In his book, Awakening the Entrepreneur Within, Michael Gerber described the awakening of a new passion. He said, It was exactly in that moment when the Dreaming Room® was born in earnest; when an entirely new phase of my life began; when my inner entrepreneur was awakened and the flood of new impressions catapulted me out of my lethargy and drew me to places I had never been before; when the inventor in me woke up and thought, ‘I am awake.’

Michael E. Gerber is the founder and chairman of E-Myth Worldwide, the coaching, training and education firm he founded in 1977 to transform the development of small businesses worldwide. For over 25 years, Michael’s E-Myth company has achieved stunning results by helping to grow more than 50,000 businesses in over 145 countries.

As the author of seven E-Myth books, including the mega-bestseller, The E-Myth Revisited, Michael has established his revolutionary perspective as the gold standard for small business development, becoming what Inc. magazine called the world’s number one small-business guru, and one of Business Week’s bestselling authors of the past decades.

Michael’s passion and genius for understanding the plight of the individual entrepreneur is the crux of his tremendous appeal and success, and has formed the core value of the E-Myth brand as it has evolved over the decades. Indeed, the unique ability of Michael Gerber’s E-Myth perspective to help desperate small-business operators overcome their entrepreneurial seizure and begin to work on their businesses and not merely in them, is the very heart of the E-Myth revolution.

Now 70 years young and unquenched in his passion to transform entrepreneurship worldwide, Michael Gerber is turning his attention from the development of existing businesses to the special needs of entrepreneurs in startup. In December of 2005, he launched a new venture for entrepreneurs seeking to create world-class startups called the Dreaming Room®, which conducts two-and-a-half day intensive weekend gatherings in the United States, Canada and the United Kingdom.

Based on his experiences with entrepreneurs in these Dreaming Room® events, Michael wrote Awakening the Entrepreneur Within.

CHRIS ATTWOOD: Thank you so much for being with us tonight, Michael.

MICHAEL GERBER: It’s my pleasure, Chris.

CHRIS ATTWOOD: As you know, Michael, the title of this series is Passions of Real Life Legends. Will you share with us how your passions, the things you care most deeply about, led you to helping entrepreneurs create successful businesses?

MICHAEL GERBER: It’s a long and convoluted story, but let me say it in the shortest, most direct way. My passion is to create. I’ve always been a creator. I’ve always desired to create. I’ve always been incapable of stopping myself from creating. Somebody in a recent meeting with me said, Do you do this all the time? I said, Yes, I drive everybody crazy! I can’t not do it; it’s just a significant part of me.

My passion for creating has gotten me into all kinds of trouble. It’s also been the source for everything I’ve invented, including the company E-Myth Worldwide, which started out simply as me answering a question of a friend of mine who wanted me to come and visit one of his clients on my way to someplace else doing something completely unrelated. I went to do that, not knowing what in the world I was doing it for.

In this particular context, the friend owned a small ad agency in Silicon Valley, and the client was having difficulty converting leads into sales. My friend asked me to go see what the problem was. I told my friend I didn’t know anything about business, so I wasn’t sure why he wanted me to do it. He said, You know absolutely everything you need to know, Michael. All I’d like you to do is to get an understanding of what’s missing in this picture.

I went to visit his friend, who owned a small high-tech firm. Yes, he certainly did have a problem converting leads into sales. As I sat there in front of him, I saw the expression on his face that conveyed: Who is this guy? What in the world is he doing here? Why is he taking up my time? Ace, my friend, said to his client, Just spend an hour with Michael, and let’s see what happens. I’m going to take off. I’ll come back and pick him up.

He did that. I sat there and the guy said to me, What do you know about my business? I said, Absolutely nothing. He said, If you don’t know anything about my business, how can you help me? I said, I haven’t a clue, but we’ve got an hour. Ace isn’t coming back, so why don’t we find out? I started out with the assumption that I didn’t know anything about business.

I also started out with the assumption that I absolutely didn’t know anything about the technology in which this guy was an expert. However, we started, and I began by asking him questions. By the time we were done, it happened. This happens again and again to anybody who is determined to discover something new wherever he or she is. I discovered what his problem was.

I also discovered that he didn’t understand what his problem was. I also understood that Ace didn’t understand what his problem was. His problem was that he didn’t understand that selling is a system. He didn’t understand that. He didn’t even know that. He thought selling was what experts in the technology did; that if you really understand the technology, then you should be able to sell it.

The reality, though, is you don’t have to understand the technology in order to sell it; you have to understand the consumer in order to sell it. You also have to understand what is going on in the consumer, what the consumer really wants, and what is missing in the consumer. All of this energy just began to flow in that simple hour in which my whole life was changed.

CHRIS ATTWOOD: I know that out of that has come, as we said in your introduction, a business that has helped many thousands of small businesses and startups, and it began with a book called The E-Myth. You’ve now written a whole series of those.

