot of our technical work and accident investigation work; we find that it’s night and day. I mean, what you read in the NTSB report and what really happened are so different.
I’d hasten to add that usually airplane crashes are a cause of a combination of things. There are many things that go into why the airplane crashed and it may be the crew, in part. It may be what I call “designed induced” pilot error. In other words, the design was such that it begged for the pilot to make a mistake. And that’s not a good design. Sometimes it’s a combination of the crew acting in an incorrect way under much pressure to a simple malfunction, a broken bulb, a loose part, a leaky fuel system, or something of that nature. More often than not, it’s a combination of things, it isn’t any one thing.
Unfortunately, in the system, the cause of the crash is not usually dealing with really why the airplane crashed, it’s just dealing with what are the economic interests? For example, the insurance industry. There are only a handful of insurance carriers who represent the big players like the major air carriers, the Boeing Airplane company, those kinds of entities. So for example, let’s assume we have a large insurance company who carries the insurance for the air carrier, like American Airlines, or United Airlines. And they also carry the insurance for the manufacturer of the airplane, like Boeing. They have to look at what the risk is from the day the airplane crashed. There may be 300 people were killed, or 150 people were killed; a lot of issues. They may have sold off a large portion of their risk for an air carrier. Let’s say 90% to some foreign insurance market, like Lloyd’s or some French market, or combination thereof. And they may have only held on to 10% of the risk, but in the case of the manufacturer, they may have held on to 50% of the risk and sold off 50%. So, they know from day one at the time the plan crashes, where their biggest risk is. They’re better off having it being an air carrier problem then it being an airplane because they’ve sold off most of the risk for the carrier and they’re only holding a small percentage of it. So, there’s a motivation right from the beginning to make sure that the people who on the investigative team are those who are going to protect their financial interests.
The FAA may be looking at themselves as a target from the standpoint of air traffic control or certification of an aircraft, or something of that nature. They’ve got that interest to protect. So, it’s a very complex process. In general aviation, small aircraft, which we do a lot of and have done a lot of over the years, it’s fairly simple because we have an engine manufacturer, an airplane manufacturer and we have somebody from the NTSB who is much less schooled in the aeronautics, in the power plant than the manufacturers who are on the team helping them. So, the result is usually driven by the manufacturer of the airplane, or the manufacturer of the engine.
When you get to air carriers, it gets a little more complicated and the NTSB gets much more involved from a technical point of view. They have a good metallurgical lab, for example. And they’re metallurgical people will look at metallurgical parts. But again, the result is substantially driven by the manufacturer of the airplane and the air carrier.
Question: Is this a system that is disposed to maximal safety?
Richard Schaden: I don’t think that the NTSB does the correct job in protecting the passenger. There are so many issues. For example, if you take a Boeing airplane like the model 737, that’s kind of the workhorse of the world industry. I mean, they only have one competition and that’s Airbus, and for the NTSB to come out and say that’s a defective airplane is almost an impossible thing because it destroys the balance of trade. For example, there are huge issues at stake. So, they come up with some mealy-mouthed cause for the accident that tends to blame it on the crew to make people believe that the airplane is fine; we just had a bad egg flying it at the time. I’ve seen many examples of that. They do work with the FAA and make recommendations with the FAS, quietly, after all the claims are settled and after it’s out of the public eye to try to fix some of the problems. But at the stage of the investigation and at the stage of the accident report, it usually isn’t driven directly in the direction of trying to make the plane safer or aviation safer.
Now I would add that I think aviation has gotten much safer in the last 30 years that I’ve been doing the business, especially in the air carrier business. I don’t think in general aviation it’s gotten much safer. But in the air carrier business, I think there are a lot of things that have gone in the right direction. One, crew training is much better than it ever was. The one single thing that that makes it much better is the simulators are so much better. I mean, I go to school today, these days, twice a year for a week. I’m in flying a simulator for one of the two jets that I generally fly. The training I used to have, back 15, 20 years ago, compared to what I have today, was lame. The training is very good today. And it trains to the least common denominator.
