Greg Thomas and Peter Cabon, directors at Mi Ventures, discuss why Research and Development is important to start-ups, why they might struggle and how they can innovate successfully.
Most start-ups need to continuously maintain a competitive edge if they are to prosper and grow. In most marketplaces, lack of forward movement through innovation can be fatal over the long term.
In some aspects start-ups have an advantage over their larger competitors when it comes to developing new and innovative product and services. Tighter budgets, less structure and stronger entrepreneurial instincts can feed innovative ideas and allow these businesses to respond to new opportunities faster and more creatively.
At the same time, there is no doubt that juggling the day to day running a business with continuously innovating new product/services is a challenge to most small business owners, both in terms of time and resources. However, there are practical steps they can take to help them develop and commercially exploit new innovations.
Step 1: Take time out to innovate – get together the brightest minds inside and outside the business to review the needs and desires of your customers/markets. Consider new technologies and innovations in your sector and beyond, and brainstorm how they can be applied to create new and innovative products/services that your customers will want.
Step 2: Take advantage of support available – There is advice and assistance out there to help small business innovate. Organisation such as Innovate UK offer advice and grants. Businesses can also take advantage of R & D Tax credits through HMRC.
Step 3: Consider partnerships – The benefits of collaboration with others businesses/organisations can bring benefits in finance, expertise and other resources that result in your share of the spoils being larger than keeping 100% if you launch in the market on your own.
Greg Thomas is a director at Mi Ventures
Sometimes new ideas are almost forced upon a business – changes in marketplace, market behaviour, disruption to an established market by innovation, change or departure by others… all of these things can lead to a development opportunity. In most marketplaces, lack of forward movement can be fatal, so all opportunities must be considered.
For a start-up striving to maintain market position, when considering development it’s important to remember that being short of resources (people/time/money) could actually be a benefit. You will pay more attention to the costs, will spend adequate time ensuring, as far as is possible, that your proposed new direction is commercially sound, and once the decision is made you may be more committed to it than a larger player, because it takes a greater proportion of your resources and has a proportionately larger effect on your business growth. Start-ups may also be more responsive to changes in the course of a development project than a larger, possibly more process based organisation, which may therefore take longer to reach market readiness.
As a further by-product of a start-up’s size, it becomes essential to concentrate on small changes wherever possible as these are less demanding of resource. Such innovations can be easily and quickly brought to market and yet a small change can make a disproportionately large difference to the user. Start-ups must develop to survive, but the cost, distraction and management of development have to be carefully considered and monitored throughout.
Peter Cabon is a director at Mi Ventures