What Is The Difference Between Intrapreneurship Vs. Entrepreneurship?

 

Written by Peter Keszegh

If you're thinking about stepping into the business world, you've probably heard about entrepreneurs and intrapreneurs, and how they play different roles and have their own strengths.

But how do intrapreneurship and entrepreneurship differ? Let’s break it down.

What is intrapreneurship vs. entrepreneurship?

First off, entrepreneurs are those brave souls who decide to start their own business from scratch. They're the ones with a dream and the guts to go solo, building their business piece by piece.

Intrapreneurs, on the other hand, are the innovators within an existing company. They're the ones who come up with new ideas, products, or services, but do it from the safety of the company. They have the backing and the resources of an organization.

There are many ways that entrepreneurs and intrapreneurs work differently. Here's how:

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1. Risk and reward

Entrepreneurs are daredevils and go into situations where the risk is as high as the potential reward. Imagine investing your life savings into an idea you believe in, unsure whether your product will resonate with the market. 

This path is financially risky, but you have the chance to see your vision come to life and grow as a professional.

Intrapreneurs, on the other hand, safely work within established companies. They don't necessarily risk their financial stability, but instead stake their reputation and career progression on whether their innovative projects succeed.

The rewards intraprenerus seek are more about professional fulfillment, recognition, and the opportunity to make a change inside a company.

2. Resource accessibility

Entrepreneurs start with a vision and often little else. They have to scramble to gather resources, from funding to talent to technology.

Being an entrepreneur involves pitching to skeptical investors, wooing talented employees without necessarily promising them big salaries, and negotiating resources on a tiny budget. Entrepreneurship teaches resilience and creativity.

For instance, WhatsApp was founded by Brian Acton and Jan Koum, who used their savings and a modest seed investment to create the app—which later became a global messaging giant.

Intrapreneurs, in contrast, have many resources at their disposal. Because they work within a company, they can access finances, human capital, and other internal assets that entrepreneurs don't have.

This doesn't make their task easy, however, as dealing with internal protocols to access these resources can also be difficult. Intrapreneurs need to be persuasive about their innovative ideas to secure the internal backing they need. 

An example is the development of Sony's PlayStation, where Ken Kutaragi used Sony's resources to enter and eventually dominate the gaming industry.

In a similar vein, many tech startups choose to outsource game development to access specialized skills and reduce costs while ensuring high-quality production.

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3. Decision-making speed

Entrepreneurs have to be agile and make swift decisions to adapt to market changes, customer feedback, or new opportunities. This agility allows startups to innovate and respond to challenges much faster than larger entities. 

The downside to this rapid decision-making process, however, is that mistakes can be costly without the buffer of a large organization's resources.

But it's this very agility that allowed companies like Instagram to pivot from a check-in app to a photo-sharing giant, allowing them to grow with remarkable speed.

Intrapreneurs, while innovative, are often slowed down by the processes and hierarchies of their organizations.

Decision-making for intrapreneurs can be slow, because they need approval from various levels of management. This can slow down rapid innovation, but this approach makes sure ideas are thoroughly vetted and are aligned with the broader company's goals and directions.

4. Autonomy and control

Entrepreneurs have near-total control over their ventures, from strategic direction to daily operations. This allows them to creatively express themselves and pursue a vision without compromise. 

The flip side is that entrepreneurs are responsible for every strategic choice they make, with every decision impacting the project's success or failure.

Entrepreneurs like Elon Musk, who have built companies like SpaceX and Tesla from the ground up, show how total control in entrepreneurship can lead to groundbreaking innovations.

Intrapreneurs, while creative and driven, are limited to operate within their organizations. The control they have is balanced by the necessity to align with the company's corporate goals, strategies, and cultures. However, this kind of collaboration is for innovations that benefit from organizational support and inputs.

Intrapreneurial projects like Adobe's Creative Cloud show how innovative ideas can thrive within a company, transforming business models and offerings through collaboration.

5. Failure and accountability

Entrepreneurs know that failure can have personal and financial consequences. The personal investment in their ventures means that any failure will impact not just their business, but their personal lives as well.

This high-stakes environment makes entrepreneurs more determined to succeed, but also aware of the possibility of great losses. The failure of a startup can mean not just losing time and resources, but also starting over or rethinking one's career path.

Intrapreneurs are still accountable for their projects, but they share the consequences of failure with their organization. A failed project is often viewed as a learning experience within the company's overall operations.

