On the contrary, an intrapreneur is an employee of the organization who is paid remuneration according to the success of the business unit, for which he/she is hired or responsible.
The primary difference between an entrepreneur and intrapreneur is that the former refers to a person who starts his own business with a new idea or concept, the latter represents an employee who promotes innovation within the limits of the organization. In this article excerpt, we are providing you wit some other important points of distinction between the two.
Content: Entrepreneur Vs Intrapreneur
- Comparison Chart
- Definition
- Key Differences
- Conclusion
Comparison Chart
| Meaning | Entrepreneur refers to a person who set up his own business with a new idea or concept. | Intrapreneur refers to an employee of the organization who is in charge of undertaking innovations in product, service, process etc. |
| Approach | Intuitive | Restorative |
| Resources | Uses own resources. | Use resources provided by the company. |
| Capital | Raised by him. | Financed by the company. |
| Enterprise | Newly established | An existing one |
| Dependency | Independent | Dependent |
| Risk | Borne by the entrepreneur himself. | Taken by the company. |
| Works for | Creating a leading position in the market. | Change and renew the existing organizational system and culture. |
Definition of Entrepreneur
An entrepreneur is an individual who conceives the idea of starting a new venture, take all types of risks, not only to put the product or service into reality but also to make it an extremely demanding one. He is someone who:
- Initiates and innovates a new concept,
- Recognises and utilises opportunity,
- Arranges and coordinates resources such as man, material, machine and capital,
- Take suitable actions,
- Faces risks and uncertainties,
- Establishes a startup company,
- Adds value to the product or service,
- Takes decisions to make the product or service a profitable one,
- Is responsible for the profits or losses of the company.
Entrepreneurs are always the market leader regardless of the number of competitors because they bring a relatively new concept in the market and introduce change.
Definition of Intrapreneur
An intrapreneur is nothing but an entrepreneur within the boundaries of the organisation. An intrapreneur is an employee of a large organisation, who has the authority of initiating creativity and innovation in the company’s products, services and projects, redesigning the processes, workflows and system with the objective of transforming them into a successful venture of the enterprise.
The intrapreneurs believe in change and do not fear failure, they discover new ideas, looks for such opportunities that can benefit the whole organisation takes risks, promotes innovation to improve the performance and profitability, resources are provided by the organisation. The job of an intrapreneur is extremely challenging; hence they are appreciated and rewarded by the organisation accordingly.
From last few years, it has become a trend that large corporations appoint intrapreneur within the organisation, to bring operational excellence and gain competitive advantage.
The important distinguishing points between entrepreneur and intrapreneur, are given in the following points:
- An entrepreneur is defined as a person who establishes a new business with an innovative idea or concept. An employee of the organisation who is authorised to undertake innovations in product, service, process, system, etc. is known as Intrapreneur.
- An entrepreneur is intuitive in nature, whereas an intrapreneur is restorative in nature.
- An entrepreneur uses his own resources, i.e. man, machine, money, etc. while in the case of an intrapreneur the resources are readily available, as they are provided to him by the company.
- An entrepreneur raises capital himself. Conversely, an intrapreneur does not need to raise funds himself; rather it is provided by the company.
- An entrepreneur works in a newly established company. On the other hand, an intrapreneur is a part of an existing organisation.
- An entrepreneur is his own boss, so he is independent to take decisions. As opposed to intrapreneur, who works for the organisation, he cannot take independent decisions.
- This is one of the salient features of an entrepreneur; he is capable of bearing risks and uncertainties of the business. Unlike intrapreneur, in which the company bears all the risks.
- The entrepreneur works hard to enter the market successfully and create a place subsequently. In contrast to Intrapreneur, who works for organization-wide change to bring innovation, creativity and productivity.
Conclusion
Since, last few decades, it has been noticed that people give more value to innovations, which lead to the rise in the number of startup companies year on year. This is because the world is changing rapidly with the advancement in technology. It has also resulted in the competition among companies. Now, if the enterprise wants to stand in competition with other enterprises, it should bring something new in their products. Entrepreneur and Intrapreneur play a major role here, to enter into new business and even markets.
Intrapreneurship is a strategic service being delivered to core business units to provide them with innovation that adds 5-10% uplift in top or bottom line.
Let’s take a deep dive into how it differs from entrepreneurship to find the right approach for your business:
Goal-Setting
Entrepreneurs rely on their vision or their capability to identify gaps in the market to set their goals, while an intrapreneur’s targets can be shaped together with or by senior leaders.
As employees of a company, intrapreneurs don’t have unlimited and unchecked autonomy over how they work or what they work on. This is a positive point though, as entrepreneurs often tend to fall in love with their ideas and seek strategic guidance and direction from their investors.
The reality check of senior managers and executives helps intrapreneurs focus on impact and keeps them on a path to success.
Access to Resources
Entrepreneurs mostly rely on personal networks, their own resources and stamina to forge their path.
On the other hand, intrapreneurs get access to the breadth of capabilities, resources and insights available from an existing organisation, giving them a clear head-start and certain unfair advantages.
However, we know well that this might mean they have to work with internal processes, stakeholders and political dynamics.
Mitigated Risks
Risk-taking is all in a day’s work for both entrepreneurs and intrapreneurs.
However, the types of risks they take can differ dramatically. Ambitious entrepreneurs put themselves in an incredibly vulnerable position when launching a new business.
Whether it’s quitting their day job or gambling with their savings, entrepreneurs face enormous pressure.
An intrapreneur also experiences risk because a failed venture could damage their professional reputation and career path within the organisation or industry. But there is less financial downfall as they’ll still receive their salary.
Approach to Failure
Did you know that 60% of entrepreneurs fail in their first five years of trading?
Entrepreneurs are responsible for their failures and mistakes, which are crucial for achieving eventual success.
On the other side, decisions that intrapreneurs make may have consequences that aren’t isolated to the individual.
However, failure managed correctly is key for companies to learn and understand what their customers truly want and expand the boundaries of what’s possible.
Safety Nets
While a single month of poor sales can be game over for entrepreneurs, and a single bad choice may mean financial disaster when new businesses are taking off
On the other hand, established organisations have the competitive advantage of providing safety nets if bets don’t go to plan, and have a financial safety net to encourage risky behaviour.
Even if a carefully planned innovation project fails, its impact will unlikely materially show on the overall company accounts, thus giving intrapreneurs more room for maneuvering and creativity.
Intrapreneurship promotes experimental ideas. Whether it’s Google’s failed Project Glass or Amazon pulling the plug on their innovative solution to shopping, not all ventures succeed.
For intrapreneurs, failure isn’t necessarily a bad thing. Companies can learn from failure to understand what their customers want and stretch the boundaries of what’s possible.
As sci-fi author, Arthur C. Clarke once wrote: “The only way to discover the limits of the possible is to go beyond them into the impossible.”