Two similar words with very distinct meanings—intrapreneur and entrepreneur.
An entrepreneur is a person who starts and owns a business. An intrapreneur is an employee in a company who uses entrepreneurial skills to innovate and improve the company. Just because you work for a company doesn’t mean you’re considered an intrapreneur.
Risk vs. Reward
Entrepreneurs have different risks compared to intrapreneurs. They are also compensated differently. As a business owner, your income is entirely dependent on your work ethic and forces out of your control.
Intrapreneurs can earn a lot of money via performance bonuses and raises but are somewhat at the mercy of their employer.
The Advantages and Risks of Entrepreneurship
Opening a new business is challenging. The vast majority of new companies and businesses in America do not last. Only 25% of new businesses make it past the 15-year mark.
Entrepreneurs need financial skills involving marketing, research, and business knowledge, and financial capital to get it all started. Luckily, there are more options to finance a business venture than ever.
Being an entrepreneur means that you will either be doing everything on your own or hiring people to help you, like managers and consultants. Sometimes, people who own and run businesses completely on their own are called “Solopreneurs.”
The benefit of running a business entirely on your own is that you get to keep all the revenue minus expenses. Not having to worry about hiring staff can keep you more nimble and allow for more control, but this method has its costs.
Formal education can certainly help in the pursuit of starting a successful business, but surveys show that most entrepreneurs do not have a college degree. What seems to be a key factor to success is experience.
Advantages of Intrapreneurship
One of the biggest upsides to working within a pre-existing company or organization is the lack of risk. The worst that can happen financially is getting fired. Business owners have a lot more skin in the game if things go south.
By not owning the business or its assets, you are free from the financial fallout of a company that fails. People who start businesses that fail usually end up in financial ruin and have to go through difficult processes like bankruptcy.
Another bonus to intrapreneurship is a steady paycheck. Regular income and benefits is a staple in stability. As an intrapreneur, your job is not just to provide labor to your employer. You also need to actively add value to the company with new ideas and products that will make the company more profitable and sustainable.
Another advantage for intrapreneurs is the number of resources immediately available when you get hired. There are managers, staff, and other resources at your disposal to help you through your career.
The Risks of Intrapreneurship
Intrapreneurship is inherently lower risk than standard entrepreneurship, and it’s a lot more financially stable. Business owners are on the hook for not just their own labor but everything else involving the company.
Regular business owners have startup costs and few financial safeguards. When working your way up and advancing through an existing company, there’s the risk of being fired, and that’s about it.
An abstract risk to intrapreneurship is that you’ll have less control over your career, and it may take you places you did not intend.
Entrepreneurship is a chance to have complete control over how a business runs. Owning your business means keeping the profits. And if you end up selling your company, you keep all of the money from that sale.
As a business owner, there are innumerable perks like making your own hours, prices, and business approach. A good example of an entrepreneur you’re probably familiar with is J.K. Rowling. Today, she is considered a household name but had humble beginnings.
Now famous for her award-winning Harry Potter novels, Rowling was living on welfare as a single mother before her rise. Her books are credited by many for the popularization of young teen novels, and the film adaptations and merchandise rights only added to their value. Today, she is estimated to be worth about $1 billion.
A Case Study of Entrepreneurs and Intrapreneurs
Tim Cook of Apple Inc. replaced Steve Jobs as CEO in 2011. These two men are perfect examples of an entrepreneur and an intrapreneur working together.
Steve Jobs is a classic example of an entrepreneur. He found a gap in the computer market and filled it with a company he co-founded: Apple Computer Company.
Before the Macintosh, computers were not user-friendly, and they were primarily used by tech companies, scientists, and government agencies like NASA. Job’s recognized this and believed that computers could be a consumer product in the home.
For the most basic of tasks, computers require that you learn their language and input unintuitive codes to achieve things. The Macintosh changed this with an easy-to-use interface that is widely considered the precursor to Windows 95.
In 2007, Jobs revealed the iPhone to the public at the Macworld convention in San Francisco, and the world was never the same. Entrepreneurs don’t just start businesses. They come up with new ideas and change the world.
Jobs was an entrepreneur in the truest sense in that he created a company and products that upset the natural order.
Tim’s Early Career
Cook earned his bachelor’s degree in industrial engineering from the Auburn University of Alabama. After graduating, he worked for IBM from 1982 to 1994 and became a director within the company.
While working, he earned his Master’s degree in business administration from Duke University. After that, Cook had a couple more high-ranking jobs at different companies. In 1998, he met Steve Jobs, who offered Cook a position at Apple.
At this time in Apple’s history, it was not the tech giant we know today. It was actually nearing bankruptcy, and Cook went into the position understanding that things weren’t going well.
Cook’s role at the time largely involved supply chain operations. He completely revamped the supplier operations by shutting down pre-existing manufacturers and signed new contracts with more efficient manufacturers.
Within just a year of Cook’s hiring, Apple began to see profits for the first time in years. Other decisions he made early on, like investing in new flash memory technology, were crucial to Apple’s future success.
These decisions had direct impacts on how Apple would produce products like iPods and iPads. While Jobs was battling pancreatic cancer, Cook would go on to take over more and more of the executive work and went higher up the ranks.
Cook truly is the pinnacle of intrapreneurship. He entered into a company on the verge of bankruptcy and helped turn it into the most valuable company in the world in the span of thirteen years.
Intrapreneurs and Entrepreneurs
Intrapreneurs are a necessary support for most traditional entrepreneurs. They play a key role in the vast majority of business venture’s success and adaptability. A lot of credit is given to entrepreneurs for leading the way in things like environmental protection and workers’ rights.
However, more credit needs to be given to those who innovate and create change from within existing businesses and organizations. It might technically be an easier path to success, but it still requires intelligence, talent, and experience.