What Is Corporate Entrepreneurship? (Definition, Types And Examples)

 

Written by Peter Keszegh

As you carve your path as a digital marketer, there's an important concept you might not have fully embraced yet: corporate entrepreneurship. 

This isn't about wearing a suit and walking all high and mighty in your office. In a landscape where digital marketing trends shift quickly, corporate entrepreneurship is about adopting an entrepreneurial mindset within your organization.

What does this mean for you? It means viewing challenges as stepping stones, not roadblocks. It means fostering a culture where every team member is empowered to think like an entrepreneur, spotting opportunities where others see obstacles.

Corporate entrepreneurship is your chance to innovate, to experiment with new technologies, and to lead your industry into the digital future. This journey requires courage, creativity, and unwavering commitment.

If you're ready to explore into the thrilling world of corporate entrepreneurship, you've come to the right place.

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What is corporate entrepreneurship?

In simple terms, corporate entrepreneurship is about creativity, innovation, and thinking about the box. It's about steering your organization toward new kinds of success.

But what exactly makes up this dynamic concept? Let's break it down.

Strategic innovation: The quest for uncharted markets

First and foremost, corporate entrepreneurship deals with strategic innovation—which means pursuing new markets, products, and business models that can change the landscape of an industry. It's not just about making improvements; it's about setting new standards.

This is where big companies like Amazon continually evolve, shifting from e-commerce to cloud computing with AWS, and then to AI and machine learning. It's about asking, "What if?" and "Why not?"

For instance, Amazon, which was initially an online bookstore, transformed into a tech giant, focusing on the need for scalable cloud computing services.

Adobe also shifted from selling boxed software to a subscription-based model, making its creative tools accessible online and constantly updated. This move greatly expanded its market reach and customer engagement.

Intrapreneurship: Fostering internal innovation

Intrapreneurship is about entrepreneurship within the corporate structure. This means encouraging employees to innovate, take risks, and pursue new ventures as if they were independent entrepreneurs.

Companies like Google have policies that allow employees to dedicate time to personal projects, which creates an environment where innovation is not just encouraged, but expected.

For instance, Google's "20% Time", a policy that led to the creation of Gmail and AdSense, encourages employees to spend one day a week working on projects outside their regular tasks.

3M's Post-it Notes also came out of a failed adhesive experiment that later turned into one of the most successful office products worldwide—thanks to 3M's supportive environment for intrapreneurial ventures.

New venture creation: Making new businesses

Corporate entrepreneurship also focuses on creation of new ventures, exploring untapped markets, and developing innovative products or services.

This means some companies may have dedicated teams, resources, and sometimes even separate entities under the brand to explore new opportunities for growth.

For example, Sony's PlayStation started from an internal project. The PlayStation was then introduced to the gaming industry, and Sony became a dominant player in the gaming world—creating new revenue streams for the company.

The Virgin Group also mastered this art, as they've explored the airline, music, telecommunication, and even space travel industries under their brand.

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External collaboration: Embracing open innovation

In the digital age, corporate entrepreneurship thrives on external collaboration and open innovation. This entails partnering with startups, academia, and other companies to co-create value.

This approach not only speeds up innovation but also opens up new markets and technologies.

Take BMW and Toyota’s partnership on hydrogen fuel cell technology, for instance. It was a strategic alliance that combines the companies' strengths to innovate in sustainable transportation.

P&G's Connect + Develop program also invites innovators outside the company to submit ideas, fostering a culture of open innovation and boosting its R&D productivity.

Risk-taking: The courage to fail forward

Corporate entrepreneurship also requires the willingness to take calculated risks and embrace failure as stepping stones to innovation. This is crucial for fostering a culture where experimentation is celebrated, and learning from failures is important to the process.

Creating a safe space for risk-taking allows companies to explore ideas and innovations. It's important to understand that not every venture will succeed, but that there's a valuable lesson in trying.

Take Amazon's Fire Phone, for example. Despite being a commercial failure, the lessons learned allowed the company to develop different products later on, such as Alexa and Amazon Echo.

Kodak also invented the digital camera, but didn't capitalize on it because they feared it would hurt film sales. This serves as a lesson for business owners on why it's important to embrace innovation, even when it might change things up in your existing business models.

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Five types of corporate entrepreneurship

Corporate entrepreneurship is about more than just a single approach to business development. It's a range of strategies that can change how companies operate and compete.

Here are five distinct types of corporate entrepreneurship, which can drive change and foster growth:

Internal innovation programs

These programs encourage employees to act as intrapreneurs, developing new ideas and projects within the company. They're about making the most of the creative power and insights of a company's workforce to explore innovative ideas.

