Less than six months after launching my company I found myself at a diner with a friend. Over coffee, I began telling him about my recent successes — and struggles — as an entrepreneur. He stopped me. “Have you read The E-Myth?”
I shook my head.
“Then cancel everything you’re doing today and get yourself a copy. It’ll transform how you run your business.”
I listened to his advice and immediately read Michael Gerber’s seminal work, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. One of the top five top-selling business books of all time, it changed the trajectory of my company. According to the man recognized by Inc. as "The World's #1 Small Business Guru," Gerber's book title refers to the so-called entrepreneurial myth: "the flawed assumption that people who are experts at a certain technical skill will, therefore, be successful running a business that does that technical work."
The reason my friend suggested I read Gerber was that he heard me describing the common challenge individuals face when running a company. This challenge has to do with mentality. A recent study by the Haas Economic Analysis & Policy Group found that a significant number of entrepreneurs share a common history of juvenile delinquency. This finding isn’t so unbelievable the more you consider it. After all, entrepreneurs tend to possess similar mindsets. Often rebellious and contrarian, they don’t like to follow in the paths of others. Instead, they like to make paths for others to follow.
However, what Gerber found through his experience business consulting is that many iconoclastic visionaries crack under the strain of the daily grind. This is especially true when it comes to solopreneur operations. An independent-minded entrepreneur may have set out to free themselves from the tyranny of working for someone else by starting their own business. However, the sad truth is, they quickly discover they don’t really own one. As Gerber writes, “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!”
Gerber’s point resonated with me from the moment I began reading. The problem he points to is scaling. According to Investopedia, “Scalability is a characteristic of a system, model, or function that describes its capability to cope and perform well under an increased or expanding workload or scope. A system that scales well will be able to maintain or even increase its level of performance or efficiency even as it is tested by larger and larger operational demands.”
The more I told my friend about the challenges I faced that day in the diner, the more he could see I was falling into a trap Gerber warns about in his book. According to Gerber, three business personalities exist the visionary, the manager and the technician. Though many entrepreneurs begin as pie-in-the-sky visionaries, daringly imagining their company solving big problems, in time, if they are not vigilant, survival’s exigencies will force this same individual to take on more managerial and technician roles, sapping their vitality and time. If this person isn’t careful, they could find themselves in a danger zone where their business demands threaten to overwhelm them.
A longtime critic of "trading hours for money," Gerber urges the truly entrepreneurial-minded to invest in a "systems approach" to business. Those who don't heed his advice risk burying themselves under a ceaseless mountain of work. Worse, Gerber warns, if you own a job instead of a business, you can't just quit as you would a normal vocation, because, without you, the whole enterprise will collapse.
What’s so interesting about the times we live in is that through the rise of AI, suddenly a mechanism exists for scaling a business in unprecedented ways. I learned this firsthand upon receiving the opportunity to interview Michael Gerber for the book I am co-writing with Neil Sahota, subject matter expert on tech for the United Nations, Own the A.I. Revolution: Unlock Your Artificial Intelligence Strategy to Disrupt Your Competition.
Though every era experiences its share of upheavals, it can be argued the current one is unlike any other. It’s not just the scale of business and life that’s changing so dramatically, but rather the speed at which it’s happening. Don’t believe me? The Sopranos celebrated its 20th anniversary this year. That's not that long ago on paper. But go back and watch some episodes and tell me it doesn't feel like you're witnessing a bygone era. Wait. Tony didn’t own a smartphone? How did he ever get anything done? Oh, how much differently things might have gone for the DiMeo crime family if they were on social media …
The point is we’re at the beginning stages of a disruptive time. The 4thIndustrial Revolution offers much promise — and much uncertainty. Now, more than ever, we could use the insight of a brilliant expert known for disrupting mentalities the world over. What might Michael Gerber, a man known for bringing a systems approach to business, have to say about artificial intelligence, a technological tool notoriously associated with automation?
“Since I started my consulting business back in 1977, I understood that a successful business, regardless of what it did, what is produced, or what it sold, was based on a business system,” Gerber says. “Ray Kroc, who founded McDonald’s at age 52, never made a hamburger or fried a French fry in his life. His genius lay in understanding and incorporating systems thinking into everything he did. This made it possible for him to replicate his success over and over and over again.”
According to Gerber, “success” can be defined as a methodology through which outcomes are produced. Preferred outcomes are produced in a preferred process through which ordinary people become extraordinary as they're leveraged by the system that has been created to produce that result. Whether it’s called McDonald’s or Starbucks or Apple or Amazon, it's the same systems thinking. Anyone who has read The E-Myth will attest that Gerber does not advocate hiring the best people to accomplish the tasks required for an organization. Instead, the best people invest time developing systems thinking. “The system is the solution,” explains Gerber. “There’s a system to running an Apple Store, and that’s what makes it Apple. AI is perfect for this, because it, too, is systems-based. That’s what an algorithm is. It’s a system. A system that can grow and replicate itself over and over again.”
