Book Reviews
The E-Myth Revisited (1995) The E-Myth Real Estate Agent (2019) by Michael Gerber (& Brad Korn) Reviewed by Kris Freeberg January 2020 |
Favorite quote:
"People buy feelings . . . how your business anticipates those feelings and satisfies them is your product" (155).
"People buy feelings . . . how your business anticipates those feelings and satisfies them is your product" (155).
Executive Summary. The E-Myth series is a paradox insofar as it is a collection of hyper-emotional books written for a hyper-emotional audience about the importance of unemotional work: systematization, and documentation.
Because it's written by hyper-emotional authors for hyper-emotional readers, it never seems to get clear enough about systems and documentation as to be actionable. They go on for pages and chapters about the importance of systems and documentation, but the most definite example we ever see, in the case of E-Myth Real Estate, is a makeshift manual Post-It Note Kanban board on a window.
In 2019. After all the progress we've made in tech. Somebody still publishes a book containing a picture of Post-It notes on a window.
For me, this was the most memorable, compelling lesson I gained from the experience of reading both books. It left me feeling both dismayed, and fascinated by the opportunity . . . wondering what difference I, as an Introverted Stoic who actually thrives on Lonely Work, might be able to make in the lives and businesses of such otherwise capable people. It taught me a lot about people, and about the wide varieties thereof.
Because it's written by hyper-emotional authors for hyper-emotional readers, it never seems to get clear enough about systems and documentation as to be actionable. They go on for pages and chapters about the importance of systems and documentation, but the most definite example we ever see, in the case of E-Myth Real Estate, is a makeshift manual Post-It Note Kanban board on a window.
In 2019. After all the progress we've made in tech. Somebody still publishes a book containing a picture of Post-It notes on a window.
For me, this was the most memorable, compelling lesson I gained from the experience of reading both books. It left me feeling both dismayed, and fascinated by the opportunity . . . wondering what difference I, as an Introverted Stoic who actually thrives on Lonely Work, might be able to make in the lives and businesses of such otherwise capable people. It taught me a lot about people, and about the wide varieties thereof.
"Work ON your business, not just IN it."
ON versus IN: that's the distinction for which Michael Gerber is famous. He has been preaching that message since 1986. That's thirty-four years, and counting. It's an abiding, valuable, timeless message.
I am not a Businessman. I am a Man of Business. The French call it "Homme d'Affaires." I learned that distinction in James E. Hughes' book Family Wealth. It's a vital distinction that may be obscured in American culture, but that seems to be more distinct in European culture.
Businessmen work in their businesses. Men of Business - Hommes d'Affaires - work on businesses - both theirs, and others'.
I help people work ON their businesses; and whenever I am frustrated, whenever I struggle to get my clients to shift their focus from the minutiae of day-to-day operations to The Bigger Picture, I think of authors like Michael Gerber, Steve Covey, and Sam Carpenter.
For me, this frustration reached a peak in 2019. I asked myself, "How am I going to get through to these guys? Maybe I need to re-read Gerber and see if he can help me attain some kind of breakthrough."
So in January, I read both books.
Gerber understands the importance and significance of emotion. He understands his readership. He understands that he must write in a style that is designed to hook their emotions.
As a Stoic, I found this style ponderous, tedious, and unnecessary. To me, it was impertinent fluff designed to coddle emotionally weak people. But I slogged through it to get the nuggets. I sifted through the chaff to get the kernels of wheat.
This sifting effort was instructive to me, however. It taught me that tending emotions is important if you want to get along in the world and reach those who need your help. I still feel, however, that there is a fine line between helping and enabling. Maybe I'm wrong, but my gut tells me that Gerber crosses it.
I compare and contrast Gerber's work with Sam Carpenter's (Work the System), Gary Keller's (MREA, MREI), and Charlie Munger's (Poor Charlie's Almanac). Carpenter and Keller emphasize the importance of "putting systems in place." Munger writes a lot about "Grannie's Rule" (eat your carrots before dessert). Gerber's "carrot" is working ON your business, getting in touch with your "inner entrepreneur" . . . regardless whether you feel like it.
So I would describe Gerber's approach, his style, as hyper-emotional, designed to reach hyper-emotional people. But perhaps I am the deviant one. Perhaps I am not emotional enough. To a Stoic, I suppose most people seem hyper-emotional.
