The E-Myth

The book describes the process the average entrepreneur goes through when starting their business, and emphasizes systems thinking to make your company scalable.

Notes taken:

• Every person has distinct personalities operating inside them
• a good example of this is the Fat Guy vs Skinny Guy. (One day, you notice you're fat and start changing your life. A mental paradigm shift is happening, where the Fat Guy role exits your mind and the Skinny Guy role takes over. These two personalities hate each other, and they're fighting for control. One of them will win. Usually, what happens is that the Skinny Guy takes the reins for two days, and then the Fat Guy comes back to wreck everything.
• In the world of entrepreneurs, we have three roles: The Entrepreneur, The Manager, and The Technician.
• The Entrepreneur lives in the future, and plans things with vision;
• The Manager lives in the past, and organizes everything they see; they're averse to change;
• The Technician lives in the present, and executes, does, executes.
• The big problem with small businesses — which is usually a person who is 10% entrepreneur, 20% manager, and 70% technician — is that in a moment when the entrepreneur takes command, they decide to open a business. But soon the technician wins the mental battle again.
• So small businesses run with almost no entrepreneurial vision, no management, and lots of action. (Also known as the //dumb// way of doing things)
• Companies have three stages; infancy, adolescence, and maturity;
• Most companies will never make it past infancy, and most of the ones that get past infancy will never reach maturity (90% of companies close within 5 years; of the 10% that survive, 80% close within the next 5)
• Infancy is when the whole business is centered on you. *** ??? ***
• Adolescence is when you bring in a manager and start expanding. *** ??? ***
• I'll revisit the part about the Infancy, Adolescence, and Maturity of a business. A table is the best way to understand that information.

The idea of the three roles inside an entrepreneur's mind keeps intriguing me more and more. Picturing yourself as a fragmentation of several personalities (like in the movie Split, minus the psychopathy) seems like an interesting mental model to me.

Usually, people see their ego as something singular and indivisible - I am this person, I like bananas, apples, I'm good at this and that.

But the truth is we all put on and take off masks and costumes all the time. I'm not going to behave at a bar the way I behave at work. The person writing here is not the same person who chats with my grandma.

I mean - we naturally take on all sorts of roles already. What starts to happen if you create these characters deliberately, and choose “today I'm going to be Gabriel the Programmer”, or “Today I'm going to be Carnival Gabriel” at the start of the day?

At the very least, it would make me think about which routine I'm stepping into that day, and it might even prevent bad habits;

It's a thought I still have to develop, and I have a really good feeling about it.

Anyway, here's the rundown of what I read yesterday:

• Extraordinary businesses don't expect their results from people - they expect their results from processes, from Systems.
• Think of your business as a product, as if you were going to franchise it, so that it can be operated in Vladivostok just as well as in Piracicaba, the same way, run by wildly different people, who achieve the same result (McDonald's)
• Your first store, or unit, (whatever it is), should operate as a franchise prototype; that's exactly what you want to build, a franchise prototype, which should be the basis of operation for the next ones (even if you're not going to work on a franchise model)
• Every business you build should be an aggregate of systems that generate consistent results and experiences.
• Build systems that generate extraordinary results with people

The book keeps unfolding, and makes lots of interesting points about metrics, goals, etc. Apparently there's a 12-step process for building a franchise prototype.

The first step is identifying your personal goals. Then, he starts talking about business specific goals, which threw me into an Excel frenzy, projecting revenue volume and profits for that services company. It was really interesting to use Sivers' thinking model - a business plan is a conjecture; do it now with no money. Now with lots of money. I built two models - one thinking of a one-time service, and another thinking “What if it was a SaaS?” I believe in the end the two models will coexist, with demand both for regular cleaning and for last-minute cleaning.

The process of putting together the company's org chart as the very first thing you do - starting from the end - struck me as wonderful. Of course this would never work for a disruptive startup, but I can clearly see it working for simpler businesses - and, why not, for Estoicos.com.br and the services company I intend to set up?

It works like this:

• Start from the end. Picture your company's structure once it's at the size you're planning for.
• Make an org chart with all the roles in the company:
• That structure will exist from day one. The only difference is that you fill every role at first.
• Write a description of the responsibilities and activities of each role, as well as the standards against which that person's work will be evaluated.
• At the end, make a contract, to be signed both by the company's CEO and by the subordinates - if you're all of them, sign everything. Making a contract with yourself, from yourself.