The one thing that has advanced a lot in aviation are avionics. Electronics and flight management systems and navigation systems, like GPS, satellite-based navigations systems. Those things have provided such much better situation awareness to crews. They know where they are better than they ever did. When I started flying freight, there was a young man out of Detroit for the automotive industry; we didn’t know where we were most of the time. We were kind of pointing and one direction hoping we would find something on the ground that would tell us where we were, or some radio signal. I remember flying into Detroit oftentimes looking for WJR, which was 760 hz radio station for music and morning talk show. And I was so glad to get my needle pointing in that direction knowing – I mean, today we know where we are within feet, within a few feet all the time. We’ve got displays, computer displays in front of us that show the airplane, and show where its relative position is and what its situation is in all degrees of freedom. So, the view from the cockpit is so good now that you, I often tell people you only really need one pilot in the dog. You need the pilot to feed the dog, the pilot to bite the pilot if he touches anything because everything works pretty well by itself.
But on the other hand, that switch to automation where you have to monitor that very carefully and oftentimes the automation does something that you don’t think it should do, or something it shouldn’t do. And what’s the answer to that usually? Reboot. Well, if you’re three miles from touchdown, the weather’s bad, you’ve got ice on your wings, you might have to shoot a missed approach, and all of a sudden something goes upside down on you, you better know what it is that happened and you better know how to revert back to basic data and basic airmanship. And that’s the thing it is getting away from the younger, newer crews because they start with automation and that’s what they know. Two weeks before they went to flight training, they were champion at texting on their cell phone. They know how to button push. They don’t really understand the systems from the standpoint of airmanship and hydraulics, and pneumatics, and the electrical systems. They know how to push buttons and how to react to button pushing and messages and so there’s something lost.
But all in all, I think that the system has been made safer by the kind of technology that’s in the cockpit. Aerodynamically, the airplanes have been flat for years. I still say to juries that the Spirit of Wichita is still the Spirit of St. Louis, it’s a high wing single engine model plant, but it costs more and goes slower.
Question: Is there a trend in the types of crashes that occur as a result of the lack of airmanship?
Richard Schaden: Yes. You can go back to a crash of American Airlines in Callie, Columbia, where we reconstructed that and the cockpit regularly and we see the pilots are confused and they’re saying, “What’s it doing now?” “Why is it doing that?” “Why is the autopilot doing this?” “Why is it turning us in that direction? I thought we were supposed to be going in this direction?”
In the simulators where I spend probably 12 days a year, even these days, flying different airplanes. The comment that I hear more often than any, either from the instructor or from one of the crews I’m flying with, or from myself is, why is it doing that? It’s not supposed to be doing that. So, I mean, that is a common problem.
Airplanes have been flown into the ground; they’ve been flown into mountains. In Callie, Columbia that was the case, it was flown right into a mountain because the automation, the flight management system basically flew it right into a mountain. So, we have seen that.
The other thing we are seeing is, there’s a lot of use of composite materials as compared to metals. Metals we had a pretty good understanding of what their strengths were their ultimate strength, their fatigue strength, their compressive strength, their tensile strength, what have you. Composite materials are just coming to age in terms of homogeniality, in terms of being consistent and having exactly the same properties all the time because they are evolving so fast. We had an American Airlines crash out of JFK here bound for the Dominican Republic, probably four years ago. That was the case where the vertical tail came off. It was attached using composite structure, of composite materials rather than metal materials and the tail broke off. A great example of what I was referring to before though, the NTSB investigation really didn’t want to ground the Airbus, so the investigation substantially pointed at the crew claiming that they put in rudder inputs that caused the tail to break. Well, at the speed that they were at, which was well below maneuvering speed, a pilot in airmanship that had learned to be a pilot from days gone by, would have used any kind of control inputs they could use to try to recover the airplane when it got in the vortex behind the airplane ahead of it, which in that case, I believe they were flying behind a JAL Japan Airlines, 747, which sheds a pretty good vortex. And they got caught in the vortex and the recovery technique, they used rudders. And so the NTSB had an escape there where they could point to the pilot’s overuse of the rudder to recover the airplane and that’s why the tail broke off. I don’t believe that for a minute. I believe that the reality was that the non-composite materials that attached the tail to the fuselage was flawed material. And you’ll see little bits of information along those lines in an NTSB report, but they work pretty hard at putting it on the crew.
Question: As a young engineer in the sixties, is this where you expected aviation would be today?
Richard Schaden: We don’t have much left in the way of competition in the aircraft industry. When I graduated from aeronautical engineering school in the big air transport area, we had Boeing, Convair, Lock Heed, General Dynamics, Douglas McDonald, etc. Today there basically is one company in the United States, the Boeing Airplane Company. In general aviation, we had many more competitors. So, there isn’t a lot of competition in the business, certainly within the United States, even on the global basis. What we have on a global basis is Airbus and Boeing, and that’s it. And we’re very limited also in general aviation in that respect too. There’s not a lot of competition.