But I think to myself, isn't what Gerber advocates - getting over yourself and running your business like a grown-up - isn't this just garden-variety "Adulting?"
I think it is.
It all reminds me of Garrison Keillor's character Evelyn Lundberg of the E.L.C.A., the Evelyn Lundberg Counseling Agency, a parody of the Evangelical Lutheran Church of America: she is so blunt that she can solve all of your problems in one session. I guess I have an "Evelyn Lundberg" approach toward Gerber's subject. Whereas he fills entire books with his ON versus IN message, I would take care of it with one sharp rebuke. As Evelyn would say, "Get over yourself. Think you can handle that?"
But Gerber is smart enough - in all humility, I must admit that he's probably smarter than I am - to know that he needs to administer this medicine in small doses, not all at once like Evelyn does. Really, the all-at-once approach is absurd . . . which is, I suppose, why Garrison Keillor's humor is funny.
As a Stoic, I found this style ponderous, tedious, and unnecessary. To me, it was impertinent fluff designed to coddle emotionally weak people. But I slogged through it to get the nuggets. I sifted through the chaff to get the kernels of wheat.
This sifting effort was instructive to me, however. It taught me that tending emotions is important if you want to get along in the world and reach those who need your help. I still feel, however, that there is a fine line between helping and enabling. Maybe I'm wrong, but my gut tells me that Gerber crosses it.
I compare and contrast Gerber's work with Sam Carpenter's (Work the System), Gary Keller's (MREA, MREI), and Charlie Munger's (Poor Charlie's Almanac). Carpenter and Keller emphasize the importance of "putting systems in place." Munger writes a lot about "Grannie's Rule" (eat your carrots before dessert). Gerber's "carrot" is working ON your business, getting in touch with your "inner entrepreneur" . . . regardless whether you feel like it.
So I would describe Gerber's approach, his style, as hyper-emotional, designed to reach hyper-emotional people. But perhaps I am the deviant one. Perhaps I am not emotional enough. To a Stoic, I suppose most people seem hyper-emotional.
But I think to myself, isn't what Gerber advocates - getting over yourself and running your business like a grown-up - isn't this just garden-variety "Adulting?"
I think it is.
It all reminds me of Garrison Keillor's character Evelyn Lundberg of the E.L.C.A., the Evelyn Lundberg Counseling Agency, a parody of the Evangelical Lutheran Church of America: she is so blunt that she can solve all of your problems in one session. I guess I have an "Evelyn Lundberg" approach toward Gerber's subject. Whereas he fills entire books with his ON versus IN message, I would take care of it with one sharp rebuke. As Evelyn would say, "Get over yourself. Think you can handle that?"
But Gerber is smart enough - in all humility, I must admit that he's probably smarter than I am - to know that he needs to administer this medicine in small doses, not all at once like Evelyn does. Really, the all-at-once approach is absurd . . . which is, I suppose, why Garrison Keillor's humor is funny.
From Primary Aim to Systems. The heart of the first book, The E-Myth Revisited, is Chapter 12: "Your Primary Aim." It isn't financial. It's existential. "What do you want them to write on your gravestone?" That kind of thing.
In this chapter, Gerber tells a long-winded story about a wandering soul who turns out to be himself. When I got to the end of the chapter, I found myself wondering still what Gerber's Primary Aim is. I have a feeling he's still figuring it out.
His point - and it's a point well taken - is that whether you have an answer or not, asking the question is important because the answer drives everything else. If you have a squishy answer, you'll probably have a squishy business or businesses, and vice-versa. If you have a clear focused answer, you will probably have a clear focused business or businesses.
On the other end of his progression, toward the ends of both books, are systems. I found these to be as elusive as his Primary Aim. He writes at length about the importance of systems, of putting solid systems in place . . . but he's a little sketchy on the details.
And Gerber's not alone. In MREA and MREI, Gary Keller does the same thing. He lauds the importance of systems. What systems? Well . . . he wrote MREA in 2004 and MREI in 2005. Now in 2020, some 15-16 years later, with Keller Williams' "Command" management information system, after playing trial and error with a lot of expensive third party Customer Relationship Management (CRM) vendors, it turns out he is still working on the answer to that question. It's still very much a work in progress.
