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This article was written under the assumption that startups in general = innovation.


That is generally true.

BigCo has billions in profit from existing products. They can't task big risks. What big innovations have the BigCos done in the last X years?

Startups do crazy stuff. Many fail. Some succeed. End result: Innovation


I think this is a common misconception, this is not generally true: "In 2014, 36.7% of U.S entrepreneurs stated that their products or services were innovative". This isn't to say even unique in the marketplace, but rather just "innovative".

http://www.gemconsortium.org/country-profile/122


what does that statistic even mean?


it means that even from a biased perspective, the majority of startups do not consider themselves to be innovative, in the context of well established, truly innovative work.


Wait. Why can't they take big risks?

They're in a better position to take big bets than anyone else - Google X, Microsoft Research, Facebook's FAIR and others. If they have the right people in house (or can get them), they can take big swings.


Public companies often can't take big risks because they have to justify them to their shareholders and consistently meet expectations. The examples you've listed are all just R&D projects, the expense of which are a tiny line item in the budgets of the companies.

Conversely, a startup has nothing to lose. Early-stage investors know they're taking a moonshot, and they expect only a few of their bets to succeed, so they will encourage the team to swing hard. That's how startups can disrupt established markets with big players: they have less to lose, and don't need to earn buy-in of a large existing company. They can build what they need as they go.

This is also why most acquisitions fail. The team of the acquired company can have difficulty navigating the existing company culture. Often, they're tasked with being a "change agent" only to be identified as a threat by the acquiring company's "immune system" (its existing power structure).


Well, they can take risks, but new projects have to make sense to their bottom line. If you are 10B company and you are looking on 5 - 10M opportunity than it doesn't take much sense for this company. There is great book on this topic called Innovator's Dilemma.


They can take many big risks. They can't take others.

In particular, they can't destroy markets, by creating products that creates the same wealth while capturing a small fraction of the revenue.


it's assuming that the success rate will be so high that it can support a sizable portion of the us economy.

a bunch of destined to fail startups employing a handful of people (paid via owernship and future options) hardly contributes to the economy.




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