Intrapreneur vs. Entrepreneur: Which Path Is Best for You?
Learn about the different environments, levels of risk, and potential upsides
Does the thrill of entrepreneurship mixed with the safety of a corporate job sound like the perfect combo?
Entrepreneurs and intrapreneurs alike drive innovation, but they do it in very different environments.
In this article, I’ll break down the similarities and differences between these paths and help you determine which path best fits your personality and your career goals.
What Is an Entrepreneur?
In general, an entrepreneur is anyone who organizes and operates a business.
Steve Jobs, Oprah, and Walt Disney all started businesses that went on to become gigantic corporations.
Right now, some kid is programming on an indie video game in his basement.
Elsewhere, a marketing professional is building an organic food startup.
My Dad built a small business where he sells computer systems for pet stores.
One of my friends sells travel mugs with the Zia symbol on them.
I write freelance content about business and technology.
What do all of us have in common?
We are all entrepreneurs.
The mantle of entrepreneurship belongs to the Silicon Valley founder with his dozens of employees and millions in venture capital, the owner of the diner down the street who barely makes ends meet, and the freelance travel photographer alike.
What Is an Intrapreneur?
Intrapreneurs take on a role very similar to that of entrepreneurs.
The main difference between intrapreneurs and entrepreneurs is that intrapreneurs are still part of a larger corporation — leading to differences in risk, control, resources, and potential upside gain.
If there are 1,000 flavors of entrepreneurship, there are just as many for intrapreneurship.
You may have heard of Google’s 20% project — an initiative in which each employee is allowed to spend 20% of their time on personal projects.
The 20% project spawned Gmail, AdSense, Google News, and more.
These were all massive intrapreneurial successes resulting in internal innovations that likely would not have occurred otherwise.
Do you have a post-it note handy?
Post-it notes were created under 3M’s own 15% initiative — launched all the way back in 1948!
One of the most famous intrapreneurship efforts was the “Skunk Works” project at Lockheed Martin — the project that birthed the SR71 and some of the other most innovative aircraft of the time.
Shorter-term intrapreneurial incubation sometimes takes the form of hack-a-thons or other competitions wherein groups of employees come up with and present their best innovation ideas over a few days’ time.
Intrapreneurship can also come from so-called internal startups — a prime example being Target.
No, you didn’t read that wrong — I’m not talking about a startup launched within Target.
Target began as an internal startup launched by Dayton-Hudson, and it grew to be one of the biggest retailers in America.
Intrapreneurship — also known as corporate entrepreneurship — is not new, but it’s certainly not yet the rule in large corporations.
Capital One, Verizon, GE, Mattress Firm, Aetna, and Coca-Cola have all launched internal startups.
Intrapreneurship can also take the form of think tanks or innovation centers.
Merck is a particular inspiration in this area, offering a 3-month scholarship stay at their think tank and several other programs to encourage the ideation and development of new innovations.
These examples are often of very different forms, but they are all examples of intrapreneurship and an internal culture of innovation.
Choosing Between Intrapreneurship and Entrepreneurship
Entrepreneurs and intrapreneurs share the same primary motives: problem-solving and innovation.
The difference between entrepreneurs and intrapreneurs is all about their environments.
If you have found a problem worth solving and you have an idea of how to solve it, you could go to your boss and try to launch that project within your company.
You could also decide to start up your own company to develop the idea further.
How do you figure out which idea is better for you?
Here are a few things to consider:
What is your current company’s culture of innovation?
You aren’t going to go pitch this idea to a random other company.
If you are going to be a successful intrapreneur in the near future, it’s going to happen right where you currently work.
If your current company doesn’t have a history of allowing intrapreneurship, you are going to have a hard time making it happen.
It’s not impossible, but it’s one more barrier.
Does your company sponsor hackathons?
Do they have an innovation center?
Do they offer something like Google’s 20% time?
These are all indicators of the innovation culture in your company.
Is your idea an extension of your current work?
