The Art of Internal Entrepreneuring

The Art of the Start: The Time-tested, Battle-hardened Guide For Anyone Starting Anything
by Guy Kawasaki

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Innovation often originates outside existing organizations, in part because successful organizations acquire a commitment to the status quo and a resistance to ideas that might change it.

— Nathan Rosenberg

A large number of aspiring entrepreneurs currently work for big companies. Like all entrepreneurs, they dream of creating innovative products or services and wonder if this can be done internally. The answer is yes. The purpose of this minichapter is to explain how.

The "arts" that this book describes are equally appropriate for internal entrepreneurs - they, too, must innovate, position, pitch, write business plans, bootstrap, recruit, raise capital, partner, establish brands, make rain, and be mensches. But there are special recommendations that apply in this case.

Ironically, many independent entrepreneurs envy the employees of big companies - they think that these lucky souls have humongous financial resources, large sales forces, fully equipped labs, scalable factories, and established brands, plus medical and dental benefits, at their disposal. How wonderful it would be, guys in garages muse, to invent a new product or service with the luxury of such an infrastructure already in place.

Guess again. Creating a new product or service inside such a beast is not necessarily easier; the challenges are just different. I happen to have been part of a "best-case" scenario: the Macintosh Division of Apple. I can explain the success of this internal entrepreneurial effort in two words: Steve Jobs. His off-the-scale design talents, maniacal attention to detail, and reality-distorting personality (plus co-founder status) made Macintosh successful. Were it not for Steve Jobs, Macintosh would not exist - or it would have taken the form of an Apple II with a trash can.

But if it takes a Steve Jobs to innovate within large companies, you are undoubtedly thinking, we might as well give up right now. While that kind of visionary is in short supply in any business, anyone with guts, vision, and political savvy should be able to set up an entrepreneurial outpost in an established business. I collaborated on this minichapter with Bill Meade, a close friend who helped Hewlett-Packard organize its substantial vault of intellectual property. We came up with this list of recommendations for internal entrepreneurs.

PUT THE COMPANY FIRST. The internal entrepreneur's primary, if not sole, motivation should remain the betterment of the company. Internal entrepreneurship isn't about grabbing attention, building an empire, or setting up a way to catapult out of the company. When you have a good idea for a product or service, it will attract a large number of employees, from the bottom up. They will support you if you're doing it for the company, but not if it's for your personal gain. If you can attract a large number of rank-and-file supporters, you might not be totally dependent on what the "vice presidents" say.

KILL THE CASH COWS. Don't announce this widely, but your charter is often to create the product or service that would put an end to existing products or services. Still, it's better that it's you who's killing your company's cash cows than a competitor or two guys in a garage. Macintosh killed Apple II. Would it have been better for Apple if a competitor had created Macintosh? No way. This recommendation is another reason why it's so important that you've put the company first: What you're doing is bound to be controversial. But if you don't kill the cash cows, someone external will.

STAY UNDER THE RADAR. Two guys in a garage should try to get as much attention as they can. Awareness of their efforts makes it easier to raise money, establish partnerships, close sales, and recruit employees. However, the opposite holds true for internal entrepreneurs. You want to be left alone until either your project is too far along to ignore or the rest of the company realizes that it's needed. The higher you go in a company, the fewer people are going to understand what you're trying to do. This is because the higher you go, the more people want to maintain the status quo and protect their positions.

FIND A GODFATHER. In many companies, there are godfather figures. These are people who have paid their dues and are safe from everyday petty politics. They are relatively untouchable and usually have the attention and respect of top management. Internal entrepreneurs should find a godfather to support their projects by providing advice, technical and marketing insights, and protection - if it comes to the point where you need protection.

GET A SEPARATE BUILDING. An internal entrepreneur, sitting in the main flow of a big company, will die by a thousand cuts as each department manager explains why this new project is a bad idea. "The new always looks so puny - so unpromising - next to the reality of the massive, ongoing business."* The Macintosh Division started in a building that was far enough away from the rest of Apple that it stayed out of the daily grind, but was close enough to obtain corporate resources. A separate building will keep your efforts under the radar and foster ésprit de corps among your merry band of pirates. The ideal distance from the corporate pukes is between one-quarter mile and two miles - that is, close enough to get to, but far enough to discourage overly frequent visits.

GIVE HOPE TO THE HOPEFUL. Inside every corporate cynic who thinks that "this company is too big to innovate" is an idealist who would like to see it happen. Good people in big companies are tired of being ignored, forgotten, humiliated, and forced into submission. They may be trampled, but they are not dead. When you show them that you're driving a stake in the heart of the status quo, you will attract support and resources. Then your goal is to advance these people from wanting to see innovation happen to helping you make it happen.

ANTICIPATE, THEN JUMP ON, TECTONIC SHIFTS. Structural deformations in a company are a good thing for internal entrepreneurs. Whether caused by external factors such as changes in the marketplace or internal factors such as a new CEO, tectonic shifts signal changes and may create an opportunity for your efforts. Effective internal entrepreneurs anticipate these shifts and are ready to unveil new products or services when they occur: "Look what we've been working on." By contrast, corporate pukes say, "Now I see the shift. If you give me permission, six months, and a team of analysts, I can come up with a new product strategy."

Copyright © 2004 Guy Kawasaki. All rights reserved. This excerpt, or any parts thereof, may not be reproduced without permission.

About the Author

Guy Kawasaki, who helped make Macintosh a household name, now runs Garage Technology Ventures, a venture-capital firm. He has held his workshop, "Boot Camp for Start-ups," around the world. Kawasaki is the author of seven previous books, including Rules for Revolutionaries.