While the Austrian American economist Joseph Schumpeter is best known for his 1942 paper describing his theory of “creative destruction,” the process of disrupting existing industries through business innovation or technological change, few people know about another prediction he made: He believed that innovation would gradually become an embedded process within large corporations. In many ways, Schumpeter predicted the internal innovation hubs of corporate giants like Amazon and SAP. With incumbents making innovation part of their established routines, he theorized, they would gradually squeeze out the traditional entrepreneur.
I have a ton of respect for Schumpeter, and am generally a big fan of his work. But I disagree with this somewhat. And the reason is that the advantages big companies have when it comes to innovation, are often largely offset by other aspects of being a big company. So yes, you have money, smart people, plenty of high end hardware or cloud resources, data, etc. Great... guess what you also have?
A stifling bureaucracy, 23 redundant layers of management approval, 12 competing teams each trying to stab the other in the back, arbitrary layoffs / shuffling of people between teams, executives playing favorites on choosing what projects to fund, nepotism, etc., etc. etc.
Example: I work for a Really Big Company (but not FAANG), and I routinely see us take - literally - weeks or months to make a decision that a startup could make in a day, because the founder could just say "do it" and that's the end of the story. Yes, yes, it's an anecdote, but this is hardly an unknown phenomenon. And I've seen this first-hand in plenty of other companies as well.
I would argue that startups can still disrupt things, but that they key to doing it is to focus on their natural advantage: speed.
See also: It's Not the Big That Eat the Small...It's the Fast That Eat the Slow: How to Use Speed as a Competitive Tool in Business.