The advancements have now been, as they have been in many areas in life, been in the IT area, or in what we call technology today, which basically means electronics. The airframes, that’s the airplane itself and the power plants have been fairly flat in progression. I expected that today, we would be flying higher, much faster. I thought we’d be flying more in the outer edges of the atmosphere and we would be aerodynamically much cleaner than we are. Part of the problem is to get an airplane in certification is such a long, terribly expensive, capital-intensive project today that it’s almost impossible. So many people have tried, for example, to make the very light jets in the last 10 years and gone totally broke. Probably you’ve talk to them, or seen some of them. I know of no one who has successfully produced a new light jet aircraft.
Question: Is technology in other domains insufficient to move these proceeds along?
Richard Schaden: I don’t think so. I believe the ideas to make airplanes much better and to make travel in the atmosphere and even outside the atmosphere for that matter, is there. And that’s one of the reasons that provoked me to think about this Beyond The Edge project that we’re on right now, and one of the reasons I am here is, we’ve got to find that technology and we have to share it and bring it to fruition. There are many young people, “young expansives,” as I would call them, with ideas that we are not able to get together for one reason or the other. The same kind of problems that I had when I was a young man in the aircraft industry. And also I think that we have some very mature people with some great ideas who really aren’t sharing their ideas today because of either ego or fear of losing control, or financial issues. And what we have to do is create a safe place to bring that kind of know-how, those kinds of ideas, those new thinkers together in a collaborative sort of way so that we can bring it to fruition.
I think there’s just a lot of great stuff out there that’s kind of stuck with no place to go. Either they don’t know how to capitalize it, or they’re afraid to share it for fear of losing their idea, not having control, ego problems. We have to get ourselves into a more broad, I would say, concentric way we have to move well beyond ego concentric to what Andrew Cohen refers to as a cosmos concentric, and at least a global concentric so that we really share outside of the constraints of ego and financial fears, the idea that we have to make them work. And I think that evolving in that direction.
Question: Describe the genesis of your idea for Beyond the Edge.
Richard Schaden: Well I first thought of the idea, my son used to always say about, “If you’re not living on the edge, you’re taking up too much space.” And I was thinking maybe all the great ideas are somewhere in the middle. How do we move them out to the edge and beyond the edge and into fruition? Just off of that one comment. And I got to thinking in terms of travel on the planet, whether it was on the surface of the water, or whether it was on land, locomotion. Whether it was in the atmosphere, or maybe should be outside the atmosphere, and how do you do that in a clean fashion because I look at it this way. We’re 10 years past Y2K, 24/7 we move people up, down, sideways, across the surface of the planet, in the atmosphere, and what have you. And for the most part, we’re doing with hydrocarbon fuels which are having a very detrimental effect on our ecosystem and our planet and the survival of the planet. So, I got to thinking along those lines.
I found the Tesla car, looked at that. Looked at it from the possibility of making an electrical airplane with the same type of technology. It looked like an easy thing to do. Horsepower to weight ratio, that same power plant system could be used in a small airplane without much trouble. Looked at how you would do that. And then I also got to thinking the biggest problem we really have, is we’re moving passengers for the most part, all over the world in the atmosphere in large jet airplanes that are using hydrocarbon fuels. How do you solve that problem? And where is the technology to make that work in a cleaner fashion?
Or maybe the idea is not to fly in the atmosphere at all. We started looking at that. So, I thought, “Well, I’ve got to go find those ideas.” Find out where those people are, where that technology is and how it can grow in the direction to cause clean travel to come to fruition.
Question: What role will you play in Beyond the Edge?
Richard Schaden: That’s what I was looking for when I started. What role will I play and how would I find it. It’s been amazing, that since I started in a short period of time, some people have come together very well. It was a great pleasure that I met with Peter Diamonds and his Xprize Foundation and how he was able to leverage people to compete and come up with the best ideas to accomplish a particular feat. The first Xprizes, as I understand, was for a kind of a suborbital flight into space, which was given to Burt Rutan, and Paul Allen. What a great way to get people to spend a lot of resources to accomplish and to bring to fruition the best ideas. I thought that was great leverage.
