The E-Myth Revisited: Book Summary and Top Takeaways
The E-Myth Revisited by Michael Gerber is one of those books that I’ve heard about for years. I’ve seen it constantly recommended by entrepreneurs I respect, so I was excited when it finally came next on my reading list.
Similar to Crossing The Chasm, the book gives you tools to get unstuck and break through plateaus in your business.
It’s aimed at entrepreneurs and business owners, but it’s also very useful for anyone leading a team.
Here’s my summary of The E-Myth Revisited.
What is the E-Myth ?
Let me explain with an example.
We all have a friend who’s really good at baking cookies.
Well, have you ever said this to them?
Wow, these cookies are good. You should totally sell these! You should open a bakery! People will love it!
If you’ve ever said that, or something similar to that, then you’ve just fallen prey to the E-Myth, the “Entrepreneurial Myth”.
This is when we confuse “being good at X” with “can create a business that sells X.”
According to Gerber, this confusion is what causes most businesses to fail. Just because you’re good at baking cookies, or accounting, or SEO, doesn’t mean you can build a business that sells those services.
Building a successful business is more than just having the technical skills, as you’ll soon see below.
The 3 People You Need To Run a Successful Business
When you’re a business owner, or leading a team, you’re actually fulfilling three separate roles:
The Technician, The Entrepreneur, The Manager.
The Technician is the one who is skilled in something that people want.
The Entrepreneur is the one who thinks big about the future.
The Manager is the one who makes sure everything stays on track.
Running a business requires successful execution of these 3 roles.
Where most people run into trouble is they spend a disproportionate time in one role, and neglect the others.
Most people who start businesses are excellent Technicians; they make amazing cookies, they are Adwords masters; they are incredible lawyers, they are great electricians.
But Gerber points out that being a Technician gets you part of the way to a successful business. 1/3 of the way, to be exact.
You need someone to set a vision and dream big for the future, so there’s something to be excited about. That’s the Entrepreneur.
You need someone to make sure everything’s being taken care of, the beans are counted, payroll is going out on time and that the team has what they need. That’s the Manager.
Knowing how to balance the three roles — whether you do them yourself, or you bring in help — is a key part of creating a business that crushes through every plateau.
The Business is The Product
Have you ever heard this phrase?
Stop working IN your business, start working ON your business.
Gerber believes you should think of your business as a collection of repeatable processes and systems.
And your work as an entrepreneur and team leader is to build those repeatable processes and systems.
He has great admiration for Ray Kroc, the guy who took a single burger joint and grew it into the worldwide behemoth that is McDonald’s.
Ray Kroc is the definition of a guy who worked ON his business, not IN his business.
Kroc realized that his job wasn’t to flip the perfect burger; it was to create a system where it didn’t matter who was behind the grill — the perfect burger would be flipped every time.
If you want to be more than a mom-and-pop business, you have to think in terms of processes, and think bigger than the individual items and services you’re selling. Don’t think of your cookies, your SEO skills, your legal services as your products. Think of the business itself as the product.
Don’t Become People-Dependent
One of the things that Gerber drills over and over in the book is that you need to think bigger than yourself.
If your business is dependent on you, it’s going to fail.
If your business is dependent on a handful of rockstars, it’s going to fail.
Gerber argues that your business should be system-dependent, not people-dependent.
If you’re reliant on “geniuses” to run things, it’s just a matter of time before it bites you in the butt. Instead, the ideal is to create a system that can succeed regardless of who’s in the team. Creating a culture so strong that even if the founder leaves, team norms and behaviors stay intact.
Find a system that leverages your ordinary people to the point where they can produce extraordinary results over and over again.
One way to do this is to create an org chart where you break out the different functions that need to exist in your company in order for you to achieve your goals.
For example, imagine someone in a startup who’s running marketing, managing finances, and doing customer support.
Those are all separate functions; but in the early stages of a company, it’s possible that it’s just one person.
Gerber advises that you create an org chart that highlights those different functions: in this example, it might be VP Marketing, VP Operations, VP Customer Success.
Then, if it’s currently you — put your name down under each job title!
This snaps you out of the E-Myth, the illusion that you’re a Jack Of All Trades who has to do everything, and reminds you that you’re building a system. It just so happens that right now the system has 1 person doing several functions. But that won’t be the case forever.
Doing this for your team helps you think at the system level, and helps you from becoming dangerously dependent on a few key people.
There’s an underlying theme to the book that’s hard to describe.
The best way I can put it:
If you want to find repeated success, you have to constantly increase the size of your comfort zone.
If your business is stuck, it’s because of you — as the team leader, you’re at the limit of your comfort zone, and it’s up to you to figure out how to break through.
It could be that you’re afraid of leaving the safety of a Technician’s mindset and trying to be an Entrepreneur. Maybe you’re afraid of taking your business to the next level, because you don’t what that could look like. Maybe you’re afraid to ask yourself some hard questions — like what do you want out of life, and how does your business align with that?
The E-Myth Revisited was an easy read; and there’s plenty that I left out about managing people, validating businesses and measuring results. It’s worth picking up if you’re finding yourself unsure about the next step in your business.