One thing I'll say for Gerber's systems theory: he's on the right track. I like his metrics. What's missing is the process of compiling them, which I believe I've perfected, or certainly worked out, in the form of organizational Whole Day Timekeeping.
In this chapter, Gerber tells a long-winded story about a wandering soul who turns out to be himself. When I got to the end of the chapter, I found myself wondering still what Gerber's Primary Aim is. I have a feeling he's still figuring it out.
His point - and it's a point well taken - is that whether you have an answer or not, asking the question is important because the answer drives everything else. If you have a squishy answer, you'll probably have a squishy business or businesses, and vice-versa. If you have a clear focused answer, you will probably have a clear focused business or businesses.
On the other end of his progression, toward the ends of both books, are systems. I found these to be as elusive as his Primary Aim. He writes at length about the importance of systems, of putting solid systems in place . . . but he's a little sketchy on the details.
And Gerber's not alone. In MREA and MREI, Gary Keller does the same thing. He lauds the importance of systems. What systems? Well . . . he wrote MREA in 2004 and MREI in 2005. Now in 2020, some 15-16 years later, with Keller Williams' "Command" management information system, after playing trial and error with a lot of expensive third party Customer Relationship Management (CRM) vendors, it turns out he is still working on the answer to that question. It's still very much a work in progress.
One thing I'll say for Gerber's systems theory: he's on the right track. I like his metrics. What's missing is the process of compiling them, which I believe I've perfected, or certainly worked out, in the form of organizational Whole Day Timekeeping.
That's where Stoics like me enter the picture. We're "cold" enough that we can get past the emoting, hand-wringing, lecturing, preaching, wishing, hoping, and dreaming, and actually create (and more importantly, deploy) the systems about which our more emotional friends spend years, even decades, talking and writing.
Because we actually like "Lonely Work", we get it done. (For more information on systems design, see the HWD page. I design a lot of systems with the QuickBase platform.)
Advance Org Chart. In E-Myth Revisited, I felt that Chapter 14, "Your Organizational Strategy" was brilliant. Gerber says, instead of waiting until your business is large and complicated enough to necessitate one, draw your organizational chart now, complete with job descriptions. Visualize how it should grow. Visualize the departments and the roles. Architect the whole thing in advance.
That's what Walmart did. That's what McDonald's did. They had preconceived visions of how they would grow. We should, too.
Document. Everyone agrees about this, but few do it well. That's what Carpenter's book is all about. That's what much of both MREA and MREI are about. Document your procedures. Systematize and routinize.
Documentation - intellectual property - is what makes turn-key businesses possible. It's what makes the difference between a stagnant single-location mom and pop business, and a thriving franchise that grows like a beautiful, flourishing, nourishing garden.
I find that among what Gerber calls "technicians", there is a lack of respect and appreciation for the importance of documentation. Techs are doers, not thinkers or writers.
I won't say they're illiterate, but I have found that they're often anti-literate. That is, they can read and write, but they don't want to. As Mark Twain once wrote, "The man who does not read has no advantage over the man who cannot read."
Unfortunately, a dominant strain of self-defeating, anti-intellectual, anti-literary bigotry runs through blue collar culture. It's unfortunate, because regardless of their collar's color, thinking is the business of everyone who has a brain. It's literally unfortunate because development of intellectual property is the key to large fortunes.
Documenting procedures is what Carpenter's book Work the System is all about. He tells quite the story. He avoided documentation until he was divorced and homeless, living in the back of his shop sleeping on a cot and cooking on a hot plate. Then crisis struck and he couldn't even afford payroll.
That night he had an out-of-body experience; in a trance he saw his business as a tangled plate of spaghetti. He laid out each noodle straight and parallel, and realized his business was nothing more than an interactive collection of linear, sequential, step-by-step procedures.
Once he realized that, he wrote them down, and life has never been the same. His business improved so much that he made more money in a month than he used to make in a year.
In the end, he became a True Believer in documentation; but I daresay he went the hard way. He had to hit a crisis point before he saw the light.
People. Gerber and others point out how if your business is weak on documentation, systems, and procedures, then it becomes what I, as a Stoic, have coined "hyper-personal." A business owner who lacks structure becomes hyper-dependent on so-called Rock Star Employees who, in the final analysis, have a tendency to be both problematic and expensive. In effect, employers who seek Rock Stars put themselves over a barrel, making themselves vulnerable to exploitative predators.
