The E Myth Revisited

by Michael Gerber

Troy Shu
Troy Shu
Updated at: February 23, 2024
 7 min read
The E Myth Revisited
The E Myth Revisited

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What are the big ideas?

  1. Great business people don't just know a lot, they keep learning more.
  2. To succeed in business, you need to be open to change and understand that knowing how to do something doesn't mean you know how to run a business doing it.
  3. A successful business needs a dreamer (Entrepreneur), a planner (Manager), and a doer (Technician) all working together.
  4. Your business should grow to a point where it can run without you, giving you freedom and serving your life goals.
  5. For a business to grow big and work well, it needs good systems and continuous new ideas.

Summary

The Entrepreneurial Mindset in Business

  • Michael believes that the people who are exceptionally good in business aren’t so because of what they know but because of their insatiable need to know more.
  • “If you are unwilling to change, your business will never be capable of giving you what you want.”
  • That Fatal Assumption: if you understand the technical work of a business, you understand a business that does that technical work.
  • The Entrepreneurial Seizure: the moment you decide it would be a great idea to start your own business.
  • The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job.
  • “Everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.”

Roles and Dynamics within a Business

  • The Entrepreneur
    • “The Entrepreneur lives in the future, never in the past, rarely in the present. He’s happiest when left free to construct images of ‘what-if’ and ‘if-when.’”
    • “The Entrepreneur is the innovator, the grand strategist, the creator of new methods for penetrating or creating new markets.”
    • “The Entrepreneur is our creative personality—always at its best dealing with the unknown, prodding the future, creating probabilities out of possibilities, engineering chaos into harmony.”
  • The Manager
    • The Manager is pragmatic. Without him, there would be no planning, no order, no predictability.
    • “If The Entrepreneur lives in the future, The Manager lives in the past.”
    • “Where The Entrepreneur craves control, The Manager craves order.”
    • “Where The Entrepreneur thrives on change, The Manager compulsively clings to the status quo.”
    • “Where The Entrepreneur invariably sees the opportunity in events, The Manager invariably sees the problems.”
  • The Technician
    • “The Technician is the doer.”
    • “The Technician loves to tinker.”
    • “If The Entrepreneur lives in the future and The Manager lives in the past, The Technician lives in the present. He loves the feel of things and the fact that things can get done.”

Business Growth and Development

  • “The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us.”
  • “The typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician.”
  • “Most businesses are operated according to what the owner wants as opposed to what the business needs.”
  • “The three phases of a business’s growth: Infancy, Adolescence, and Maturity.”
  • “If your business depends on you, you don’t own a business—you have a job.”
  • “The purpose of going into business is to get free of a job so you can create jobs for other people.”
  • “There’s a critical moment in every business when the owner hires his very first employee to do the work he doesn’t know how to do himself or doesn’t want to do.”
  • “Your job is to prepare yourself and your business for growth.”
  • “A Mature company is founded on a broader perspective, an entrepreneurial perspective, a more intelligent point of view. About building a business that works not because of you but without you.”
  • “A Mature business knows how it got to be where it is, and what it must do to get where it wants to go.”
  • “The Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.”
  • “Your business is not your life.”
  • “Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.”
  • “Pretend that the business you own—or want to own—is the prototype, or will be the prototype, for 5,000 more just like it.”
  • “Documentation says, ‘This is how we do it here.’”
  • “Without documentation, all routinized work turns into exceptions.”
  • “Documentation provides your people with the structure they need and with a written account of how to ‘get the job done’ in the most efficient and effective way.”
  • “What you do in your model is not nearly as important as doing what you do the same way, each and every time.”

Strategic Business Questions and Innovations

  • Go to work on your business rather than in it, and ask yourself the following questions:
    • How can I get my business to work, but without me?
    • How can I get my people to work, but without my constant interference?
    • How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5,000th unit would run as smoothly as the first?
    • How can I own my business, and still be free of it?
    • How can I spend my time doing the work I love to do rather than the work I have to do?
  • Innovation is the mechanism through which your business identifies itself in the mind of your customer and establishes its individuality.
  • Quantification: the numbers related to the impact an Innovation makes.
  • “Orchestration is the elimination of discretion, or choice, at the operating level of your business.”
  • “Once you’ve innovated, quantified, and orchestrated something in your business, you must continue to innovate, quantify, and orchestrate it.”
  • “Think of your business as though it were the prototype for 5,000 more just like it.”
  • “Your Business Development Program is the vehicle through which you can create your Franchise Prototype.”

The Business Development Program

  • The Program is composed of seven distinct steps:
    • Your Primary Aim
    • Your Strategic Objective
    • Your Organizational Strategy
    • Your Management Strategy
    • Your People Strategy
    • Your Marketing Strategy
    • Your Systems Strategy
  • Your Primary Aim: Before you can determine what that role will be, you must ask yourself these questions:
    • What do I value most?
    • What kind of life do I want?
    • What do I want my life to look like, to feel like? Who do I wish to be?
  • Michael believes great people are those who know how they got where they are, and what they need to do to get where they’re going.
  • “Great people have a vision of their lives that they practice emulating each and every day.”
  • Michael believes that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.
  • “The difference between a warrior and an ordinary man is that a warrior sees everything as a challenge, while an ordinary man sees everything as either a blessing or a curse.”
  • Before you start your business, or before you return to it tomorrow, ask yourself the following questions:
    • What do I wish my life to look like?
    • How do I wish my life to be on a day-to-day basis?
    • What would I like to be able to say I truly know in my life, about my life?
    • How would I like to be with other people in my life—my family, my friends, my business associates, my customers, my employees, my community?
    • How would I like people to think about me?
    • What would I like to be doing two years from now? Ten years from now? Twenty years from now? When my life comes to a close?
    • What specifically would I like to learn during my life—spiritually, physically, financially, technically, intellectually? About relationships?
    • How much money will I need to do the things I wish to do? By when will I need it?

Questions

  1. How does the constant desire to learn more contribute to business success?
  2. Why is understanding technical work alone insufficient for understanding a business?
  3. How can recognizing the roles of the Entrepreneur, Manager, and Technician inside us influence our approach to business?
  4. In what ways can the balance between these three roles (Entrepreneur, Manager, Technician) impact the growth and maturity of a business?
  5. What steps can you take to ensure your business functions effectively without your constant involvement?
  6. How does documenting processes and routines contribute to the efficiency and scalability of a business?
  7. Why is it important to differentiate between working on your business versus in it?
  8. What role does innovation play in distinguishing your business in the market?
  9. How can establishing a clear personal vision and life goals influence the direction and purpose of your business?
  10. In what ways can understanding and catering to customer needs and perceptions drive your marketing strategy?

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