Escaping the Entrepreneurial Seizure: Interview with Michael Gerber (Plus: Tim Speaking)

65 Comments


Michael Gerber, the E-Myth evangelist.

Michael Gerber’s name should sound familiar.

I recommend his bestseller, The E-Myth Revisited, as the must-read classic on automation. It brief, it discusses how to create scalable businesses that are based on rules and not outstanding employees; and how to become an owner instead of constant micromanager.

Michael also had a enormous influence on me as a first-time writer. His words to me were simple during our first lunch:

“If you’re going to write a book, write a f*ing book.”

Don’t hedge and don’t think small. I didn’t hold back material for a sequel, I aimed for the top of the top, and I credit Michael’s advice as, in part, responsible for the subsequent success of the 4HWW. It was that recalibration of ambition that made it all possible.

His latest book, Awakening the Entrepreneur Within, examines how to recalibrate the scale of objectives and other facets of the core entrepreneurial experience, which we recently sat down to discuss…

1. Michael, having counseled more than 50,000 post-corporate entrepreneurs caught in what you call the “entrepreneurial seizure,” can you explain this phenomenon and how to avoid it?

The “entrepreneurial seizure” lies at the heart of most failures in judgment when someone decides to leave his or her job to go out on their own.

The excitement of independence associated with getting rid of the boss is almost always fueled by a flawed understanding of what being on your own means. Most small businesses are started by technicians rather than by true entrepreneurs.

The technician believes in the fatal assumption that because he or she knows how to do the work — whether graphic design, engineering, cooking a great dinner, repairing an automobile, snow boarding, or otherwise — they can turn that capability into a business that frees them from the boss. The graphic designer creates a graphic design business. The technologist creates a technology-based business. The cook creates a restaurant. The mechanic creates an auto repair business. The snow boarder creates a snow boarding business.

But instead of freeing themselves from the boss, they have become their own boss, and they’re now — with absolutely no understanding about how it happened — working for a lunatic and doing what they know how to do but in greater volume than before.

True entrepreneurs make the transition from working for someone else to working on their own much differently. Entrepreneurs invent businesses that work without them. Technicians create businesses that work because of them. The entrepreneur is liberated from what I call the “tyranny of routine,” and the technician becomes a slave to it. In the entrepreneur’s case, the business works. In the technician’s case, the technician works. And that’s why most of the 500,000 new businesses that are started every month in the U.S.A. will fail. According to a recent study done by the Kauffman Foundation, 81% of all businesses in the US employ no people besides the owner. They’re sole proprietorships. True entrepreneurs are never sole proprietors.

2. Much of the model you laid out in The E-Myth Revisited has to do with the importance of systems in building a scalable business. What is the shape of the process and the practical steps for business development in your model?

As I’ve said before, and as AT&T has been quoted: the system is the solution.

The system I’m talking about is the core operating system of your business. It comprises three essential functions that must work in a completely integrated way. These are lead generation, lead conversion and client fulfillment. Whether the business is McDonalds or Starbucks, FedEx or Dell Computer, these three systems are critical to the success of that company. Building these systems then is the process we teach at E-Myth. They are really arranged in a very simple three-step approach. Step one: intentional dreaming (the dream, the vision, the purpose and the mission). Step two: intentional organization (conceiving, building and perfecting the automated client fulfillment systems that comprise the operating reality of the company). Step three: intentional growth (conceiving, building and perfecting the lead generation and lead conversion operating systems of the company). Every business under the sun is conceived, built and perfected in identically the same way, using identically the same processes.

3. Has the Internet really fundamentally changed the game for small business?

The internet era has, of course, changed the game for small business, but not as dramatically as most would profess.

After all is said and done, the internet is simply a medium through which the business of business is transacted, a conduit through which one can communicate and deliver the results one has set out to deliver. As many or more companies fail on the internet as anywhere else, and many more businesses (especially sole proprietors) stumble along without every making an impact on anyone, and most without selling anything to anyone.

In short, if an internet business fails to follow the three-step development process I just outlined, it will fail just like any other business will. So, I must say frankly that I am not a great believer in the internet as the be all and end all of business opportunity that others see it to be. Maybe I’m simply too old, but I think not. In short, I think that, given my experience of internet entrepreneurs as being very much the same as any other types of entrepreneurs, if they are absent the entrepreneurial fundamentals that are absolutely essential for any new company to grow, the result will be the same: lack of direction, lack of intention, lack of execution, diminished results.