I was able to talk to some physics professors that came up with some new ideas for collecting solar energy. The sort of things that would help tremendously in aviation and clean power. So, all of a sudden, I’m starting to find that there are a lot of people that really want to do this. There’s a lot of great ideas out there and some of the ways of bringing them together are in the competition arena, which I think is really wonderful. And I’m looking for other hooks to do that, but many nights I go to sleep thinking, you know, how am I really going to do this? I’ve learned this today, but what’s going to come up tomorrow. And every day, I find a better way to bring people together. And I think it’s evolving rapidly to a point where we’re getting the best minds to be able to share on a very legitimate and authentic basis without fear of ego.
And what I’m trying to do is create a safe place for these people to collaborate and now have the fear of losing their identity, losing their financial position, somebody stepping on their ego, to get people to evolve beyond that. And I have the sense that it’s going to work real well, and it’s going to happen real soon.
Question: How do you see this idea of a safe place for collaboration manifesting itself?
Richard Schaden: Well, it’s interesting because although I refer to myself as an aviation person, as an aviator and a trial lawyer, I got dragged into business kicking and screaming maybe 20 years ago. I am my second oldest son’s partner in the food business, which is a quick-service restaurant. We have two concepts plus a food purveyor company, a computer company, a restaurant equipment company. And we control or have maybe 6,000 units throughout the world. As a result of that, kicking and screaming, I’ve had to learn business, which was never – to me I used to call it the “soft science” but I actually find is fairly sophisticated. Although it’s not my passion, I’ve learned about business and the business acumen that was necessary to make all of that work and I give much credit to my son, Rick, who is Richard E. Schaden, for I mean, he’s basically created that and I’ve been a great beneficiary of it. But it has given me a view of how to do these things also from the standpoint of the capital that’s required. And we have some great partners in the capital world.
So what we can bring to the table, you know, for of all was the technical understanding and the conceptual understanding of mathematics, chemistry, and physics, which was my original passion. We can bring the legal acumen because we’ve got a lot of experience in the legal arena, not only in the trial of airplane crash cases, but now in the trial of many business cases because we always have what we call litigation going on in the franchise world, which we are very involved in now. So, there’s the legal side of it, and now we have the business side. So, it’s really a three-pronged thing.
Sometimes it will just be a matter of taking a great idea that a young person has and helping them find the information that’s necessary to bring it to fruition and the capital. And without the fear that they’re going to have to give something away to do it. I’ve had many experiences just in the last month of being able to talk to young engineers, or “young expansives” as we call them, with great ideas and being able to help them along the path to making it real.
Question: How does this compare to traditional venture capital?
Richard Schaden: Well because the capital part of it is, my own cash is a relatively small part of it. It’s the conceptual ideas technically, mostly from a science prospectively. I often talk to venture capital people or investment bankers that are looking at ideas that have a science base. And they understand just what they need to know to understand how to talk about that particular product, or that particular idea, but they don’t understand what’s right next to it, and they really don’t understand science from a conceptual standpoint. I’ve heard, for example, more people trying to raise funds for storage of electricity. Various battery systems, or propulsion systems, or airplane systems, but the people in the venture capital where they’re talking about it really don’t conceptually understand it. And that’s what we want to bring to the table.
Question: What are the domains that have the greatest potential to unleash waves of innovation?
Richard Schaden: Well I think what’s on the table right now is the clean travel, alternative energy. I mean, we’re bumping up against a lot of other ideas when we start looking at this. For example, if we’re looking at electrical power for powering electric cars, or electric airplanes, we still have to look at storage systems to store that power. And Lithium Ion batter is the current brainchild; it’s the favorite among scientists. And it’s the favorite among industry. And then I started thinking, but where does lithium come from? And I started looking at water concepts, reverse osmosis system water, and what he byproducts of that were, how lithium can be a great byproduct from what is being manufactured as RO water, Reverse Osmosis System water. So, it’s branching out well beyond the simple issue of locomotion and green travel.
Question: How would you formulate the parameters of a prize to achieve the outcomes you are looking for?
Richard Schaden: Well, again, it’s a very evolving process. I’ve been thinking about it a lot. I think that competition works really well, on the other hand, I don’t think it’s the only way. I think that there is a real change happening in human kind in this world. I think there are a lot of people who really want to improve the culture that we live in. We have lots of cultures on the globe, but they want to think more on a global basis and share ideas and I’m working every day on trying to find the best way to do that. Right now I like the competition approach, the prize, I was going to say it is very similar to running for the United States Senate, you know, you spend $7 million to get a job that pays $150,000 a year. But that’s great leverage. You get a lot of people working and doing lots of things. And that competition prize sort of system seems to work pretty well.
