Opinions expressed by Entrepreneur contributors are their own.
No matter your industry or job title, chances are you’ve looked at how things are done and thought, “I’ve got a great idea for improving that.” Perhaps you secretly long to turn that idea into a startup. Before you quit your job, take a line of credit and launch a “coming soon” website, you should ask yourself, “Would I be better off as an intrapreneur?”
An intrapreneur shares many of the same qualities as an entrepreneur, but instead of turning their ideas into startups, they work within their employer’s company. With a focus on innovation, an intrapreneur can do much to drive the company’s success. For instance, gamers everywhere can thank an intrapreneur at Sony — Ken Kutaragi — for the invention of the PlayStation. Some companies actively encourage intrapreneurship by establishing “skunk works” teams that operate independently from the day-to-day business. Other companies prefer to acquire innovations once they’ve shown product-market fit. Most leading companies do a bit of both.
Pros and cons of intrapreneurship
Before deciding which path to take, examine the benefits and drawbacks of intrapreneurship. As an intrapreneur, you will not own your idea — your company will. You may not be chosen to turn that idea into a product. Furthermore, you may not even get credit for the idea. As the saying goes, “success has many parents.” And just as your financial downside is limited, so is your financial upside.
On the other hand, intrapreneurship has many compelling benefits: You will not need to spend excessive time procuring funding, setting up legal entities or deciding which health plans to offer for employees you haven’t even hired yet. Instead, you will benefit from a brand, a client list and access to colleagues who will return your calls and offer help. You’ll continue to get a cash salary that’s significantly above what typical startups provide, as will your team. And if you have a family, you won’t have to take them on a daily rollercoaster ride.
Factors to consider
It takes a while to decide whether, at heart, you are an intrapreneur or an entrepreneur. But that’s only part of the question: You must decide which path your idea fits best.
For me, the choice was relatively straightforward. When I was the CEO of Fox International Channels, I wanted to pursue a project centered on creating podcasts that replicated the emotional experience of leading character-driven TV shows. Fox actively encouraged intrapreneurship, but the podcast industry in 2015 was tiny and not of interest to Fox. This meant if I wanted to start what became Wondery, I would have to do it on my own. However, if your idea could feasibly be launched within your current company, the question, “Should I stay or should I go?” becomes harder to answer. Consider these four questions:
- Does your company encourage internal innovation? Virtually all companies pay lip service to innovation, but some wholeheartedly encourage it. How many projects have been launched internally within your company?
- How does the company treat projects that fail? In other words, if your idea flops, are you likely to see your career derailed?
- How long will it take? Are you and your boss likely to still be at your company when the idea gains demonstrable traction and delivers results?
- Have you already used any company assets? Even if you only wrote a business plan draft on the company laptop while on vacation, you must bring the idea to your employer. Venture capitalists would not fund a company if it was created using company resources.
If, after answering the above questions, you are gravitating toward intrapreneurship, there are other factors to consider before chatting with your boss.
- Why you? Why should you be the one to champion this project? Are you a manager with a team ready to turn your idea into a product? Or do you think your project could allow you to step into a position of P&L responsibility?
- Do you have the necessary internal support? Will your project receive the right tangible resources, or will you fight for them daily?
- Are you infatuated? If you’ve fallen in love with your idea, it’s essential to seek disconfirming views to assess its true worthiness. Be careful, especially if you have many yes-people around you.
Perhaps neither intrapreneurship nor entrepreneurship is the right choice for you. There are other ways to get involved in the startup world while building equity for yourself. Some of these may be available to you depending on where you are in your career and may better prepare you to become an entrepreneur in the future.
- Start a side hustle.
- Become an advisor or a board member of a VC-backed startup.
- Become an investor (an “LP”) in a venture capital fund.
- Join a two-year-old startup with funding and product-market fit that needs to scale.
- Find a small to midsize company that has potential but is poorly run. Create a clear turnaround plan; convince a private equity firm to buy and let you run it, negotiating an equity stake for you.
A path forward
About 20% of employees engage in entrepreneurial-like activities within their company. Some of them would indeed be better off launching their own startups, but many could find intrapreneurial success within their established organizations. The intrapreneurial path, at a minimum, can serve as a proving ground.
Great ideas are what drive organizations forward. Those that fail to embrace innovation and change may lose more than a missed opportunity. If you have a great idea, regardless of whether you gravitate toward intrapreneurialism or entrepreneurialism, the worst path to take is allowing self-doubt to prevent you from taking any action whatsoever.