How Social Media Is Challenging the E-Myth Principle

Back in 1985, Michael E. Gerber wrote a book called The E-Myth: Why Most Businesses Don’t Work and What to Do About It. The E-Myth (“Entrepreneurial Myth”) discussed in the book is the commonly held belief that most businesses are started by ambitious entrepreneurs.

The truth, according to Gerber, is that most businesses are started by “technicians” — those who know and enjoy the “hands-on” work of the organization. Gerber asserts that when a person starts a new business, being able to do the technical work required personally is actually a liability — having tangible business skills is far more important.

Fast forward over 25 years where we live in a do-it-yourself world with unprecedented access to information, education, global networks, and the E-Myth principle appears out-dated. Spend some time online and you can learn more about business than you might believe is possible, and you don’t have to pay a penny to do it. Today, it’s relatively easy for anyone to start a business, and having “innate” business savvy is no longer a requirement for starting a succesful business.

Is the E-Myth principle dead? Here are three key changes since the original book was published, which make the case that the E-Myth principle is indeed obsolete.

Resources and Education

Want to learn about something? Anything? Google it. It’s really that simple. You can learn how to start a business, get funding, secure a loan, hire employees, create marketing materials, design a storefront, manage your accounting, and more, online. If you want, you can even get a degree in business from a virtual school. The information is out there and at your fingertips. You just need to spend the time looking for it, reading it, and absorbing it.

Beyond simple web searches, you can find specific websites dedicated to teaching you about business. From strategy to tactics, planning to execution, and even practical case studies and instruction, there are websites where experts share their experience and knowledge with you. Many of these experts write books and teach at the college-level, and they offer their expertise through written content, podcasts, videos, and more online, which you can access at anytime.

The E-Myth Principle focused on teaching skilled people — technicians — how to think strategically and work on their businesses rather than in them. These days, there is no need to distinguish between technicians and entrepreneurs, because anyone can learn to think and act like an entrepreneur with a bit of self-education.

Tools and Implementation

When it comes time to put your entrepreneurial plans into action, the Web gives you direct access to free and affordable tools to make it happen. Whether you need a tool to launch a direct response marketing campaign like MailChimp or Constant Contact, a tool to manage your finances like QuickBooks or Freshbooks, there are resources to help you with just about every aspect of your business.

The web also gives entrepreneurs access to experts and technicians in other fields. It’s easier than ever to find affordable help when you need it. For example, if you don’t have the expertise to create a marketing plan, you can find that help online. You can even hire telecommuters to put your marketing plans into action from the other side of the globe!

Communities and Networking

In 1985, networking happened only at in-person events. It was simply a different world. Today, networking happens every minute of every day online. Twitter, Facebook, LinkedIn, blogs, forums, and other social sites are integral parts of our professional lives. A question about starting a business in 1985 couldn’t be answered instantly. Today, you can publish a question on LinkedIn Answers or Quora and get dozens of answers within minutes.

While Gerber offered a very prescriptive method to grow a business that relied heavily on the popular franchising model of the 1980s, such a view is too contrived and short-sighted in 2012. Today, relying on a franchise model isn’t a guaranteed recipe for success. Today, the businesses that think outside the box, challenge the norm, and understand that the real world is changing faster than ever are the ones that will succeed.

The bottom line? Don’t sell yourself or your business short by viewing entrepreneurship through blinders that are a quarter century old. Instead, take those blinders off and open your eyes and your mind to the resources, education, tools, communities, and networking that entrepreneurs from 25 years ago could not have even imagined.

[Image credits: InfusionSoft, Rafe Blandford, scanna283, Jason Tester]

Ikeswoop 5 pts

After reading the article, I have concluded that the views expressed are extremely flawed. I agree that there is a lot of useful resources out there and information is easy to come by these days, however the article fails to address the more important issue, which is; doing all the technical work required in a business, such as designing websites, baking cakes, doing hair etc, will not give the entrepreneur the important time required to develop a world class business.

The article also fails to discuss the importance of systematising a business by having clearly defined systems and processes. It does not discuss how important it is to have good organisational structure, even within a small business. The writer does not discuss the importance of having a clear vision and a goal when starting a business. The article fails to discuss the need for financial planning and managing money. The list goes on.

Many business owner skip many important aspects of creating a world class business, which intimately leads to business failure. The writer fails to discuss any of the above. People reading the article, may conclude that starting a business is easy and anyone can do. People that start a business relying on the information contained in the article will surely regret missing out many of the important concepts discussed in the E Myth, when the cracks start showing within their business.

Yes, the E Myth was written in 1985, however since then Gerber has written the E Myth Mastery (amongst others), which is more recent and relevant. The E Myth Mastery makes use of the internet and provides the reader with online resources and templates to use within their business.

Every author will have their fair share of critics and I wouldn't expect Mr Gerber to be any different. The internet is awash with information, however it is important to follow structured and organised learning. Hence the importance of education (both formal and otherwise).

Enjoy your day. ;-) Ikeswoop

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Josef at Emyth

Thanks for the provocative article. The vast amount of information available via the internet and social media is truly stunning. Is there more support than ever for small business owners? Yes. Does this challenge the Entrepreneurial Myth? Unfortunately, it does not.

The idea that accessibility of information addresses the issue of the absence of business skill and awareness is a misunderstanding of the E-Myth Point of View. From page 8 of the introduction to The E-Myth Revisited:

"The problem with most failing businesses I've encountered is not that their owners don't know enough about finance, marketing, management, and operations – they don't, but those things are easy enough to learn – but that they spend their time and energy defending what they think they know."

Is lack of knowledge and skill an issue for small business owners that can be helped by social media and the internet? Yes, but the root issue is about awareness. You have to know what you don't know to use the internet to find out. If you don't know what you don't know, or worse, think you already know what you need to know, all the information in the world will not help because you won't look into it.

You don't get answers to questions you don't ask. The Entrepreneurial Myth is the assumption that technical skill translates into the ability to run a business. An individual operating with this assumption is tragically unable to ask the right questions.

In short, information is not knowledge, knowledge is not skill, and skill is not awareness. The E-Myth diagnosis of the epidemic of small business failure is based on a deficit of awareness, skill, and knowledge – in that order. It would be wonderful if accessibility of information would solve the problem, but unfortunately the issue is much deeper.