What Differentiates Corporate Entrepreneurship from the Independent Startup

Ever wonder how the independent startup environment differs from the world of corporate innovation and entrepreneurship or intrapreneurship? I have been involved with corporate startups, intrapreneurship and the entrepreneurial world of independent startups for many years and I can tell you that there are major differences. In fact, I have seen many entrepreneurs get a rude awakening after their startup or small business was acquired by a larger corporation because they failed to understand the following.

Materiality. A major difference between the independent entrepreneur launching his/her own business and that of the intrapreneur within the corporation is that the intrapreneur must very quickly demonstrate how financially material the new business idea will be to the overall performance of the corporation. Even a great idea, with good business potential, can be rejected or shut down because it simply will not be worth the effort. For example, the intrapreneur might have a timely and worthy innovation that is projected to grow to a $100 Million business, but if the core business is already at $1 Billion, is it worth the effort? Conversely, it might be given unrealistic growth targets to reach what are considered material results.

Time. The world of corporate innovation is always much more demanding on the time horizon of the new business idea. While a new business being bootstrapped independently can pace its progress more reasonably, the corporate startup will be imposed timelines as to when results are expected. These timelines will often overestimate the amount of support the corporate startup will receive from the parent to help it reach its objectives. If these timelines are not properly negotiated or left to be subjectively assigned, and if the intrapreneur is not a master at managing expectations and properly negotiating the "T" of SMART objectives, the new business idea might be doomed to failure.

KPI's. Corporate entrepreneurship is too often overtaken by corporate key performance indicators (KPIs). KPIs are a great tool to ensure leaders and employees focus on what matters most. Unfortunately, too many corporations make the mistake of flowing down KPIs designed for a well established core business running on a proven business model onto the fledging new business initiative. The startup needs a very different set of KPIs that will focus it on understanding the market need, validating its MVP, positioning the business, and properly scaling activities.

Leveraging. A corporate new business will be expected to leverage the core business from the parent company. After all, the ability to leverage the corporation's existing capabilities, systems, processes, and resources is a major competitive advantage as compared to the independent startup. A properly planned leveraging strategy will go a long way to ensuring success. It will also ensure that the leadership team of the parent company understand the level of support needed to succeed. Unlike the independent entrepreneur however, it can attack a lot of unwanted help or interference which, if left unchecked, can be fatal to the startup.

Change Management. Finally, the intrapreneur will have to master change management. After all, the new business is likely to need some level of support from the parent company requiring changes to the way business has historically been carried out. This will trigger resistance to change and can eat up a lot of the intrapreneur's resources and time which, if allowed to go on too long, can lead the corporate startup to run out of time.

The book, Winning at Intrapreneurship, tackles the above issues and others that must be addressed by any company looking to succeed at innovation and the launch of new businesses. I am happy to report that it has already received great reviews.