How is innovation different in startups?

When we talk about corporate innovation, we tend to think of it in the context of large, established corporations – and it makes sense since those are the ones usually most in need of what I call ‘innovation muscles’: the processes, talent and technologies to thrive through change. Nevertheless, the discipline and practices of innovation management can and should be applied to startups across their journey from early-stage through the growth and scale phases, all the way to their maturity.

Before we discuss those practices, though, it is critical to under-stand that not all new or small businesses should be considered a startup. A new bakery, a recently established hairdresser, an account-ant’s office, a retail store – those are all traditional SME (small & medium enterprises). They all have something that a startup doesn’t have: a well-known business model. They know who their customers are, how to produce their products or services, and how to commercialize them. A startup founder with a crazy innovative idea doesn’t know any of that.
I like to think of startups as a love story - the tale of an idea in search for the right business model. In this story, the entrepreneur’s job is to find a business model that will make their idea viable. When they begin their search, things like customer, operations, and monetization models are all unknowns. It is precisely due to this high level of uncertainty that startup founders cannot resort to traditional financing mechanisms (i.e.: bank loans) and need to access funding from venture capitalists. Only VCs have the appetite for risk required to help bring a crazy idea to life [ ... ]