This shared responsibility can lessen the personal impact of failure, allowing intrapreneurs to take risks and innovate, knowing that a single failure won't define their career.

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6. Innovation scope

Entrepreneurs are not constrained by any boundaries in their ventures. They have the freedom to dream big and introduce groundbreaking products or services that can change markets for the better.

This allows for radical innovation, pushing the limits of what's possible and often creating entirely new categories of products or services.

Companies like Uber and Airbnb are great examples of entrepreneurial projects that didn't just enter existing markets, but created new ones—rethinking how we use transportation and accommodations.

Intrapreneurs focus on specific areas of improvement or expansion within the scope of their company's existing capabilities. Their innovations are meant to improve on or extend the company's current products and services, which can lead to growth.

This approach allows for innovations that make the most of the company's strengths. For example, IBM's development of cloud computing services built on its expertise in technology and infrastructure for new opportunities.

7. Funding sources

Entrepreneurs look to secure funding from external sources, whether it's through venture capital, angel investors, crowdfunding, or loans. This journey can be challenging, requiring entrepreneurs to pitch their ideas, often to multiple audiences, and compete for limited funds.

The ability to secure funding is crucial any entrepreneur, which sets the pace at which their venture can grow. Success in securing funding not only provides the necessary capital, but also validates the business idea in the eyes of other audiences.

Intrapreneurs, on the other hand, have the advantage of using their company's internal capital. While this may seem easier, it requires intrapreneurs to deal with the internal politics and priorities of their organization, meaning they have to convince company leaders of the value and potential of their projects. 

This involves crafting compelling business cases, aligning projects with company-wide objectives, and competing with other internal projects for funding. Internal funding can be a more stable source of capital, but it greatly depends on the intrapreneur's ability to sell their idea within the organization.

8. Market strategy

Entrepreneurs typically not just enter markets, but create them. They look for unmet needs or demands and create solutions that make the most of these opportunities.

This approach requires a deep understanding of one's target audience, a product development strategy, and the ability to communicate with the public about what their new solution has to offer.

For instance, startups like Tesla have not only introduced creative products, but have also shaped consumer attitudes and demand for electric vehicles.

Meanwhile, intrapreneurs focus on expanding their company's reach within existing or related markets. Their strategies may involve developing new products that complement what they already offer, or targeting new kinds of customers.

The goal is to make the most of the company's existing strengths and market presence to get new customers or grow the overall market.

Take Apple's iPhone, for example—Apple used to be known solely for their computers and music players, and later expanded into the mobile phone market.

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9. Cultural influence

Entrepreneurs have the opportunity to shape the culture of their ventures from scratch. They incorporate their values, vision, and work ethic into their organizations, creating a culture that reflects their personal beliefs.

This allows entrepreneurs to build companies that not only excel as a business, but also resonate with employees, customers, and partners on a cultural level. The culture of a startup can be a key factor in attracting talent, engaging customers, and building brand loyalty.

Intrapreneurs, while working within the established company culture, can still help change the culture in their organization. They challenge the status quo, introduce new ways of thinking, and advocate for innovation within the company.

By leading by example, intrapreneurs can influence organizational culture. These efforts can gradually change company culture, making organizations more comfortable with innovation, risk-taking, and change.

10. Professional development

Entrepreneurship offers a unique professional development experience, where learning is self-directed and depends on the success of the venture. 

Entrepreneurs learn on the job, facing various challenges that demand a diverse set of skills—from product development and marketing to finance and operations. 

This intense, hands-on experience can speed up personal and professional growth, leading to a deep understanding of business dynamics and leadership. Entrepreneurship provides entrepreneurs with a distinct set of lessons and opportunities for growth, depending on their ventures.

Intrapreneurs, by contrast, have access to more structured professional development within their organizations. They can take advantage of formal training programs, mentorship opportunities, and career progression frameworks designed to cultivate leadership and innovation skills.

The support structures available within companies can provide a more guided and stable growth experience for intrapreneurs.

Intrapreneurs learn to handle corporate politics, collaborate with different teams, and drive change within an organization, gaining skills that are valuable for internal leadership roles.

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Embarking on your journey: A personal choice

Whether you’re dreaming of starting your own thing or looking to be the change-maker within a larger organization, there’s a path for you. Intrapreneurship and entrepreneurship are both rewarding and filled with opportunities to make a mark.

What matters most is finding the path that resonates with your goals, values, and vision for the future. Whichever path you choose, embrace it with passion, perseverance, and a heart ready for adventure.

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