EPISODE 003
Are You Legit? Intrapreneurs vs Entrepreneurs

Some will say you're not a "real" entrepreneur if you're only doing entrepreneurial stuff inside of a corporation and collecting a steady paycheck. There's something about letting go of the certainty of an income that earns respect in the startup streets. 

However, in Corporate, you get the benefit of being creative and solving problems without taking on the risk---some say intrapreneurship is the best of both worlds. 

In this episode, we talk about the different types of innovations and how creating innovations inside your organization can be "risky" too.....

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Host – Monique Mills

Intrapreneurs and entrepreneurs are not the same thing. There is an entirely different level of risk involved for those who are creating something outside of a large organization. So we have to make a clear that although you have the creativity and the ability and all of that, to create something within an organization, it's not until your feet is held to the fire. And like everything's on the line for a lot of people to respect you as an entrepreneur, that is the hard part.

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Many say that startups equal the unpolished MBA. Anyone who has built a business from an idea can attest to the fact that the experience is another level MBA. And there's nothing quite like it. Since you must be extremely resourceful and scrappy as a startup founder, quite often doing many things unconventionally, the conventional corporate MBA's considered the experience "Unpolished", but is it really? Honestly having been on both sides, as an engineer in corporate, and then as a startup founder with an MBA, I'd have to agree with those who say that you don't need an MBA to be a startup founder. In fact, I think you learn more on how to build a company as a startup founder than you do in a structured MBA program. In fact, you certainly earn an MBA while on the job building the company piece by piece. "Build the plane on the way down" they say. Well, that's exactly what it is, but there are lessons to be shared to help both sides learn from each other. The Unpolished MBA podcast will be the sharing of candid conversation related to topics on both sides of the fence. One is not better than the other, just different. Let's jump in.


Host - Monique Mills


So right off the bat, the term intrapreneurs, it describes employees of a company that have been basically given the task to behave like an entrepreneur while working inside of that large organization. Now, of course, that's definitely difficult, right? So if it's something that someone has an idea about that can help their company, this may be something of interest to them. But if it's your desire to create a stand alone entity meant to serve like an entire industry, not just your employer, the intrapreneur part could actually be very frustrating because if you create something internally to your organization, we all know the paperwork that we sign, right. You transfer all rights of any innovation to your employer upon when you begin working there. So even if you do create something internally you have a lot to overcome to even try to use it or commercialize it outside of your organization.


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The relationship between employment, intellectual property and ownership of new innovations have some really very clear laws defining all of it. And typically employers are entitled to all intellectual property created at or for their business, unless there is some kind of contract stating otherwise. I always tell people to remember that even when using your employer's computer to create something, it gives them ownership of whatever that is you created. Now, there are four main types of intellectual property patents, copyright, trademarks, and trade secrets. So I'm not an attorney. And so I will not be digging into each of these separately right now. However, it's just important to understand that if you create something it's usually a given that your employer owns it, unless there's a predefined, that means before you create it, right, a predefined, written, on paper, agreement regarding specific exclusions of intellectual property. I've never seen it happen before, but there are always exceptions to the rule somewhere.


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It is nice. It's very nice to have your organization, basically bank rolling the idea, providing all of the necessary resources for you to try out and test out and create something. That's great. But unfortunately, having the cushioning of the corporation backing you, it doesn't provide the authentic experience of entrepreneurship. I mean, it's, it's almost like roleplaying without experiencing the risks, actually, or the returns, to be honest with you, of operating, as let's say a real startup outside of that organization on your own. Now those intrapreneur programs and innovation programs inside of corporations are really cool for those who want to express their creativity and create new things without taking on the risks. And these are programs are popping up everywhere, worldwide, and it's actually a great thing. It helps keep things energized and fresh internally. But it's essential for me to just point out a few things.