Typical example: consider the business owner with weak accounting knowledge who hires a bookkeeper "to handle all of that stuff." Then s/he treats the bookkeeper as a kind of wizard or guru, and regards the bookkeeper's work as a mysterious Black Box. Long story short: the bookkeeper becomes a thief, stealing not only from the employer, but from customers, other employees, creditors, and vendors as well.
Another thing that can happen in a hyper-personal business that is weak on structure is that it can become moody. The quality of the work becomes dependent on people's moods. If they feel good, if they're having a good day, work is of a higher quality . . . and vice versa. The business becomes like a formless jelly fish that ebbs and flows arbitrarily according to people's feelings. It becomes a lightning rod, a controversy magnet, an accident waiting to happen.
But a business with a solid skeleton? Think of McDonald's. A Big Mac is a Big Mac regardless where you are in the world. It's always those "two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun." I didn't have to Google that jingle. It's embedded deeply in my memory because McDonald's has consistent, documented burger making procedures that are totally independent of people's vacillating moods.
Because we actually like "Lonely Work", we get it done. (For more information on systems design, see the HWD page. I design a lot of systems with the QuickBase platform.)
Advance Org Chart. In E-Myth Revisited, I felt that Chapter 14, "Your Organizational Strategy" was brilliant. Gerber says, instead of waiting until your business is large and complicated enough to necessitate one, draw your organizational chart now, complete with job descriptions. Visualize how it should grow. Visualize the departments and the roles. Architect the whole thing in advance.
That's what Walmart did. That's what McDonald's did. They had preconceived visions of how they would grow. We should, too.
Document. Everyone agrees about this, but few do it well. That's what Carpenter's book is all about. That's what much of both MREA and MREI are about. Document your procedures. Systematize and routinize.
Documentation - intellectual property - is what makes turn-key businesses possible. It's what makes the difference between a stagnant single-location mom and pop business, and a thriving franchise that grows like a beautiful, flourishing, nourishing garden.
I find that among what Gerber calls "technicians", there is a lack of respect and appreciation for the importance of documentation. Techs are doers, not thinkers or writers.
I won't say they're illiterate, but I have found that they're often anti-literate. That is, they can read and write, but they don't want to. As Mark Twain once wrote, "The man who does not read has no advantage over the man who cannot read."
Unfortunately, a dominant strain of self-defeating, anti-intellectual, anti-literary bigotry runs through blue collar culture. It's unfortunate, because regardless of their collar's color, thinking is the business of everyone who has a brain. It's literally unfortunate because development of intellectual property is the key to large fortunes.
Documenting procedures is what Carpenter's book Work the System is all about. He tells quite the story. He avoided documentation until he was divorced and homeless, living in the back of his shop sleeping on a cot and cooking on a hot plate. Then crisis struck and he couldn't even afford payroll.
That night he had an out-of-body experience; in a trance he saw his business as a tangled plate of spaghetti. He laid out each noodle straight and parallel, and realized his business was nothing more than an interactive collection of linear, sequential, step-by-step procedures.
Once he realized that, he wrote them down, and life has never been the same. His business improved so much that he made more money in a month than he used to make in a year.
In the end, he became a True Believer in documentation; but I daresay he went the hard way. He had to hit a crisis point before he saw the light.
People. Gerber and others point out how if your business is weak on documentation, systems, and procedures, then it becomes what I, as a Stoic, have coined "hyper-personal." A business owner who lacks structure becomes hyper-dependent on so-called Rock Star Employees who, in the final analysis, have a tendency to be both problematic and expensive. In effect, employers who seek Rock Stars put themselves over a barrel, making themselves vulnerable to exploitative predators.
Typical example: consider the business owner with weak accounting knowledge who hires a bookkeeper "to handle all of that stuff." Then s/he treats the bookkeeper as a kind of wizard or guru, and regards the bookkeeper's work as a mysterious Black Box. Long story short: the bookkeeper becomes a thief, stealing not only from the employer, but from customers, other employees, creditors, and vendors as well.
Another thing that can happen in a hyper-personal business that is weak on structure is that it can become moody. The quality of the work becomes dependent on people's moods. If they feel good, if they're having a good day, work is of a higher quality . . . and vice versa. The business becomes like a formless jelly fish that ebbs and flows arbitrarily according to people's feelings. It becomes a lightning rod, a controversy magnet, an accident waiting to happen.
