What is the E-Myth?
This is the review for the fourth edition of the Flyby Book Club.
Quick update: I've created a separate page with all the book club reviews so far and added a rating for how valuable I thought the books were. You can view them all here.
This one scored the highest so far. 10/10. Why? Because it changed the way I see the world.
Let's find out how.
Since the book was very dense, I've focused on the top three things I found the most valuable (although there were many more). Give the book a read if you haven't already. It's a short one and full of actionable insights.
This post is about a 12-minute read. I usually say grab a hot coffee or beverage, but I'm experimenting with giving up caffeine, and it's summer. So maybe let's just grab a glass of crisp blue water for the ride.
The E-Myth
Last time on Startup Flyby, we discussed writing your own story. This can conjure up images of great valor, strength, and climbing the metaphorical mountain of entrepreneurship as you conquer your fears and succeed in your goals. You are, of course, the hero in your own journey, so this is how it should be. But, as the book describes, it doesn't always play out this way.
The core idea is that when you take on the quest, there are not one but three competing personalities involved inside of you. Most people are fighting the battle with the wrong leader at the helm. These three personalities are the technician, the entrepreneur, and the manager.
Many people start a business with the intention of building something with the skills they have already acquired. This is totally fine and exactly what got me started as well. But… there is a risk of getting too zoomed in on that work and missing the bigger picture. The technician is the part of you that is really good at a particular set of skills. In the book, the technician is a baker baking pies, who then starts a pie shop. The baker was so zoomed in on perfecting the pies that she couldn't zoom out and focus on the other stuff which goes into growing, scaling, and even running the business.
Now for a software or digital startup, you could argue that the work you do itself has leverage. That is, you could write the code once and then deploy your army of 0's and 1's to go to work for you. That's true, and there's definitely a huge advantage, but only as long as you manage the three personalities properly.
Many years ago, I had quit my job for the first time to build my first "startup." Unfortunately, there was a problem. The technician was in charge. At that point, I didn't have any deep knowledge of the entrepreneurship process or journey. The technician within me thought the solution to all the problems would be, to well… write more code. Because that's the only thing the technician knew how to do. I lacked the entrepreneurial skills to turn that software into a product that people would want. I ended up with a very complex piece of software that served no real purpose other than to satisfy the technician's own curiosity. What I had was not a business but a very passionate hobby.
And without the managerial order, I ended up never shipping it, ran out of savings, and went back and got another job. But hey, all the interviewers were impressed with what the technician had built, so I got a step up in my career. Not quite entrepreneurship, but better than doing nothing, right? As the book suggests, the technician is the perfect employee.
Then a few years later, I came across a book that awakened the entrepreneur within me. It was always present. It's there within us all. Only the entrepreneur within would even think of giving up the stable comfort of a job in search of something better. But as the author suggests, there was just a glimmer of it at that point. It was in the background, waiting to be let out, developed, and coaxed into a true and real entrepreneur. Since then, I've been going deep into everything I can get my hands on to improve my knowledge about the various skills needed to make this a reality. Just like the technical skills, this is a lifelong journey of learning and improvement. We are all students of the game. The entrepreneur is the visionary within us, and looks at the world from the lens of the world. It's the part of you that goes beyond yourself and translates your vision into a product that can help others and perhaps even change lives. It's the part of you which takes the technician beyond its comfort zone and into the depths of the unknown. Indeed, only an entrepreneur would be willing to embrace such discomfort. We might as well give it a fighting shot.
There's one problem, however… the visionary always lives in the future. While the technician is too zoomed in, the entrepreneur can be too zoomed out, always thinking bigger and bigger. This also makes it susceptible to distractions and shiny new projects. For example, maybe you were already working on a solid business idea, but then some shiny new tech emerged. The visionary will almost always want to "check it out," perhaps lose sight of the current business, or worse, drop everything and chase the glitter for no valid reason other than to satisfy its own curiosity. While the technician gets too focused on the tiny details of one thing, the entrepreneur can get easily distracted or lose sight of the intermediate steps involved. Hopping from one prototype to another without any of them taking off. This can probably work great if you already have a big business and large resources to allocate. But in the start, this needs to be kept in check so your first few solid ideas can take flight, one step at a time.
