Awakening the Entrepreneur Within: Summary
Posted on April 24, 2008 - Filed Under Book Summaries |
Awakening the Entrepreneur Within, By Michael Gerber, the author of the best selling “E-Myth” books, is a book that explores the power of entrepreneurship. The book centers on not only the logistics of creating a business, but also the spiritual ramifications of creating your own reality by starting your own business.
The Author claims that entrepreneurship opens people up to a new world where they find more meaning and are able to live the kind of life that they only dream of. He centers this around the idea that each business started needs to have a dream, a vision, a purpose, and a mission. These are paramount to the success of a business.
Without a dream, a vision, a purpose, and a mission that are beyond the self-fulfilling needs of the entrepreneur, the business is destined to fail or become wholly unfulfilling to the entrepreneur. The author invites the readers of the book to embark on a journey with him where they dream up a business that is bigger than themselves, and where they are filling a need in the world they live in that is sorely needed.
Part 1: The Preparation
Chapter 1: A Conversation With My Mother Leads to the Dreaming Room
The author begins the book with the story of how recently he had come to an impasse in his life where he had gotten too comfortable and began to think that he needed to take on a new challenge. He realized that he had become the essence of what he counseled people not to become in his previous books.
One day while talking to his mother, he realized that he needed to re-create the same entrepreneurial spirit that he had when he founded his first company. The idea of the dreaming room, a business centered around helping people to dream up their own business and join support groups rekindled the entrepreneurial fire within him and allowed him to find a greater purpose with his life.
Chapter 2: The five realities of entrepreneurship
1. An entrepreneur is an inventor. They observe the world around them and identify the missing pieces. They invent businesses to fill the void.
2. Entrepreneurs do not buy business opportunities; they create them. The entrepreneurial spirit revolves around creating self-sustaining businesses, not buying a job. Franchises and purchased businesses are for people with little creativity
3. Invention is contagious. Entrepreneurs find joy in creating a business, and even more joy from knowing that others are deriving value from their business. Much like an actor is encouraged by the enthusiasm of their audience.
4. The entrepreneur, the success of the invention – the business – is measured by growth. Just because a business can survive or grow slowly does not mean that it is successful. Rapid growth is the goal.
5. Everyone possesses the ability to be an entrepreneur. Entrepreneurship is a skill that can be developed with practice.
Chapter 3: The four dimensions of the entrepreneurial personality
1. The Dreamer: The dimension of your personality that takes your passions and motivates you to act on them. They stand on the mountain top of imagination and fuel your entrepreneurial desire. Not to be confused with dreaming of living in a mansion, traveling to exotic locations, and driving luxury vehicles.
2. The Thinker: The entrepreneurial dimension that takes the dream and conceives the business plan behind it. They take the plan and work out the marketing, sales, financial, accounting, and other technical business aspects.
3. The Storyteller: The entrepreneurial dimension that takes the dreamers dream and the thinker’s conception and creates a compelling story arc to the rest of the world. They “sell” the vision to the rest of the world.
4. The Leader: The entrepreneurial dimension that embodies the story of the organization and moves the project forward. Leaders possess the skills of concentration, discrimination, organization, innovation, and communication.
Part 2: The Dreamer and the Dream
Chapter 4: The Awakening
The awakening is the moment when the entrepreneur recognizes an opportunity that they are passionate and excited about. It is the entrepreneur’s eureka moment when they realize that they have the workings of a great idea. It came to the author when he accidentally found himself sitting with a client of his friend’s advertising business and realized that the client did not understand that a business was a system and that he did not need advertising as much as he needed a system to convert those advertising leads into actual sales.
Chapter 5: The Realization
Once the awakening occurs you need to be open to the possibilities that present themselves as a result of the realization and go with it. Once the author proposed that he could sell a selling system as an extension to his friend’s advertising services, both the author and the author’s friend had to decide to go with a new idea that was unconventional and uncertain.
Chapter 6: The Negative Reaction:
Once you have dreamed the dream and put the plan in motion, there will be an inevitable clashing of the thinker and the dreamer. The thinker will tell you that you lack the experience, credentials, cash, etc. to start anything and that you should let the dream die.
