Intrapreneurs and Out-preneurs
Out-preneurs start a business from inside and build it outside unlike intrapreneurs who are people who start new businesses within their employers companies. Intrapreneurs demonstrate a spirit of entrepreneurship within an existing organization. An intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture, by operating within the organizational environment
Out-preneurs are people who spin themselves out of a company to set up on their own, either being rejected as intrapreneurs within their company or who find the constraints too demanding to stay employed. In a sticky economic climate, many larger companies can save headcount and potentially increase sales at the same time, by encouraging staff members to go into business for themselves.
Unlike an entrepreneur who simply leaves the company to start a business, out-preneurs can see synergy and fit with their existing employer, but nonetheless want to be out from under the organization with enough distance to be autonomous.
If you have an idea that does not quite fit the product portfolio or business model of your company, you can start your own. If you are likely to buy components or services from your (ex)employer, then they will be even more likely to support you. They are even likely to be attracted to offer you extended credit because they know you. They may have spare office or production space that they’d be happy renting to you.
Things You Need to Carry Towards the Door
Being an out-preneur is not necessarily an easy route to a starting a business, especially at an early stage. You will be expected to be fully committed to your employer and fulfill the requirements of your position, but at the same time you will have to carve out (probably your own) time to work on a business plan.
Your business plan will differ from the normal one, because you will need to make the value proposition not only appealing to your customers, but also to your present employer, or you will simply be out on your ear, or lose your position of trust. The new business has to make sense to your employer if he is going to cooperate.
So, here are the things you will need to do:
- Decide on your business model and what the proposition is in a nutshell;
- Pull together some ball-park figures, taking care not to use sensitive/proprietary corporate numbers;
- Draw up two lists: one of the benefits for the corporation and another for your startup;
- Consider the downside: if, when you expose the idea to your superiors, they show you the door;
- Find hidden pockets of value requiring attention the company cannot give, but that you can;
- Identify special skills or assets you have that are underutilized in your present job;
- Leave some ownership in the hands of your present company, so it has an interest in your success;
- Demonstrate new revenues that may come from the startup, but also any savings that may result;
- Pay special attention to changes in corporate strategy than may provide windows of opportunity;
- Use the ‘partnership’ as leverage for raising other funds or making customers more confident.
The most critical factor may be timing, especially the timing of your announcement. Avoid being too precipitate. Make sure you have identified objections and objectors ahead of time–and a plan for dealing with them. You will need to consider your own position; are your results going to be too strong for you to be let go, or too weak that you will be an easy sacrifice. If the company is about to introduce a significant change involving you or your job, make sure that your revelation will not scupper it.
A dream come true
Franklin Chang Diaz is an out-preneur, an ex-astronaut and immigrant from Costa Rica, who translated himself from NASA senior engineer to entrepreneur, when NASA’s budget cuts forced the closure of his lab. He urged NASA to let him privatize the operation. To his amazement, they agreed, “They actually said yes.”
They allowed the enterprise, to continue occupying space at the Johnson Space Center, while Diaz raised funds, about 50% of which he raised in his native country. Now the business has bases there and in Webster, TX, three miles from the Space Center..
His science is the VASIMR rocket technology which the company, Ad Astra Rocket Company, is working on together with his former employer. The aim is to deploy their engine tom the International Space Station in 2014.
Ad Astra Rocket is one of many examples of out-preneurs, both from big companies as well as government-owned institutions. The initiative demonstrates the possibilities that can be opened up by creative solutions to what may seem fait-accomplis.
The United States SEC definition of a spin-out is more precise than the general description of an out-preneur that I give. In the corporate field, spin-outs occur when the equity owners of the parent company receive equity stakes in the newly spun out company. For example, when Agilent Technologies was spun out of Hewlett-Packard in 1999, the stock holders of HP received stock in Agilent. Following its successful IPO in 1999, Agilent is now a fully independent company focusing on communications, electronics and life sciences.
What we are talking about here is a win:win both for the erstwhile employer and the new business. I did it myself in a very minor way, when I set up, taking over the premises occupied by the division I ran as part of a bigger firm. We concluded a deal where the new business bought the assets on an interest-free 12-month loan, thus saving the costs that would have been incurred by the parent from closing the division and helping our initial cash flow situation.
Corporate entrepreneurship refers to the formal and informal process of creating new businesses, products, services, and processes to create value and generate new business growth inside of existing organizations. Individuals that do this work are referred to as corporate entrepreneurs, intraprenerus, or mavericks.
Corporate entrepreneurship refers to the formal and informal process of creating new businesses, products, services, and processes to create value and generate new business growth inside of existing organizations. Individuals that do this work are referred to as corporate entrepreneurs, intraprenerus, or mavericks. They are the pioneers, business builders, and change agents that initiate growth inside organizations.
Corporate Entrepreneurship is also sometimes called Corporate Venturing. Corporate Venturing provides an alternative to traditional methods of growing a company. A company invests in new products or technologies by funding businesses that have a reasonably autonomous management team and separate human resource policies. Corporate venturing is akin to Open Innovation in that both aim to capture the entrepreneurial spirit inside and outside the company.
Organizational Orientation: Edgewalkers
If you are inside an organization and want to get ‘out’, look around you to identify others who may be good partners by using Judi Neal’s five ‘Organizational Orientations’. If you can identify the Edgewalkers, link up with them. An Edgewalker is someone who walks between worlds and who avoid getting too caught up in any one of them. If you want to know more about these special people and whether you may be one of them, then read, Edgewalkers: People and Organizations That Take Risks, Build Bridges, and Break New Ground.
There are five Qualities of Being that are inherent in people who are on the leading edge. Everyone has these qualities to some degree, but they are more defined in Edgewalkers. These five qualities are:
Edgewalkers are also very skillful in the following five areas:
- Knowing the future
Do these characteristics sound like YOU? Are you in the upper right quadrant? Surely you are not a doomsayer who sees a calamity in everything, nor a flamekeeper who wants just to maintain the original vision, nor a placeholder who see boundaries instead of possibilities, or even a hearthtender who just keep the home fires burning. Let me know!
If you are in an organization that has a mix of organizational orientations like in the figure below,
the chances are high that you work for a traditional organization and that seeking to be an outpreneur will be an uphill struggle. Don’t despair, just go looking for a champion in a position of power or influence who can influence your success. He or she will tend to be on the right hand end of the bell curve above.
If on the other hand you see your organization more like the picture below,
chances are high that you will find support for your innovative ideas. The corporate energy is more likely to be welcoming to people with ideas like yours. In this kind of organization you are less likely to be seen as disruptive.
If you want to know more or work with the idea of edgewalking, then by all means read this article by Judi Neal and Let me know. Or if you want to contact her directly, you can do so through her website and let her know you’ve been visiting ther Startup Owl. The images above are by courtesy of Judi Neal.