Should Your Tech Company Invest More in Research?
Let me put my cards on the table. In tech, both sides of R&D — research and development — are very challenging, but I must confess that my heart beats stronger for research. This is probably because research is ultimately about challenging the status quo. You imagine what things could be rather than what they are, and try to come up with solutions to make that change come true.
Google is one of the best examples of impactful research. The tech giant got its start at Stanford in the ’90s as the result of a research project that aimed at creating a ranking algorithm, to help people access the most relevant web pages. The efficacy of that algorithm is on the foundations of Google and made it possible for them to take over the search engine market at a time when several other search engines were already established (who remembers Excite and Lycos nowadays?). The outcome of this research was so impressive that we don’t “search” online for anything anymore; we “Google” it. In the meantime, they continue to bet a lot of their chips on exploratory research.
Research — and some pretty good marketing — is also what SpaceX has been doing by creating and improving new types of space rockets. In 2018, they even managed to launch a car into space! However, getting the car up there was not the goal. They wanted to design new technology and prove that it works in front of the whole world. We now know that rockets can launch large objects as far as the orbit of Mars, returning to earth to be reused, and it was project SpaceX that discovered how to do it.
I would love to say that groundbreaking research projects are the way to go for any credible tech company and proudly finish this article here, but the fact is that this isn’t always true. Tech companies must have the ability to explore new ideas, but there’s more to success than just research. Particularly, you need to have a solid and experienced product development team to transform ideas into fully working high-quality products.
The question stands: when should your company invest in research projects?
Before answering that, we need to answer another question.
What Exactly Is Research?
(And isn’t every product development team doing it already?)
To skip philosophical discussions and reach an actionable answer to this question, let’s get back down to Earth to discuss… dinner parties.
Imagine that tomorrow you’ll have to cook dinner for ten very important guests — let’s say they are prospective customers or, better yet, your new partner’s family that you’re meeting for the first time — and that they’ll be arriving at 08:00 PM. Since you want to please them, you think about what you’ll cook for dinner, and wisely consider a few options:
- Spaghetti: You’ve cooked spaghetti many times before, you know the ingredients, can predict how long it’ll take to cook and know the result is quite tasty. You just need to get home before 07:30 PM and dinner will be under control. You may not impress your guests, but you won’t disappoint them either.
- Duck à l’Orange: You’ve heard about this emblematic french dish before, but you’ve never cooked it yourself. Fortunately, other people have, which means you can find many recipes online, choose one and follow it. In any case, it would be wise to get home earlier than usual, just in case something goes wrong and you need time to fix it or try something else. It’s a bit risky, but you’re confident something palatable will come out of it and your guests will be, at the very least, impressed with your effort.
- Solar-Cooked Wild Truffle Flambé. Say what? Bear with me. It’s a new idea I’ve just come up with, in which you use aluminum foil to build your own solar oven, and then use sunlight to slowly cook the truffles. Finally, you flame them with cognac in front of your guests, making this the most healthy, eco-friendly and spectacular dish of the three. Pretty cool, right? Just make sure to take the day off to prepare dinner and warn your guests that there is a “slight” possibility that they’ll starve tomorrow night, and help put out a fire, at the same time…
Now, before you — and Google’s web crawlers — think this post is about cooking and not technology, let’s get back to the definition of research and development.
For all practical means, cooking spaghetti or Duck à l’Orange should be considered a development project. You’ll need to go through a few instructions and recipes before you cook the duck, but the risk is low enough that you can plan a dinner party assuming you’ll learn to cook it in time for dinner. Finding the right recipe is not research since you’re scanning through available knowledge for your development project, and not creating new knowledge.
On the other hand, the Solar-Cooked Wild Truffle Flambé would be an actual research project. Why? First of all, you’re not even sure truffles can be cooked using sunlight. Secondly, even if they could, no one knows how to do it and, more importantly, whether the outcome is edible at all. The uncertainty of being able to pull off this dish is too high and you don’t want to risk the dinner party for it. You should probably try to solar-cook truffles a few times and eat them yourself before serving them to anyone else, let alone the people you are trying to impress.
