This is a guide to site content oriented from the investor standpoint as well as information on specific topics of interest to investors not covered elsewhere.
New Sapience has achieved a breakthrough in computing: Compact Knowledge Models (CKM), a software technology that represents human knowledge (as it introspected in human minds) in software. CKM is the result of a multi-disciplinary approach combining state-of-art computing techniques with practical experience in modeling complex real-world systems and an original theory about the underlying structure of human knowledge. CKMs contain, extend and apply knowledge and have the ability to learn in real time. No other software technologies can do this, they are limited to merely processing data and information. Read about the difference between data, information and knowledge.
Solving the knowledge representation problem in a practical compact form has enabled New Sapience to develop a platform for solving problems that have previously proven intractable. These include a wide range of automated monitoring and control applications, diagnostics programs, and other systems where human expertise is required. Today such applications require either person-in-the-loop or extremely expensive, code intensive approaches. We call these CKM Robotic solutions.
CKM provides an internal model of the world or domain that embodies the same concepts and relationships that people recognize as objects of their own thoughts. This model is, by design, completely independent of natural language vocabulary and grammar. This enables our software to process natural human language by interpreting it as instructions to create new knowledge models by connecting existing model elements into new configurations. This process is cognitive learning or comprehension. Read about language and knowledge.
The result is something the world has never seen before: a digital entity with the core knowledge needed to understand the meaning of natural language words and grammar. In short, our technology can do what no other software can do because it is the only software that understands what the words actually mean.
The capacity to understand human language opens a whole new market of language-enabled applications that start at a level of capability far beyond the reach of today’s existing chatbot technologies. Since our software learns, like a person, through reading and conversation, each instance becomes a unique individual. We call these entities sapiens. Read about sapiens.
New Sapience’s founder, Bryant Cruse, is a proven entrepreneur behind two previous successful high-tech companies that employed advanced automation technology to solve stringent real-world requirements. These companies were both eventually acquired by public corporations, providing a return on investment to investors and shareholders.
His life-long interest in understanding the relationship between human knowledge and its objects, in other words, ”how we know what we know” has led him on a path of discovery that has culminated in the achievement of CKM. Read: “How we got here.”
Sean Reineke joined New Sapience in early 2015 as President and CEO. He has developed the company’s strategic and tactical plans for bringing the company’s unique and potentially disruptive technology to market, protecting our competitive advantage and maximizing shareholder value.
He has served as CEO, President, Director and Chairman of the Board of a variety of early-stage firms in the information technology and biotechnology fields over the last 12 years. Prior to that, he held executive positions with Lockheed Martin at multiple locations, including Vice President positions running P&L business areas, strategic planning and business development, and he served two years at Lockheed Martin Headquarters as Vice President, Programs and Technology, for the $10B Systems Integration business area.
Neither the employees or the company are bound by any previous non-compete agreements or other restrictions to operate.
$3M has been raised thus far through three Friends & Family and Angel offerings.
Our CKM application platform, MIKOS, reached a level of maturity sufficient to support applications in focused domains in the second quarter of 2018. At that time the company began our first outside marketing for CKM applications with explorations into medical, elder-care and industrial/robotics control markets. Response has been excellent, and we are already in negotiations for a CKM industrial application to commence early Q3. Contract value is expected to be $4m for the 1st phase of the program.
The market for natural language applications is exploding. Gartner’s Top strategic predictions for 2018 and beyond:
- By 2021, more than 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development.
- Individual apps are out. Bots are in. In the “post-app era,” chatbots will become the face of AI and bots will transform the way apps are built.
- Traditional apps, which are downloaded from a store to a mobile device, will become just one of many options for customers.
The current and future market for chatbots which, sapiens are poised to disrupt, is only a subset of the market their genuine capacity to comprehend language will create.
The market for Robotic CKM solutions is even larger than that for natural language apps since it includes everywhere humans use their knowledge and intelligence to perform a task as they interact with digital systems. Read more.