If you have already started building precursors to your idea at your current company, you may be in a murky legal area.
I’m not going to give you legal advice, and you shouldn’t listen to me if I do.
If in doubt, go talk to a lawyer.
I know it’s not the cheapest option, but the last thing you want as a new entrepreneur is the fear of a lawsuit hanging over your head.
Intrapreneurship definitely starts to look better if the alternative is losing your new company or its intellectual property.
Is your idea a good fit for your current company?
If you have an idea for a new fertilizer while working at Capital One, intrapreneurship probably isn’t an option.
Even if they did want it, their company resources are probably not the best fit for building a fertilizer product.
In that scenario, neither party benefits from building the idea within the company.
It would be better to just part ways and start your own company as an entrepreneur.
I know that’s an extreme — and obviously fabricated — case.
Stop screaming it at your monitor.
Not all cases have to be that extreme.
There are several reasons why a product might not be a good fit for a given company.
The product could compete to solve the same problem as another of their products.
It could require a pricing model that is too different to mesh with what the company currently uses.
It could serve a different group of customers that the company is not interested in.
It could upset a current partnership that the company finds important.
I could list more examples, but I’d never be able to capture every case.
You may not have enough information to determine what is or isn’t a good fit from the company’s perspective, but be sure to think of it from your perspective.
Do you think that your product will get the resources, respect, and attention that it needs to thrive if you build it in your current company?
What is your risk tolerance?
One of the key traits of entrepreneurs is that we are calculated risk-takers.
That is, we don’t mind risk-taking, but we are smart about which ones we take.
There are various types of risks involved in entrepreneurship — one of the key ones being financial risk.
Entrepreneurship has a high failure rate.
People go broke because of entrepreneurial pursuits all the time.
Depending on how and when your venture fails, you may be left with few financial resources and the need to find new income quickly.
Intrapreneurs don’t have that risk.
They are still getting a salary from their company, and — if the project fails — they may well just be reassigned back to their old position within the company.
When you look at how much money entrepreneurs make, it becomes clear that — on average — intrapreneurship is your better option financially.
When it comes to other types of risks, the balance can look very different.
These are primary risks to the business venture rather than to the entrepreneur.
Competitive risk — the possibility that a competitor may push you out of the market or make you unprofitable — is a common concern.
Having the resources of a large company would seem to help with that risk, but it all depends on what resources and support the company gives you access to.
It also depends on the particular way in which the competitors come after you.
If your competitors have a more innovative solution, nothing the company can do may matter.
But if your competitors are, for example, stealing your intellectual property (IP), a corporation is in a much better position to enforce those claims.
Weigh all of your risks and consider what environment would best negate them.
Most often, intrapreneurship is your less risky option.
What are your goals?
Are you driven by financial gain?
Do you want to see your name on a building someday?
Those, by the way, are terrible reasons to start a business.
You should, though, consider your personal goals and what you want your company to be.
If you want to start a company known for its privacy standards and you work for a company with a sketchy record in that area, you shouldn’t let them be the ones in control of your baby.
If calling the shots is important to you, keep in mind the limits you’ll have when the CEO title belongs to someone you may have never even met.
But what if you want to be able to focus on solving a problem instead of worrying about taxes, payroll, and all of the other intricacies of building a business?
Then intrapreneurship starts to look like a better fit.
Sometimes it’s better to be the Vice President of Amazing Idea at GiantCorp than it is to be the CEO of Amazing Idea, Inc.
The differences between entrepreneurs and entrepreneurs are small compared to their shared traits.
They both are laser-focused on bringing a successful product to market.
They both require decision-making skills, business acumen, and other such entrepreneurial qualities.
The key differences have to do with their environments and associated risks.
More important, though, is which route is best for your idea.
There is a problem you want to solve — a need you are trying to fill in the market.
Does that baby need an intrapreneur or an entrepreneur parent?
For more entrepreneurship and career advice, sign up for my newsletter at zakkann.com