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What do you think of Intrapreneurship?

I was talking to a friend recently who was offered a position as an "Intrapreneur "(no, that's not a typo) after telling his boss that he wanted to leave to start his own company. Essentially, he and a small group have the ability to spin up small projects and see if they go anywhere. While I like the idea in theory, I took issue with the name because I think true entrepreneurship means taking real risk. In this scenario, not only is there not really risk - it's not their money, they get a salary, but also the upside is gone. It's not truly an alternative to being an entrepreneur.

Curious if anyone has taken on this sort of role and/or has anyone seen this actually spawn anything meaningful from a big company? Do you think it's just a big company retention technique?

22 Replies

Simon Bain
1
0
Simon Bain Entrepreneur
CEO SearchYourCloud Inc.
Hi, Like you I do not like the word. However do not knock the idea. Surely an entrepreneur is someone with an idea, someone who wishes to take that idea and run with it, and see it through. I do not see the word risk in there. If he can sell the idea to his boss and his boss is willing to fund that, how is it any different than going to a business angel or to a VC? Ideas are the important part. But an idea is only that unless it can be put in to practice. If he has sold the idea to a third party then good luck to him. Many companies have started that way. Simon
Dan Seitam
0
0
Dan Seitam Advisor
Entrepreneur Assistance, Business Strategy, Funding Assistance, Partner @ C-leveled
This was really a popular thing to do in the 90's when the web was blowing up. IMO, it was more about a large company attempt to message its commitment to innovation. It may have helped with retention, but not with true entrepreneuers. As to outcomes, I'm not aware of any, but I've never really studied this.
Eric Landeen
2
0
Eric Landeen Entrepreneur
Director at doxo
I've done it twice. The first time, we built a $45M annual run rate business over the course of 4 years. I made good money in salary and commissions but we were not successful in organizing an equity plan. It was really hard to get the parent company to allow us to operate autonomously. Sometimes our interests were contrary to those of the parent company. It was a tug of war that we usually won, but there was not the upside as you say. The second stint was less successful. We could not get the business off the ground because we didn't have autonomy and our interests were secondary to the interests of the parent. No equity arrangement, and we couldn't attack the market the way we would have wanted to if we were truly independent. It didn't work. Private equity investors bought the parent company and wound the business unit I established. There are some advantages to intrapreneurship. You only have one investor so you don't have to do investor road shows. And when you're out selling your product, you can tell the target market that they don't have to worry about you going out of business for lack of next round of funding. But all in all, I'd say if you want the upside, it's worth going it on your own.
Michael Calleia
1
0
Michael Calleia Entrepreneur • Advisor
Product/Experience Design/Strategy Leader. Founder, Humanist partnering with clients to build great products and brands
According to Lean Startup movement, an entrepreneur is anyone who works in a startup-including startup founders and internal innovators. With a startup defined as, a human institution designed to create new products and services under conditions of extreme uncertainty.

I would not say all risk is removed. Too many failures and your friend risks getting fired-all employees risk getting fired if times get tough, especially those on "pet projects." I also would not say all upside is gone. If one of the experiments takes off, your buddy may get to run it. Also, some companies still do bonuses right, so there can be upside there. Oh, and the experience your friend will get, will prepare them for when they do start their own company and make them much more valuable in the job market as Lean thinking (Lean Startup, Design Thinking, Podular organization, etc.) continues to take hold.
Sridhar Rajagopal
2
0
Sridhar Rajagopal Entrepreneur
Software Engineer, Maker, Tinkerer
I don't think you should read too much into titles anyway, as an entrepreneur, right? :-)

I think the main point of intrapreneurship is that not everyone wants to quit their regular job and go about doing all the things it takes to attempt to start a successful company. However, the principles of entrepreneurship (fast execution, hypothesis validation, customer validation, quick pivoting to find the perfect product-market fit) are applicable even in a large company environment, and fostering that is beneficial not only to the company, but also the employees.

It is not a replacement for entrepreneurship - what your friend's company is trying to do is to address his need of trying something new and working on cutting edge ideas he (or someone else) may have, while keeping him employed and happy.

Of course, the efficacy of such "Intrapreneurship" and intrapreneurship positions really depends on the company and the individuals involved. If your friend is considering leaving to pursue his own dreams that are separate than that of his company, by all means he should quit and pursue his entrepreneurial dreams.

There are risks in every project that you do, irrespective of size and employment status. You have major risks if you're spearheading a new enterprise within your organization. You still have to answer to people on your progress (like you would with a VC), and funding, etc is decided by upper management. As an entrepreneur just starting out, you'll have to put on a lot of hats (including fetching coffee and bagels and wiring up the computers, etc). That doesn't mean that you will continue to do as your company progresses and matures, but that doesn't make you any less an entrepreneur. Similarly, just because a person is getting a salary doesn't mean that he doesn't face the risks and pressures of a new enterprise (within an existing one). It all really depends on where you are in life, and what is meaning to you.