Throughout his books and talks, Gerber has pointed to the McDonald's model as ideal due to this type of reproducibility. A fan of franchises for their ability to scale, he's also a realist who knows there are two kinds of small businesses. The first model is created by a person who wants to be his/her own boss and is uninterested in growing beyond a single location. The second is a business begun by an entrepreneur who may or may not have an attraction to an industry yet wants to pursue an advantage in a specific marketplace.
According to Gerber, AI won’t have a significant impact on the first model. At least not initially. Why? These types of businesses tend to be highly people contingent. Success or failure is dependent upon the skills and creativity of the person(s) running them. As a result, artificial intelligence is unlikely to have a profound impact on their daily operations. “However, for this second type of business, the one founded by the entrepreneur, AI is going to offer a significant advantage,” says Gerber. “It will offer operational efficiencies that allow one to grow quickly beyond the ‘one shop’ model.”
“Radical U, an online trade school for entrepreneurs initiated by Gerber, helps entrepreneurs acquire a systems-oriented approach to their business. Offering a proven eight-step business-building curriculum, it enables students to design, build, launch and grow a company capable of harnessing AI’s potential for scaling. It’s little wonder, therefore, that Gerber’s influence is responsible for success stories, like Brian Scudamore, who created 1-800-GOT-JUNK? with a pickup truck, leading to an international franchise. Likewise, Dr. Ivan Misner, who created BNI, another winning franchise model, attributes the scaling of his referral-based networking business to Gerber’s thinking.
Though Gerber is proud to have played no small role in these entrepreneurs’ achievements, he is quick to point out a vital truth often overlooked when talking about AI and commerce. Too often, businesses and the societies that produce them, miss the point about the important things in life. “This leads to one of the greatest problems I face when dealing with small business owners,” says Gerber. “They don't understand that it’s not about making a living; it’s about making a difference.”
Noticeably absent in discussions surrounding scalability, growth and profits due to AI, says Gerber, is any significant debate over what makes for a good life — a meaningful life. “I think the big danger in AI is that it’s likely to make things too easy, too entertaining. It doesn’t demand anything of us. It does for us. As much as our society and the educational system wants us to be more productive, more accurate and more efficient, I'd like to see similar emphasis placed on individual creativity, our innovative spirit.”
Time and again, my experience co-writing Own the AIRevolution has yielded inspirational interviews with today’s thought leaders who echo similar sentiments. Like Gerber, they make the increasingly compelling case we mustn’t allow AI’s efficacy as a tool for attaining more material abundance obscure our larger purpose as a species. Making money is important, yes, but it’s not why we are really here.
For clarity on this question, arguably the most important query of them all, we would do well to heed one final thought from Gerber. “I believe we have divinity within each of us,” he says. “Life’s meaning is not about having religious authorities tell you what to do or devising new ways to be profitable. It’s about finding the divine spark within yourself. AI or not, we must always seek our higher purpose: to be creative creatures, just like God.”
Michael Ashley, contributor, and fascinated with the artificial intelligence revolution, is currently co-authoring the ultimate guide for businesses on the subject of AI with Neil Sahota, worldwide business development leader and master inventor for the IBM Watson Group. Part author, part screenwriter, Michael Ashley’s treatment was turned into the hit Disney film, Girl Versus Monster. A 4-time Best-Selling author, he has ghostwritten both fiction and non-fiction books. It’s Saturday Morning, his debut traditionally published book (becker&meyer!), will hit bookstores in Q3 with a foreword by Howie Mandel. Michael was commissioned to screenwrite a TV pilot for Brandon Fayette, Lead Visual Effects artist for JJ Abrams (Star Wars, Lost). Prior to establishing Ink Wordsmiths, his own creative content company, he worked in many literary positions, including as a professional reader for the Head of the Literary Department of Creative Artists Agency.
Michael’s ghost-written blogs have appeared in the Huffington Post and OpEdNews. He has worked as a beat reporter for the Columbia Missourian and as a columnist for Newsbase, an online journal specializing in the energy sector. Author of This Works Marketing (2018), Evolution by God (2017), Fiction in A Weekend (2017) and The Six-Figure Writer (2015) Michael holds a Master of Fine Arts degree in Screenwriting from Chapman University and teaches online writing courses. Thought leaders, including Michael Gerber, David Oreck, and Montel Williams have endorsed his work and his clients have appeared on Inside Edition and prestigious publications, including the Orange County BusinessJournal and Pelican Hill Magazine.