The Methodology

Replacement Value answers: “What would this cost to build if you hired traditional consultants, developers, and agencies?”

The Calculation

For each IP asset, calculate:

1. Strategy Phase: McKinsey-level consulting hours
2. Architecture Phase: Senior developer planning time
3. Development Phase: Full engineering team implementation
4. Go-to-Market Phase: Agency-developed positioning and launch

Multiply by market rates. The result is often 100-300x the actual cost.

Real-World Example

SMO® Portfolio: Using Replacement Value methodology, the 30+ IP assets created in 7 months (Jan-Aug 2025) were valued at $28 million USD—demonstrating extraordinary capital efficiency.

Why It Matters

Replacement Value proves:

• Speed-to-Market: Assets created in weeks vs. months
• Capital Efficiency: Minimal investment, maximum output
• Competitive Moat: Competitors can’t afford to replicate at this speed

Investor Perspective

This metric answers the critical question: “How much value can this team/technology create per dollar invested?” When the ratio is 100:1 or higher, you’re not investing in a company—you’re investing in a value-creation machine.