Brainchip Business Model

I remember reading a book many years ago called Kane & Able that traced the lives of two business people, one from humble beginnings and the other from a privileged background. There is a scene described where Kane starts work at his father's bank. He introduces the concept of banking: "Son, come and look out the window" (from the 31st floor of their Manhattan offices) "see all those businesses, factories, people and real estate? They all work for us."

Bank's better than any other business understand the concept of leveraging capital.

I perceived (reading through these forums) that some people aren't getting the BrainChip business model, so I drew-up the above diagram to explain how I think it operates.

Selling BrainChip IP (that is, the core technology used to make Akida work) to other companies ("customers" in the above diagram) enables those customers to develop highly customised advanced technology products that they can then take to market. Selling the IP (as distinct from just selling an Akida chip) enables these customers to develop more efficient, compact and dedicated devices that leverage the BrainChip IP.

This IP licensing enables the fastest and broadest application of BrainChip's IP than if BrainChip were to develop, manufacture, and distribute it's own consumer ready products. Each of BrainChip's customers are experts in their own markets, have existing distribution channels in place, and understand their area of technology far greater than BrainChip could if it decided to go it alone. In addition, each customer is risking it's own capital developing products and markets that use the BrainChip IP.

Under a license model EVERY product sold by each of these customers must in-turn result in a royalty payment back to BrainChip.

If BrainChip can develop a portfolio of (say) 20 large customers all using BrainChip IP - that's 20 manufacturing operations, 20 sales and marketing departments, selling 10's of thousands of products to many different markets all over the world.

But 20 is just a starting point I chose for illustration.

What if it becomes 100 customers?
1,000 customers?
10,000 customers?

How many technology manufacturers are there in the world?
What if BrainChip only captured 5% of the edge IP market?

Do the math.


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Just my musings.
Don't base investment decisions on my posts.
Be warned - I know nothing.