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Managing a Publicly Funded R&D Project
This is the second of a series of three guest posts about R&D funding for games companies, by Andrew Richards, CEO and founder of Codeplay Software, a company providing acceleration solutions that optimize performance for graphics semiconductor designers and AAA game developers.
In my previous articles I talked about why and how to get funded – Why public sector R&D funding for games developers and How to apply for R&D funding grants. Next, you need to manage the project to get a commercializable result. The project won’t be a success if the technology goes nowhere.
Public Funding: paperwork and deliverables
At all times, you need to remember that public funding is a compromise between completely different types of organizations, with different needs. The public sector needs paperwork, and you need products you can sell. The public sector will use the word “deliverable” in a completely different way from what you will be used to. If you treat the public sector like a customer, your project is doomed to fail.
The public funding bodies will try to lock down exactly what you will produce, because they don’t want to fund you to do nothing. But they are not the final customer, so delivering exactly what makes sense to them will leave you with a bunch of paperwork and nothing to sell. The smarter public servants will understand this very well, and be happy to discuss it with you in person.
Changing research direction
In our first project, we planned to produce auto-parallelizing tools for games developers. We took this idea to developers and it turned out it was never going to work, for various reasons. But we came up with some really good ideas during the project, and so changed direction a little based on customer feedback. This lead to some very valuable IP and some big projects with paying customers.
Changing direction can be a very slow and complex process with public funders. So, it’s best to ensure that your proposals, your reports to the funders, and the way you talk to your funders, minimizes the paperwork impact of responding to customer needs. Public funders may have a particular structure for integrating customer needs into a project. You may need to say you followed those structures, but those structures are unlikely to be something you should actually follow yourself as a small company as they will be too inflexible. Some grants will have no structure for integrating customer needs. You therefore need to ensure your proposals give you room for manoeuvre. That usually means a certain amount of vagueness. Don’t worry, vagueness will not be too much of a problem for public funders, because they are unlikely to be experts in your area.
Managing research time
Your proposal may say you will spend a specific amount of time on a component of work in your project. Usually, they will not look so closely to check each item of work matches what was proposed. So, it is usually best to allow some work items to shrink and others to expand as necessary.
What comes out of this is the absolute necessity to track: time spent on the project, and money spent on the project. This does mean that you need a time-keeping system. Usually, you just need hours per day spent on a particular project. We use an intranet-based timesheet system and then print and sign the time-sheets. Your book-keeper and accountant will need to be able to produce accounts that divide up spend and overheads between different projects. And of course you will need to be able to produce receipts for spending on the project. Often, you will need an “audit”. The audit costs for the project are not as high as you might expect, as long as you have your paperwork in order. It is not like a full-blown company audit.
Ensure that you do not commit to dedicating specific people to spend all their time on a particular project. This can cause serious problems if a customer comes along. You will want to move people on and off the project according to customer needs, as well as the needs of the project. Give yourself this flexibility in the proposal, without directly saying this is what you are doing. The funder will want to feel they are the most important, while still understanding that the success of the project does require you to meet customer needs.
Cross-country projects will need a certain travel budget. This can be a benefit if you export or recruit internationally. Take advantage of those trips to talk to other local potential employees or customers.
You can’t have two public-sector funders fund the same project. This either means splitting what you see as one project into multiple smaller projects, or only having one funder.
What to do After a Project Ends
What we find is that it takes a long time to sign a grant. Therefore, it is best to start early, and try and keep the grant going as long as possible. Year-long grants are not unusual, and extending to 3 years can really help with the company’s ability to focus on long-term technology and market development. It can really be worthwhile looking into your next grant before the current one has finished. Just be careful not to snap up everything: you have to choose what is going to work for your business. You don’t want to be stuck match-funding a project that is not going to do you any good.
We have found that using a range of public-funded research projects allows us to have a long-term R&D plan, to bring in good people, and to expand our network internationally. Make sure you get all of those benefits that make sense for you, but without wasting too much time with the public sector’s need for paperwork.
Types of Grants to Go For
Different grants are appropriate for different businesses in different stages. Some grants are only possible if you can show some level of longevity as a business, so are not worth spending time on if you only recently started up. Other grants are appropriate from day 1, so don’t be put off if one funder tells you to come back when you’re a multinational company. Some grants require large contributions from companies, others require no contribution. So you have to shop around.
These are often no financial cost to the company and a small company will give great experience to a student. If an intern isn’t very good, then you will waste a lot of your time on them, so be careful who you take on. You may be pressured to take on people that are not appropriate for you, so you do have to be quite tough here. A normal staff member may be easier to motivate, or to get rid of if they are not doing the work. Opportunities for internships usually go through academic organizations or networks, so you need to get on the email lists of organizations who produce these. We get interns from EngD courses, from Abertay’s game course, and from HiPEAC (a compiler network, but Black Rock Studios got involved with them, so you should consider it: they do some really good work). The shorter internships are lower risk, but lower potential benefit. We have taken on some amazingly good staff through such schemes.
Early-stage R&D grants
In Scotland, SMART grants are great. I think they no longer exist in England and Wales. Early stage R&D funding often has the highest funding percentage, so they’re great for small companies. There will be local organizations that help you find these grants, and there will be people desperate to get companies to sign up. The European Commission’s Framework 7 projects work for early-stage R&D, but take a year or more to start and you need a university to help you make sense of the rules. They are really worth going for (we are part of http://www.peppher.eu and http://www.lpgpu.org) as they last 3 years and help build up a network. Although a year is a long time in a small company, going for a grant like this gives you a long-term planning ability.
Larger technology development grants
There are grants that fund around a third of R&D. You do need to be sure you can commit to finishing the project, but if you are doing a project where you will own the IP, they can really help funding. You can’t use it for a customer project, but you can run it at the same time as a customer project. Games companies that own their own tools and technologies can be in a stronger position to win contracts. If you work out a cash-flow forecast when you have investment or a profitable contract, a grant like this can boost your IP and your stability.
There are grants for commercializing technology. These can bring in consultants, or cover export travel. Having done a publicly-funded R&D project will help you get these grants. A lot of our sales and marketing work involves the assistances of consultants, instead of employees, so these grants can help pay for those consultants if you time it right.
Conclusion: R&D Funding for long term planning
If you are a small or medium-sized games business you are highly desirable for R&D funding, if you pitch yourself right. You have to present yourself to funders in a different way to how you present yourself to customers. Don’t say it’s about making a great game, say it’s about producing technology that will help you make lots of great games, that you will market and export internationally.
Used right, these grants will give you: more stability, your own IP, recruiting and training new technical staff, more visibility, and an international network. They both require, and enable, long-term planning for a small business. They will not solve short-term problems, but if you set them up in advance, they may bring in cash when you need it most. It can be hard to think long-term when you’re small and it’s a recession, but you may thank your past self at some point in the future if you do.