The author experienced this reaction in the form of self doubt and his friend’s reaction to his news of selling his advertising client a selling system. The author’s friend saw the author’s new venture as a problem to be dealt with and not an opportunity to be seized. One of the most important duties of the entrepreneur is to not let the negative reaction suppress their entrepreneurial dreams.
Chapter 7: The personal dream:
The personal dream is the dream for an incremental achievement, like buying new car, finding a lover, building a new house, achieving fame and fortune. These dreams are the dreams that once accomplished, leave the dreamer in the same spot as when they originally dreamed the dream; unfulfilled.
Chapter 8: The impersonal dream:
The impersonal dream is different because it does not revolve around the entrepreneur. The entrepreneur derives value from creating something that has value and meaning for someone else. Meaning, they create value for other people and then they achieve their personal goals.
Also, the entrepreneur must often create a product that anticipates what other people want before they even know what they want. It takes a degree of insight and vision to accomplish this. You must find ways to kick ass in ways that nobody thought were possible.
The key to success is to get past the narcissistic personal dreams and help other people get to where they want to be.
Chapter 9: The Shock:
Essential in the entrepreneurial process is the shocking moment of truth when you realize the missing pieces in your plan and they teach you a lesson. When you have a “shock” you need to stop and focus and incorporate that into your plan.
The shock came to the author when he saw McDonalds, a business that was run on a system. The author realized that small businesses could be consulted and moved along with the help of a system that was carried out at a price that any small business owner could afford.
Chapter 10: The Dream is born:
When you have a shock that allows you to see a problem or a need clearly, you must learn to dream a solution to a problem in the world, and that somebody would pay to have. The dream is complete when you have found a way to achieve the impossible that is so compelling that you have no other choice than to act.
Part 3: The Thinker and the Vision:
Chapter 11: Taking the Dream Apart
When the dreamer is done, the thinker comes onstage. The thinker is responsible for taking the dreams and coming up with a fiscally and logistically sound way to accomplishing them. The author had to create the logistics of his small business consulting company after he had developed the dream to transform small businesses worldwide. They came up with the following:
• Every business requires a vision.
• All visions are both personal and impersonal: the vision for your life and the vision for your company work together to create the vision for your life and the strategic objective to get there.
• Every company is an organization: every business needs to have an organization chart that describes how the business works, where the accountability and authority rested, the relationships between business functions, as well as which functions were primary, secondary and tertiary, etc.
• An organization is an organization of systems: within the organization chart there must be a set of systems to describe how to carry out all the functions of a business. A business is the sum of its total operating systems. All of these systems merge into one system that ties them all together and is the core of the business.
Chapter 12: Taking the Dream Apart Again
Once you take the dream apart on a theoretical level you should try out your idea and see what practical roadblocks may exist that you may not have been aware of when you were conceiving the idea in your head. You can define a vision in your head, but you will never fully complete your vision unless you also get input from your end users.
Chapter 13: The Vision Begins to Take Form
The key to business is to work on your business, not necessarily to work in your business. Your job is to develop, implement, and master the systems behind your business so that your business could be performed by even the most unskilled laborer.
The “10 pillars of business are as follows:
1. All Businesses require a vision
2. All visions are both personal and impersonal
3. Every company is an organization
4. An organization is an organization of systems.
5. There is no such thing as customer service. You only make an outrageous promise to your customers that becomes your brand. The effectiveness of your systems within your business are validated on how well they help you keep your promise to customers.
6. Master the money. Your ultimate goal as a business is to make money. Everyone in your organization should be conscious of how much you are making and how efficiently it is being made.
7. Your people are not your business. People are self-interested and are only interested in your business as much as it provides them with value. Your business is a separate entity that’s primary focus is to provide value to people.
8. Your business is an idea. There are either good ideas or bad ideas. There are no in-betweens; good ideas are ones that are compelling enough to make you act.
9. You know more about your business than anyone else. You can’t hire anyone to know it better than you, your job is to educate, inspire, train, and coach your people.
10. A business must mean something. Your business has to do something meaningful to really produce the kind of results that you want.