A lot of intrapreneurs are judged harshly by those that consider themselves real quote unquote entrepreneurs and have taken on the risk of everything on themselves. So experienced entrepreneurs really should be a part of those intrapreneur programs because they are a necessary component to provide candid information and feedback to those on the innovation team internally of these corporations. Because what seems feasible to those on the inside, what seems feasible in theory typically does not equate to real world success that experienced entrepreneurs can tell you the lessons learned. And they can help you avoid the pitfalls and ensure that you all make the best use of your internal resources in these programs. And so one of the resources that a lot of companies use and startup incubators is The Lean Startup book by Eric Ries. Also the business model canvas is another resource that's really common in the startup world and many innovation teams and intrapreneurs in companies use.


But while both of those resources will provide some foundational thinking for pursuing an innovative idea, there's just much more to the equation, right? So what about customer discovery, customer development? What about sales funnels? What's your go to market strategy? What's your digital marketing strategy? You know, what is your revenue engine? What type of tools? How are you going to optimize your revenue engine? Because it really comes down to can this idea make money in the marketplace if you were to try to take it outside of the organization. And so the thing is you have to understand when you're creating something internally doesn't necessarily translate to outside of that corporation, it being successful. It doesn't translate to that always. So when you want to transform your thinking about, can this apply to the real world i.e. organizations within a certain industry, you have to adjust your thinking and entrepreneurs who are out there doing it will be a great resource for doing that.


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The truth is that the corporation you're working for is not expecting you to pack up and go out there to start a company of your own. They are counting on you to stay there and continue to share your brilliance and innovative ideas internally to bring value to their organization. And there is absolutely nothing wrong with that. In return, you have a steady paycheck benefits and an opportunity to test new ideas without bearing any of the risks, but keep in mind that you also forego the rewards. You forego the financial rewards that can be received on the upside when an entire industry is transformed from your idea. So sure you helped your company create it, but it is owned by them. And therefore they receive those benefits. Now, many companies do offer a bonus to employees for patents they create. I know one that pays their employees $10,000 per patent that is granted. Now that's pretty nice. And if you're satisfied with that, it won't bother you that they'll make millions or billions off of commercializing your idea. For many, it doesn't bother them at all, but for others, it bothers them so much that they're willing to take a shot out there on their own. But there's much more to entrepreneurship than creating something cool. And it requires a much broader skillset and risk tolerance.


But without specific de-risking measures in place, very few employees will ever leave their jobs to bring an idea to the marketplace. And I think corporations are counting on that. Employers that have great talent that has the ability to work in a corporate environment and be innovative and scrappy like a startup. Those kinds of people are great to have. No company wants to lose those people. Innovation teams are not meant to go out on their own and create something, but there are some employees on that team that that is their desire. And it's important for them to know that when they create things within the company, it's going to be very challenging to do anything with it outside of that company. And building a company requires a hundred percent commitment. So if you're working full time at the corporation, it's just going to really slow down the progress of any startup that you decide to pursue.


And it's not to say that many people don't have time to work on their startup outside of work, but just expect that there's going to be increased stress, lack of sleep, and an imbalance to accompany any decision like that. Many corporations have innovation programs that allow employees to work on projects in addition to their regular job. And this type of intrapreneurship can be exciting, but it's also stressful at the same time. So I would suggest getting a few questions answered by your employer up front. And some of those things really apply mostly to assignment of the IP and who gets that. And most of the time, as I mentioned, it's your employer. But also is there additional pay for it? What kind of support will you get? Can you use members of your existing team or other people within the organization to help support the project?


So just think about it. If you're creating a software or anything like that, and you're not a developer, are they expecting you to go out and source a developer off the market? Or can you use someone internally? So those kinds of things are really important because if you have the support internally, you can really take it much further and find out if it's something that can work. But if they're expecting you to do extra work for same pay, I don't know how many people would actually sign up for that, unless it's just really in you to just have a different way to express your creativity inside of the workplace. And if that's, you, that's fine. But most people would not want to sign up for doing additional work at the same pay.


