Importance of Startup Businesses

Chris EdwardsThisCato study examined the role of startup businesses and the angel investors who fund them. It discussed how startups create jobs, generate innovations, and inject competition into markets.Covering some of the same ground, a new piece in theWall Street Journal by Christopher Mimsdiscusses differences between large and small high ‐​tech firms. Compared to large firms, small firms tend to have less bureaucracy, assume more risk, act more quickly, and may have better worker incentive structures.The moment Noam Bardin, former chief executive of navigation app Waze, knew that life at a big company would be profoundly different from running a startup came soon after he sold his company to Google. ‘The first few weeks after the acquisition, we began dealing with the bewildering corporate bureaucracy,’ says Mr. Bardin. ‘What seems natural at a corporation —multiple approvers and meetings for each decision—is completely alien in the startup environment: make quick decisions, change them quickly if you are wrong.’… big companies of every sort tend to give their employees incentives to be cautious rather than bold, to pursue overly complicated solutions rather than simple ones, and to seek promotions over serving the customer.[The findings of a new study] show that when inventors join large firms, they get a pay bump, but they also produce fewer new innovations, relative to inventors hired by young firms.… At big companies...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs