Eight Lessons for Entrepreneurs from Michael E. Gerber (E-Myth Insights)

How to Build Scalable Businesses, Systems, and Vision that Last

Episode Number: 1
Publication Date: September 18, 2025

Want to know why most startups fail, and how to build a business that actually lasts? In this episode, Solomon Thimothy sits down with Michael E. Gerber, legendary author of the E-Myth series, to explore what separates struggling small businesses from scalable, system-driven enterprises. From real-world examples like McDonald’s and Disney to modern tools like AI, Gerber shares timeless principles of entrepreneurship, leadership, and business growth that every founder needs to know.

Meet the Guest: Michael E. Gerber

Michael E. Gerber is one of the most influential voices in entrepreneurship and small business development. Named by INC. Magazine as “The World’s #1 Small Business Guru,” Gerber is the bestselling author of the E-Myth series, including The E-Myth Revisited, Awakening the Entrepreneur Within, and Beyond the E-Myth. Over nearly three decades, his work has reshaped global conversations around franchising, business systems, leadership, and sustainable growth.

Top Quotes from the Episode by Michael E. Gerber

  • “The entrepreneur leads the show as the founder and creator. The manager runs the show. The technician delivers the show.”

  • “Most small business founders are technicians suffering from an entrepreneurial seizure. They start a business to get rid of the boss, but end up working for a lunatic… themselves.”

  • “Perfect your prototype before you scale. That first business model is your McDonald’s.”

  • “AI alone won’t make your business successful. Integrate AI with human intelligence and brand intelligence.”

  • “Passion is essential. Without it, you can’t create the world you’re meant to build.”

  • “Discover your dream, vision, purpose, and mission before tackling operations. That foundation drives everything.”

Key Takeaways

  • Work on your business, not just in it. Focus on building systems, processes, and leadership structures that let your business run without you doing everything.

  • Understand the three roles in every business. Entrepreneur leads, manager organizes, technician executes. Knowing these roles keeps you from getting stuck in the wrong one.

  • Most startups fail because founders misunderstand entrepreneurship. Starting a business isn’t the same as creating one. Focus on systems, not just day-to-day tasks.

  • Perfect your first business-format franchise prototype. Test, refine, and systematize your first product, store, or service before scaling to ensure consistency.

  • Follow the Eightfold Path of Entrepreneurship. Master the roles of dreamer, thinker, storyteller, leader, designer, builder, launcher, and grower to move from vision to execution.

  • Integrate AI with human and brand intelligence. Combine AI with human insight and brand identity to make smarter decisions, streamline operations, and maintain a strong brand.

  • Passion is essential for lasting success. Internalize Gerber’s lessons and read his books repeatedly to discover the drive that fuels great entrepreneurs.

Listen Now:

 

Full Podcast Transcript:

Solomon Thimothy (00:00)

Well, Michael, it's an honor to have you so excited. Welcome to the show.

Michael E Gerber (00:07)

Thank you very much, Solomon, and it's a pleasure to be here.

Solomon Thimothy (00:10)

You know, it's been so many years. I got the privilege of getting to know you. We email each other. You send me things. And I've seen you. I met you in person. We had coffee together. So I feel like we’ve developed a friendship, and I'm happy to call you my friend. And first of all, you made such a huge impact on my life. So thank you for that.

Michael E Gerber (00:32)

My delight. Answer a question for me. When you say it made a huge impact on your life, can you summarize that succinctly? What was it that impacted you? And what has the outcome of that been?

Solomon Thimothy (00:52)

Hundred percent. So I've built a couple of businesses in my life, and I read your book when I was struggling to grow my first one. I came across the book, and then went through the EMIT coaching program, where I met some amazing coaches. But what I really think got coded into me the most is the difference between working on the business and working in the business. That’s probably the one thing I say every day.

I come across entrepreneurs who have the same struggle, and when I mention that, it always resonates with them. So I look at my day and say, well, where am I working on the business? Where am I working in the business? If I take that one core piece, everything else can be extrapolated: working on the system, the process, the hiring, the leadership. It all comes down to that one thing: whether you are running the show or managing versus just owning it and letting it run itself.

Michael E Gerber (01:49)

The entrepreneur leads the show as the founder and creator. The manager runs the show. The technician delivers the show. So there are really three roles here: the technician, the manager, and the entrepreneur, who, in Disney’s terms, is the imagineer.

