R&D pitfalls for start-ups


15 Mar 2010

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Research and development (R&D) isn’t an end in itself, unless the product or service meets a market need, then the time a start-up spends on this is wasted, says Dr Aidan O’Boyle, chairman of the Small Firms Association, joint managing director of Aalto Bio Reagents Ltd, and Bizstartup.ie mentor.

Aalto Bio Reagents started operations in 1979 to meet the growing biological raw material needs of the in-vitro diagnostics industry and R&D has been central to its strategy ever since, particularly as the business is mostly export-based.

“As a technology or science-based start-up you have to ask yourself what exactly you are doing R&D for. You need to establish that there is a demand for something that might take two or three years to develop,” says O’Boyle.

“Start-ups and small firms often have the wherewithal to develop a product, but the problem arises when it comes to marketing, particularly if it’s a ‘high-flier’. This can often be the Achilles Heel of the process and can eat up a lot of a start-up’s costs.”

He says tech or science-based start-ups should take advice at an early stage on the intellectual property aspect.

“There are two sides to that: if you patent your product theoretically you’re protecting it, but not necessarily if you’re only a tiddler of a company," O’Boyle says.

"In this case, it means you’re telling everyone in the world in detail about your product. I think you should think twice about that – ask yourself whether you have the financial and legal muscle to defend your patent, which could be quite expensive. Purely patenting something doesn’t mean someone isn’t going to copy it. If protecting the patent is going run into hundreds of thousands of euro, it might mean a small start-up should consider an alliance with a larger company," says O’Boyle.

By Sorcha Corcoran

Photo: Dr Aidan O’Boyle, chairman of the Small Firms Association, joint managing director of Aalto Bio Reagents Ltd, and Bizstartup.ie mentor