But a business with a solid skeleton? Think of McDonald's. A Big Mac is a Big Mac regardless where you are in the world. It's always those "two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun." I didn't have to Google that jingle. It's embedded deeply in my memory because McDonald's has consistent, documented burger making procedures that are totally independent of people's vacillating moods.
Quotes & Lessons from E-Myth Real Estate Agent
Favorite quote: "Document everything you do and the time it takes to do it" (126-127).
Favorite quote: "Document everything you do and the time it takes to do it" (126-127).
- "I was not running my real estate practice like a business. I was just dumping everything into my personal checking account and spending it as I needed it, hoping there was enough in there to pay for everything" (10).
- ". . . even though I attended a lot of events and took a lot of notes, I really wasn't implementing the things I wrote down when I got back to the office" (17).
- "When it comes to [cash] flow, most real estate agents are flying by the proverbial seat of their pants. No matter how many people you hire to take care of your money, until you change the way you think about it, you will always be out of luck. No one can do this for you. Managing [cash] flow takes attention to detail . . ." (26).
- Key question to ask "magic bullet" vendors: "Can you guarantee me a five- to ten-times return on my investment?" (35)
- "I was losing all that money (spent on 'magic bullet' success gimmicks) every month and doing nothing with the stuff I was paying for" (37).
- "The most efficient team I have ever heard of in my entire career was operating at a 35 percent net profit" (46).
- Have systems for (1) Lead Generation, (2) Lead Conversion, and (3) Client Fulfillment ("Contract to Close", or Transaction Coordination) (67).
- Add five people a day to your database. "Adding people to your database should be as natural as brushing your teeth" (169).
- "As a rule, it's always best not to add a new expense without a plan to increase your profit by the amount of the expense" (111).
- "To create [the] Perfect Process, you must track what you do every day" (112).
- "I can't stress enough how important it is for you to get systematized before you bring on a big team" (113).
- "Build something scalable so it can be salable" (127).
- Types of clients, & what they want: Tactile-People; Neutral-Technology; Withdrawal-Ideas; Experimental-Uniqueness; Transitional-Dependability; Traditional-Financial Competitiveness (130-131).
- Regardless how you develop your system, make sure it has checkpoints. Don't set it and forget it.
- "The perfect system means you don't have to worry about firing employees! The system will choke them out if they don't use it" (143).
- "Each (dissatisfied) client from this day forward will help you document where and when to tweak your current system until you perfect it" (143).
- " . . . most real estate agents are not entrepreneurs. They aren't true businesspeople at all, but technicians suffering from entrepreneurial seizure" (146).
- "I have not seen [real estate agents dialing for dollars 4-6 hours a day every day] in any real estate office, ever" (151).
- ". . . very few agents put everything . . . into the database" (152).
- "Email addresses alone are never going to get you much better than a 1 percent to 3 percent conversion rate. There is no magic subject line or message that will get everyone to do business with you. The conversion happens when you connect with them" (152).
- "[Shift from a] bulk . . . mentality . . . into a relationship [mentality]" (172). In other words forget the bulk email campaigns. Focus on building real relationships gradually and consistently over time. Use your CRM to do that.
- "Before you ever hire a person or employee, implement the necessary systems" (191). Note: routinely, I see business owners get this backward. They hire people, THEN think about systems, often expecting the people they hired to figure it out. When your hirelings pick and run your systems, you're at their mercy. You're vulnerable to them. They have you over a barrel. You're chronically disengaged from your own intellectual property. The remedy is to get over yourself and assume command of your own intellectual property. Architect it yourself because you understand your business better than anyone else does. Epictetus said, "No man is free who is a slave to his own impulses." Surmount your impulses, and do it.
- "All too often, real estate agents take no responsibility for the business of real estate but instead delegate tasks without any understanding of what it takes to do them, without any interest in what their people are actually doing, without any sense of what it feels like to be at the front desk when a client comes in and has to wait for forty-five minutes, and without any appreciation for the entity that is creating their livelihood . . . . Organization is first, last, and always cleaning up the mess of our own minds" (210-211).
- "You must never engage your people in the process until you yourself are clear about what you intend to do" (212).