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What is Research & Development (R&D)?

What is Research & Development (R&D)?
on August 25, 2023
What is Research & Development (R&D)?

Launching a new product without going through the research and development process is a recipe for failure. Without research to back up your product, you have zero background knowledge. You don’t know how it will do once it’s in market or how your target audience will react. Is there even an actual need for it? You could end up with little to no sales, and for a startup, that kind of failure is a huge blow—one you might not be able to come back from.

Before putting something new into the world, your startup needs to go through an R&D process—but what and who is required to create that process and put it in motion? The answer is simple – a solid team of R&D experts and a strategy to set your product launches (and your business) up for success.

What is research and development?

Research and development is the process of investigating and exploring new processes and technologies in order to create new products, services, or systems. Along with that, research is also used to improve existing processes and techniques to help a business become more efficient. 

The end goal of an R&D team is to create an innovative solution to a problem based on the research they’ve done. There are three types of R&D: applied research, basic research, and experimental development.

Basic research

Basic research is the exploration of a field to gain new knowledge or an understanding of the underlying principles, usually done without any specific practical application in mind. 

For example, someone might do research into the current financial landscape to get more information on industry trends and the economic environment but not have a specific application for that knowledge. 

Applied research

Applied research involves finding new information through the same methods as basic research; however, there is an intended goal or application for the findings. There are different types of applied research:

  • Evaluation research: Evaluation research seeks to measure and assess the effectiveness of a program or activity – for instance, a study conducted to measure the success of a new marketing campaign. The research would measure the number of sales, customer feedback, and other metrics to determine if the campaign was successful.
  • Action research: This type of research is undertaken in order to solve an immediate problem. For example, a team might try to find ways to solve an inefficient manufacturing process that’s wasting company resources. 

Experimental development

Experimental development is the process of taking research results and applying them to create new products or services. This could include creating a new prototype of a product or building new software to increase efficiency in a department.

The basic process of research and development

R&D is complex and changes from one company to another, but some core phases are common to every R&D process—research, development, testing, and launching the product.


This is the first phase of research and development, where the goal is to identify a potential market need or opportunity and see how feasible it is to fill that need. Let’s say your startup company is creating a new vacuum cleaner that is more effective than the leading brands at picking up pet hair. While your team researches, they’ll look into: 

  • Market research and analysis: This involves the process of researching and evaluating the size, competition, and other factors that affect the profitability of a particular market.
  • Patent searches: Your R&D team will need to research the patent database to determine if the new product or process has already been patented.


This phase involves the development of the product and depends on the research your team conducted. During development, your R&D team will work on a design of the product, which may include working with an engineer to build a completely new product or refining your product concept to address customer feedback.

So if your company is building that vacuum cleaner, during the development phase, they will examine designs for a more effective vacuum, which might include better brushes or a unique detachable piece. 

Once those designs are ready, your team will determine what technology is required to build the product and then create the prototype. The prototype should look exactly like the vacuum cleaner that is going to market so that the development team gets accurate feedback. 


This phase involves testing the product to ensure that it meets the requirements of the potential customer base. The team performs various tests to ensure that the product works correctly and is easy to use, such as:  

  • Laboratory testing: Perform experiments on the product to ensure it meets standards and doesn’t have any defects. 
  • Usability testing: Make sure the product works correctly and has all the functionality it’s supposed to have. 
  • Performance testing: Run the product through several tests to see how it performs in various scenarios. 
  • Security testing: If your product needs security measures (like software that stores customer data), run extensive security tests to look for any possible code errors or other issues that a hacker could exploit. 
  • Accessibility testing: Ensure your product is accessible to those who might need accommodations to use it.

During this time, identify any areas for improvement so your team can refine the product based on your tests to get it ready for launch. If you test your product with focus groups during this phase, monitor how your potential customers interact with your product so you can adjust based on their feedback. 


In this final phase of research and development, the product is ready to go to market. But your R&D program doesn’t end here. Your team should continue refining the product as needed based on feedback, market trends, and industry standards.

The benefits of investing in R&D

Research and development is vital for businesses, especially startups. It gives your team valuable knowledge and insights into how your new product or service will fit into the market, but along with that, R&D investment brings other undeniable benefits to the table. 

R&D allows your startup to compete. You’ll need innovative products and services to stand out from the other companies that are already out there. With R&D, you gain insights into the current market needs and can identify gaps in your industry. Those insights help you create products and services that fill the gaps and meet the needs of potential customers – unlocking a competitive edge and, consequently, increasing profits. 

In developing products and services that are more attractive to customers, you increase your chances of high customer satisfaction and lifetime value. That means loyal customers and brand recognition for your new company. 

The information your team gleans from their R&D efforts might unveil cost-effective ways to develop, enhance and manufacture products. These newfound efficiencies streamline the production process, saving you both time and money. Additionally, R&D ensures that the products you make will be of the highest quality since you’re doing extensive research and testing before they ever go to market.

How to build an R&D strategy

Money is tight as you work to secure funding—ensure that your company’s R&D strategy is rock-solid so you don’t waste precious R&D spending and time. 

