The E-Myth Revisited:
He’s referring to Entrepreneurs as the E
The reason most businesses fail is because of mindset:
There are 3 personality types that are required in the business
1. The Entrepreneur: the dreamer, innovator
a. Starts in the future, sees the world as a treasure hunt
b. See’s the whole, a wider perspective
c. An integrated
d. How must the business work?
2. The Manager: Day-to-day tasks
3. The Technician: The person who want to do good work.
a. Starts in the present, sees the world as a place that never stops
b. See’s the parts, a more focused perspective.
c. Fragmented View of the world
d. What work must be done?
Most New E’s are actually Technicians:
• Most new entrepreneurs are technicians that decide to be their own boss and they know very little about business.
The Cycle of Most New Businesses:
• The Honeymoon phase
• The speed up phase. More effort, more time, more energy
• The breakdown Phase.
• After a few months of really hard work they decide to hire help. Usually the help is really amazing at first then after a few months to a few years the situation falls apart and they leave. The business owner is left hurt and sometimes never recovers.
The Job of a business Owner:
• Your Job as a Business owner is to prepare it for growth.
• You want to build a business that doesn’t need your every moment of attention. You want a business that that will run even if you are not there.
• Is what you are doing scalable
• Ask the right Questions: where are we going? How much capital? What technology will be required? What will we need in the future?
• Plan and articulate what you are planning your your employees
Begin with the End In Mind:
• Tom Watson (IBM founder): For IBM to become a great company it would have to act like a great company from the beginning. He had a vision of what the company would become.
• Tom Watson had a passion for the enterprise. He was not a technician
The Entrepreneurial Model
• Looks outward to find what does the market need?
• Where’s the opportunity
• What’s the solution
The Turn Key Revolution / Franchise Prototype (create a system)
• A balanced model of business that works. It’s about creating a system that runs the business.
• People run the system which runs the business.
• Ray Croc created a model for the genesis of the Franchise Phenomenon. He understood that the Hamburger wasn’t the product. The Business was the product.
“A systems-dependent business, not a people-dependent business .”
• The system isn’t something you bring to the business. It’s something you derive from the process of building the business.
• Integrity: doing what you say you will do, and if you can’t: learning how.
• Franchise prototype:
◦ Create predicable interchangeable parts.
◦ Where all assumptions are put to the test to see how well they work before becoming operational in the business.
◦ Every successful every successful franchise is built on this model.
• How the E, M and T fit in the Model:
◦ Entrepreneur : franchise prototype is the medium through which vision takes form in the real world.
◦ Manager : franchise prototype provides the order, predictability, system.
◦ Technician : franchise prototype is where he is free to do the things he loves to do : the technical work.
Your Entrepreneur side is your spiritual side. This is the side of you that dreams.
ORGANIZATIONAL STRATEGY (Organization Chart)
The organizational development reflected in the Organizational Chart can have a more profound impact on a small company than any other single business development step.
• Most Companies Fail because they don’t create positions:
• More companies organize around personalities (bad) rather than around functions (Good).
• the result of doing business this way is chaos
Make a chart of Organizational Positions :
• You need a COO, VP Marketing, VP Operations, VP Finance, Sales manager, Advertising/Research manager, Production manager, Service manager, Facilities manager, Accounts receivable manager, Accounts payable manager.
• Create a clear tree of who reports to who
• Create a position contract:
◦ This is a summary of the results to be achieved by each position in the company,
▪ the work that position is accountable for,
▪ a list of standards by which results are to be evaluated.
▪ Sign off on it.
▪ This is not a job description, it is a contract between the company, employee, and a summary of the rules of the game.
▪ It provides each person with a sense of commitment and accountability.
• Look at each position as a franchise prototype of its own.
◦ When one goes to work in a position, one goes to work ON a position, implementing the business development process of innovation, quantification, orchestration.
◦ Don’t hire someone with experience. Not a master technician.
◦ A novice, a beginner, an apprentice (someone new)
◦ Make sure they are eager to learn how to do it right.
◦ Willing to learn what you’ve spent so much time and energy discovering.
◦ Someone who is open to the possibility of learning skills not developed yet, skills he/she wants to learn.
If you don’t obey the rules, honor them, extol them, why should you expect anyone else to take your game seriously?
Your MARKETING STRATEGY:
View Your Product through the eyes of your customer:
• It’s what your customer wants that matters.
• When it comes to marketing, what you want is unimportant.
Beware They May Not Know what they want:
• What your customer wants is probably different than what he thinks he wants. Think Steve Jobs and Henry Ford way of thinking.
• Make a promise the customer wants to hear, and then deliver on that promise better than anyone else on the block. You want to deliver 10X for what they paid. It has to be 10X value to them. Also think of ways to create more perceived value (extras, goodies, secret access, better content, insider information)
• The COO is the driver of all of this.
◦ The COO connects each part of the business process.
◦ The COO maintains the integrity of the whole.