I read a rather harsh criticism on Hacker News today about “Intrapreneurs”. The Intrapreneur is an “Internal Entrepreneur” who starts up new projects, ideas, etc, but from within an established company. I personally feel this criticism is rather misguided. The key to the argument was that Intrapreneurs take no risk, and therefore do not deserve to be associated with any deviation of the word “Entrepreneur”. Update: My colleague Bryan has also written his thoughts on the subject. You can read them here.
As an entrepreneur who has done both, here’s why you’re wrong. You can follow along with the original article if you care at all.
“Intrapreneurs take no REAL risk” - Entrepreneurs take great risks at the benefit of great possible reward. A successful entrepreneur can make his entire career by taking a chance. You’re confusing someone who drives internal product direction with someone who just shoves paper all day. Innovative products that come out of companies (like the iPod, Motorola Razr, Kinect, etc) were all driven by internal entrepreneurs. You may feel that the term “entrepreneur” is being trodden upon by these lowly individuals who have chosen not to go bankrupt. Sometimes that’s just not an option. But an entrepreneur by definition is someone who works on a new idea and is held accountable. Have you ever failed a multi-million dollar project? That’s a risk and responsibility very few people are willing to take.
“Little Accountability” - Entrepreneurs blame all sorts of things when their startups fail. The market conditions weren’t right. We couldn’t get enough investment. Johnny should have written our webapp in Python instead of PHP. At the end of the day, that’s not an “intrapreneur” vs entrepreneur issue. That’s a goddamned character flaw. Intrapreneurs rarely get a second or third chance to start over. Entrepreneurs usually flee with their tail between their legs. In either case, it takes balls to do it over again.
“Little Upside” - 10k in bonus money? If you come up with the next iPhone and you get stuck with a 10K bonus then you’re an idiot - not a hesitant entrepreneur. Stock options, bonuses, a career, a significantly higher salary. Again, this is a risk vs reward scenario. For many serial entrepreneurs, they aren’t in it “for the money” they’re in it for the experience. Building something new is (and arguably should be) its own reward. The money is a bonus.
“Intrapreneurs dont call the shots” - If you’ve started or a project that would be significant enough to justify calling yourself an “intrapreneur” then by definition you’re calling the shots. How many entrepreneurs are great at press releases anyway? I can tell you straight up that the number is pretty low. Sometimes having an entire department to spruce up some product documentation would be nice. Is the process a pain - sure. But if i’ve built something good enough this issue is moot.
“Scarcity of Resources” - Yes. Yes there is. It’s called a budget. Sometimes you go over your budget and you have to beg for more money. I’m not saying it’s glamorous. It’s certainly not as “glamorous” as asking a VC for more money, but it’s real. Just because you work for a big company, doesn’t mean you get to piss that money away on catered lunches and sparkling water.
“Knowing, Not Doing” - It’s incorrect (if not downright delusional) to believe that after raising money internally an “Intrapreneur” can sit back and watch everything magically happen. Again - we come back to risk vs reward. No VC is going to throw their money into a project that has no traction with an inexperienced team. But many times, a kick-ass team and a great idea, and a track record will get you seed financing in the millions of dollars range. You’re wrong.
“Intrapreneurs piggy back on a Brand” - Companies of the size you’re describing as so massive that the “shared resources” benefit is not really a benefit at all. It’s more of a cost. The brand very often has nothing to do with the quality of a product. It gives you a little bit of marketing money, but at the end of the day that doesn’t necessarily result in sales. Most recent example of this is the Blackberry Playbook. All the marketing money in the world won’t save them from the fact that nobody cares about having Flash if the thing doesn’t have email. Bad products are not made good by means of a logo. Startup or not.
“Luxury to Specialize” - Yes. The Marketing, Finance or Tech people have specific functions. But by your very definition, they’re not “Intrapreneurs” if they just go to work and do their very specific pigeon-holed jobs. That’s called “Having a job” and there’s nothing wrong with it. If you want to start up a new idea at your company, you have to learn a whole bunch of other “Entreprenerial” skills. How to sell your idea, how to write a presentation, how to socialize with people who decide if you get your money or not, how to run a team, etc. If you’re an entrepreneur who is worrying about writing contracts, and how to do all your taxes then you’re doing it wrong.