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Corporations, approach innovation strategically. They pursue innovation by identifying what can help them gain or sustain their competitive advantage in the market. And everything is integrated into their thinking such as what is their vision, mission values, their current resources, right? And also the competitive landscape of their industry. There's just a lot of considerations that go into their innovation strategy. Whereas in a typical startup, the catalyst for even starting the company is usually a problem that the founder experienced or noticed, and they just decided, Hey, I'm going to create a solution for it. And then the strategy comes much later. But corporate does it differently. The strategy comes first. And the next part I'll share the four types of innovation. And all innovations fall into one of these four categories. So whether you are an Unpolished MBA or a corporate MBA, it's good information to know.



Now there are four different types of innovations in regards to markets and technologies. So when you think of markets, there are existing markets that already have incumbents, competitors, et cetera, people that are doing great things already. And then you have new markets that have yet to be created. And when you think of technologies, it's the same thing. You have existing technologies that already exist. And then there are new ones. So when you target an existing market with an existing technology, that's a little bit better. That's called an incremental innovation. And basically it's when a corporation builds off of their existing strengths already and they improve their existing product or service to get a competitive advantage over others. A great example of this is the dollar shave club, which was a startup that was later bought by Unilever. And it was just a company that shipped razors and razorblades directly to consumers.


They didn't create razors. They didn't find new people to use razors who weren't. They just innovated on the business model and ship quality blades on a subscription basis. So people never ran out. And when you have an existing market and you want to launch a new technology to them, that's called a disruptive innovation. You see, to be considered disruptive you'll need to have a new way to meet an existing customer need. Their need is already there. You just need to find a new way to address it. And I put Airbnb in this category because they disrupted the hospitality industry. People needed somewhere to stay when they travel and now they don't have to stay with family or in a hotel. And not only that, most times it's cheaper than staying in a hotel to stay in an Airbnb. I want to note that in disruptive innovations, when they first come out, they're usually inferior to existing options, but they keep iterating and improving until they outpace the existing solutions.


And if I take it way back, we can talk about floppy disk. We used to use floppy disks to save data from our computers. Then we advanced from floppy disk to hard disks. And then we go from hard disks to CDs. And then from there to zip drives. And then from there to flash drives. And now we just put everything in the cloud, right? And so that's an example of disruptive innovations. Now, if you have an existing technology that you want to put in a new market, then that's considered an architectural innovation. And basically you use the lessons and skills and technology, and you are applying them to a different market. And you're using the same components of your technology, but you just reconfigure them in a novel way to create a new market for your firm. So this is very common with products that were previously only sold to corporations, but now the everyday person can buy it.


So think about Dell computers. They did this by letting us, the everyday consumer, select our computer parts online. And then they shipped us a customized PC directly. And no one else was doing this or doing things that way at the time. So no, they didn't invent the computer, but they reconfigured the idea of purchasing one and it was a hit. And finally, if you have a new market and a new technology, first off, that's really hard, really, really hard. And it typically requires more financial backing than others. Which is why I would say the name radical innovation is so fitting. But these types of innovations are created from an entirely different knowledge base than you would normally use. And you can recombine your current capabilities to produce something that's radically new to a new target market. So in my opinion, nobody has done this better than Apple. So if you think about the iPod, that's a great example of this. The iPod is a long way from their Mac computers, which we knew them for before the iPod came out. It's also long way from CD players and cassette players before them.


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As you can see, intrapreneurship is less risky, but there's also many other layers of accountability and constraints that aren't there in entrepreneurship. Questions around ownership, resources, pay, et cetera, need to be sorted out first. And that's only the beginning. Before spending a dime you'll need to get approvals. Whereas an entrepreneur will just get down to business without asking anyone's permission. And both will still make mistakes and it will cost money and time. It's just a matter of who takes the hit from those mistakes and who is the beneficiary when things go well. That's the major difference.


If you have questions, go ahead and send us a message using the link in the show notes. Your questions may be incorporated into a future episode. And if it is we'll notify you, the Unpolished MBA conversation continues and you can be in part of it by going to Unpolishedmba.com. Thank you for listening.

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