E-Myth Revisited

You can be the entrepreneur, the manager, and the technician. All in one. You don’t have to be an employee or have employees. You can be the one-person business that does and enjoys all three roles. You can enjoy being an entrepreneur, a manager, and a technician. If you plan accordingly, this can be a very satisfying and independent life, providing you with all the freedom and flexibility that you desire in your life.

The E-Myth: Small businesses are started by entrepreneurs risking capital to make a profit.

This is simply not so. And it finds its roots in this country in a romantic belief that small businesses are started by entrepreneurs, when, in fact, most are not. The real reasons people start businesses have little to do with entrepreneurship.

In fact, this belief in the Entrepreneurial Myth is the most important factor in the devastating rate of small business failure today.

The Fatal Assumption: If you understand the technical work of a business, you understand a business that does that technical work.

You believe that by understanding the technical work of the business, you are immediately and eminently qualified to run a business that does that kind of work.

This is the most disastrous assumption anyone can make about going into business. It is an assumption made by all technicians who go into business for themselves, one that charts the course of a business—from Grand Opening to Liquidation—the moment it is made.

The technical work of a business and a business that does that technical work are two totally different things.

Entrepreneurial Seizure

The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job.

The work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores.

Rather than maintaining its specialness, representing the unique skill the technician possesses and upon which he started the business, the work becomes trivialized, something to get through in order to make room for everything else that must be done.

The Entrepreneur, the Manager, and the Technician

Everybody who goes into business is actually three people in one: The Entrepreneur, The Manager, and The Technician. They are totally different personalities, with different needs, interests, and lifestyles.

The Entrepreneur

• The visionary, the dreamer, the catalyst for change.
• Lives in the future.
• Worldview: an overabundance of opportunities and dragging feet.
• Their work is to wonder. To imagine and to dream.

The Manager

• Pragmatic. Craves order.
• Without manager, there’d be no planning, no order, no predictability.
• Sees the problems in events, in contrast to the entrepreneur, who sees the opportunity.

The Technician

• The doer. Loves to tinker.
• Lives in the present. Suspicious of lofty ideas or abstractions.

If you’re doing tactical work all the time, if you’re working all the time devoting all your energy to your business, you won’t have any time or energy left to ask, let alone answer, all of the absolutely critical questions you need to ask. You’ll simply have no time or energy left to work on it.

An entrepreneur is always causing trouble for technical with the creation of yet another “great new idea”. On the other hand, he also creates new and interesting work for the technician.

To The Manager, The Technician becomes a problem to be managed. To The Technician, The Manager becomes a meddler to be avoided.

Since most entrepreneurial ideas don’t work in the real world, The Technician’s usual experience is one of frustration and annoyance at being interrupted in the course of doing what needs to be done to try something new that probably doesn’t need to be done at all.

If all these personas were equally balanced, we’d have an incredibly competent individual. In reality, the typical business owner is 10% entrepreneur, 20% manager, and 70% technician. And it’s the technician who goes into the business, which is a mistake.

In your business, you can see how one part of you craves a sense of order, while another part of you dreams about the future. You would see how another part of you can’t stand being idle and jumps into programming, and to test, and to handle support, the part of you who feels guilty if she isn’t doing something all the time.

Three stages of a business:

1. Infancy
2. Adolescence
3. Maturity

Infancy: The Technician’s Phase

During this phase, the technician is in charge. You work, work, and work. It’s not done grudgingly, but optimistically.

However, now you’re doing not only the work you know how to do but the work you don’t know how to do as well. You’re not only making it but you’re also buying it, selling it, and shipping it. During Infancy, you’re a Master Juggler, keeping all the balls in the air.

It’s easy to spot a business in infancy - The owner and the business are one and the same thing. If you removed the owner, there’d be no business left.

Infancy ends when the owner realizes that the business cannot continue to run the way it has been; that, in order for it to survive, it will have to change.

There’s nothing wrong with being a Technician. There’s only something wrong with being a Technician who also owns a business! Because as a Technician-turned-business-owner, your focus is upside down. You see the world from the bottom up rather than from the top down. You have a tactical view rather than a strategic view.

If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!

Adolescence: Getting Help

This period begins when you decide to get some help.

In a single stroke, you suddenly understand what it means to be in business in a way you never understood before.

“I don’t have to do that anymore!”

A very common mistake at this stage: management by abdication rather than by delegation. When people keep dropping balls, as they will, you have to do all the work.

Every Adolescent business reaches a point where it pushes beyond its owner’s Comfort Zone—the boundary within which he feels secure in his ability to control his environment, and outside of which he begins to lose that control.

As a business grows, it invariably exceeds its owner’s ability to control it—to touch, feel, and see the work that needs to be done, and to inspect its progress personally as every technician needs to do.

Out of desperation, he does what he knows how to do rather than what he doesn’t, thereby abdicating his role as manager and passing his accountability down to someone else.

