How Entrepreneurs and Intraprenuers approach innovation

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© Tweeter Linder 2017 – All rights reserved. Photo by iStock

Innovations can come from two related but different sources. Entrepreneurs building a new business around their innovation. Intrapreneurs innovating inside an existing business. Learn about what they have in common and how they are different


Both innovation models have a set of common denominators. Generic to any type of innovation efforts.

The most critical success factor is a solid understanding of the jobs to be done for customers. Validating that the demand for the innovation is authentic. And to take understanding from initial hypothesis to validated articulations.

All innovators develop a minimum viable product first. Advanced enough to generate valuable feedback from pilot customers. Limited in scope to reduce initial capital demand and time from idea to prototype. The path to first commercial offering involves several iterations. With customer feedback inserted in each step. Where needs, solutions and business models evolve together.

Today’s innovations leverage both technology and business model innovations. Platform logics and disruptive business models represent an essential part of new innovations. Great innovators rank business model innovation as high as product innovation. Making sure the business model is in alpha when first prototype is in in alpha.

Financing is tight and allocated at pre-defined gates or milestones. With clear expectations on progress on both solutions and customer engagements. Don’t expect big commitments upfront. Expect pay for progress and tight purses.

Sales prove your innovation is working. Your first paying customer, and the initial pipeline validate your innovation assumptions. An area where investors and sharks focus their attention and questions.

People are critical to innovation success. With complementing skills in the team to get the whole program off the ground. Finding and engaging the required profiles is a cumbersome effort. with high impact on the odds for success.

Entrepreneur specifics

An entrepreneur takes large personal risks. Investing own money and time in early stages of the venture. Innovating on the side, on top of a full-time job. Often having to leave a paid full time job before the innovation idea is proven. And balancing the dilemma between how much control you give up to get in required capital.

Investors expect entrepreneurs to be full-time and all-in when investing. Where both own time and invested capital used to gauge your skin in the game. Where the measuring stick is, the more the merrier.

Entrepreneurs rely on external stakeholders. Mentors supporting the innovator. Incubators providing an innovation framework to follow, and a network of fellow innovators. Investors providing capital and setting expectations.

Entrepreneurs start without customers. And the challenge of finding customers before you have a brand or have a product is an art in itself. Defining and finding pilot customers is a difficult task an entrepreneur face.

Entrepreneurs look at innovations capable of carrying a whole business. Where bold unicorn visions, moon shot projects and blue ocean thinking are in play. The potential size and growth of the business is the promise investors look for.

Success for an Entrepreneur can come from both operational results and/or asset valuation. Where strategic positioning and growth potential define asset valuation. With operational results coming into play in later phases. Entrepreneurs expect that asset game to be their financial driver.

Intrapreneur specifics

The journey for an intrapreneur is one about change management. Requiring a different culture and approach than the base business. Changing what we do. Changing how we do things.

Intrapreneurs often kick-start their innovation on part time. As a paid part of their full time job. The 10-20% offered is a welcome contribution. But real progress requires private time to bear fruit. Where the investment of private time doesn’t generate any control. Nor financial stake in the business.

Intrapreneurs have access to internal structures and resources. Reducing the efforts required to find mentors/incubators/investors. A model where proven garage or skunk projects can scale within an existing business.

Intrapreneurs build innovations for an existing customer base. Making the choice of target customers simpler. And is a great starting point for a customer led innovation approach.

Intrapreneurs also have the potential to innovate as part of an existing business. Develop the next big thing in a field where your business is already present. Leveraging brand and market recognition. Disrupting yourself rather than waiting for an external disruptor to eat your lunch.

Success for intrapreneurs come from operational results. Most innovations are too small to have material impact on the valuation of a large company. At least for the planning horizon you build the business case for. This put higher pressure on delivering operational results. Without a long term valuation upside in the mix.

Questions to you and your team

  1. Do we represent an entrepreneurial or intrapreneurial approach – you are either or.
  2. How do we support innovation driven by intrapreneurs – the in-house alternative to an extrernal incubator.
  3. What characterize our investment gates – establish clear expectations intrapreneurs can see.
  4. What goals do we have for our innovation agenda – measured as how much future business it should generate.
  5. Do we have a good grip on the 6+6 factors shaping our intrapreneurship efforts – common and specifics above.

Additional reading suggestions 

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