4. In your new book you write–very counter-intuitively to most–that the reason most small businesses fail is not that they dream too big, but that they dream too small to create a truly thriving enterprise. Can you elaborate?

By “dreaming big” I mean conceptualizing a result greater than anything you have ever experienced. When I started my first company, now E-Myth Worldwide, I had absolutely no business experience. All I had was an idea bigger than life itself. My idea, my dream, was to transform small business worldwide.

That dream was the energizer for everything that was to follow. That dream for me was the realization of a picture I had formed in my mind of the typical small business I walked into every day, where the owner lived for sweat equity, worked 18-hour days, and had no idea that his or her life could be any different than the overwhelming life he experienced, and that all of his or her peers experienced in the day-to-day hell of doing it, doing it, and doing it some more. I just knew, don’t ask me how, it didn’t have to be that way.

Then I saw McDonalds and the impression I walked away with was huge. I suddenly realized exactly how the tragic condition of small business could be turned on its ear. All I had to do was to McDonald-ize every small business by teaching the owner how to think like Ray Kroc, the founder of McDonalds, did. That led to the invention of E-Myth worldwide.

That’s what I mean when I say dream big. Dream about great results. Dream about a world that works, rather than one that doesn’t. Think of one thing you wish to transform and than go to work ON it, rather than IN it, which quickly became my E-Myth mantra. The result of that will be something bigger than you ever imagined. Dreaming small is not dreaming at all. Dreaming small, which is what most small business owners do, is really the act of shrinking yourself to live a life that you can imagine because it fits your perception of what you know and are able to do. There is no imagination in that. And a life without imagination is already dead. In my new book, I am focused on awakening the soul of my reader to enable him or her to discover the entrepreneur within. And, once discovered, to put his or her imagination to work to invent a new life beyond anything he or she has ever done before. Just like I have done. Just like you have done, Tim. Just like every entrepreneur does.

5. It’s interesting to me that in your view of a truly awakened entrepreneur, they would not ever buy in to a franchise. I think people often confuse designing a scalable business that could be franchised with become a franchisee. Two fundamentally different objectives, right?

Right. The truly awakening entrepreneur wouldn’t buy a franchise. Why would they? The franchise is someone else’s dream. Not the entrepreneur’s. The entrepreneur is the one who invents a franchise company, not the one who buys a franchise. If the entrepreneur were to buy the franchise, he would immediately set about the task of taking it apart and turning it into something else. And, in the process, he would destroy the franchise.

No, the one who buys a franchise is either the technician – he buys a system that works and then he works it – or a manager – he buys a system that works and than manages it. And that’s the way it ought to be.

6. My readers are interested in the intersection of business and lifestyle design. Does an “awakened entrepreneur” seek some form of balance, or is it something else? I’m a big proponent of work-life “separation” vs. balance, as you know.

An awakened entrepreneur isn’t interested in balance of the typical sense. An awakening entrepreneur is passionate about creating. Creating is, by its very nature, unbalanced. But, to the creator, it doesn’t at all feel that way. It feels like the optimal flow of life. Creating is a power all its own. It takes you where it wants to take you, and the creator simply follows where it takes him.

Just like joy. Joy is not balanced either. Joy is explosive, it is the intense experience of life’s purpose all happening at once. So, if you want balance, don’t become Walt Disney. Don’t become Michael Dell. Don’t become anyone who seeks the unknown. Balance is a figment of our known reality. Balance has never been something that people who are disinterested in control ever pursue. The only people who crave balance are people who are desperately out of balance. When you’re living the creative life, you achieve a natural balance all its own.

7. After 30 years of working with entrepreneurs, do you see a fundamental change in entrepreneurship today? If so, what is different now and why?

Actually, no. I don’t see a fundamental difference between the entrepreneurs of 30 years ago and the entrepreneurs I meet today. Other than this: today’s entrepreneur is more likely to be interested in meaning rather than money. Not that he’s not interested in money; he obviously is. But money that comes with the absence of meaning is too big a price to pay for the new entrepreneur I’m engaging today.

Understand, I’m not saying that everyone I meet today has the question of meaning in mind. But, when I begin the conversation about meaning, more people I meet today are interested in having the conversation than ever before. So, there’s something going on today in the world of the entrepreneur. And that’s why I call it “the age of the new entrepreneur.” Something interesting is beginning to wake up, not only in the people I’m talking to, but in me as well.

###

Odds and Ends: Tim Upcoming Speaking and Two Favors

I don’t do much speaking, just as I’ve never done any formal book tours or signings, but there are two coming up soon:

E-Tech in San Diego, CA – I’ve giving the closing keynote on March 6th
SXSW in Austin, TX – I’m speaking at the following from March 7-11:

-Fri. 3:30pm “How to Rawk SXSW: The Basics”
-Sat. 3:30pm “The Art of Speed: Conversations with Monster Makers”
-Sat. 5pm Book Signing (Day Stage Cafe, Level 4)

TWO FAVORS, PULEEZE:

1. I’m putting together a group of Lifestyle Design 101 posts. Which 3-5 posts on this blog would you recommend for first-time visitors who want to learn some basics?

2. What questions would you ask the panelists on the “Art of Speed” panel? Please put in your top 2 or 3 in the comments and I’ll try and make them happen. Please keep them relevant! (i.e. no “how does a sonic boom happen?”)


Speaking to Google management at an offsite in Marina del Rey

Posted on: February 27, 2008.

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65 comments on “Escaping the Entrepreneurial Seizure: Interview with Michael Gerber (Plus: Tim Speaking)

  1. Tim,
    Your book, your blog, your philosophy — all of it has had a tremendous impact on my life. I am constantly telling people that they just need to stop worrying, go with the flow, and live in the moment… and then I try and point them to ‘The 4-Hour Workweek.’ So first and foremost, thank you for such great content.

    Now, moving on to your question about a few posts that would really grab the attention of new readers… I believe that the popularity of “The Art of Letting Bad Things Happen” speaks for itself, but I also got a lot out of “The 10 Most Common Words You Should Stop Using Now,” and “The Top 5 Reasons to be a Jack of All Trades.” Beyond those? The post on gratitude training is just a great, up-beat piece that should appeal to anyone…

    Keep up the great work!

    Like

  2. Hey Tim,
    Wish I could catch your sessions at SXSW… I’ll be in Czech, looking for Weapons of Mass Distraction :) Was your shootout anywhere near Teplice?

    Nice interview, Gerber’s work has always been interesting to me, and I will have to check out his new one. Well done again, sir!

    Like

  3. Sweet I get to christen this post.

    Like most people in North America (I say this because i’m from the the Canada aka the frozen north…i read what you wrote about us Canucks in you book Tim…just joking), I am stuck in a job that I really don’t like and am starting to abhor. Since reading your book, and select others, I have begun searching for a way out of the rat maze that I am in. I am obvious referring to setting up a business (owning it and not running it, eventually) and living my life the way I want. Basically, I look at the world now in a very Ferrissian way (if no one has come up with this terminology before, I would like to get the credit for it if it ever takes off). The same can be said about my aspirations in becoming an entrepreneur.

    As for the interview with Micheal Gerber, the two biggest things that I am taking away from it are that true entrepreneurs invent businesses which work without them, and concurs with your statements in your book about liberating your time and increasing mobility. The second is that in this day and age money is meaningless without meaning to the entrepreneur of today. To me this is a powerful idea since an average person can get caught up on the floating dollar signs when a business takes off and they don’t want to liberate themselves from the work since the business is “doing so well”. In essence what they end up doing is chaining themselves to the table with cash and invoices.

    Now a couple of questions…a couple personal and some for the Art of Speed thing.

    Personal:

    1. As a person who is looking to start their own business, do you have any advice on what profitable or successful businesses to go into? (or point me in the general direction of one).

    2. What are the major hurdles in starting a business (much like Body/Brain Quicken) and how did you overcome them (i.e. how did you not become part of the 500,000 new business that fail within a year)?

    For “Art of Speed”

    1. What is the quickest way (faster than the speed of light, quick) to reach the greatest number of people with the greatest degree of effect?

    2. What is the biggest problem when it comes to mass advertising?

    Three excellent introductory posts to you blog:

    1. How to lose 20lbs of fat in 30 days…without any exercise.

    2. The Choice-Minimal Lifestyle: 6 Formulas for More Output and Less Overwhelm

    3. How to Do The Impossible: Create a Paperless Life, Never Check Voicemail Again, Never Return Another Phone Call…

    The reason I chose these three is because all three touch base with what you have written in much of your posts and more importantly, in your book. Furthermore, there is something there for everyone; the person concerned with health and something they can do without putting forth too much physical effort, the person who is trying to reshape their definition their lifestyle and the person who has chosen not to fly away from the confines of the office/home office, but does not want any unwanted cranial explosions due too much stress and distractions.

