The Difference Between Entrepreneur vs. Intrapreneur: Which Do You Prefer?
The Concept Explained
Entrepreneurship is the act of creating or unlocking value by bringing together various resources such as human resources, capital, and technology to start a process and make a product or offer a service. The entrepreneurial process involves putting dreams or ideas into action, usually through innovation and experimentation, and results in seizing latent opportunities that fulfill wants, needs, and desires to reap rich commercial rewards.
Working in an established company usually means being stifled by rules, regulations, and precedents. Most corporate employees follow a set course of action to reach predetermined objectives. At times, however, corporations require a different approach. For instance, a company staring at bankruptcy with its business model having broken down may need to start afresh, or the company may simply plan to diversify into a new product line. In such cases, the company may empower an in-house executive to indulge in the necessary innovations and experimentation, without the commonly applicable rules and regulations serving as an impediment. Intrapreneurs are such “internal entrepreneurs,” and they very often emulate the company’s founder’s path and methods.
Entrepreneurs have more things to do than intrapreneurs. An entrepreneur has to arrange for everything starting from capital to land, machinery, resources, and set up a new supply chain. Intrapreneurs, in contrast, very often draw most resources from the corporation. Funds are almost surely from the parent company, as are most support infrastructure such as administrative offices. Very often the new product launched by the intrapreneur piggyback on the supply chain of the parent company.
Both entrepreneurs and intrapreneurs sell ideas, set a path instead of following someone or something, and concentrate on results rather than processes. Since both seek the same objective, they require similar characteristics and traits to succeed. The key traits required are:
- Conviction, passion, and drive to perform well
- Creativity, originality, and self-confidence to implement ideas
- Strong appetite for taking risks
- Ability to think out of the box
- Ability to see the wider picture
- Sharp mind to conjure up and try unconventional ideas
- Temperament to remain at ease in uncertainties and fluid situations
- Ability to handle pressure
Both entrepreneurs and intrapreneurs have to take risks, but entrepreneurs who do not have anyone backing them need a higher risk appetite. For the intrapreneur, the promoting company ultimately absorbs any failure.
Limiting factors which may clip an entrepreneur’s wings are non-availability of funds, lack of skills or ability to gather the required resources, and lack of expertise or know-how to put ideas into action. An intrapreneur may also be restrained by such factors, but with the backing of a large corporation, rarely so. Intrapreneurs may, unlike entrepreneurs, rather face obstacles from within the company as owners and other employees feel threatened, co-workers resent the rise of the intrapreneur, the workforce tries to protect the status quo, and a general resistance to change surfaces.
The general factors that influence entrepreneurship also affect intrapreneurs. Generally, an entrepreneur, especially with personal or unencumbered funds at disposal, remains the arbiter of his own destiny and can make speedy and even instant decisions. An intrapreneur has considerable autonomy and leeway compared to an executive managing a normal process of a company, but would still need to seek advice and justify actions, especially when requesting funds.
The organizational constraints make it imperative for the intrapreneur to build, nurture, and carry along a team. In contrast, entrepreneurs encounter difficulty in persuading top talent to join untested and unknown start-ups, and as such very often work solo and adopt a highly centralized set up, especially during the initial stages.
The entrepreneur has no choice but to connect his rewards with the success of the company he starts. For an intrapreneur, this is a desirable characteristic but not essential, as the company may still reward the effort.
Which is Better?
In comparing the work and responsibilities of an entrepreneur vs. an intrapreneur, intrapreneurship offers the best of both worlds–the freedom to seize opportunities without the restrains of organizational rules and regulations and without placing personal assets at risk. Very often intrapreneurs also gain access to the company’s reputation and a ready-made platform to launch their ideas, two crucial factors that shape success and which remain out-of-bounds for an entrepreneur.
The successful development of XBox by a team of intrapreneurs led by Robbie Bach and J. Allard exemplifies the advantages of the intrapreneural route. This new console gaming system could leverage Microsoft’s reputation and resources to compete with Sony Play station, which then had a 50 percent market share. Had Robbie Bach et. al taken the entrepreneurial route, they would neither have the access to the millions of dollars nor the reputation or strength to compete with Sony.
The success of the intrapreneur, however, depends on the patronage and support of the company on a sustained basis, and companies usually support only such ventures that they benefit from. Entrepreneurs, in contrast, have a free run with their vision limited only by the extent of funds at disposal.
- Kansas State University Economics Club. Corporate Intrapreneurship. http://www.k-state.edu/economics/econclub/Intrapreneurship.pdf Retrieved August 04, 2011
- University of Central Arkansas. Corporate versus Intrapreneural Culture. http://www.sbaer.uca.edu/publications/entrepreneurship/pdf/03.pdf. Retrieved August 04, 2011
- Image Credit 2: freedigitalphotos.net/Ambro
- Image Credit 1: freedigitalphotos.net/Ambro