Michael Gerber, bestselling author of The E-Myth Revisited, on awakening the entrepreneur within

May 13th, 2008 by Lisa Singh

Michael Gerber, bestselling author of The E-Myth RevisitedYou know him as the author of the E-Myth book series. For over 30 years, Michael Gerber has helped shatter preconceptions on what it takes to successfully run a business. As both the founder and chairman of E-Myth Worldwide, as well as the bestselling author of books such as E-Myth Mastery and Awakening the Entrepreneur Within, Gerber has tackled a slew of challenging questions that befuddle small business owners. In the following Q&A, Gerber talks about his latest book, and what entrepreneurs can do to make their business dreams a reality.

How did you arrive at the title of your latest book?

Michael Gerber: I have been working on my company, E-Myth Worldwide, for 30 years. In 2004, for whatever reason, I decided it was time for me to do something new. I did — I brought an executive team into E-Myth Worldwide to further the growth of the company. I became chairman of the board and spent three hours a month meeting with the board to discuss strategy, tactics, results, problems and successes, in the mean time perusing my own personal views. I knew I wanted to do something fresh, I wanted to do something I had not been doing for 30 years. I wanted to have a new conversation with the world.

It came to me that I wanted to create the “Dreaming Room.” The name came to me earlier on. In fact, I had created an office within our office that E- Myth Worldwide had called the Dreaming Room. It was intended as a place where people would go and break out of the box, break out of the mindset that we were all constricted by at one point or another and to do fresh thinking. Well, it didn’t really end up doing that. It simply ended up being a room with a name on it. I decided I was going to do a Dreaming Room. The very first Dreaming Room that I did was in December of 2005. I went into that Dreaming Room with all manners and forms of hopes, dreams and expectations. I labeled the Dreaming Room by saying what’s going to happen here is a blank piece of paper in a beginner’s mind, we are going to pursue the impossible and we are going to discover what it is that entrepreneurs do.

Which one of your books would you recommend reading first? Michael Gerber: Awakening the Entrepreneur Within — it truly begins the whole conversation about what a business is, what a business does, how an entrepreneur thinks and dreams and does what an entrepreneur does. I would say read this book first, then read The E-Myth Revisited. Then, The E-Myth Manager. Then — if you absolutely are determined to do this all the way — read E-Myth Mastery. It will tell you the seven essential disciplines for building a world class company.

In your new book you talk about the “Dreaming Room” and the “Entrepreneurial Dream” — can you differentiate an Entrepreneurial Dream from an Entrepreneurial Vision?

Michael Gerber: Absolutely, in fact the dream is the first thing. The dream is really the great result, the great idea, the big picture. The dream is all of those things and much, much more. In the case of E-Myth, I started my company in 1977 and I had a very big dream. The dream was to transform the state of small business worldwide. That was exactly how I said it then, that’s exactly how I say it now. It is still my dream to transform small business worldwide. I had a vision as well. My vision was to invent a system — a consulting system — that would mirror the success of McDonalds. I wanted to create the McDonalds of small business consulting.

Beyond the vision, the next stage is the purpose. The purpose is the story I will need to tell to every single person who owns a small business at that time when I started my company. Finally, the forth step is the mission. The mission at the very beginning of my entrepreneurial career was to invent a turnkey consulting system that I could train any motivated novice to use and, in turn, through the use of this turnkey consulting system, this developing system could train anybody who was equally inspired and motivated to apply this to the building of a successful small business.

In your book you write, “We are what we think, we are what we do.” How does that help entrepreneurs focus on their story? And what you mean by “but the story is you”?

Michael Gerber: It is absolutely essential for every single person who has entrepreneurial imaginings or entrepreneurial leanings to know what the end is. What is the picture you have in your mind? Understand that when I started E-Myth in 1977, prior to that for over two years I had been working with small hi-tech companies in Silicon Valley and the San Francisco Bay area. I was trying to figure out what was wrong with those companies. All of them wanted sales, of course, all of them wanted more customers. But the reality is that really wasn’t what was critical to their problem and to their success. My entire time then was focusing on what’s missing in this picture. It was obvious to me that there was something gravely wrong in every one of these small businesses I was working with. There was no clear picture in the mind of any of the people I worked with at that point and time. Subsequent to that, after the creation of E-Myth Worldwide with the over 60,000 small business clients we had worked with in 145 countries, that clear picture is what has been the biggest single missing piece. There is no clear compelling story that they tell about how their product works or about how their service works. But there is no end game. We are the meaningful end game that everybody is committed to.

