In Defense of Intrapreneurialism (2011)
In defense of intrapreneurialism – The Observation Deck

			Trevor pointed me to a ChubbyBrain article that derided “intrapreneurs” as having nothing in common with their entrepreneurial brethren. While I don’t necessary love the term, what we did at Fishworks is probably most accurately described as “intrapreneurial” — and based on both our experiences there and the caustic tone of the Chubby polemic, I feel a responsibility to respond.  (And so, I hasten to add, did Trevor.)  In terms of my history:  I spent ten years in the bowels of Bigco, four years engaged in an intrapreneurial effort within Bigco, and the past year at an actual, venture-funded startup.  Based on my experience, I take strong exception to the Chubby piece; to take their criticisms of intrapreneurs one-by-one:


Intrapreneurs take no REAL risk.  Wrong; an intrapreneurial effort  takes every bit the risk that one is taking at a startup:  the risk of failure.  And unlike most startups, in a larger organization there are many putative allies that are actively hoping that you’ll fail:  at an established company, a startup effort usually takes every ounce of political capital that one can muster and will likely make plenty of enemies in the process — the intrapreneur will be lucky if they don’t have to endure active sabotage from the broader organization.  And while failure might not mean loss of job, the failed intrapreneur is unlikely to want the job that’s left after the dust has settled from the demolition of their dream.  (In our case, had we failed, we would have lost our office, our team and our mission; what’s left, at that point?) Indeed, I believe so strongly that one is taking a risk when engaged in a startup within a larger organization, that I would make this tautologically false:  if you’re not taking a real risk, you’re not engaged in intrapreneurial activity.

There is Little Accountability with Intrapreneurs.  Wrong, and to the contrary:  unlike a startup where you have a board that has different folks with different interests, you will likely have exactly one sponsor as an intrapreneur — and if that executive loses patience with your effort (or if one of your newly-made enemies finally catches their ear), you’re done. To put this in startup terms:  in terms of accountability, it’s as if you took debt financing — miss the mark and you might find your enterprise shut down overnight.

Intrapreneurs Have Little Upside.  This depends on your definition of “upside”; clearly from their snide tone (“Where will you spend that extra bonus $10k in bonus money?” they write), the Chubby Team defines “upside” very narrowly as cash payout.  Fine for them, but not for me and not for the breed of engineer that I have spent my career working with; in my opinion, the lust for mammon has built very little of lasting value — and I have never known a superlative engineer who defines their aspirations in such shallow terms.  For us at Fishworks, the upside was the opportunity to develop innovative product and to use that product to change the world (which, I hasten to add, bears significant resemblance to the desired upside at the most successful startups).

Intrapreneurs Don’t Really Call the Shots.  Wrong, or at least just as wrong as saying “entrepreneurs call all the shots.”  If you’re an entrepreneur, you’re only calling the shots if you’re not taking any outside investment; the second you’re spending someone else’s money, there are some shots that you are no longer calling.  Similarly for an intrapreneur:  yes, there will be some shots that you don’t call (you still work for a larger company, after all) — but if you’re not calling all of the shots around product and engineering and many of the shots around sales and marketing, it’s probably not intrapreneurial.

Intrapreneurs Don’t Really Have a Scarcity of Resources.  This has elements of truth in that you don’t (generally) have a burn rate — there isn’t the sense that you have at a venture-funded startup that if you are not profitable by a certain date, you will be out of business.  That said, the implication of this statement is still wrong:  you still (very much) have a budget, and you have someone reviewing that budget.  Worse, that review can be fickle — much more fickle than money in the bank.

Intrapreneurs Get Funded for Knowing, Not Doing.  This is perhaps true, but meaningless.  In a large organization — just like in a small one — you get to knowing by doing, so it’s unclear what the point is here.  (And this point in particular drips with so much ad hominem attack and misunderstanding about how a large organization operates that one questions whether the authors have ever spent a meaningful period of time at a large company.)

Intrapreneurs Get to be Free Riders on an Existing Brand.  Finally, we are at a point that is unequivocally true!  And it’s not just brand, by the way, you also get marketing, channel, field sales, etc.  But perhaps surprisingly, and as we discovered at Fishworks, this can be as much curse as blessing:  unlike in a startup where you have a ramp in which you can learn your weaknesses and improve upon them, when you drop a new and desired product onto the white-hot sales channel of an established company, the demand can be explosive — and that’s not necessarily a good thing.  At Fishworks, our effort paid for itself within fifteen days of shipping product — which was great — but the product itself was punished by that success:  despite our established brand, this was a radically new product (and one in which the standards for quality are essentially — and rightfully — perfection), and it took fifteen brutally painful months to get it right.

Of course, there are differences between a startup within a large organization and an actual startup.  When I was pitching Fishworks to the executives at Sun, I thought of our activity as both giving up some of the upside and removing some of the downside of a startup.  After living through Fishworks and now being at a startup, I would be more precise about the downside that the intrapreneur doesn’t have to endure:  it’s not insecurity (or at least, not as much as I believed) — it’s the grueling task of raising money.  At Fishworks, we had exactly one investor, they knew us and we knew them — and that was a blessing that gave us the luxury of focus.
On balance, I don’t regret for a moment doing it the way we did it — but I also don’t regret having left for a startup.  I don’t doubt that my career will likely oscillate between smaller organizations and larger ones — I see strengths and weaknesses to both, much of which comes down to specific opportunities and conditions.  In short:  there may be differences between intrapreneurialism and entrepreneurialism — but I see little difference between the intrapreneur and the entrepreneur!
		