Chapter 14: The Vision Continues to Take Form
Without a clearly defined vision the dream is aborted. As the author began to proceed with his own business he realized that he needed to have a distinctive reminder of the company vision. He painted his mission statement on the wall. Also, they decided that they needed to catalog their deliverables in a repository so that they could leverage their work. They built a database that included deliverables for the “Seven Centers of Management Attention”:
• Leadership
• Marketing
• Money Management
• Client fulfillment
• Lead Generation
• Lead Conversion
The library began to fill the three areas of the small business owner’s transformation. 1. Getting your house in order 2. Growing your business 3. Getting free of your business. The whole process revolved around making sure that the process revolved around the business owner, not the business itself.
Chapter 15: Coming to Grips with the Business Model
A dream is critical to the journey; a vision is essential for the dream to become reality. You never really know where the business will take you along your journey. Business is hard and it will not be easy, only proceed with your business if it is something that you are very passionate about. Only if not doing it will make you more miserable than doing it.
Your business model is the method by which you monetize your business. Regardless of how you plan to monetize your idea, it has to be an idea that consumers want, or you will never be able to monetize the business. Your business idea is only as good as your determination to do it better than anyone else has ever done. You have to have a differentiator that keeps your customers coming back to you. Ultimately, customers come for results.
Your business model is something that should be conceived even before you start your business, and you must have a “secret sauce” that allows you to deliver your goods and services in a way that nobody else can. Your business model should also be “turnkey” meaning it should be reproducible and scalable over and over again.
Part 4: The Story Teller and The Purpose
Chapter 16: Defining Purpose to Capture Your Imagination
Creating a business is not about you. It is about creating something that benefits other people because you feel called to do so. Entrepreneurs do not invent most small businesses; technicians suffering from an entrepreneurial seizure who create a business for themselves invent them. These people who live a life driven by personal dreams are only bound to be disappointed.
The thinker and the dreamer are not the only ones who ask questions in the entrepreneurial process. The Storyteller also asks questions. The Storyteller asks different questions however; they deal with questions that evoke the essence of the Dream and the Vision. They take the purpose and craft a compelling story to people so that your customers will also catch the vision of the company you are trying to create.
To develop a “story” you must first put into words what the essence of your purpose is. After you have adequately vocalized it, you should record it and continually tweak it, memorize it, and share it until it has become the essence of the Vision you had for starting your company. You have to practice telling the story like you would practice playing a musical instrument, practice until it starts sounding great. Bottom line, the story gives meaning to your business.
Chapter 17: Pursuing Your Story
“What’s going to happen to me” is less a question than it is a belief. Every decision in business is driven by the question of “What’s going to happen to me?” If you don’t expect something great to happen then you are really just asking for more of the expected to happen.
The one truth is that you will die, after that; you must deal with what happens to you between now and that time. The major fear that people encounter that stops them from acting on their dream is the fear that they will embark on a journey that will place their lives out of their control.
The human condition is defined as follows by the author:
We are all individuals with external forces acting on us. Externalities often come into play and disrupt our existence, in order to protect ourselves; we seek to control the externalities as much as we possibly can.
The main goal of entrepreneurship is not to fix an old company, but to invent a new business and a new way of life to change the human condition.
Chapter 18: And the Story Grows from Within
The new Age of the new Entrepreneur is to make sure that the spiritual and commercial worlds merge to create spiritually charged economic success.
The author then begins typing an entrepreneurial manifesto of sorts:
“I want to create a world of meaning…the business I am inventing will make a demonstrable difference in people’s lives. That difference will be the point of my story…my story will get better and better each time I tell it, it will become the passion that fuels my life.”
Part 5: The Leader and the Mission
Chapter 19: The Leader
There are 5 essential skills needed to lead anything of significance: concentration, discrimination: Organization, Innovation, and Communication. You also need to be an effective leader even before the company is created. When the dreamer, the thinker, and the storyteller have each done their jobs well; the dream is in place, as well as the vision and purpose; thinking has been done to provide logic for the mission; the story has legs; and the story is moving, then the leader begins his work.
The author then tells a story of looking for a COO to handle one of his businesses. He tells the candidate that he is looking for someone that will take his standards and not only agree to them, but will embody them. He also wanted someone who was as enthusiastic and excited about his vision, as he was himself.