    Cheers,

    Norman

    Like

  4. Hi Tim, enjoy the blog, this is my first time commenting.

    Questions for The Art of Speed panel:

    1. On the topic of Speed Learning, sometimes people think to learn something quickly you need to find someone who is an expert at something and learn from them, but I’ve found that sometimes the best experts aren’t always great teachers so its more effective to look for good teachers.

    So what are ways they use to find good teachers to learn quickly?

    2. What do they think is the most effective way to market a niche book from an unknown self-published author?

    3. What are good ways to speed learn?

    Recomended Lifestyle Design Blog Posts:

    The art of letting bad things happen

    Robert Scoble Interviews Tim Ferriss: Productivity, E-mail Fasts, GTD, and More…

    What’s Your Lifestyle Quotient (LQ)?

    Like

  5. Hey Erik,
    Attila posted this under Weapons of Mass Destruction.
    Attila Says:
    October 28th, 2007 at 4:12 pm
    What a party here in the comments, I’m glad this one got so many responses! Thanks for the shotout, Tim, it was a lot of fun indeed – always welcome.

    The name of the shooting range is Strelnica Casta (Shooting Range in Casta). The list of weapons is on their site as well, not in English but you can probably figure it out. If not, ask!

    There’s much to do here in Bratislava, including sports/exploration/underground clubbing (to list some of my favorites), so anyone who wants to shoot big toys or hang out is welcome! Just drop me a line at attila@emailias.com and I’ll try get back to you in a couple days.

    To try to inspire some of you, I’ve recently kicked in a completely 4hww advocated lifestyle. It allows me to focus on crafting heavy beats full time, be able to travel, have fun like this and do all my work online forever. I’ve realised that with more than 9 years of experience in quality journalism, knowledge of four languages and a natural talent for writing (wrote a 100 page fantasy book when I was 6) it would be stupid not to use this to my advantage and help others in the process as well. A few days later I’ve quit working in the office for an internet marketing company and started my own ghostwriting and website promotion service for smaller businesses who want to gain more leads online. [URL deleted — please follow the “comment zen” rules above the comment field.]

    [From Tim: sales pitch deleted. Thank you for the contribution, but please put your URL in the URL field and no pitching. Thx.]

    Like

  6. For your 101 list.. Just start by stating up front to succeed you must prove your mental strength. IE: The ice bath, or even the “slow carb” diet. The skill to write a detailed task (not lose 10 lbs. but run 5 miles a week.) then follow through on it. Just one mental test. With success of this simple task, the newbie reader will be in the right mindset to followthrough on parts of the 4HWW.

    For the “Speed” panel.

    “A lot successful entrepreneurs had that one meeting, or one cab ride which keyed future success. What top networking techniques can replace these chance meetings?”

    Like

  7. Hmm, I agree that work life balance is largely delusional, and that work life separation is freeing, but my sense is that once work-life separation has been achieved, the goal is actually work-life fusion— but on a new level, with passion, meaning, etc… Tim, I have a hunch that you spent more than four hours a week “working” on this book (and hopefully loved doing it), no?

    ###

    Hi Allison,

    Indeed. It comes down to a definition of “work”. When I say work-life separation, I’m referring separating purely financially-driven activity from pleasure-driven activity. If you engage in pleasure- or excitement-driven activity and it happens to make you money, fantastic, but google my article on the “myth of the dream job.”

    Thanks for contributing!

    Tim

    Like

  8. TIm,

    I cannot keep up with all your new discoveries. I have a library of unread business books…lol Thanks to you. Looking forward to South by Southwest Conference. You have had some great posts, I will dig through them and pick my top ones.

    Always,

    Jose Castro-Frenzel

    Like

  9. Tim, your interview with Gerber rocked. One of the best I’ve read in a while.

    For the panel you’re moderating at SXSW on The Art of Speed:

    I’d like to hear from Ev how he and his team at Twitter have managed speed/rapid growth; if they could do their first year again, what would they do different in terms of speed and managing rapid growth?

    Business coach Keith Cunningham says this about speed:

    >> The faster you go, the greater the impact if things go wrong. If you’re going fast on a bicycle and you fall, you might skin your knee. If you’re going fast in an F16 fighter jet and you crash, people die! Taking the analogy further: two things are needed if you want to go fast, and people don’t often think of these: 1) experience; and 2) a lot of dials and instrumentation (like in the cockpit of an F16).

