Intrapreneur or Entrepreneur?

[Upd. 12/10/09] This is the story of how I became an entrepreneur through intrapreneurship. I wasn’t born an entrepreneur. I have yet much to prove. But I’m on the road, trying not to take the detours and enjoying it all the way. Lately I’ve been reflecting on how I got where I am and whether I would advise somebody 10 years younger to take the same path. If you’re a recent college grad, if you work in a large tech company and are wondering if you should take the plunge or if you’re a young entrepreneur asking yourself about the path you’ve followed, this may be useful for you.

I went to college in Manchester, England. When I graduated, I had a choice. I could start a business or get a job. Unlike many grads from US colleges, I didn’t have any debt, thanks to the EU and the public university system. It was clear that I wanted to work in the software industry. Investment banking was a strong temptation, but after a summer at Barclays, I saw way too many alcoholics to crave the life, and frankly, getting a limo back home at night didn’t do much for me.

So I had a real choice. I saw two classmate friends (hello Roland and Su , who I respected for their intellect and their attitude, plunge into the dotcom bubble. I remember Roland’s words “Sam, this is a very special time, it may never come again.” They moved to San Francisco and kicked off their careers the startup way.

But I felt very strongly that the chances of succeeding with 100% stamina and 0% knowledge of how to run a business were significantly lower than with 60% stamina and 60% knowledge.

So I decided to wait. I tried to find the most entrepreneurial company hiring engineers in the software industry, with the most exciting technology and the most charismatic leader from whom to learn. In 1998 that was Microstrategy, without a doubt.

Hot off an IPO, MSTR was seeing explosive growth. It was racking up customers left and right, and its leader, Michael Saylor, was electrifying. I remember devouring his interviews, articles and speeches and stand in awe of him. This was the general that I could follow. So I joined his army.

You can get a taste of Michael in his Charlie Rose interview from 2000. He starts slow, but as Charlie asks him about the future and what’s the next big idea, you can get a glimpse of Michael at his best. He was able to articulate why technology mattered and how it could make lives better. Not only that, he could fire up his troops, line them up and execute.

Microstrategy was a company that attracted incredible talent, especially for an East Coast company. They had this mantra of finding the best young grads they could find and put them in positions of real responsibility. They also believed everybody needed to know the products and the philosophy inside out. So they put together a 3 month bootcamp that every employee went through. I remember those three months as grueling and challenging. At the end of bootcamp, depending on your grades, you got more opportunities to join different efforts in the company.

I wanted to join a team that had all its challenges ahead. I wanted an opportunity where, if I figured things out, there would be tremendous growth. I wanted to work with brilliant people. Finally, I wanted to be part of a small team. I found all those things at Angel.com. When I joined the Angel project, it had been up and running for 6 months. It was called Project X. Some marketing people had written a white paper explaining how Saylor’s vision could be translated into a product. Some techies had explored different ways of building it. But not a lot else.

For the first 2 years I worked as a software engineer. I stayed out of a lot of decisions, wasn’t even aware of many being made, and simply put my head down and tried to learn professional software engineering. My contributions weren’t particularly good — I’m an OK programmer, but not great. But thanks to a couple of brilliant developers, Ben and Josh, I learnt a lot: design patterns, agile programming, test driven development, UML, enterprise Java…

Two years into the project I had an opportunity to change roles. I became a technical product manager. In this job, I learnt how to write specs, how to design software, how to release, how to run a beta program, how to get feedback from customers, how to research competitors. I learnt how to prioritize and how to solve the tension between business people and technical folk.

It was 4 years into the project that things started to get interesting. We had finally struck a chord in the marketplace. We had changed the business model a couple of times and finally there was an audience. As I delivered my projects I kept on getting bigger assignments. I built very strong relationships with 5 folks who ran sales, engineering, marketing and operations. These were years where I started getting a team. First, one guy, then another. For a long time, not much more.

In 2005 I got my first VP-level position. It’s at this point that I think I finally became an intrapreneur. From 05 till I moved on in 09, I was part of one of the most exhilarating rides of my career. Incredible challenges, fantastic solutions, great growth. At the end, we were 25 technologists and a high performance team.

An intrapreneur is somebody who runs a business unit inside of a bigger organization, as if it were a startup. You make your pitch, you get the funds, you hustle, you get something out in the marketplace, you grow it, break some rules, and hopefully you turn it into a success for the organization, which in turn, rewards you with the gifts big organizations can give: bigger salaries, plusher jobs, more resources, fame within the building.

