In this special group panel episode of the Econ Breakthrough Podcast, host Josh Hadley and fellow podcasters interview Michael E. Gerber, author of “The E-Myth.” Gerber shares his foundational principles for business growth, emphasizing the need for entrepreneurs to work on their business, not just in it. He introduces his “eightfold path” for evolving a company from one person to an enterprise, and stresses the importance of developing elite talent and adopting a transformative mindset and “soul set” to build a successful, scalable organization.
Chapters:
Introduction and Setting the Stage (00:00:00)
Host introduces the episode, panel, and Michael E. Gerber, setting up the discussion on business ownership myths.
The Myth of Doing It All Yourself (00:01:09)
Discussion on the misconception that business owners can do everything themselves and the dangers of being the business’s core.
If Your Business Depends on You, You Have a Job (00:01:42)
Gerber explains his famous quote about business dependency and the need for transformation in business thinking.
People Development and Its True Meaning (00:02:28)
Explores the concept of people development and its foundational role in business growth.
The Eightfold Path to Business Evolution (00:03:17)
Introduction to the Eightfold Path: dream, vision, purpose, mission, job, practice, business, enterprise.
The Dreaming Room and the Importance of Dream Discovery (00:03:48)
Gerber describes the Dreaming Room program and the necessity of discovering your dream before vision and purpose.
Gerber’s Personal Dream, Vision, and Mission (00:05:00)
Shares his original dream and mission from 1977 to transform small business worldwide.
Scaling a Business and People Development Advice (00:06:52)
Advice on finding and hiring top talent as you scale from a company of one to an enterprise.
The Navy SEALs Analogy for Talent Development (00:07:44)
Compares elite business team development to the rigorous selection and training of Navy SEALs.
OldCo vs. NewCo: Building the Future Organization (00:09:07)
Explains the concept of OldCo (legacy) and NewCo (future), and the need to focus on building NewCo.
Mindset and Soul Set for Business Owners (00:11:08)
Emphasizes the importance of both mindset and “soul set” before committing to transformative business changes.
Closing Remarks and Thanks (00:11:51)
Panelists thank Michael E. Gerber and conclude the episode.
Links and Mentions:
Tools and Concepts
“The Eightfold Path”: “00:03:48”
“The Dreaming Room”: “00:04:56”
Books
“The E-Myth“: “00:00:00”
“Beyond the E-Myth: The Evolution of an Enterprise from a Company of One to a Company of 1000“: “00:03:19”
Notable Quotes
“If your business depends on you, you don’t own a business; you have a job, and it’s the worst job in the world because you’re working for a lunatic.”: “00:01:09”
Transcript:
Josh 00:00:00 Welcome to the Econ Breakthrough Podcast. I’m your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Howard Tye, and Stephen Pope. Today is a special episode where I have joined a group panel of other podcasters that are interviewing Michael E Gerber, the author of the E myth. This is a foundational book that many of you have probably read. And now we get his decades of wisdom and we get to ask him questions. I know you’re going to enjoy this podcast episode, so sit back, enjoy and enjoy this episode with Michael E Gerber, the author of the E myth. You know, Michael, I’m amazed with the book that you you wrote e myth. And because it is a timeless principles that are going to impact generations to come. And I look forward to my children and my grandchildren being able to read those principles. As an e-commerce business owner and as I speak with other e-commerce business owners, there’s kind of this myth, that people believe that they could do it all on their own.
Josh 00:01:09 Right. And they what they do is they build a team of a lot of VA’s that are surrounding themselves, but they are still the core function of the business. There’s a quote from your book that I want to read real quick and get your take on it. If your business depends on you, you don’t own a business. You have a job. And it’s the worst job in the world because you’re working for a lunatic. So, Michael, can you provide some additional insight as to if you are still working in the business, why you don’t actually own a business?
Michael 00:01:42 Well, you have to understand that, oftentimes my statements are stronger than they need to be. Oftentimes, as well, they’re not strong enough, but I understand. Take that quote working for a lunatic and you might change it to be working for an idiot. And it’s that idiot that I attempt to transform. And the only way in the world that idiot is going to be transformed is if he or she doesn’t persist. Being that idiot in the way they think about who they are, why they do what they do, what they’re there to create, and how it’s going to be created if in fact, they grow beyond their idiot hood.
Michael 00:02:28 So it’s a master, master, master position to take charge. In short, to strenuously understand that while you’re not in a people development business. In short, that’s not the intent you are. You get what I mean by that. While you’re not in a people development business, you actually are. Everyone is. But the question then becomes what is people development? And how does one approach people development at the very outset? And that is in the positioning of who you are and what you do. So the most critical process in what I describe, how many of you have read beyond the email?
Josh 00:03:17 Yes, I’ve read it.
Michael 00:03:19 Well congratulations Josh folks. I picked the book up. It’s beyond the myth, the evolution of an enterprise from a company of one to a company of 1000. And at the heart of that book is what I describe as the Eightfold Path. The Eightfold Path is crucial to the process of becoming who you intend to be. Let me describe the eight steps in the Eightfold Path.
