I don’t think huge companies should be creating brand new products. They should fund and acquire new businesses that are independently run. If you are just tweaking or improving existing products, or maybe copying a competitor’s offering, it’s possible. But trying to innovate inside of something like Google is just too hard to justify the expense. $5 million to a startup would be much better spent which is a drop in the bucket for Google employees’ salaries and benefits. Could $5 million even fund 5 people there?
I work in R&D at a big company, and I think there is some merit to this position.
It is not impossible, but incredibly difficult to innovate within a large company with business processes not designed for it.
The problem is essentially the corporate equivalent of people who post on HN saying they want to make a startup but have no good ideas. If you don't have a vision or value proposition, it is impossible to force it. Simply wanting to be an innovator is not enough.
The problem is even worse if you have management deadlines and bureaucracy. You end up simply picking the top bad idea at the next review cycle and running with it.
New businesses are constrained in the kinds of products they can make.
If you're a VC backed startup you typically have to produce results (=sales or other proof of product-market-fit) within 3-4 years, and work on a product that propell the company to a billion-dollar valuation in 15 years. Meanwhile if you bootstrap you either need very low costs or very fast time-to-market (or a very deep checkbook). And I guess if you can prove very low risk (like opening another McDonalds) you can get a bank loan, but that's a difficult route to take for product development.
Existing companies don't have these restrictions. They can finance projects that take 10 years to pay off, projects that require high volumes to be profitable (no startup could have made the iPhone at that price point), or projects that have a 3x ROI at significant investment.
In return, big companies have cultural problems that can make these things difficult. But it's valuable to have both innovation in big companies and in small flexible companies.
I tend to think the opposite - companies buying potential competition (like the way FB bought Whatsapp or Instagram) serves the public a lot less than letting these companies grow on their own.
That's sad and hope something can be done about that. But that still doesn't mean we should go back and kill the iphone if we can do it. Because then we should go back to get rid of cars (so many accidents) and kill industrial revolution as well (so much pollution)...
yes we should definitely get rid of cars, they don't add anything. you make your neighbourhood walkable and car looses to a bicycle on every metric except showing off who is rich.