-Sridhar
Rob Roj
3
1
Rob Roj Advisor
Entrepreneurial Technical Sales
It's very rare that this works. Innovation needs a culture to build, support, and sustain it. You won't find that in most large companies. It's mainly lip service until an actual buget is applied to it. There needs to be autonomy and the freedom to fail. Walmart labs in Silicon valley is one of the few successful examples I can think of. Of course, Walmart put 1+ BILLION into that effort.
Josh Benjamin
2
0
Josh Benjamin Entrepreneur • Advisor
Founder of Lifechime | Authentic Human Being
Although it's not the full experience, joining a skunkworks team is a great way to 'get paid to learn'. As long as he has energy after this experience, it's a good setup. He just needs to avoid testing his resilience and burning out.

A counter to that offer would have been allowing the company to invest in his new company.
Jumal Qazi
3
0
Jumal Qazi Advisor
Learning Design Executive
Zulfikar,

I think this is a very intriguing question you bring up, and I am finding it very hard to resist responding to it..

Considering Problem Solving (not risk) to be the Root of Entrepreneurship
The word "Entrepreneurship" actually comes from the French, "Entreprendre", which means "To Undertake", which itself means "to commit oneself to a responsibility". In other words, entrepreneurs connect themselves and take ownership of challenges. To do this, very often entails risk, but actually- if you can get a big financial backer (whether a VC or a large company), than that can quite conceivably (though not always) increase your chance of overcoming the challenge you have undertaken.

Great Entreprenuers Actively Reduce and Avoid Risk
Reducing risk(not seeking, as folklore would have us believe...)is key in addressing the challenge that is the reason the entrepreneur gets up in the morning. When you have to manage very limited resources, you are always trying to actually reduce risk, which is essentially the chance that one or more of those resources you need to solve your problem will no longer be available.

Here's a great INC article that discusses this a bit more: inc.com/paul-brown/more-proof-entrepreneurs-hate-risk.html

The Case for Intrapreneurship
If a company actually recognizes...
  1. Talent (which it seems to in the case of your friend)
  2. The need for innovation (which it seems to by allocating resources towards a staff devoted to innovating)
  3. The need to support experimentation (which it seems to by having that team be specifically devoted to trying out new ideas)
...then I think that is a great thing. In your friend's case, the issue seems to be the lack of an upside.

However, to me that seems mostly like a negotiation failure, and not decisive proof that intrapreneurship can't work / isn't a great idea. Your friend seems to have leverage, I think all he needs to do is be a bit more insistent and creative about sharing in the upside. It is in no way out of the question, to ask for something like X% of the additional revenue his ideas and execution bring to the company- especially if your friend's boss was forward thinking enough to basically create an intra-incubator on the spot.

His boss seems to really want to keep him so I think he would totally be open to it. If your friend isn't happy with the terms, he should still negotiate until he is happy with the terms of the deal...

Your friend just needs to himself, step out of the "company mindset" of just taking whatever offers / orders are given to him- and think like an entrepreneur ;) Make use of the existing resources in a way that solves the challenge in front of him...
Aaron Schumm
0
0
Aaron Schumm Advisor
Co-Founder, Chief Customer Officer at FolioDynamix
This is exactly how we started my firm that recently just sold for $210M, as a separate entity. My only piece of advice: fund it how you can, as cheap as possible, while creating the ability to spin out at a later date.
CJ Cornell
2
0
CJ Cornell Entrepreneur • Advisor
(Visiting) Professor of Entrepreneurship, Managing Director - Propel Ventures
1. Intrepreneurship is a different flavor of entrepreneurship - so you should not compare them exactly.

2. I think it is an extraordinary opportunity - if the company is sincere and can set it (the job) up right.

3. chances are, like most corporations - they don't understand entrepreneurship (because the corporation's immune system has rejected, ejected or exiled any person of entrepreneurial spirit.

4, but if a corporation does it right , it can be an extraordinary retention tool.

5. re: risk ...
there are all kinds of risks - not just risking your job, or of financial risk.

Intrapreneurship does indeed have a set of risks comparable to entrepreneurship.

For instance, as a serial entrepreneur - and someone who also worked at a big corp I can tell you that risking bankruptcy no longer scares me as a risk - but risking my reputation is a big one for me (since it risks my ability to do future ventures). Being placed into an intrapreneurial position, for me, would actually pose MORE risk than starting my own company - since the success of the project would certainly not be all under my control).

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