The author proposes 10 core leadership beliefs:
1. Lead with Purpose, commit yourself to the mission
2. Once committed, never alter your commitment until you have achieved it
3. Create clear operating standards, and live by them.
4. Create clear operating results, and commit to them
5. Surround yourself with people who believe in your mission
6. Surround yourself with people who are committed to your mission
7. Surround yourself with people who believe in your standards
8. Surround yourself with people who are committed to your standards
9. Surround yourself with people who are committed to your results
10. Surround yourself with people who are faithful to their commitments
The author then proposes 10 Operating standards:
1. Learn how to produce results with little or no capital
2. Learn how to produce results with little or no information
3. Learn how to produce results with little or no experience
4. Learn how to produce results with little or no likelihood of success
5. Learn how to do the impossible
6. Learn how to inspire people without money, without motivation, without options
7. Learn how to manage people without making them wrong
8. Learn how to communicate your dream, vision, purpose, and mission so that 90 percent o the people you share it with buy into it. Do not spend any time with the 10 percent who don’t
9. Learn how to replicate your successes and rise above your failures
10. Learn how to become a world-class leader you can be proud of
Chapter 20: The Leader Goes to Work
The first step for a COO is to think very small. You first need to be able to build the “DNA” of your company. A company is described by the author as a hierarchy of three where the lowest level is the DNA of the company. The “DNA” of the company is called a practice, which consists of Lead Generation, Lead Conversion, and Order Fulfillment. These are the essentials to creating revenue and growing.
The COO is to create the systems for the practice, perfect them, and document so that anyone in the company can perform them with minimal experience and training. This set of systems becomes the core competence of the business that enables the practice to be scaled exponentially.
The next level of the hierarchy is the business, which is the aggregate of all of the replicated practices, plus a business management system to monitor, control, and improve the operating system.
The third stage of the company is the Enterprise level. The enterprise is the aggregate of multiple businesses. A leadership system is developed within the enterprise; the main purpose of it is to provide inspiration, education, application training, coaching, and consulting.
As the company grows there will be multiple enterprises split into regions that operate the same and produce consistent results. This is how all companies grow.
Chapter 21: The Wisdom of Process
The wisdom of the process is to begin. The first step is critical in the fact that if you don’t take the first step you will never take the second or third step. The Author uses this chapter to tell the story of how his COO read over the white paper for his business and the started building a mission statement together.
The fictional business is called” Who is Manny Espinosa”. It is designed to train young Latino-Americans to fill jobs in service industries to both increase leadership and employability of young Latin Americans, as well as to diminish the cost of high turnover in the restaurant industry.
Imagination happens when a great idea possesses us and ignites a dream within us. However, if you never take the first step you will never actually accomplish the goal that you are looking to achieve. If you do take the first step, then the second, and work through all of the subsequent steps you will find that you have accomplished all of your dreams.
Chapter 22: Beginning the Strategy; Beginning the Plan
The author presents a story where the COO that he hires takes the vision presented in the whitepaper and develops a strategy to accomplish it. The COO puts together a plan where they sign up three restaurant chains to be strategic partners and help fund the project. Then they put together a team of curriculum designers who will design a curriculum for their 6-week intensive course for little money. They also hire the rest of their staff for little money by using students, retirees, and people who agree with the vision of the business more than they seek for financial remuneration. The COO places a lot of responsibility on himself and gives clearly stated objectives that fall in line with the guidelines that were given to him earlier.
The key is to calculate the end of the mission at the very beginning. The strategy that you put in place should reflect the standards that you give in the beginning. In the story the COO put everything together in a plan that would not cost much money, and that relied on inspiring people based on the vision of the company, and not by giving them a lot of money.
Chapter 23: The Mission is Under Way
The author then tells the story of how his COO got together a group of all the key stakeholders in his business of “Who is Manny Espinosa”. Investors and others were so excited about the idea and the vision that they were easy to get on board.
They listen to the speech of the CEO (the author) and they all have questions. Through the process of questioning and revising their ideas regarding the project, they are able to come to understand the true essence of their company’s vision. On the fly they were able to redefine the company’s mission and vision.
Chapter 24: The Mission Reveals Itself
The dreaming does not stop when the thinker takes on the dream, a good idea will intensify in the thinker’s mind. The author describes starting the “Manny Espinosa” project and determining that the main “X” factor was how well “Manny Espinosa” would react to the curriculum. You can begin to doubt the product, or you can continue to move forward.