Ultimately the market for CKN technology extends to every human with access to a smart device, every enterprise that utilizes knowledge workers, and every device that would benefit from integrated intelligence. Read: A Blue Ocean of New Markets.”
New Sapience has a four-prong approach to marketing of the Compact Knowledge Model technology which includes:
- Stand-up our business of delivering custom CKM solutions for our customers on T&M or FFP contracts. In all cases, customers will pay an up-front license fee for use of our core technology in their application. Becoming a free-standing company based on system integration revenues will reduce over-all risk and provide real-world experience that will strengthen our core product line.
- Selection of strategic partners in an expanding set of vertical markets that will lead the roll-out of “Expert Sapiens” knowledge workers (i.e. Customer Service and Healthcare initiatives).
- Select one of the lead technology companies (Alphabet/Amazon/Apple/Facebook/Microsoft) as the initial integrator of sapiens technology into their offerings, followed by expansive licensing of sapiens technology after the lead releases their first wave of sapiens-enabled systems to the market.
- Release of our first consumer product, “Companion Sapiens” that are sold as unique individual virtual entities, dedicated to their “principal” individual.
Human comprehension represents things in the real, external world with internal ideas or cognitions. Taken as a whole, these ideas form an internal cognitive world model. Natural human language is a symbolic code where words map to elements of the internal model. When a person expresses a thought using language they encode information from their internal model into a message. Comprehension of that message by another person (or computer program) is thus totally dependent on decoding the language in terms of a compatible internal world model.
The company’s technology, Compact Knowledge Models, is comprised of a software engine built about a core model of the common-sense world. The elements in this object-oriented software structure are explicitly designed to correspond to the most commonly used concepts used in everyday human speech. The model also incorporates epistemological or meta-knowledge concepts (knowledge about knowledge) and a sophisticated structure of dynamically managed contextual parameters that support comprehension during the flow of a conversation.
A key shortcoming of all previous approaches to knowledge representation has been that they do not scale. Their capabilities advance rapidly in the early stages of development but as they try to tackle the breadth of knowledge required to handle even common everyday language, the required number of explicitly hand-coded processing artifacts increases exponentially. CKM technology has the opposite characteristic. The explicated coded elements in the software are limited to those that support learning new concepts based on a well bounded set of core concepts in the model. Once those learning rules are in place and the model of been built-out to contain the required core concepts, the system can learn an arbitrary number of additional concepts through reading or conversation without any additional explicit coding.
2018 Q4: The company is currently anticipating break-even revenues based on contracts to deliver CKM applications. This will allow the company to begin hiring additional high-quality technical staff as fast as practicable.
2020 Q3: “Tipping Point” Technical Milestone. The completeness and consistency of our Common Knowledge World Model will support unscripted conversation about everyday topics. This milestone is the point that we will be ready to publicize the existence of our technology and to attract the attention of the leading tech companies. Our Natural Language Comprehension Core (NLCC) is expected to be mature enough for licensing to third parties at this time.
2021 Q3: Release of out first consumer product, the Personal Sapiens. This is timed to coincide with the release of any products by our first NLCC licensee(s).
New Sapience is a C Corp, incorporated in March, 2015.
The company has 7 full time employees. Management includes a full time CEO, and the founder, who divides his time between management and leading the engineering team which consists of 5 engineers. Monthly burn rate, which is primarily salaries is approximately $100K.
The company operates on-line and therefore does not require office space or other infrastructural investments.
A final US utility patent, No. 1476.52307L00, “Method and System for Machine Comprehension” was filed in February 2013. The Company plans to follow this with other patents to establish a strong defensive posture for its IP. The Company’s Patent Lawyer is Don Stout, of Antonelli, Terry, Stout & Kraus, LLP, Arlington, VA, a recognized leader in protecting and monetizing IP.
The company has reason to believe that the approach it has taken to the development of software that can comprehend natural human language is the only viable approach possible. Thus the value of its IP can hardly be over-estimated.