Enter the third personality described in the book — The Manager. The manager is the glue between the entrepreneur and the technician. The manager brings a sense of order to the chaos and allows each personality to thrive. Nobody likes the manager, of course. The technician just wants to do its thing, and the visionary the same. But without the bridge or the glue, nothing would ever get done. The manager lives in the past, a snapshot of the future, and guides the technician to meet the vision which was agreed upon with the entrepreneur. But there's a risk here too— If you are stuck in the past, you might miss the opportunities right in front of you. Sometimes, it genuinely makes sense to pivot and go in the direction the market wants us to. Only the entrepreneur can make that decision.
What we really need, then, is the balance between all three personalities and allow each of them the time and space to thrive. The entrepreneur to create a vision, the technician to build it, and the manager to keep both on track and translate the vision into actionable results.
"The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we'd be describing an incredibly competent individual.
The Entrepreneur would be free to forge ahead into new areas of interest; The Manager would be solidifying the base of operations; and The Technician would be doing the technical work.
Each would derive satisfaction from the work he does best, serving the whole in the most productive way."
While author suggest this is challenging to achieve in a single person, I think it can be done. Perhaps more so in areas where your work has leverage and can scale on its own (e.g., software, books, music, video, podcasts, courses, etc.). Even for a one-person business, though, there's work I would always delegate (accounting, taxes, legal, etc.). But for physical or service businesses, such as the pie shop in the book, I would agree with the author in nurturing the entrepreneur within and delegating the rest of the tasks, or the ones you least enjoy doing. This is definitely necessary where the work doesn't have leverage and needs to be done every time. The book goes into great detail about how to achieve this. I highly recommend reading it regardless of which category you are in.
I would also add that now with AI and perhaps in the future with Robots! You can have an additional level of leverage that can be used to your advantage.
The Franchise Prototype
The way to achieve cohesion, according to the book, and become a mature business is the franchise prototype. I was about to skip this part since I'm not really interested in starting a franchise, physical product, or service business at the moment. But I decided to give it a read, and I'm glad I did... because it blew my mind.
The author is talking about treating your business as a "prototype" that can be developed as an individual unit and replicated. This is precisely what I was thinking above, with the work having leverage. It's basically the process of treating any business like a piece of software. The prototype here is not for the product but the business itself. By establishing order, protocol, and guidelines in a single unit, the business can be automated, replicated, and scaled, just like a piece of code. You can either run it in one location or scale it over and over again. This frees the entrepreneur from working in their business to working on their business with the same passion, care, and dedication they had towards their craft as a technician.
It's a game of consistency. The author gives the example of McDonalds (among others). Every store in any location is basically a clone of the others, all the way from the branding to the menu to the time it takes to get your food. They applied the assembly line model to the food industry to establish automation and precision. I don't particularly eat at McDonalds anymore, but as a child, I was hooked. According to the author, it's because of this consistency and getting the same experience every time that makes people fans. I'd say it was actually all the variable toys, but the colorful branding definitely played a big part in it.
If you treat the business itself as a product, then you can apply continuous improvement and everything you've learned to optimize as a technician to the business itself and turn it into something which can grow and scale and have a better chance of being a runaway success. Just like a piece of software, the prototype needs to be honed, polished, free from any glitches, and work consistently in all situations. You have to go to work on turning your business into the best possible business it can be. It's about having a passion for the intricacies and details of building something great!
The book describes this as the process of Innovation, Quantification, and Orchestration. Start with an improvement to an existing solution (innovation), measure the results (quantify), and translate these into a system that puts everything into action (orchestrate). Then repeat. This is what the author calls the Turn-Key Revolution. Treating the business as a system that can be improved, measured, and set into flight. Can you think of other areas where this concept applies?
