Importance of Research and Development Team in a Startup
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There is a misconception among the masses that investing in a research and development team is generally for large companies and well-established brands.

Innovation is crucial for any startup but it doesn’t always have to be something inventive or ground-breaking. The modern meaning of “innovation” has evolved over the years. Now, the right explanation of this term is to identify the needs or challenges of the market or society and utilize the research and development team to produce the best product or services.

Startups and business owners should create research and development teams to make their innovations relevant and sustainable. Certain entrepreneurs take inspiration from other companies’ concepts and build their own products. However, without re-modeling and customizing the products to the local market, their objective of building a brand will most likely fail. 

Therefore, to achieve this objective, startups should start investing in a well-qualified research and development team for their businesses.


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But first, let’s find out the meaning and purpose of ‘Research and Development.’

What is ‘Research and Development?

‘Research and Development, also known as R&D, is the process to gain new knowledge or ideas for creating new products, technology, or services. Companies who want to stay in business for a longer time need to build an R&D team to continuously satisfy the consumer’s needs. 

For instance, ‘Cadbury’ has introduced different variations in its chocolate lines such as caramel, Turkish delight, or oreo to remain relevant and exclusive in the market with the help of its extensive R&D team.

What is the Purpose of an R&D Team?

Companies invest in the R&D team to achieve their long-term goals by fulfilling the demands and needs of the consumers. However, there is a variety of other reasons too.

  1. To create and launch new and improved products or services.
  2. Improve existing technology to save cost and time.
  3. Increase efficiency by modifying the business structure and production processes.
  4. To stay ahead in the competitions
  5. Secure the future of the company.

They help a company to survive and thrive in the industry. Startups should also consider building a research and development team before planning their growth strategy. Startup owners can supplement the R&D team with the sales team for better coordination in achieving the company’s short-term and future goals. 

Also read: Startup business idea- Interior design app

Let’s discover the importance of the R&D team in a startup for its growth and securing the future. 

Importance of the R&D Team in a Startup

A well-educated and experienced R&D team can contribute in many ways to a startup. From market research to the development of unique and innovative products, the R&D team is responsible for that. 

They not only help in modifying the product according to the target market but in various other aspects too. Let’s find out how:

Click here to find out the FAQs that every startup founder asks

1. Research new products and services

The basic responsibility of an effective R&D team is to create new products or services or modify the existing ones as per the local market. Upgradation and continuous improvement are crucial for the survival of your business in this competitive industry. 

For instance, brands like Apple, Samsung, and Hyundai are launching new products at every desired interval to stay at the top of their industry. They are continuously making changes in their existing products and services too for satisfying the ever-changing needs of the consumers. 

2. Modify existing technology to increase efficiency

Companies also leverage the R&D team to add or modify the existing methods or equipment that are being used in production. It helps them to look for any faults or ways to increase the production of their products. They constantly look for solutions and are being upgraded to the latest technology so that they can boost overall efficiency. 

3. Identifying the problem and generating the income

The key to effective R&D is to conduct market research thoroughly. It will help them in identifying the problem and requirements of the consumers, investors, vendors, etc. Finding a full-proof solution to the existing problem increase the development of products and services.

These unique products and services help in generating income and maintain the company’s popularity. 

4. Funding opportunities 

A successful R&D team attracts potential customers also by building the credibility of the company. It shows that the company believes in continuous progress and dedicated a whole team to it.  

The R&D team also offers numerous research and development grants for the public sector and even global funding for innovation. Startups are benefited from these grants in launching their products to the market.

Click here to read: Self-funding- How to do it for your startup?

5. Relief in tax deductions

A qualifying R&D is considered for tax reductions as well. A startup can claim R&D tax relief to reduce its taxes. There are various types of R&D reliefs depending upon the size of the company. For instance, tax relief for small and medium enterprises is different from large companies. 

To apply for R&D tax relief, one should mention how their product will be helpful in science and technology and will help deal with the uncertainties caused by other factors. 

6. Offer a collaboration approach

Collaboration contributes to the success of the company whether it is done with other companies or from within. Often R&D team collaborates with the sales and marketing team to create an integrated roadmap and transparency and increase the revenue of the company.

When this collaboration is done with another enterprise, it allows the transfer of talent pool and technology, skills, and knowledge with each other.

7. Building a reputation in the industry 

The R&D team helps in strengthening the reputation of your brand by displaying the positive image of your company. They don’t only help in producing new products but also detect the consumer’s current and urgent needs and create a solution for them.

Your reputation grows when you collaborate with another trusted and established company’s R&D team. It makes your company reach the global market effectively and quickly.

Also read: 8 best CRM for your startups in 2022


Sectors that prioritize the R&D team are the automobile industry, pharmaceuticals, technology and software, the food industry, etc to develop new products with their extensive research.  However, it can help other industries too especially startups to build a solid ground in its initial stages.

Thus, a startup should consider creating an R&D team before expanding its market range and developing its long-term strategy.  It creates a unique selling point for startups.

Generally, companies have their in-house R&D as an internal team but for startups, it can be outsourced too. An outsourced R&D team can also help in achieving the goals by sharing your vision.