• by Cory Treffiletti , Featured Contributor, August 31, 2011

Start-ups, innovation, and brands: which of these three things don't belong?   You can guess the answer I have for you.  Start-ups and innovation go hand-in-hand, while brands are typically the odd man out. 

Established brands don't create innovation.  They create committees to talk about innovation.  There are certainly exceptions to the rule (for example, Apple, P&G), but for the most part brands are seized by process paralysis when it comes to innovation. 

I can understand why; once you get to a scale and size to deliver products on a mass scale, it can be very difficult to re-engage with smaller groups of consumers.  Some brands try to create innovation groups of employees in a silo who are responsible for identifying, researching and developing innovative extensions of products, but these rarely work because of the culture established by these brands. 

Large brands are risk-averse by nature, because they can't upset the apple cart of their core business just to try something new.  Start-ups constantly talk about "pivots" they make that allow them to follow a path toward developing a profitable solution -- but large established brands are unable to pivot.  A pivot is a quick change in direction.  Large companies can't make large changes in direction.

That brings us to the typical way brands try to innovate: acquisition.  Most brands have an M&A arm that is constantly looking at related companies and products to acquire and use as extensions of their business.  This is why start-ups exist -- to feed the M&A for larger, more established companies.  Whether it's a matter of packaged goods, technology or software, M&A fuels growth.

So where am I going with all this?

Too many people create companies just to get sold.  I like to create companies to solve problems; if you solve a large enough problem, then someone will buy you.  Innovation is the process of identifying challenges and developing solutions, so I see start-ups as the best source for innovation. If you're considering working at a start-up in this market  -- where job creation is of ultimate importance -- here are some nuggets of advice.

First of all, kick the tires on the idea and do your own research.  It's great to hear what the founders are saying, and its great to hear what other friends and colleagues are saying, but you need to formulate your opinion for yourself.   Try to come up with a clear understanding of the challenge being presented, how the start-up offers a solution, and what the competitive set looks like.  These are fundamental questions that any start-up needs to be able to answer.

Second, find out the path the company has taken to date.   The ever-present "pivot" is a good thing because it means the founders are willing to have their idea morph as the opportunities present themselves.  That being said, too many pivots in too short a time -- possibly with too much money invested at each stage -- means the company doesn't know when to recognize there is no opportunity there for them.  Good entrepreneur will tell you they learn more from their mistakes and failures than they learn from their successes.  If the founders are unwilling to recognize that they have a bad idea, it may not be the best idea to join them.

Last bit of advice: talk to customers.  Find out what customers are looking for and see if they are being provided what they need. Being able to execute is 80% of the battle.  Anyone can develop an idea, but execution is more important.

In this day and age, I would almost always recommend working at a start-up over an established brand.  The opportunity to learn and be rewarded is better, the chance to grow and mature in your professional career is clear.  Plus, it feels a lot more fun.

Of course, this is just one opinion.  Maybe you should get some others?