Set your goals for R&D

Your first step should be to set clear, measurable goals for your team. So if you’re designing that new vacuum cleaner, set goals like “design a new attachment tool with 30% more suction power.” Develop a timeline for your goals. Tell your team to come up with a solution for more suction power in three months’ time so that there is a deadline. 

Plan each milestone and what deliverables you want to see at each stage. A month after the team comes up with a suction power solution, you’ll want to see a working prototype for the attachment tool. With each milestone, the team will feel like they’ve taken a big step toward accomplishing their final goal of creating a new, more efficient vacuum cleaner.

Once you set your goals, you’ll have a better idea of what resources you’ll need for your R&D strategy, including the number of employees, their expertise, the technology, and the financial resources to allocate. 

Define your budget

Once you have goals in mind for your R&D department, you can define your budget for the team and its various projects. Start by looking at all of the estimated R&D costs for your team. You’ll need to consider personnel costs, including salaries and benefits, as well as supplies, equipment, and other R&D expenditures. 

As you plan, give yourself some wiggle room in the budget. You want to factor in any unexpected expenses or contingencies that could arise during the R&D process. Also, add in any potential sources of funding that your company might get. These could be loans, grants from nonprofit organizations or local government, or tax incentives to help you with employee salaries and product development. 

Be sure to monitor the progress of the R&D team to ensure that the budget is respected and the money is used efficiently. If necessary, make adjustments to the budget to ensure that the R&D team is meeting its goals—but be judicious with your changes so you don’t spend money that you don’t have.

Structure your team

An R&D team is responsible for ensuring the process of building new products goes as smoothly as possible, from conceptualization all the way through implementation. The people you choose and their experience will either drive your R&D efforts or completely stall them, so choose wisely. 

A typical R&D team could include engineers, product designers, project managers, market researchers, and technical writers, depending on the type of products you’re creating. Each member plays a vital role in the R&D process: 

  • Scientists are responsible for conducting research and experiments necessary to develop new products and services. They analyze data, identify trends, and develop innovative solutions to problems.
  • Technical writers take information from scientists and engineers and turn them into clear and concise documents that can be used to communicate with other departments. They create user manuals and other documentation to help end users understand how to use the products. 
  • An engineer is responsible for designing and building the products and services developed by the R&D team. They use their engineering and mathematics knowledge to design efficient, safe, and cost-effective products. 
  • A product manager is responsible for managing the entire product development cycle. They create the vision for the product and guide the team in developing it. They must also coordinate with other teams to ensure the product meets customer and business needs.
  • Market researchers look into current market trends and provide vital information on the product’s target market and customer demands. Their research allows the team to build a product that will be highly relevant to the audience.

When you’re hiring the people that will make up your R&D team, zero in on their experience. For example, seasoned researchers will have the knowledge and expertise necessary to sift through lots of information and can steer your team in the right direction. You’d look for individuals who have the skillset and a proven track record of: 

  • Researching new technology, materials, and methods to create new products/services for a company
  • Offering feedback on existing products and processes to improve them
  • Working with other departments as needed and communicating progress clearly 
  • Staying up to date with industry trends, market conditions, and customer feedback to easily make adjustments to your business’ products and processes.

Invest in the right technology

Ensure that each team member has the technology they need to do their jobs efficiently. For example, does your engineer have the software necessary to design the product? Does your project manager have access to a centralized platform where they can track the development cycle? Your researcher might benefit from AI software that can quickly distill lots of information and identify trends.

Before you start a project, sit down with your R&D team and ask them what resources they need to do their jobs. Look at the goals and budget you defined as well, then work together to find a solution you’re all happy with that doesn’t overtake your R&D budget. 

Create processes to keep track of the R&D projects 

Keep everyone on the same page for all R&D activities. Put processes in place for each project so that nothing falls by the wayside and everyone can keep track of project assets, progress, results, and roadblocks. 

Having clear processes in place helps your team stay organized and productive and helps your R&D team’s project manager with their job duties. Determine who is in charge of the team, who will report to whom and how often, what needs to be reported, where you’ll store essential project information, and who has access to what information. If meetings need to take place, define how often, who should attend, and what each person needs to come prepared with.

Find a project management software like Jira or Asana to track project progress, ensure seamless collaboration between the team, and provide easy access to project data. 

Build a company culture that encourages innovation

Your company culture should encourage innovation so that your R&D team feels empowered to collaborate, share ideation, and think outside the box to come up with new products or processes. 

A culture promoting innovation also helps break down barriers between departments and bring teams together to solve complex problems. Create this kind of culture by:

  • Asking employees to speak up and share their ideas.
  • Encouraging team members to work together to brainstorm solutions for a specific problem your company is facing. 
  • Telling your employees that it’s okay to take risks.
  • Celebrating failure as a learning experience.

Maximize your research and development efforts with R&D tax credits

Once you have your R&D strategy going, start looking for funding that can supercharge your company’s efforts. Each year, the US federal government gives out $500,000 in tax credits through the US Research and Experimentation Tax Credit program. 

Find out more about how you access those tax credits here or talk to a Boast expert today to learn whether you’re eligible for the program.


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