For the unindoctorinated reader, what is the “entrepreneurial seizure”?

Michael Gerber: The “entrepreneurial seizure” that I talk about in my E-Myth books is essentially very critical to the problem we just described. Most people who start their own business are not entrepreneurs, but what I have come to call technicians suffering from an entrepreneurial seizure. That means they want to become their own boss, they want to get rid of their boss, they want to get rid of their job, they want to get out on their own and do their own thing for their own reason. They want to start a company to do what they know how to do. A cook starts a restaurant, a software guy starts a software business, a hardware guy starts a hardware business, and an auto repair guy starts an auto repair business and the graphic design guy a graphic design business. That is what I call the entrepreneurial seizure.

For one minute they are propelled to launch a company of their own, but the minute they launch it it’s gone because then they go to work. Who goes to work? Not the entrepreneur but the technician who is suffering from the entrepreneurial seizure. The auto mechanic, the cook, the graphic designer, the software guy and the hardware guy, they go to work. Doing what? Doing what they know how to do, software, hardware, cooking, fixing a car etc. They become lost in the minutia of doing it…doing it…doing it….doing it, busy…busy…busy…busy, and that’s the condition of 99 percent of all businesses that you will walk into. The owner is consumed by work but he is doing the wrong work, the business doesn’t work, the owner does. The owner is doing the tactical work of the business, making it, selling it, shipping it…doing it….doing it…doing it. Not the strategic work that is going to invent a company that works without him.

As a McDonalds does, as a Starbucks does, you have to understand that McDonalds and Starbucks are very, very, very small businesses writ large. At their writ large because the very first one, first McDonalds or first Starbucks was designed to work. Not with an owner, but designed to work with a manager. And that manager was to become the franchise and that franchise was to manage the system that was McDonalds, the system that is Starbucks, the system that is Wal-Mart and on and on. Then the minute that you see that, you see there is a method to creating of the truly stunningly effective company and the reason we can show evidence of the fact that is done wrong is because most businesses never get beyond being very, very small. The vast majority of those very small companies never really grow beyond anything that they were at the very beginning.

It might get a couple of people employed, but in fact close to 70 percent of all businesses start in this company are sole proprietorships and will remain that. They don’t know how to grow. They don’t know how to grow because they don’t have a big dream. And they don’t have a big dream because they started the business in the wrong way for the wrong reason and are implementing exactly what it is that they had in mind. My show, it’s my show, and in fact it shouldn’t and can’t be your show. It has to be “The” show. McDonalds wasn’t Ray Kroc, McDonalds was an invention invented by Ray Kroc.

Can anything be done at a national level to change the alarming rate of small business failures.

Michael Gerber: Absolutely not. I know that is a terrible thing to say, but understand that it is an entrepreneurial position. The only way that this alarming failure rate can become eliminated is by entrepreneurs. Governments cannot do anything. Governments have difficulty enough doing what they do. The worst thing in the world would be for governments to engage themselves in helping small business because all they would do is to bring people in into government who don’t have any clue about how to be entrepreneurs or what entrepreneurs do; all they would do is muck it up.

The best thing government could do would to be hands off. The most extraordinary thing government could do is to provide an X benefit to a brand new business for the first five years. After the first five years, your revenue would be taxable. Before the first five years your revenue would be free to be invested into your business in hiring people, developing the architecture for your company and in doing all of the development work that you need to learn how to do. The market will take care of that opportunity as I know it will. We will invent the ways small businesses get started. We will invent the ways small business entrepreneurs are supported. We will invent the ways that, as we have been doing with E-Myth, we can transform the reality of any small companies into something really original, unique, striking and effective. In the process of doing that, I have created an enormous amount of joy in people who start small business.

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Interview with Michael Gerber conducted by Lisa Singh

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