Yes, Patagucci, Cascade Designs, GoLite, all started as "cottage" industries. REI started out in a climber's basement. The internet networking firm my son #3 works for had about a dozen employees when he started and it's now in the S&P 500. Who knows what "cottage" firm will be the next corporate success story?
Things can and do change, though, when a firm becomes really big, enmeshed in its own corporate bureaucracy and having to cater to the mass market. The whole atmosphere is different!