The problem is that this someone else is a technician.

• They need more direction than the owner can give them as a technician,
• They need to know why they are doing what they’re doing,
• They need to know the results they’re accountable for
• They need to know the standards against which their work is evaluated.

In short, they need a manager.

Maturity and the Entrepreneurial Perspective

Maturity is not an inevitable result of the first two phases. It is not the end product of a serial process, beginning with Infancy and moving through Adolescence. A mature business goes through infancy and adolescence in an entirely different way.

The very best businesses are fashioned after a model of a business that works. Most people don’t have this model of a business that works, but of work itself, i.e. a technician’s perspective.

The Entrepreneurial Perspective differs from a Technician’s Perspective as follows:

1. Asking how must the business work? instead of what work has to be done?
2. Sees the business as a system for producing results for the customer - resulting in profits
3. Envisioning the business in its entirety vs. seeing the business in parts.

The Entrepreneurial Model: Fulfill the perceived needs of a specific segment of customers in an innovative way.

When The Entrepreneur creates the model, he surveys the world and asks: “Where is the opportunity?”

Having identified it, he then goes back to the drawing board and constructs a solution to the frustrations he finds among a certain group of customers. A solution in the form of a business that looks and acts in a very specific way, the way the customer needs it to look and act, not The Entrepreneur.

“How will my business look to the customer?” The Entrepreneur asks. “How will my business stand out from all the rest?”

Thus, the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created. It understands that without a clear picture of that customer, no business can succeed.

The Technician, instead, looks at his skills, and asks “How can I sell them?”

Working on your business, not in it.

Your business is not your life. They are two totally separate things.

The primary purpose of your life is not to serve your business, but to serve your life.

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. In other words, pretend that you are going to franchise your business.

The Franchise Prototype is the name for my business-as-a-product. It’s a way of thinking about my business as one complete thing, a whole, you might say, that looks, acts, and feels in a clearly definable way, apart from me. Independent of me.

1. Provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.
2. Operated by people with the least guidance. You need to create the very best system that leverages average people to produce exquisite results.
3. A place of impeccable order.
4. All work documented in Operations Manuals.
5. Provide a uniformly predictable service to the customer.

Primary Aim

If your business or the job is going to be an integral part of your life, it should know what your life’s aim is.

You must ask yourself three questions:

1. What do I value most?
2. What kind of life do I want?
3. Who do I wish to be?

What would you like to be able to say about your life after it’s too late to do anything about it?

Strategic Objective

A very clear statement of what your business or job has to ultimately do for you to achieve your Primary Aim.

The business or job is a means rather than an end, a vehicle to enrich your life rather than one that drains the life you have.

Organizational Strategy

Most companies organize around personalities rather than around functions. Around people rather than accountabilities or responsibilities. The result is always chaos.

Organizational strategy is the process through which you think through your business as best as you’re able and then structure the way it is to work.

Without an organizational strategy holding each and everyone accountable, everything hinges on luck and good feelings, which are the recipe for chaos and disaster.

Management Strategy

It is a System designed into your Prototype to produce a marketing result. And the more automatic that System is, the more effective your Franchise Prototype will be.

People Strategy

“The first thing that surprised me when I came to work here,” the Manager said, “was that the owner took me seriously.

“I mean, think about it. Here I was, a kid, with absolutely no experience in this business. But he never treated me that way. He treated me as though I were a serious adult. Somebody worth talking to about what he obviously considered important.

People do not simply want to work for exciting people. They want to work for people who have created a clearly defined structure for acting in the world. A structure through which they can test themselves and be tested. Such a structure is called a game.

And there is nothing more exciting than a well-conceived game. That is what the very best businesses represent to the people who create them: a game to be played in which the rules symbolize the idea you, the owner, have about the world.

Marketing Strategy

The entire business process by which your company does what it does is a marketing process. “It starts with the promise you make to attract them to your door. “It continues with the sale you make once they get there. “And it ends with the delivery of the promise before they leave your door.

The only way to reach something higher is to focus their attention on the multitude of seemingly insignificant, unimportant, and boring things that make up every business, and even life.

Those mundane and tedious little things that, when done exactly right, with the right kind of attention and intention, form in their aggregate a distinctive essence, an evanescent quality that distinguishes every great business you’ve ever done business with, from its more mediocre counterparts whose owners are satisfied to simply get through the day.

The simple truth about the greatest businesspeople: they have a genuine fascination for the truly astonishing impact little things done exactly right can have on the world.

The problem is not that the owners of small businesses in this country don’t work; the problem is that they’re doing the wrong work. As a result, most of their businesses end up in chaos—unmanageable, unpredictable, and unrewarding.

Your business is nothing more than a distinct reflection of who you are.

• If your thinking is sloppy, your business will be sloppy.
• If you are disorganized, your business will be disorganized.
• If you are greedy, your employees will be greedy, giving you less and less of themselves and always asking for more.