While software processing of natural language is a major goal of AI, the community as a whole has abandoned the goal of actual language comprehension and is focused instead on statistical processing of large unstructured text databases to produce structured databases which facilitate natural language queries. IBM’s Watson Jeopardy-playing program and Apple’s Siri iPhone application are products of this line of development. While these applications have some utility for their intended purpose, it is soon evident to their users that they possess no understanding whatsoever of the language they are processing.
The field of AI is extremely active currently, but New Sapience is clearly differentiated from all companies and technologies in the field as discussed in these articles.
Barriers to Entry
When CKM comes to market it is likely that industry-leaders such as Apple, Google and Microsoft, along with the rest of the academic and commercial community involved with natural language processing will soon recognize that they have been on the wrong path. The Company has a carefully devised strategy based on aggressive patent protection combined with attractive licensing opportunities designed to encourage cooperation rather than direct competition with these companies.
More importantly, big corporations do not “turn on a dime” and the same internal culture of software development which has led them to follow the mainstream “big data” approach of statistical analysis of natural language will make it difficult to change course. The Company will have ample time to dominate this new market before any credible competition appears.
Interest in Artificial Intelligence applications in general and natural language applications in particular is at an all-time high. What is more, our competitors are creating a demand for digital personal assistants that comprehend natural language that they cannot meet with the technologies they are currently using. The timing for our company could not be better.
One important timing consideration is, how long does New sapience keep our technology “under the radar” from the big tech companies like Apple, Google and Microsoft. We have identified a technical milestone (tipping point) when our common knowledge core model reaches a level of sophistication sufficient for a sapiens to converse about any common everyday topic and not just in a particular domain that requires custom model development.
We believe this achievement will demonstrate that New Sapience has comprehensively solved the natural language comprehension problem and the scalability issues with respect to knowledge representation. In the meantime, if our success in building domain specific applications attracts the attention of the big tech companies and they pursue us, we will be in an even stronger negotiating position for licensing than if we initiate contact.
Since the company’s technology will be disruptive to the revenue models of major high-tech companies it is prudent to “stay under the radar” at this time and so exposure of the business plan has been limited to select angel investors, a small number of potential strategic partners in vertical markets and potential CKM systems customers.
The company expects to become a free-standing business by the end of 2018 based on custom CKM solutions revenues. While we expand that business, closing on additional financing will allow us to aggressively grow our core development team to achieve the “tipping point” of demonstrating language comprehension across the general common-sense domain in 2020.
At this point the Company will have proven that our solution to natural language comprehension is the solution and we will be ready to offer licenses to leading tech companies. It is a technology that Apple, Google, Microsoft, and others must have access to. Acquisition offers by one or more of these companies seems highly likely.
However, a more attractive option may be to utilize our non-dilutive revenues to accelerate growth. Our Personal Sapiens product, planned to be released within a year of securing our first major licensing, should yield excellent profit margins. This is the type of product that can “go viral” on its own and sell in the millions.
It is our belief that New Sapience has all of the essential characteristics of a “unicorn” company: one with the potential to achieve millions of customers within a few years of its founding, achieving evaluations in excess of a billion dollars. Such companies, whether they elect to go public or remain private, present many attractive exit opportunities for their investors.
Specifically, we expect to use the proceeds to (i) further the development of the Company’s technology, (ii) pay salaries and fees of executive management and those involved in developing the Company’s technology, (iii) pay certain offering expenses and (iv) pursue other corporate purposes. We currently intend for any follow-on financing to be all that is required to bring the breakthrough product and core technology to market to achieve the initial licensing / partnership deals that we envision will provide the basis for explosive growth.
The company’s business of developing custom CKM solutions serves as our contingency plan since it will continue to provide a steady source of non-dilutive income should technical milestones take longer than expected or other adverse factors impact our primary plan to achieve licensing and product revenues.