MICHAEL GERBER: Actually, Chris, it’s important to know that it didn’t begin with the book, The E-Myth.

CHRIS ATTWOOD: Forgive me, please.

MICHAEL GERBER: The E-Myth was a product of what I had learned over eight years building what was then the Michael Thomas Business Development Program. I was Michael and my partner was Thomas. We set out, based upon this principle I’d learned in doing this thing with Ace and his advertising clients, and I suddenly understood that, in fact, what was missing in all of these small businesses was a system, like at McDonald’s.

What was missing was McDonald’s in all of these small businesses. If I could teach every small business owner how to do what Ray Kroc intuitively knew how to do with McDonald’s, then I could transform the state of small business worldwide. That was the beginning. The first book, The E-Myth: Why Most Small Businesses Don’t Work and What To Do About It, was a product of a happenstance.

A stringer came from Ballinger Books to attend my seminar because his fiancé was working for my company. He heard the seminar, came up to me afterwards and said, How would you like to write a book? I said, Sure! He said, Great! and he brought back an offer to write that first book. That book became The E-Myth. However, the seminar was called ‘Key Frustrations in a Small and Growing Business, and What To Do About Them’.

The words ‘E-Myth’ I never owned; I didn’t even know about them. The stringer, the guy who was working with me and editing that first book, said, You know, this is all about the entrepreneur and the absence of the entrepreneur. Why don’t we call it The E-Myth? I said, Fine, and that’s how it happened.

CHRIS ATTWOOD: What a great story. Thank you. I want to get to your new book, but before we go there, would you be willing to share just one or two of the stories-I’m sure you have many of them-of some of the entrepreneurs who have applied the principles in The E-Myth, and what’s happened in the contexts of their businesses?

MICHAEL GERBER: There are thousands of them, but let me give you a great example. There’s a company I’m sure you know of called Got Junk? Got Junk? picks up junk; they’re in the junk business. The founder of Got Junk? when asked, How did you build this incredibly successful company? said, I read a book. Of course, the book was The E-Myth. He built his entire company on the principles and the system that is shared in my book, The E-Myth, and later in The E-Myth Revisited: Why Most Small Businesses Don’t Work and What To Do About It.

He built his whole franchise on that, and he started out by driving a truck picking up junk while he was in college. He happened to be driving through a drive-through at McDonald’s, when he saw a truck in front of him with a sign on the side of it that said ‘We Pick Up Junk’. The guy I’m talking about, the founder of Got Junk?, had a small pickup just like the pickup in front of him.

He was driving through the drive-through at McDonald’s, and he honked his horn at the guy in front and said, What do you do? How do you do that? He explained, It’s very, very simple. This guy, the founder of Got Junk? decided he’d do that. He started doing that, picking up junk in his pickup truck, and somebody said to him, You have to read a book. Of course, the book was The E-Myth.

He read the book, and that was the beginning of this extraordinary company, which is spreading worldwide. It’s an amazingly successful business entirely based upon the one story you read about in The E-Myth: How to Go to Work On Your Business, Not In It, and How To Build a Business That Works. That’s the perfect exemplar for what happens when somebody truly understands the perspective, a point of view I don’t take credit for.

Essentially, all I did was to look at Ray Kroc at McDonald’s and ask, How come everybody doesn’t do that? Everybody can, and the stretch was obviously that. Ray Kroc didn’t realize that what he was doing was building a template or a model for all small businesses. Ray Kroc was simply doing what Ray Kroc knew he was going to do in order to build the most successful hamburger business in the world.

Anybody can do the very same thing. This friend at Got Junk?-You got it, we’ll get it-does it with a perfect turnkey system that he’s replicated through franchises around the world.

CHRIS ATTWOOD: That’s fabulous. Thank you for that story. It’s fascinating that you’ve worked for 30 years with small businesses, helping them to create systems. I don’t know how many you have or have had, but I know you’ve had many, many consultants who worked with small businesses all over the world, helping them to create those systems so they could work on their businesses rather than in them.

As you describe in your latest book, Awakening the Entrepreneur Within, a few years ago you went through a big transition. You describe a process of awakening that happened within you. Would you share that with us? What made you have the thought that it was time to step out of what you’d been doing so successfully for so long and do something that is obviously related, yet is a new direction?

MICHAEL GERBER: It was, again, a product of another decision. In this particular case, the decision was to bring in a new CEO-I’d never done that before-to grow E-Myth Worldwide beyond where it was. I came to the realization that I was not going to do it. In fact, being consumed as a manager was not, in fact, what I was really born to do. My entrepreneurial spirit was diminishing, dying, as I was working on E-Myth, but I began to realize that I wasn’t going to get there doing it the way I was going.

