I have no problem subsidizing production as well, since capital equipment purchasing and production validation testing can be one of the most demanding phases of a companies startup with regard to capital. Research costs money, don't get me wrong, but in automotive for instance, one has to purchase all of the production equipment, hire operators, buy production materials from production tooling, and then run months upon months of production validation tests (and re-tests if there are failures, and we EASILY spent north of $150,000 on validation testing for ONE customer, not including our own internal tests which were required for our own warranty info and projections) while not being allowed to ship production goods to the customer. Also, prototype samples are often sold at 10-20 times the cost of a production quality component so can help a companies bottom line. This is a lot of capital and inventory (since you don't just run the samples needed for testing but a much larger production run that the parts are pulled from at random) to sit on while not having any revenue from that customer, hence the difficulty in getting many good ideas to actually be produced and sold (without sinking a company!)

Last edited by Bayern710; 12/29/2011 12:08 AM.