Entrepreneurship versus Intrapreneurship

Entrepreneurship versus Intrapreneurship

Entrepreneurship versus intrapreneurship; two terms that are often confused with one another. However recently, a new term has been added to our business vocabulary and you just might have never encountered it before: Intrapreneurship. This article is going to define, differentiate them both as well as be able to provide similarities.

Who Is An Entrepreneur?

Before we compare; entrepreneurship versus intrapreneurship, let us start with the understanding of who is an entrepreneur? According to Investopedia, an entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards.

The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures. Entrepreneurs have a few of the following characteristics:

Another definition of entrepreneurship refers to the process of establishing a business entity, intending to get profit, as a return in the future. An enterprise or an established business is the end result of this process.

Entrepreneurship tests are available to test entrepreneurial abilities have been increasingly used to characterise entrepreneurs or people that have such characteristics. META Entrepreneurship Test is one of the ways to measure the entrepreneurial ability of an individual.

See more in detail regarding the META Entrepreneurship Test, a state-of-the-art psychometric test that identifies the entrepreneurial potential to help businesses nurture and retain their entrepreneurial talent.

Levels of Entrepreneurship

Amongst the comparison of entrepreneurship versus intrapreneurship Entrepreneurs create wealth. But it takes time to get there. We all start in the same place, as students. There are 5 levels of the entrepreneurship process.

• Level One is Self Employment. Being an entrepreneur, participating in the process of entrepreneurship teaches you everything from sales, marketing, management, accounting, legal, finance and HR.
• Level Two is The Managerial Perspective. Those with a managerial outlook are often in a great position to succeed as entrepreneurs. It teaches you how to employ, train and manage people who work for you, but it is still a level that you are doing much of the work of your business.
• Level Three is the Attitude of the Owner/Leader. This is different from level 1. A business owner has an enterprise that works without you having to work in it. It is the level where you have built your employees and management team to a place where they do the work of your business and you get out of their way.
  
  The entrepreneur who attains the level of an owner/leader enjoys remarkable benefits by knowing how to step aside and let the business – and those employees working in it – operate as a profit centre not reliant upon the owner’s constant hands-on participation.
• Level Four is the Pinnacle of Entrepreneurship. An entrepreneur uses other people’s money ideas talent and time to create wealth. It takes the lessons and knowledge learned from each level before becoming a master of level 4. Having learned new things every step of the way and evolved through various stages of entrepreneurial accomplishment and insight. A real entrepreneur knows that there will be moments that they will fail, prototypes will not work, testing results will not meet expectations.

How To Become Better Entrepreneurs

Moving aside from the comparison of entrepreneurship versus intrapreneurship, before you even start reading this section, be aware that as an entrepreneur, you will fail multiple times, ideas will not work, tests will fail. Take that as a learning process and learn from it to constantly make improvements to your business. Here are a few tips that might help to keep you going:

• You will make mistakes. Great entrepreneurs make mistakes, accept their failures. So, failures are something that brings new knowledge and experience to them and in such a way they become better business owners.
• Learn from the community. Their supporters, their common thinkers, attention grabbers and followers always can give them ideas about possible improvements, possible needs, or possible problems that the business can solve. These entrepreneurs have the biggest potential to increase their business potential energy directly from their community increasing their knowledge about what people want. In such a way, they can give them what they want. That’s a win-win situation.

There are multiple programs and workshops that help entrepreneurs to improve their understanding of the entrepreneurial world. For example, to nurture entrepreneurs, there is NEXEA's Entrepreneurs Programme, Malaysia's exclusive peer network for top tech entrepreneurs to learn and grow together. During this programme, entrepreneurs are guided by some of the best startup mentors and investors.

You are able to solve your business problems with peer entrepreneurs who have probably experienced similar issues using systematic methods to solve issues together. Not just that but you will get guidance from real, experienced mentors that are also Angel Investors (they have done IPOs/ M&A and are Chief Executives levels only).

Who Is An Intrapreneur?

An ‘Intrapreneur’ is a term made for an individual responsible for innovation in a business. An intrapreneur may not face the outsized risks or reap the outsized rewards of an entrepreneur, however, has access to the resources and capabilities of an established company.

An intrapreneur is someone who’s filled with leadership qualities – innovative, driven and passionate.

The infographic below lists all the strengths of intrapreneurship from both the intrapreneur's perspective and the company’s perspective. It includes a very detailed mind map that correlates individual workers and the whole company.

These individuals are generally given autonomy to work on a project that may have a considerable impact on the company. In many instances, intrapreneurs within a company have evolved into entrepreneurs.

Intrpreneurial Culture and Innovation

While comparing entrepreneurship versus intrapreneurship, they both possess different cultures of work ethics and idea execution. There are four characteristics of intrapreneurial culture:

• Innovation. To foster an intrapreneurial culture, a firm needs to attract and recruit creative, innovative and talented individuals. However, it may not always be about innovative individuals, creating an environment, and providing resources that foster growth and support innovation. Intrapreneurial employees should have a healthy sense of competition with one another to do the best job they can and get results.
• Honesty and Transparency. Trusting your employees with important company information and including them in company-wide decisions can make them feel like they’re more involved in day-to-day business processes, regardless of their individual roles. Honesty needs to be valued in an intrapreneurial culture, proactive and efficient innovative employees need to be rewarded and appreciated.

• Involvement. Involving all employees across the business in idea generation and execution is always a great idea, you never know which individual in which department will be hosting the best idea for new products and services. Each person must feel ownership for the improvements and advancement they have generated. In this respect, employees need to be encouraged to create solutions independently of the chain of command.
• Learn from and accept failures. Create a culture where failures aren’t looked down upon, instead you learn from them and not let them affect your innovation process. When an issue occurs intrapreneurs must take responsibility and address the problem right away. Learn to take risks but at the same time do not bite off more than you can chew.

How Can Companies Encourage Intrapreneurship and Have Realistic Expectations?

According to Intrapreneurial Initiative, give your employees time to work on something they are interested in! By doing this, setting realistic goals and timelines, and acknowledging that there will be both failures and successes, you will succeed!

The important part is to constantly test new ideas at various stages of development rather than waiting until a new product or service has been entirely developed – this “pivoting” will allow for realistic evaluation of new projects along the path of development.

Entrepreneurship versus Intrapreneurship: The Differences and Similarities

Entrepreneurship versus Intrapreneurship: The differences and similarities can be summarised in the short video below, dividing both into categories.

A few of the major differences in entrepreneurship versus intrapreneurship have to do with dependency, risk-taking, fundraising and orientation.

In terms of dependency, entrepreneurs as owners and establishers of the business, have full independence whereas in comparison to intrapreneurs, who work for entrepreneurs may not have as much liberty in decision making as entrepreneurs do.

Entrepreneurs are risk-takers and will be responsible to bear all the risk that the business goes through whereas an intrapreneur may not encounter as high a risk as entrepreneurs however business risk is never fully eliminated for both types.

The element of fundraising, entrepreneurs are responsible for raising their own funds for their means, could be through all methods, angel investors, crowdfunding, loans and so on. However, intrapreneurs are not responsible for raising funds.

An entrepreneur begins his journey by setting up his own business from scratch, his/her own business idea and models whereas an intrapreneur ends up working for other businesses and organisations.

On A Final Note

To conclude entrepreneurship versus intrapreneurship, the infographic below gives us a visual comparison of the differences and striking resemblances between the entrepreneur and the intrapreneur. Entrepreneurship versus intrapreneurship may sound similar, but there are striking differences between the two as well as some similarities.