So one of the things I am doing now is looking at some of the things that would be a good design for a competitive project. I’ve been looking a lot in the last month or so, and there are a lot of great ideas up there. I love the idea, for example – and this idea came to me through Peter DeAmandis and I’m not sure where it came from originally, but rather than carry fuel in the airplanes, for example, to beam fuel up either on a microwave basis or a laser basis from the ground up to the vehicle rather than having to carry it. And that way I think it could be done with clean energy and without carbon fuels.
If you look at a microwave oven, the microwave really excites the particles in the matter, in the food and causes it to heat up rapidly. If we had, for example, an element that wasn’t carbon, like hydrogen, in a vehicle that was up in the air and we could actually beam up the energy to excite the particles in the atoms, or in the molecules in the hydrogen, or whatever it is that you store it, that’s a non-carbon fuel, we could create energy and if you wanted to expand that energy through an exhaust nozzle, you would have thrust, for example. Real simple terms.
Question: What are the boldest and wide-eyed visions you have for the future?
Richard Schaden: Well, I’m sure it’s not an original thought by any stretch, but I think that suborbital travel is a concept that makes a lot of sense for scientists to look at right now. You know, the globe turns at 1,000 nautical miles every hour, so let’s take some advantage of that. If you wanted to travel from New York to Sydney, why not get out to the outer edges of the atmosphere, either re-enter, skip off of the atmosphere and re-enter into Sydney, or what have you. You could do it at tremendous speeds, you could do it with a lot less energy, I believe, although there is a lot of debate on that right now. How you do it? It would be a great prize for competition, but that excites me, that idea.
The idea of blasting through the atmosphere at altitudes of 30,000 to 45,000 feet all the time seems to me to be very energy inefficient and also right now we are using a lot of carbon fuels and we are doing a lot of damage to the atmosphere and to the planet.
Question: What’s your understanding of the issue of today’s lack of scientific transparency?
Richard Schaden: Well, ego is a big issue because people like to be connected with what they’ve created. Money, obviously making money and having power is a very important thing tied to ego and certainly gets in the way of sharing and people being willing to release their ideas. I think that for me, it’s very possible to create a safe place for young people with good ideas. It’s a matter of trust, it’s a matter of people trusting each other and having no fear that they’re going to be taken advantage of, or being hurt from either an ego standpoint, or a financial standpoint.
I think you have to do it by raising the level of consciousness of people, particularly in the scientific world to a point where they really believe that we have to improve our culture. We have to get unstuck from where we are. I don’t have much trouble communicating with scientists on that level; to me it is very similar to communicating with juries. Personally, I don’t have a lot of trouble with that, I think that I’ve been able to make a few young engineers feel very safe to disclose their information to me and trust me with it. What I’m trying to develop is a system of what you call, mature scientists and expansive thinkers that can do that – that can make a safe place for people to share ideas. And that’s the work in progress, that’s were we are evolving.
Question: What stakeholders could help advance this shift in the scientific community?
Richard Schaden: Every day I meet more new ones. I think that in the last month or so, I’ve met some that I – some whose name I can give freely like Peter Diamandis, I think he is great along these lines. He was a great find for me. I think that some people, in terms of helping expand the level of consciousness, people like Andrew Cohen from Enlightenment Next, I think that kind of teaching will help tremendously to expand people so that they will work for the good of their culture as compared to the egocentric kind of inventors that we have really had historically. So, every day I am meeting more people that I think will make this inner circle work. And I’ve met several people whose names I wouldn’t feel real freely to give right now because I don’t think they would feel safe. But I think they will very shortly.
Question: Do you see any radical leaps forward coming in other aspects of mass transit?
Richard Schaden: Well, it’s interesting. I’m driving 100% electric car, for example, the Tesla, which is a great concept because I think Tesla has done what needed to be done to let people know that to have an electric car didn’t mean you had to be driving a breadbox, ugly looking green sort of thing that we might find in Boulder, Colorado, but you could actually look kind of sporty and go fast and it’s a great performer and a great little car, and it’s 100% electric. I think that we still have to look at what it costs to make the electricity and how much carbon fuels were used to make the electricity to store in the car to make the car go. But It’s a great performer. It’s highly competitive to a Porsche in terms of performance, I think that is great.
