Monday, August 19, 2002

August 16, 2002
Started reading “The E-Myth” by Michael Gerber. Great stuff and insights about running a small business. The fatal premise of most entrepreneurs is this: “If you understand the technical work of a business (I know the design, layout and editing process of magazines), you understand a business that does that technical work.” Not only is that not true, but Gerber postulates: “Rather than being their greatest asset, knowing the technical work of their business becomes their greatest single liability.”

Why? Because if the technician didn’t know how to do the technical work of the business, he would have to learn how to get it done and would also see the other parts of the business that needed learning. Like marketing, finance, circulation. Instead, what techies do is hide inside the work they know how to do and let the rest of the business go to hell. And to hell most of them go, with Gerber rattling off the nasty statistics, like: 80% of small businesses fail within the first five years. Ouch!

Other insights are: most entrepreneurs start a business to escape having a boss, and then they discover they don’t own a business—they own a job (and in that job they are doing five times as many things as they did when they worked for someone else!). Guilty as charged!

His advice is to work on your business, not in your business (plan out your systems and operational dynamics, don’t get caught doing all the work, because you can’t). And he quotes various execs of successful companies like Tom Watson of IBM who said, “I had a very clear picture of what the company would look like when it was finally done.” And “I realized that for IBM to become a great company it would have to act like a great company long before it ever became one.”
More later.

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