A New Model for Corporate Entrepreneurship: Adopting Startup Principles and Practices

Abstract

This master thesis examines and analyzes, what benefts there are for an entrepreneur, when looking at the internal capital market and resources and capabilities available at an established company, compared to pursuing investment from the external capital market to start a new business. This thesis will establish a connection between innovation which creates growth and experimenting with validating and building new business models. This requires making judgements about the future trajectory of markets, customer behavior, technological development and countless other factors. In existing literature, this function is best ascribed to the entrepreneur, who makes decisions under uncertainty about new combinations of the resources he has under his control. Recognizing the challenges associated with running dual business models, we look to the notion of organizational ambidexterity to demonstrate how different organizational contexts are required for exploitation of the current business model and exploration of new horizons. Postulating that more and more markets are showing highly dynamic characteristics, we argue that simultaneous pursuit of both is necessary under these conditions. The empirical data used in the present thesis, is gathered through fve semi-structured qualitative interviews with employees at innovative companies, including Microsoft and Google. The fnal goal for this thesis, was to construct a separate physical organizational structure that could work in tandem with the existing focused on exploitation, but show entrepreneurs that thinking ahead and exploring new avenues for growth, is valued by the company. Working in a large corporate setting, would allow entrepreneurs to leverage the existing assets and resources a company possesses and harness that towards building something new, that can quickly reach massive scale and impact potentially millions of customers. We argue that a chief entrepreneur mentoring a team of young entrepreneurs, with the mandate to build new business models - supported by a VC portfolio style of investing - can create new valuable businesses, if the entrepreneurs are given the necessary decision rights that allow them to fully exercise their entrepreneurial judgement within the context of an established company