    For all panelists: What kind of “dials and instrumentation” do you use in managing their business as they move with speed?

    ##

    Relevant to the topics in your interview with Gerber, I wrote up more from Keith’s presentation I attended, on my blog:

    “6 Big Mistakes People Make In Business”

    http://www.davideckoff.com/2007/05/6_big_mistakes_that_people_mak.html

    Like

  10. Automation, Low information diet, and outsourcing life are a few of my votes for Lifestyle design 101.

    Very interesting post about the point of view necessary for life style design.

    I would say that for anyone with a lack of imagination, first go out and rent 10 animated movies. 5 anime and 5 disney/warner brothers animated movies.

    Watch all of them… and try to remember what it was like to be a kid, when your dreams consisted of being an astronaut or a fireman not a paper pusher or business statistics analyst. One tip, tell an idea to a friend if they think its crazy then you are on the right track… loosely quoted from the lifestyle designer himself.

    Art of speed:

    Where do you see web widgets fitting into runaway viral campaigns, working in the widget world I myself find them extremely powerful. Are they an internet fad or here to stay as viral tools for the web?

    Why can big business work at such a slow pace while small business have to do things yesterday just to survive.

    Thats all I could come up with for a 1:30am post.

    As always, great post!

    ###

    Thanks, John! Any particular posts you’d recommend for 101?

    Tim

    Like

  11. If a true entrepreneur creates a business that requires more than just himself, it would seem that creating a physical product is much easier to turn into a big business than creating a service. Someone who performs a service, for example my friend who does in-home IT and networking visits, is much less likely to expand into a bigger business than someone who invents some new gadget. Hmmm…

    Like

  12. Wonderful interview. I get pumped by what Michael Gerber says EXCEPT I think the statement in (1) “true entrepreneurs are never sole proprietors” is incorrect or, in the least, is confusing/misleading.

    Frankly, I think anyone who works on their own business and is not a paid employee could be considered an entrepreneur …whether it is bookkeeping, building houses or having a hotdog stand (or two..or three), selling brain pills via the internet or, gasp, even writing books. One can be a sole proprietor and, perhaps by following Michael’s suggestions in pts 2-7, one can get fabulously wealthy (by eventually becoming the next Krispy Creme, Arthur Anderson etc.) IF this is their dream and they find meaning in doing so.

    Tim, I imagine you are either a sole proprietor, a single member LLC or perhaps the sole shareholder of an incorporated company. For all intensive purposes, and however you file your taxes, you are the sole owner. And I would think most everyone would consider you a very successful entrepreneur.

    Thanks
    Ernst

    ###

    Hi Ernst,

    Good point. I think that Michael means to say that his definition of true entrepreneur isn’t a one-person “operational” shop. That is, that they have others do work for them instead of shoveling all the coal into the fires themselves. I have a single-member LLC and a C-corp, and I’m the only full-time employee in each, but I have had up to several hundred people working for me in contracted positions.

    For me, of course, head count was never the goal, just a means, and I believe Michael would agree with this.

    Thanks!

    Tim

    Like

  13. Now that I’m done with my rant, I’ve enjoyed many of the posts. Two that jump out at me are;

    1.) “The Art of Letting Bad Things Happen” as it has forced me to re-consider what “bad” is. Since reading the 4HWW and followed your blog, I have juggled my priorities so that I focus on the important and I limit the smaller tasks (ie. I check email only once a day) or let others handle them. To my surprise, no really bad things happen but many more GOOD things happen! I now have more time to think, to imagine…and thing BIG.

    2.) The other post would be “The Top 5 Reasons to be a Jack of All Trades” because I don’t completely agree with it! I really enjoyed the numerous posts arguing different points of view (everyone agreeing on something is usually a tad boring). My personal view on this would be “Jack of all trades, Master of (at least) one.” I believe one needs to separate themselves (and/or their business) from the pack to be successful. And to do this they need to offer something different that they really excel in.

    Tim, I have one question I’ve been meaning to ask for sometime. Your book is full of advise about how to do more in less time. But I am curious how you stay on top of all the dozens, perhaps hundreds, of individual steps that it takes to take one of your ambitious dreams to fruition. Do you use creative mind-mapping and/or traditional linear outlines? And do you do this by hand in journals or by using project management software. Would this be of interest to others for a post?

    Thanks!
    Ernst

    Like