The system itself is held together by the organization chart. This is a way of dividing responsibilities among the business to prevent chaos. You create roles for functions that the business would need to fulfill and then assign them amongst the existing members (or to yourself if it's just you). If you get overwhelmed, you can hire others to fill whichever role is neglected (while also working on improving the role itself). You'll also know what to look for since you've already been doing the role. This was quite interesting and something I hadn't thought of before. I'm already giving this a try, even with this newsletter, just to improve my organizational skills. I've found it quite valuable to mentally separate all the functions which go in.
Even if you don't have employees, it's a way to structure your routine and ensure each personality gets enough time to do their job. It's about mapping the three personalities within yourself to the business and creating a separation of the roles. The book describes this in detail with an example of a flow chart (eg: COO, VP Operations, VP Marketing etc), along with details of the operation manual. Check it out if you are interested. I might cover all this in a Part 2 if there’s interest. Let me know in the comments below.
The franchise prototype is essentially the act of treating everything as a well-oiled machine, from the product to the people to the marketing to the business itself. This free's your time to work on improving the business rather than constantly fighting the battle in the trenches. It's a level of detachment and taking a step out, which perhaps can be challenging for many, but also perhaps prove more valuable in the long term. As the author says —
"Your business is not your life. Your business and your life are two totally separate things.”
The Game
Finally, the third concept that stuck with me was of the various games being played. The author suggests thinking of your business as a game to be played. You set the rules so that other people want to keep playing. Your business is like a world you create. The structure of this world will stem from your belief systems. My beliefs are different from the author's, so I didn't quite agree with all the rules listed in the book and would set them up differently, but the concept that a game is being played was very interesting and this game theory aspect is something I've thought about many times before. What you want to do is design a positive sum game where everyone wins. This is where thinking long-term comes into play.
And if you are in a job, then you are a player in someone else's game. They set the rules, and you have to follow them. If you don't like the rules or the game being played, you leave. It's the same when you start a business, except you get to design the game and the rules to your taste. Then other people can decide whether they enjoy playing your game and following your rules. Otherwise, they would leave to play a different game or perhaps start their own game, just like you did.
And just like the world you are building within your business, there is the world within you that needs to be built and nurtured. This is the inner game.
"The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse," Don Juan (as quoted in the e-myth)
It's this mindset of the warrior that is at the core of it all, and it stems from what the book calls your Primary Aim. It's asking, "What do you want your life to look like?" or writing your own story and then working backward. But working backward smartly, with all the tools presented here, and continuously learning and optimizing to increase the chances of getting where you want to go while enjoying the process and everything you encounter along the way.
Just as above, where we discussed treating your business as a piece of software, you can think about your life like that as well. Creating a template for your ideal vision and then being able to replicate it into something worth emulating. You can do so by living your best life.
"Great people have a vision of their lives that they practice emulating each and every day. They go to work on their lives, not just in their lives."
This is fascinating. Treating yourself with the mindset of continuous improvement and something which can be molded into something greater. Just like any great product or business. This time, you are the prototype. It's the mindset of success, doing what's right, and always striving for improvement. Continuously growing, innovating, evolving, and setting forth to conquer your inner demons and changing yourself and the world in the process. This is where the inner game comes into play. You need to start winning the inner game first in order to be able to win the outer game. The beliefs of the world of your business will stem from your own beliefs and mindset, so improving those will naturally improve your business as well.
Boom.
Innovate (improve), Quantify (measure), Orchestrate (set into motion), and Repeat.
The rest will take care of itself.
It's only a matter of time.
And that's a wrap.
Great book. Very little fluff. I highly recommend it. I wasn't expecting too much when I picked it up, but this turned out to be one of the best business books I've read.
Again, I didn't agree with everything, but there's a lot of really great stuff in there, and I found myself thinking deeply about things on several occasions while reading and taking notes.
I'll definitely be applying many of these strategies to my own life and will be re-reading this book as I grow and evolve. Like I've said before, re-reading books that have had an impact on you is always a good idea. As you build your knowledge and reach different stages of life (and business), you'll be able to see things from higher perspectives and discover novel insights.
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