Thus, I brought in a new CEO. The CEO, of course, wanted to have control over the process and the company in order to do what he was setting out to do, and what we had brought him in to do. That meant I was free. You have to understand that after 32 years of building this extraordinary company, and of focusing all of my attention on the permutations and variations of this business model we were building, to suddenly not have it to do-and he didn’t want me to do it anymore-was hard.

Like I say, I’m constantly creating. In one way, that’s incredible. In another way, it’s a disaster. This is because people get satisfied with where we’ve come to, and they simply aren’t ready to completely change what we’ve come to for a better way, even if it is a better way. That would mean now that they’re going to have to learn something else again. In effect, he didn’t want me there, and I agreed. I wasn’t going to be there. Now what?

Suddenly, all that energy was unfocused. You’ve got to understand-and I think you can feel and hear the amount of energy that comes up in me about a subject I love-that all of that energy simply had no direction, no place to go. I felt completely lost. It must be exactly how somebody feels when they retire after years of doing something. I felt completely lost.

CHRIS ATTWOOD: If I may, I think many of the mothers on the line can relate to when their children leave home after many, many years.

MICHAEL GERBER: Absolutely.

CHRIS ATTWOOD: It’s like your child, your baby, who you had been nurturing for 32 years, was now gone, and you were left home alone, so to speak.

MICHAEL GERBER: You got it: home alone. Now, what happens with people who find themselves home alone is that oftentimes they just die. They literally do; they just quit. Of course, that wasn’t it for me. What happened was that I began to dream. I began to think. I began to create. I began to ask the questions, Now what? I don’t have to do that, but what am I going to do?

Of course, I was doing stuff. I was writing books, I was speaking everywhere, but that wasn’t it. That isn’t entrepreneurship. That isn’t creativity to me. Writing a book is a story about something I’ve already thought about. Creating is something I haven’t yet thought about. I was discovering; I needed to discover something. Without discovering something there is no reason to be alive.

To me, being alive means to create. That’s the passion, and that’s what happened when the words ‘in the Dreaming Room®’ came up. Literally, that’s how things happen with me; they happen in words. Words show up even before the idea shows up. Those words show up, and then they stimulate another thought and another promise and another opportunity. Suddenly, a business is born. The business that was born was the Dreaming Room®.

CHRIS ATTWOOD: Will you tell us a little bit about the nature of the Dreaming Room®? Why a dreaming room?

MICHAEL GERBER: Because I discovered something in all the years of working with broken businesses. Essentially, that’s what E-Myth does; it fixes broken businesses by changing the mindset of the person who owns that business. Through years of working with broken businesses, they’ve fixed tens of thousands of broken businesses, every imaginable kind of broken business.

As an aside, I can say this: the truth is that if you walk down the street into every small business on that street, you will find that pretty much every one of those businesses is broken. It’s astonishing to me, absolutely astonishing, how unaware people are of the fact that most small businesses don’t work. They are on the path, already from the very beginning, of disaster.

Given that, and given the fact that I’ve been working with them, the question is, What’s missing in those businesses? One answer, obviously, is a system. Another answer is an objective, meaning what in the world they’re going to do with this business. What is the endgame of this business? It’s often unlikely that people start a business to sell it; they don’t even think about it that way.

They really start a business to create a job for themselves. What was missing in all these client companies, I realized, was a dream, something bigger than life, something important, something meaningful, something that moved them, something that got them up every day, something that moved them to ask the question, What’s missing in this picture?

That’s what I realized I could do. I could figure out a way to teach, demonstrate and inspire people to begin to dream, to actually begin to ask the question, What is missing in this world that I want to create? What is going to become the outcome, the great result, of starting a new company, of being an entrepreneur? That’s what happens in the Dreaming Room®.

CHRIS ATTWOOD: That’s fabulous. It sounds very much like you’re giving people a sense of purpose, or allowing them to connect with their purpose. Before we get too much into that, in your book you talk about the five realities of the entrepreneur. Will you share with us what you mean by that? What are the five realities of the entrepreneur? Why are they important in the process of people creating a dream or a purpose for their business?

MICHAEL GERBER: In the context of the title of the book, which is Awakening the Entrepreneur Within, which is a fundamental premise of all the work that I do now, we have to understand what an entrepreneur is. That’s why I describe the five realities of the entrepreneur, to understand what entrepreneurs are and what they’re not. The first reality is that the entrepreneur is an inventor.

That is something that very, very few-an infinitesimal number-small business owners understand. They are not really inventors. They really aren’t entrepreneurs. They’re what I call technicians suffering from an entrepreneurial seizure. They simply create a job for themselves, and they create a business to do that job. Entrepreneurs don’t do that. Entrepreneurs invent.