Not that it’s new and innovative, but electric boats are very easy. That’s why there aren’t more electric boats. It’s hard for me to imagine, but at Christmas time I rented a 100% electric boat and spent Christmas Day on an electric boat. It works fine. It has a lot of advantages over carbon fuels and motors and internal combustion engines, and diesel engines, and what have you. So, I think that’s another area where we can do real well, and the ocean is a bit part of my own passion. And I do a lot of sailing, which is another, again not innovative, but there has been some real new innovative ways to make sailing more efficient and even more available for commercial use. I think that some of the things in sport sailing could be some of those ideas and some of that technology could be really transferred to commercial shipping. I love it because it’s a combination of aerodynamics and hydrodynamics. So, that’s great. So those are some things other than aviation, those are on the surface.
And then, the idea of traveling beyond the atmosphere is, you know rocketry and space mechanics are also very interesting because I think they can solve a lot of problems.
Question: What are the factors contributing to the stasis in the field of transportation?
Richard Schaden: Well one of the problems is that we have a regulation system that makes it very difficult to take risk to try new things. For example, if you tried to design a new airplane today, many things that inhibit airplane design are the Federal air regulations. Now, on one hand, that’s real important from the standpoint of safety, but it makes it very difficult for innovation because we’re stuck in these old regulations that were the design criteria that were back – basically created back in the mid-‘50’s, or even before that for air transports.
So, that part of the infrastructure, if you will, call it infrastructure, is inhibiting rather than helpful. Understanding that it’s necessary for safety, there just has to be another way to be able to advance this technology and to take the risk for new ideas without having the infrastructure prevent that from happening. Things – so many aviation ideas just haven’t come to fruition because of the infrastructure.
Another problem is that the regulated have become the regulators. To a large extent, in the aviation industry we could say that the Boeing Airplane Company certifies their own airplanes, or tells the FAA when they’re going to certify them and how they’re going to certify them. So, the system has kind of turned around on itself a little bit.
Question: What could the government do better to regulate and incentivize advances in mobility?
Richard Schaden: I think listening to people that have expertise in the areas, or in the fields of transportation rather than, and I’m talking about people as compared to corporations that are in control of the economy, and I want to make that distinction. I think there are a tremendous number of people that never get listened to and if you go to Congress and you go to a Sub-Committee and to a hearing and what have you, all of the people who testify for the most part are the heads of industry. The heads of the airlines, the heads of the airplane manufacturer. We need to get some of the people out of the universities. We need to get some of the ideas out of the hangers, out of the experimental aircraft association, some of the grassroots people who have some great innovative ideas and get the people who are in control of government to listen to them.
One of the things I loved about the courtroom is, to a large extent, we had the experts we used were people from the university. They were people that were learning and teaching as compared to people who were in control of industry.
Question: What can businesses do to help catalyze the revolution?
Richard Schaden: Well one thing that would work would be to have some system in place where Congress listens to the teachers and the students from the academic institutions, some of the cutting edge academic institutions. I know at the University of Colorado where I work substantially, there are some great things going on in the minds of young people and there’s some great things going on in the laboratories. But that’s where they are. You know, I want those things to be on the floor of Congress to be competing with the industry input.
I grew up in Detroit where when I was in high school, the phrase was, “What was good for General Motors, was good for the world.” Well, we all know better. We knew how to make vehicles when I went to the University of Detroit in mechanical engineering; we knew how to make vehicles with very high qualitative fuel usage per mile, or per gallon, as compared to what they did. I mean, the idea of driving an internal combustion engines with 12 mph fuel usage was ridiculous. But the industry perpetuated that for 40 years. And to have to have that challenged. They knew how, in the universities and in the labs and in the best scientific thinkers years ago knew how to fix that problem.
Question: What are the questions that Congress should be asking transportation innovators today?
Richard Schaden: The first question I would ask is, how do you fly through the atmosphere with a fuel that is alternative to carbon fuel? That would be one of the first questions I’d ask. What’s out there? What can we find, and how can we find it, an alternative to a carbon fuel for flying through the atmosphere? Or, to reduce the use of carbon fuel by say 50% or 75% and that would be the result of clean air dynamics.
So, how do we make aerodynamics clean enough so that we use half the fuel we use now? I think that Burt knows the answer to that, and I don’t know Burt that well, I know of him, I think he knows the answer to that, but I think that he would say that it isn’t being done because I can’t get it by the regulations, or we can’t get the capital, or we can’t get it through industry, we can’t get it to fruition in the foreseeable future.
Recorded on January 25, 2010