Prehype aims to come into a company and identify its “intrapreneurs.” Then, they will host the employee or employees a la Google’s 20% time, building a new company outside of the original company. Another way it works is if an employee has an idea and seeks out Prehype. Prehype will then help them convince their company it’s a good idea. If successful, they will spend the first four weeks planning and fleshing out the idea. In either case, the goal is to build something magnificent and sell it back to the bigger company.
“When we set out, we have this concept of an intrapreneur. It’s pretty easy to spot them. It’s the person who’s been there for a couple of years. The person in the meeting who raises their voice and has ideas that people listen to. They feel comfortable about asking the slightly silly questions and making sure everyone is on board,” says Prehype’s Philip Petersen.
Prehype spends a total of 12-14 weeks building the company, leveraging an external network of developers and designers. The idea can be big or small. Prehype only cares about it being successful. After the project has been greenlighted, they start building and Prehype ensures that the project is managed well for the engineers. Like any startup, pivoting is expected, but Prehype tries to keep it to a 3 month-long schedule, which forces the entrepreneur to limit his or her idea.
“It’s a lot about the process rather than the actual product. A lot of people think we’re an agency when we get into the corporation. So, we use the American Idol metaphor, in that it’s partly the process that helps create the winner. It’s a notion of going through a process where we have an idea of what the product will be but also leaves room for growth, as with any startup out there, we expect a healthy amount of pivoting based on feedback from real users before the end product is born,” says Petersen.
While it’s completely project dependent, if the company buys or spins out the new company, Prehype generally gives 20% of the money back to the entrepreneur(s) and the rest is split amongst Prehype’s partners and the developer and designer pool accordingly. Prehype doesn’t charge for the production, other than a flat management fee that is normally around $25,000 per month.
Interesting model — companies outsource the development and execution of innovative Google-style “20% projects” to Prehype for a fixed fee, ownership is shared after launch. Having clear and friendly ownership terms seems crucial here — I will be curious if this version holds: “If the company buys or spins out the new company, Prehype generally gives 20% of the money back to the entrepreneur(s) and the rest is split amongst Prehype’s partners and the developer and designer pool accordingly.”