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Intrapreneurship (entrepreneurship within a larger company) is taking off as companies look to innovate and experiment with new products. For startups, the idea of devoting time to such projects might feel like a distraction; but if done right, these small, scrappy efforts can offer big rewards.

Is intrapreneurship something your startup should consider? Here’s what you need to know.

Why intrapreneurship needs to happen

The most obvious reason to foster intrapreneurship is to pursue more opportunities. With these projects, you can try new ideas and test the boundaries without risking negative effects on your core business or user base. It becomes possible to experiment with offshoot products and technologies to see if you can turn a new concept into reality.

You’re also able to respond quickly to competitive threats by having a small team in place to rapidly launch products and turn out new features.

The less obvious reason for intrapreneurship is to keep your culture innovative. Most startups have been around for a while and soon enough those companies can become stale and corporate. Too many companies fall into this trap and then lose their leadership position during the next technology wave (e.g., mobile).

Intrapreneurship helps continue the startup vibe and energy from “the early days” and infects the entire team. And while there are other ways to encourage this mentality, intrapreneurship allows for hands-on innovation like nothing else I’ve seen before. Companies like Zappos have used this approach to harness their intrapreneurship roots. Zappos’ San Francisco-based team, known as Zappos Labs, is completely dedicated to creating and testing new ways for consumers to shop

How intrapreneurship happens

In order to kickstart an intrapreneur program, you first need some ideas — and the secret is, those can come from anywhere.

Lyft is a great example of an internal idea that ultimately turned into its parent company, Zimride’s, main business. Hackathons have also become a popular way to solicit new ideas, and you can go a step beyond this by accepting ideas from anywhere in the company.

Find a way to manage the ideation process and get approval from your leadership team in a way that works for your company culture and flow. You want to cast a wide net to get lots of ideas to choose from, and involve the entire team in this culture of innovation.

Second, you need a small team (or teams) that is excited to work on something new and speculative. This typically consists of product managers, designers, and engineers, but could include other roles like analysts and community managers.

Pick people who are excited to build something from scratch and iterate toward product-market fit, even though their work is experimental and may eventually only amount to a fun learning experience.

At my company, everyone is part of the larger organization; but internally, we have smaller teams dedicated to different intrapreneurial products. Projects such as our Sidewalk and Swoon apps allow brilliant minds the opportunity to experiment on smaller mobile initiatives. Ultimately, these intrapreneurs will get to experience the benefits of a startup (small team, no legacy code, etc.) without the disadvantages of having to raise money or be concerned with the administrative burdens of running a company.

Finally, you will need to support the team and at the same time give them autonomy (e.g., “supportive autonomy”). Once you agree on vision, give the team space to make decisions on how to build and iterate toward that vision, but be there to give advice whenever asked. Consider offering but not requiring the company’s other resources such as network operations, analytics, and PR. The important thing is these are all offered as options, not required as obligations.

Ready, go

Intrapreneurship programs make sense for lots of growing startups and can be hugely effective for building innovation if they map back to your business’ bigger-picture mission and goals. Who knows, one of these little projects could be the next big thing.

Greg Tseng is CEO and co-founder of Tagged.

Image credit: Zurijeta/Shutterstock

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