“Until (Manny) does what he is absolutely going to do, the only thing you know is what you think he is going to do.” The author describes how fear failure may stop you from proceeding forward with so many unknowns, but if you start, the learning and the improvement will happen as soon as you get into it.
Chapter 25: We Suddenly Understand
When you get started, as was the case with the author, you do not have to have a fully operating company. If your passion and commitment are 100% everything else can be “under development”. Hitting the point of “we understand”, when everything comes together occurs as the process of dreaming moves forward.
The author recounts the story of how his “Manny Espinosa” business began to progress as they would meet with “Manny’s” to determine their needs, and then they planned their first recruiting seminar and found that it was a huge success. They were able to use that event as a launching pad to move forward with their success.
The author suggests that once the business gains the momentum created by action, it takes on a life of its own. The key ingredient then becomes action.
Chapter 26: The Mission Is Being Realized
The chapter begins with the author giving congratulatory remarks to the team that he assembled to get his business off the ground. They had recruited more than enough people to join their program, they had had a very easy time getting restaurant “partners” on board to pay for their program, and they had an easy time recruiting their team and putting together their product.
The author makes the point that if you identify a need that needs to be done, but that nobody is doing, it will be easy to put all of the pieces together so that people will flock to patronize and support your new business. It is creativity at its best.
Chapter 27: The Revelation of the Golden Pyramid
The Author first starts that the goal is to create an enterprise, or a very large company. However, right now, you are an economy of one. In order to get to where you want to be you have to break out of the “real world” paradigm and begin to play in the world of make believe.
The Golden pyramid is that from one you can invent one hundred. From one replicated practice you can make an enterprise. The author asserts that many businesses are technicians that suffer from an entrepreneurial seizure. Meaning, they get sick of working for someone else and become independently employed; thus, creating a job for themselves.
The Golden Pyramid rests upon the idea that all you need to do is build one single uniquely practiced practice and you have reinvented your world.
The Golden Pyramid will do the following things for you.
1. It will free you from the endless routine of “doing it, doing it, doing it” just to get by
2. It will teach you what you need to learn to build a great company
3. It will provide you with the Golden keys to emotional, physical, rational, and spiritual wealth beyond your wildest imagination
4. It will awaken the entrepreneur within you, again and again and again
Here is the “Golden Pyramid” Strategy as laid out by the author.
1. Identify Old CO.: Identify the skills that you have that others do not
2. Make a list of every single vertical niche market you could conceivably provide your services to.
3. Identify your trading zone: the geographical area within which the majority of your customers live
4. Pick the ten most appealing customer categories
5. Pick the one most appealing customer category: then focus all of your remaining attention on this one customer category. Pick the category based on compelling reasons such as
a. It is a growing market
b. It demonstrates a compelling unfulfilled need
c. You already are an expert
d. It is a sizeable market segment with no sign of weakening or diminishing size
e. It is a national market segment with large numbers and a significant number of trading zones that warrant national expansion
f. It has demonstrated an interest in your core capability
g. It has not been identified by potential competitors in a viable niche market
6. Learn everything you possibly can about this one customer category
7. Design your Client Fulfillment System
8. Design your Lead Conversion System
9. Design your Lead Generation System
10. Test the effectiveness of your new practice
11. Document your practice
12. Create our surrogate practitioner: the person who takes over for you.
13. Recruit your first surrogate practitioner.
14. Train your first surrogate partner
15. Build your business management system
16. Replicate your business
Epilogue: All Systems Go!
The Author likens starting a business to the time when he went camping in Sequoia National Park. He went out of his comfort zone and went hiking up a mountain. Suddenly he climbed to the top and got scared and ran. The author asserts that sometimes we get to a scary point in lives and we run. Starting a business can be scary, but the next time that you get to that point, it is wise to sit down and get to know that scared part of yourself.
Comments
2 Responses to “Awakening the Entrepreneur Within: Summary”
Leave a Reply
Wow this is a very comprehensive summary but what did you think of the book.
I was very disappointed as I make clear in my review because Michael Gerber is one of my business heroes.
I try not to leave a subjective opinion of the business books I summarize so that I can let my readers interpret the books how they like…But I was very disappointed with the book. I got a lot out of the E-Myth Revisited, but Awakening seemed like it was 5% Substance, and then a lot of fluff.