Intrapreneurship

Intrapreneurship has become a hot topic in Turkey recently. Large companies are feeling the impact of tech innovations on their core businesses. They want to defend themselves against disruptive innovations, and enjoy the financial rewards which these innovations bring, by creating these innovations themselves. They therefore encourage their employees to practice intrapreneurship.

Here’s how Wikipedia describes intrapreneurship: “Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship”.

It makes sense for large companies to promote intrapreneurship. In addition to the theoretical defense which it provides against disruption and the potential it holds for very large financial returns, it’s an important hiring and employee retention strategy. Employees want to work for companies that give them the freedom to take risks and innovate.

Unfortunately, I don’t believe that being part of intrapreneurship efforts makes sense for aspiring entrepreneurs. Even if you want to take risks and innovate, the fact is that large companies attract a lot of people who don’t.

Most people prefer to get their steady pay check rather than expose themselves to the risk and variable rewards offered by entrepreneurship. There’s nothing wrong with this. It’s just how most people are.

This steady pay check is exactly what large companies offer, so risk-averse people overwhelmingly self-select into large companies. And since entrepreneurship is a team effort, even if you’re entrepreneurial yourself, you’re unlikely to be able to surround yourself with the team necessary to build a successful venture inside a large company. Our best entrepreneurs couldn’t operate successfully as employees inside a large company. Knowing this, they don’t take these roles.

This doesn’t mean that large companies aren’t valuable training grounds for entrepreneurs, especially at a young age. They teach you many skills, both functional and with regards to building professional relationships. However, if you have an exciting idea for a new venture, you’ll be more likely to succeed if you pursue it outside of a large company.

The same reason that makes intrapreneurship an unpromising path for aspiring entrepreneurs also makes it an unpromising path for large companies. Although it gives a short term PR boost to the company’s hiring activities, without true risk-takers and innovators on their teams, large companies are unlikely to be able to build sizable ventures that disrupt their core business, or generate great financial returns for the company in adjacent businesses.

Rather than promote intrapreneurship, large companies will produce much better returns by investing in VC funds that back entrepreneurs, and attempting to buy those startups that threaten to disrupt their core business once they reach a certain maturity.

I know this sounds self-serving, but it’s the way things are.