I really think people like her create a lot more value when they are starting a new company, and not when they are working for a giant like Yahoo!

Funny you say that. She's currently leading Yahoo!'s technology development group, and is behind their internal "startup" incubator, Brickhouse. Their first product was Pipes, which is actually quite cool.

So the "giant" seems to agree with you there.

No she's not. Salim Ismail is leading Brickhouse: http://www.techcrunch.com/2007/03/14/salim-ismail-to-head-yahoo-brickhouse/

She'll lead 'strategy'... whatever that means. I think she'll leave very soon. She was demoted afterall.

Caterina established Brickhouse at Yahoo! and hired Salim Ismail to run it. Brickhouse, of course, is a product of her strategic role at Yahoo!

'... Given a choice, a truly smart person would prefer to work for a cool starup vs Yahoo! Brickhouse. ...'

Probably making the choice of sticking around for the stock vesting period. If you are ever asking yourself a question about someone, especially web/software related go to the source [0]. Here is what 'Fake' had to say not long ago about startups v's the SoftCo's of the world ...

'... Having worked at startups for my entire career, I had never worked at a company larger than 100-150 people. On a normal day, we would walk around patting ourselves on the back for how brilliant we were, how innovative, how fast we could ship, how much attention we paid to our customers, how WE were the rock stars and the people at those big companies? slow, dull, stupid wankers! ...' [1]

and goes on to explain that innovation is happening at large companies but needs to build a process withing the corporate framework.

'... But then I started working at a 10,000 person company and began to realize we weren't all that after all, the real Peter Framptons were the ones innovating at big companies. You build something brilliant while simultaneously serving literally billions of customers? Party on, you TRULY rock. ...' [2]

So this is what Fake is up to. Working out a process within the context of a large company to allow continual innovation. After doing a startup, waiting for vesting and having access to working capital and authority to execute it seems a natural progression.

Reference

[0] Katerina Fake, 'Big Companies, Small Companies, Innovation and Brickhouse'

http://www.caterina.net/archive/001049.html

[1] Katerina Fake, 'Big Companies, Small Companies, Innovation and Brickhouse', Ibid.

[2] Katerina Fake, 'Big Companies, Small Companies, Innovation and Brickhouse', Ibid.

It's an interesting attitude but I think she's wrong. A big company is already serving billions of customers so they have a lot to lose. If a big company launches a service and its not an immediate success people will attack the brand. Also you get a lot of exposure at an early stage and the users aren't as sympathetic.

Good point. Different kind of challenge, I say..

I'm just saying there are inherent hurdles to innovation in a bigger/public company - no matter how innovative the company is.