Back to Google's "20% Time" example—This program allows employees to dedicate one day a week to working on projects that interest them, which aren't necessarily part of their regular job descriptions. Products like Gmail and Google News started from this initiative.

Atlassian also hosts regular "ShipIt Days," a 24-hour hackathon where employees can work on anything related to the company's products. It's a great creative outlet that led to product improvements and innovations.

Another example: Adobe provides employees with a "Kickbox"—a literal box containing resources, guidance, and a small budget to test new ideas, encouraging employees to experiment with new concepts.

Venture capital arms

Some corporations set up their venture capital arms to invest in promising startups. This approach allows them to focus on external innovation and staying ahead of new trends and technologies instead of developing within the company.

Google Ventures invests in startups across many industries, from artificial intelligence to health technology. This provides startups not only with capital, but also access to Google's resources and expertise.

Another example—as one of the largest corporate venture arms, Intel Capital invests in tech startups around the world, focusing on areas like AI, autonomous vehicles, and next-generation compute technologies. This fosters innovation that complements Intel's core business.

There’s also Salesforce Ventures, which is focused on cloud computing and the SaaS model. Salesforce Ventures invests in companies that can extend the Salesforce ecosystem, providing both funding and strategic partnerships.

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Strategic alliances and partnerships

Collaboration between corporations and other entities, such as startups, NGOs, or academic institutions, can lead to mutual benefits.

We previously mentioned BMW and Toyota's Collaboration on hybrid technology. By joining forces, these companies combined their expertise to speed up the development and adoption of hybrid and fuel cell technologies—proving that competitors can work together for great advancements.

Another example is the partnership between Spotify and Starbucks. This partnership allows Starbucks baristas to curate playlists on Spotify that customers can access through the Starbucks app—improving the customer experience for both companies.

IBM and Twitter also have a partnership that makes the most of Twitter's data with IBM's analytics expertise. This offers businesses insights into consumer behavior and trends, by combining social media data with advanced analytics.

Corporate accelerators and incubators

Corporate accelerators and incubators support early-stage startups through mentorship, resources, and sometimes direct investment. This fosters a relationship where corporations can focus on new technologies and innovations.

The Barclays Accelerator, powered by Techstars, is a comprehensive program for fintech startups. This program provides startups with funding, mentorship, and access to Barclays' global network of industry experts and investors.

There’s also the Microsoft for Startups initiative. This initiative offers startups technical resources, expertise, and Azure credits—helping them to develop their products and services with Microsoft's ecosystem, providing a platform for growth and innovation.

L'Oréal's Open Innovation Program also invites startups to collaborate on creating innovative beauty tech solutions, offering them a chance to showcase their products through L'Oréal's global distribution channels.

Spin-offs and corporate venturing

Sometimes, innovation means letting a part of the company operate on its own. Spin-offs can free ventures that may not fit within the parent company's core operations, but have the potential to grow as an independent company.

For example: PayPal was originally part of eBay, but spun off to focus on its online payment services independently. This allowed PayPal to grow into the global giant it is today.

Alphabet Inc. was also created as a parent company to Google and several former Google projects to allow for more flexibility and focus.

Verizon also spun off its media division, including brands like Yahoo and AOL, into a separate company called Verizon Media (later sold to Apollo Global Management). This allowed Verizon to focus on its core telecommunications business, while allowing Verizon Media to grow in the digital media and advertising industries.

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The real deal on corporate entrepreneurship

The world of corporate entrepreneurship can feel a bit scary, especially with all these big examples like Google and BMW. But here's the thing: at its heart, corporate entrepreneurship is really about getting creative and daring within your own business, big or small.

You've seen how companies, from tech giants to car manufacturers, have launched big things by thinking like smaller startups. Whether it's letting employees chase their wild ideas, investing in the next big thing, or teaming up with other companies, it all boils down to one thing: innovation.

Corporate entrepreneurship isn't just for big companies. Whether you're just starting out in the digital marketing world or you're launching a small business, there are ways to incorporate corporate entrepreneurship pie in your business journey.

It's about asking, "What can I do differently?" This can be in the form of giving your team the freedom to experiment with a new project, or maybe about partnering with another local business to create something neither of you could do on your own.

Diving into something new can be scary, and there might be risks. But every big leap forward started with a single step—what matters is that you're moving, you're trying, and you're not afraid to fail a little along the way.

Corporate entrepreneurship is a mindset. It's a way of doing business that's all about embracing change, innovation, and shaking things up. It's about making your mark, in your own unique way.

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