As an intrapreneur you’re navigating the organization trying to make things happen. On paper, it sounds great. After all, large organizations have potentially very complementary aspects to startups:

• The company wants new revenue — the intra-startup has ideas
• The company has money — the intra-startup can put it most effectively to work
• The company has expertise — the intra-startup has passionate people
• The company has channels / distribution — the intra-startup has product to sell
• The company has the ear of influencers — the intra-startup has a story to tell
• The company has a well-run back office — the intra-startup can focus on R&D and marketing
• The company has powerful executives — the intra-startup needs doors opened

It turns out that intrapreneurship is fraught with peril for both incubating companies and intra-startups. You’re simply catching two organizations at two very different spots in their life-cycle, and they’re hard to reconcile. The company didn’t get to be big and stay big without processes. Processes keep the company from collapsing. But startups die with processes. Startup people and corporate people add value in radically different ways. And they’re suspicious of each other.

There is good advice out there for successful intrapreneurship, for example, in Ben Casnocha’s blog, and in this Fast Company article by Robert Wolcott and Michael Lippitz. I would summarize it like this: Be a rebel who focuses on what can practically be accomplished and know when to shut up. The first part came very naturally to me. I am a rebel. The second part took years of honing. I still struggle with the last part.

When you are an entrepreneur, of any kind, you assume that –if it is within reach– the optimal, most rational solution to a problem wins. In a large company, though, there are many more interests and agendas at play. In the best run organizations, executives go through a process of aligning units and empowering people who help them discover the best ways to achieve the desired outcomes. In the rest of organizations you find a patchwork of well-run and well-intentioned people intermixed with much darker forces at play.

This makes the job of the intrapreneur that much harder. Like a boat trying to get from the Atlantic to the Pacific through the North East Passage, it’s the shortest route, as long as you don’t get sunk by a chunk of ice.

Ultimately, this is the main reason that drove me to become a mainstream entrepreneur. I had learnt an incredible amount and I was ready to put it towards creating value in a way that would cause the least friction and lead to the least wasted effort. It’s difficult enough to have market success. I traded an enviable amount of resources for the simplicity of the startup execution model.

My advice for someone out of college who wants to start a business. Should you set out on your own, right now? I would take a hard look at yourself. Are you beyond class? Do you have it in you to be the next Bill Gates, Steve Jobs, Sergey Brin, Larry Page or Mark Zuckerberg? If so, nothing should stop you. You’ve probably been wasting your time in college already. Are you good but within the average of your wannabe entrepreneur peer group? Then, intrapreneurship can be very fruitful.

You might be tempted to go ahead and join an early stage startup. It’s a possibility, but you must beware of the Earn or Learn conundrum, as Mark Suster puts it. You might not get either the earning that you hope or the learning that you need.

In any case, intrapreneurship does not equal corporate job. If, while you’re learning a profession you become soft (kids and mortgages can do that very quickly), stop being curious or learning and get addicted to the paycheck, the more likely outcome is that you will waste valuable years. Scott Gatz is an example of an intrapreneur with the right attitude.

My advice for someone in a corporate job who wonders about entrepreneurship. The most important question to ask of yourself is: how much learning that is applicable to entrepreneurship are you likely to accumulate in the next cycle? Have you been responsible for trying to make a buck for the company already? As the years go by, a corporate job offers diminishing returns. Especially if you are not getting promoted fast, or getting exposed to different companies by switching jobs.  If the learning opportunity is not good, you may be better off starting on your own. (Before you do, please read this.).

My advice for someone who enterprised early on and is now wondering about the path they chose. Are you prepared to make the opportunity before you a success? Are you serious and committed? Do you have partners who are trustworthy and complementary to you? Are you willing to fail many times over your first decade of startups and not be discouraged? If so, stay the course. If not, you can learn very valuable skills in a forward thinking company. Whatever the corporate environment, pick a company with leaders you admire and who you can learn from, pick an opportunity that will put you in the line of fire, and don’t let anything quell your entrepreneurial spirit. Patience pays off.

(This post is for my fellow entrepreneur Juan Mateu of Solaiemes, who asked for it)

Is there a subject that you would like me to blog about? Submit your topic