Book Review: “The E-Myth Revisted”… And Why Most Internet Businesses Will Fail

“The E-Myth” books by Michael E. Gerber are not generally internet-biz oriented but the series has been among the best-selling business books in years. Do you know what the “E-Myth” is? Basically, it’s the fatal assumption that many, if not most, entrepreneurs have, in starting up and running their business. The assumption is that: knowing the job equals knowing the business. In other words, consider a character that Gerber introduces to us, in “E-Myth Revisited”: Sarah, who is an expert at baking pies. She assumes that, because she knows the techincal side of the business — baking pies — she knows the most important part of the pie business. But she doesn’t, not even close. Just because you know how to set up a website, or you are pretty good with Adwords, doesn’t mean you know how to run an internet business. Another point Gerber says: “If your business depends on you, you don’t own a business, you have a job.” This is also what Tim Ferris was saying in his great book, reviewed here, about the importance of automation.

The way Gerber explains automation is through the model of franchising. Eighty-percent of all new businesses fail within the first five years, 75% of all business-formatted franchises SUCCEED. Franchises concentrate on building a business SYSTEM that can operate automatically — and autonomously — without you having to be there, and it can be expanded — and duplicated — which is what empires are made of. Consider Sarah’s pies — and consider the McDonald’s Big Mac. Is McDonald’s Big Mac the best, tastiest hamburger ever? Most would say no — but McDonald’s is a $40 billion a year business, with nearly 30,000 restaurants in 120 countries.

So look at it this way, whether you are a blogger or internet retailer or any other internet entrepreneur: If you want to grow and build a successful business, what can you learn from McDonald’s and others? Nobody else is talking about this today in “cyber world.” For these reasons, we recommend: The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

 

(reviewed by www.richdogmillionaire.com)

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4 Responses to “Book Review: “The E-Myth Revisted”… And Why Most Internet Businesses Will Fail”

  1. Interesting post. I’ve just ‘graduated’ from the E-Myth ‘Mastery Impact’ program and it is seriously good for transforming the owner/manager’s mindset as well as the business. I’m still concerned about the mechanised systematisation that the E-Myth pushes. I accept the fact that franchises tend to succeed but I have often had a Big Mac – and what I see there is a machine in action – no vision – no passion and drive from an entrepreneurial leader – and average staff churn of 70% (so I hear from one of the managers in the UK). The E-Myth program is hot on engaging people in the organisation “offering unconditional support and demanding excellence” but there is a risk that the systematisation of the business squeezes this out.

  2. Your point is well taken. We prefer eating at a restaurant where the chef has a passion for the food. However, our reviewer responds:

    “I agree with what Steve has to say. Just, honestly, I kinda have a passion for designing an excellent system, which is why I’ve always been interested in franchising, particularly how McDonald’s was built — and what we can learn from them, to apply to our own goals. Last I heard, the McDonald’s Operations Manual was four pounds and 750 pages. That seems excessive. On the other hand, I doubt most internet business startups even have a mission statement. Somewhere in the middle, lies success. BTW I’m also equally fascinated about the theory of McDonald’s as a real estate company. But that is an article for another time : )

  3. I’m Interested in your thoughts.. Does 37signals or E-myth have the right philosophy for business start-ups today? http://www.purlem.com/blog/?p=38

  4. Definitely E-Myth. We are unfamiliar with “37 Signals”. The thinking behind E-Myth is that you are designing a sustainable business system, whether you end up actually franchising it or not. Small businesses often — maybe usually — fail because their owners concentrate on the service or the product instead of the business itself.