Michael 00:03:48 I have a dream. I have a vision. I have a purpose. I have a mission. I have a job, I have a practice. I have a business. I have an enterprise, a dream, a vision, the purpose, the mission, the job, the practice, the business, the enterprise. The Eightfold path is the process for growing a company of one to a company of 1000. It is the process of maturing from doing it yourself, doing it, doing it, doing it, doing it to create an enterprise that does it in great measure with a great number of individuals who are in fact, instilled in the process of understanding and appreciating what a dream is, what a vision is, what a purpose is, what a mission is. How many of you are familiar with the Dreaming Room? So the Dreaming Room is a program that I developed to take one through the first four steps to discover your dream, your vision, your purpose, your vision. If you fail to discover your dream.
Michael 00:05:00 I’m saying you’ll never discover your vision. If you fail to discover your dream, I say go to never discover your purpose. And you follow me and follow me. First this, then that, then that, then that. So there’s a process, a mad process through which you grow in maturity, you grow in eloquence. You grow in ability to literally become the one you can’t even imagine becoming. At the very outset of this process, my dream way back then, in 1977. Wow, that’s a long time ago. My dream was to transform the state of small business worldwide. My dream was to transform the state of small business worldwide. My vision was to invent the McDonald’s of small business development services. My mission was that every small business who in fact accepts this process and indeed realize the outcome I’m describing here and my mission is and was in 1977, that I can invent the business development system that will make it possible for me to realize my dream, my vision, and my purpose. Did that make sense?
Josh 00:06:32 Makes a lot of sense.
Josh 00:06:33 And I love those eight steps in that process that you go through, because it truly is like an evolution of growing and developing.
Michael 00:06:40 It’s an evolution. It’s an evolution, but it’s not based upon evolution. It’s based upon something significantly more compelling than evolution. Right? That’s what’s so critical about it.
Josh 00:06:52 Michael, on that note, you know, one of the things is you begin to scale a business. And as you go from 1 to 1000 to an enterprise, you’re going to have to work with people. Right. And we talked about people development. In your decades of experience, do you have any advice or tips when it comes to finding and hiring a level talent for your business?
Michael 00:07:15 Well, that’s obviously a system and obviously how you select the people you hire, what you put them through before you ever bring them aboard, and how you determine their makeup before you ever bring them aboard. create a method for that madness. And the people you bring aboard will be immensely different than the people you’re bringing aboard today.
Michael 00:07:44 What is that? Military and group. The elite military. Navy. Marines, US Navy Seals are okay.
Jeremy Weisz 00:07:53 Literally, they’re okay to.
Michael 00:07:55 Think about US Navy Seals for the moment. The Seals put people through living hell before they ever get to become a beginner, a Navy Seal. And yet, 90% of those who become a Navy Seal drop out before they become a Navy Seal. 90% drop out before they become a Navy Seal. And the ones who become beginners have been through an immense amount of development before they’re ever qualified to go through the first stages. And then the Navy Seals put them through living hell. Put that down to living hell. Challenging. Challenging. Challenging. Challenging. Challenging. Challenging. Challenging. Challenging. You follow me. That’s your job. Hear me? How do you expect them to become stars? Challenging. Challenging. Challenging. challenging. So that’s the process. It’s so far beyond anything we do. So far beyond anything anybody expects to do, believes they need to do, wants to do.
Michael 00:09:07 Because none of the people in your organization have ever been through it. Challenging. Challenging. Challenging. Challenging. How do you expect them to bring aboard people who will do it? They won’t. Why would they? Challenging. Challenging. Challenging. Challenging. You understand the danger that creates for your people. So you’ve got to start this over here to see where I’m putting my you got to start this over here. There are two organizations within your organization. Every single one of you there is old code and there is new code. You’re not here to grow old code. You’re here to grow new code and new code. Any new capital SEO, old code. Old capital SEO, Go on. Go! Is the past. New go is the future. You’re here to design, build, launch and grow new code. That’s your Navy Seals. The question then is, do you have the measure in you to design and build bones and grow your Navy Seals? Hear me? That’s not an easy question to answer.
Michael 00:10:16 Unfortunately, it is because we don’t really ever address it. Give me a break or give me a break. I don’t even want to create a Navy Seals in my business, but that’s what it takes. That’s what it takes. So you’re going to work on NewCo while you go to work on old code, and you’re going to work on old Co to keep it from failing. But it’s not the future.
Josh 00:10:44 Yeah. Michael I think it’s an important mindset shift that the listeners take of you know with your analogy of Navy Seals and your that’s the type of talent that you need to be developing for your business in order to grow it to that new code. So I really appreciate that, and I hope our listeners go back and relisten to that. That’s a huge mindset shift that business owners need to have when they begin to hire talent.
Michael 00:11:08 Yes, but hear me, it’s a huge mindset and soul set s o l soul set for you. Don’t you dare tell that story until you’ve set your soul to it.
Michael 00:11:23 And please be careful about telling yourself that you’ve set your soul to it. Because if you hadn’t set your soul to it, it’s going to chew you up and spit you out because you’re not going to match it. And the last thing I want to do is to put you into the grinder, the soul grinder that will put you in so you’ll stay one day. Kerber, the day you told me that story was the day it went out of business.
Tom Foster 00:11:51 Thanks, Michael. Thanks, everyone.
Jeremy Weisz 00:11:52 Thank you so much, Michael. It’s such an honor to meet you.