So, when should a project be considered research? Here’s a short and actionable answer:
A project should be considered research if its outcome is too uncertain for the short-term business to depend on it.
In other words, the short term evolution of a product can’t depend on the outcome of research projects. Their goal is to explore potential paths of evolution, some of which may not work. Research projects typically answer two questions: can it be done, and if so, what’s the best way to do it?
Don’t expect the outcome of a research project to be a final product. It should be valuable knowledge, ideally a proof of concept, that’ll help to make product decisions, such as starting a development project to create a new or better product or service. It can also help with understanding the way a product shouldn’t go, which is one of the most invaluable outputs of research.
We can think of researchers as scouts working for the product team. They move ahead in several directions, scouting unexplored ground, bringing back valuable information so that the larger group — the product team — can decide where to go, to steadily move in the right direction.
Now we are ready to go back to the initial question.
Should Your Company Invest More in Research?
Here is a rule of thumb: if your business still has plenty of space to grow by tackling development projects — that you are certain will deliver new products or product features — you are probably better off putting most, if not all, your efforts into development, as it’ll deliver value much faster.
However, if you want your company to become and stay a leader in the long run, you should make room for research, that is, the capacity to experiment with new ideas that haven’t been tried before, figure out what works and what doesn’t, obtain knowledge, and only later use that knowledge to kickstart development projects. Research is what enables you to build products that no one else is offering. If you don’t do it, sooner or later some other company will, and you’ll have to make up for lost ground. This is happening, for example, in the car industry, where a few tech leaders that have heavily invested in researching electric motors, such as Tesla, are forcing other companies to follow and to also start producing electric cars to protect the future of their business.
Deciding to invest more in research is a strategic decision that depends on the status of your business, your market and your goals. Only you can decide if it’s time to invest in risky projects with uncertain and delayed rewards to try and change the game for your business.
Tech Followers vs. Tech Leaders
Ultimately, deciding whether to bet on research also depends on what role you see yourself playing. Should your company be a tech follower or a tech leader? Despite what it may sound like, both have their ups and downs to consider.
Tech Followers
Companies that place all their efforts and budget into development projects to build products similar to others that already exist and for which there’s market demand. Followers don’t bet on technological innovation, choosing to focus on superior product quality, better support or lower prices. They can offer great value to their customers and thrive for a long time.
Tech Leaders
These companies have enough product development projects to support their short-term business needs, and enough research projects to allow them to keep creating different and better technologies that no one has built before. Tech leaders create new markets and generate demand, but most importantly, through technological innovation tech leaders can shape the way we live.
Both types of companies can thrive since the world needs both followers and leaders.
Research at OutSystems, a Tech Leader
Since 2001, OutSystems has been changing how software is developed. We’ve spent years engineering a high-quality low-code development platform used for creating and maintaining professional web and mobile applications much faster than with traditional coding. We have a continuous pipeline of product development projects that are making the OutSystems platform even more powerful, assuring that OutSystems developers have all the features they need.
But as low-code platforms finally become a standard for enterprise application development, we’re also looking ahead and exploring new approaches to developing software that people don’t yet expect nor demand. We do this by increasing the number of research projects, many of which are done in collaboration with universities (I’ll talk about this in another post).
Since we want to make software development even faster and easier — ideally it should be accessible to anyone — and it’s not yet clear how that can be achieved, we have a steadily growing portfolio of research projects focused on several exciting fields, such as development experience, domain-specific programming languages and AI-assisted development. The goal is to generate new knowledge that will help our product teams shape the future of the OutSystems platform and software development itself.
Are You Ready to Challenge the Status Quo?
At OutSystems, we’re taking on the responsibility of inventing the future of our market instead of waiting for others to do it. There’s a risk factor in our decision, but given the stage we’re in, waiting for other companies to come up with all the solutions would be a lot riskier.
This is our strategy, and you need to decide what’s yours. You may need to focus on product development, or it may be time to risk investing in research to challenge the status quo of your market and field of technology. All things considered, I challenge you to think about it: how much research should your company be doing?
