The E-Myth Principle is Still Alive and Flourishing

willspring55, April 26, 2013

By M Zwilling

Over 25 years ago, Michael E. Gerber wrote a best-selling business book called The E-Myth: Why Most Businesses Don’t Work and What to Do About It.
The E-Myth (“Entrepreneurial Myth”) is the mistaken belief that most
businesses are started by people with tangible business skills, when in
fact most are started by “technicians” who know nothing about running a
business. Hence most fail.

Some pundits
argue that the E-Myth principle is now out-dated, due to the instant
access to information via the Internet, pervasive networking via social
media, and courses on entrepreneurship at all levels of education.
Perhaps an innate business savvy is no longer a requirement for starting
a successful business.

Let me assure you that in my experience, I’m not convinced. I still
see too many businesses started by technicians who haven’t acquired the
basic skills or knowledge, or still assume that business acumen is a
minor part of the new business equation. I also see no evidence that the
percentage of new business successes has gone up in the last couple of
decades.

I believe that most entrepreneurs today, at least in the technology
domains I frequent, still work in the business (“Technician’s
Perspective”), rather than on the business (“Entrepreneurs
Perspective”). Here are some key ways these views differ:

  • The Entrepreneurial Perspective asks the question: “How must the
    business work?” This perspective looks at the business as the product,
    competing for the customer’s attention against a whole shelf of
    competitors. The Technician’s Perspective asks: “What work has to be
    done?” In this view the product features, cost, and support are the key
    to success.
  • The Entrepreneurial Perspective sees the business as a system for
    producing outside results for the customer, resulting in profits. The
    Technician’s Perspective sees the business as a place in which people
    work to produce inside results for the Technician, producing employee
    income.
  • The Entrepreneurial Perspective starts with a picture of a
    well-defined future, and then comes back to the present with the
    intention of changing it to match the vision. The Technician’s
    Perspective starts with the present, and then looks forward to an
    uncertain future with the hope of keeping it much like the present.
  • The Entrepreneurial Perspective envisions the business in its
    entirety, from which is derived its parts. What’s important is the
    business as a whole: how it looks, how it acts, how it does what it is
    intended to do. The Technician’s Perspective envisions the business in
    parts, constructed from the bottom up, based on technical tasks.
  • The Entrepreneurial Perspective is an integrated vision of the
    world, where the customer need is an opportunity to make meaning. The
    Technician’s Perspective is a fragmented vision of the world, where
    customer satisfaction represents a series of problems to solve, with
    price, features, availability, and support.
  • To the Entrepreneur, the present-day world is modeled after a
    vision of a better way, one that will stand out with customers from all
    the rest in the past, and give the joy and satisfaction of success. To
    the Technician, the future is modeled after the present-day world, the
    model of past experience, and the model of getting paid for effort or
    results.

The challenge of every Entrepreneur and Technician is to maintain the
right balance of views to get things done, win in the marketplace, and
keep everyone happy. As startups grow, they quickly realize that they
need a third personality, called the Manager, to build systems and
processes. The Manager craves order, and often ends up cleaning up after
the other two.

Perhaps someday our education system and other resources will
facilitate everyone starting a business to have that balanced view, but I
don’t see it happening any time soon. In the interim, I recommend you
use social media and the Internet to find your alter-ego. Two heads are
still better than one, to get the right business started, and get it
started right, without worrying about the E-Myth.

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