They invent a business that is unique, that does something uniquely, for an absolutely necessary reason. It’s not just to create something unique for the reality of creating something unique, but because it’s going to uniquely solve a very, very important problem. Entrepreneurs are inventors. Reality two is that entrepreneurs don’t buy business opportunities; they create them.

People who buy franchises aren’t entrepreneurs. People who buy business opportunities aren’t entrepreneurs. Technicians buy business opportunities. Managers, perhaps, buy business opportunities. While business opportunities are, in one respect, opportunities-if they’re truly an opportunity, that is-they’re an opportunity for a technician who wants a job.

Subway®, the franchise, brings aboard franchisees who effectively manage a Subway® franchise, but they’re not entrepreneurs. In other words, they’re not going to create something. They’re not inventors. They’re technicians. They learn how to do the system. They learn how to use the system to make a good living. That’s the extent of it. Entrepreneurs don’t do that. That kills entrepreneurs.

The third reality is that invention, what entrepreneurs do, is contagious. Entrepreneurs love the applause they get when a customer walks in and buys from them. Essentially, entrepreneurs live for that energy of successfully having invented a solution that successfully attracts people to it, that successfully delivers the result and, in the process, the customer loves them. Entrepreneurs love to be loved.

Reality number four is that a business must grow. Most small businesses don’t. Most small businesses are static. Most small businesses stay down there, right around less than $1 million in gross revenue, and will never go beyond that. They’ll never go beyond that because the entrepreneur, the founder of that company, isn’t truly interested in growing. He’s interested in making a living.

Entrepreneurs are not concerned with making a living. They’re concerned with creating a revolution. Finally, reality number five is that everybody-I believe this-possesses the ability to be an entrepreneur. An entrepreneur is not some rare hybrid. An entrepreneur is the creator within. I’m suggesting that if we’re born in the image of God, as I believe we are, we’re born to create. If we’re born to create, that’s what entrepreneurs do.

That’s the entrepreneur within. That’s the creator within. That’s the guy, the woman, who wishes to discover something absolutely stunning, different and remarkable within himself to go and do outside.

CHRIS ATTWOOD: If everyone can be an entrepreneur, then maybe you can tell us about the four dimensions of the entrepreneurial personality, because I know you also discuss that. Then maybe you can help us see how anyone actually can possess or make use of those four dimensions.

MICHAEL GERBER: The four dimensions of the entrepreneur are very critical. In fact, it was a new process for me. I discovered in my work with E-Myth the three personalities of a small business owner: the entrepreneur, the manager, and the technician. However, I never really delved into who the entrepreneur was. It’s interesting that I’d never done that because, of course, The E-Myth is the entrepreneurial myth saying it’s not an entrepreneur running a small business.

Instead, it’s a technician suffering from an entrepreneurial seizure. We left it at that: the entrepreneur and what the entrepreneur does, but not who the entrepreneur is. I discovered four critical components or dimensions of the entrepreneur, the first of which is the Dreamer. The Dreamer is the creator, the one we’ve been talking about. The second is the Thinker. Without the Thinker, the Dreamer’s left to himself. There’s nothing he’s going to be able to manifest in the world.

The Thinker is absolutely critical to the Dreamer. The Dreamer has a dream; the Thinker has a vision. The third is the Storyteller. The Storyteller is critical because while I have a vision, I must also have a purpose. You talked about the purpose that I help people to discover. The purpose is actually the resolution of a conflict in a very specific human being on this earth, of whom there are sufficient number in order for my business solution or resolution of that conflict as an entrepreneur, to take hold, to take root, and to grow.

I have to successfully solve the most important problem some person possesses. Finally, there’s the Leader. The Leader is the one who has a mission, and the mission is to build the system. The system that we’re going to build is what the vision is all about. The vision is all about replicating or creating the McDonald’s of whatever it might be. Let me tell you, in the case of E-Myth and in the case of my first company, the Michael Thomas Corporation, the vision was very clear.

It was to create the McDonald’s of small business consulting. However, my dream at the very beginning of my company, E-Myth Worldwide, was to transform the state of small business worldwide. That’s still my dream: to transform the state of small business worldwide. How do I do that? I do that by inventing the McDonald’s of small business consulting. Why do I do that? I do that to transform the life of every single human being who ever wants to go into business.

How do I do that? I do that by inventing the turnkey system-that’s what the Leader does-through which I can actually provide the capability that I need to provide to a small business owner in order for him or her to be able to successfully do what Ray Kroc did at McDonald’s, which was to build his or her turnkey system for their business in order to be able to scale it and to grow it.

CHRIS ATTWOOD: It’s so interesting to hear you describe it and break it down in these pieces, because it makes complete sense as you describe it. I wonder if we could delve into it a little bit more. Could you talk a little bit more about the difference between the dream and vision, to begin with?

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For more information about Michael Gerber and his work, please go to http://www.inthedreamingroom.com/michael-gerber.html.