Solomon Thimothy (02:23)

Absolutely, and that's why I wanted to have you here, because there's so much wisdom that you can share with us and our audience today. I’m curious to ask you this: from your experience having impacted millions of entrepreneurs, what would you say is the biggest mistake entrepreneurs make, both small and large?

Michael E Gerber (02:45)

Well, we have to distinguish between the mistakes entrepreneurs make and the mistakes most small business founders make, because most small business founders, startups, do it all wrong.

Solomon Thimothy (02:58)

Love that.

Michael E Gerber (03:08)

Because they're not the entrepreneurs that everybody says they are. They're what I call technicians suffering from an entrepreneurial seizure. They start their own company for the wrong reason: to get rid of the boss and to become their own boss. And now they're working for a lunatic who’s doing it, doing it, doing it, doing it, busy, busy, busy, busy.

So the E-Myth is the entrepreneurial myth. And it essentially distinguishes between a true entrepreneur and everyone else. And once one makes that distinction, everything changes. Until one makes that distinction, nothing changes. Everything becomes a job, which is what the vast majority of startups are.

One more word about that. It is said that there are over 150 million new startups worldwide every year. Within a decade, fewer than 10 % of those will still be alive. Think about that. A 90% failure rate. That's the work we have focused upon for the past half-century - transforming the state of small business worldwide, transforming the state of entrepreneurship worldwide, transforming the state of economic development worldwide. Work on it, not in it. And that's the ball game.

Solomon Thimothy (05:40)

You cannot put it better than that. You mentioned Disney, and you mentioned McDonald's being the most successful business in the book. Could you tell us more about that? You always reference these amazing brands, and it's what we should all be doing.

Michael E Gerber (05:53)

You just have to think about it. Go back to the story of McDonald’s. It was founded by the McDonald brothers, who opened their first restaurant and then decided to franchise it. They opened a second location, then a third, and at some point, they thought, “This is too much work. Let’s just go back home and run our own store.”

Ray Kroc discovered McDonald’s because they kept buying one of his products. He started wondering, “What the hell are these people in San Bernardino, California, doing that they keep ordering this from me?” So he decided to drive out and see for himself. He parked outside the restaurant and watched a steady stream of customers come to the window, buy their food, take it in a bag, and leave.

And when the traffic subsided, Kroc went inside to meet the McDonald brothers and asked them, “What are you guys doing here?” They explained their system, and he followed up with, “Have you ever thought about franchising this?” They said yes, but it wasn’t what they were interested in.

Kroc then convinced them to give him the franchise rights to McDonald’s. Now, you have to understand: Ray Kroc was 53 years old when he opened his first McDonald’s in Des Plaines, Illinois. But he didn’t just open a single restaurant. He launched McDonald’s corporate, the franchise operation, and the first store all at once. And to perfect that store, he went to work on that store, not in it, before he ever replicated it. He wanted to get it right, not from inside the store, but from outside.

So, Solomon, your corporate office and your first franchise are two different things. That first franchise is your business-format franchise prototype. That’s what I mean when I say to every startup on the planet: do your McDonald’s. But before anything else, you’ve got to follow what I call the eightfold path.

What's the eightfold path? They're the eight discrete personalities of a great entrepreneur: the dreamer, the thinker, the storyteller, the leader, the designer, the builder, the launcher, and the grower.

The dreamer has a dream. The thinker has a vision. The storyteller has a purpose. The leader has a mission. That's the platform upon which, Solomon, your great growing enterprise will be created. The second four steps are your client fulfillment system.

The job, your practice, your business-format franchise prototype, lead generation, lead conversion, client fulfillment - your business is really nothing more than up to eight turnkey practices plus a turnkey management system. And the enterprise is nothing more than up to eight turnkey businesses plus a turnkey leadership system. That’s McDonald’s from soup to nuts. Every single startup on the planet needs to follow that rule. And they can do that by joining me in the Dreaming Room.

Solomon Thimothy (11:53)

True.

Michael E Gerber (11:55)

And that's what you need to do, Solomon. You need to become one of our Dreaming Room licensees so that you can lead a Dreaming Room for your prospective consumer.

Solomon Thimothy (12:13)

Amazing.

Michael E Gerber (12:15)

The dream, the vision, the purpose, the mission, the job, the practice, the business, the enterprise. Go to work on it. The entrepreneurial incubator of all time. And that's what we're doing here at Gerber.

Solomon Thimothy (12:32)

This is amazing, and thank you for that. You’re literally sharing so much of the book, and hearing it directly from you is incredible. I can already tell this is going to be one of the best episodes. And by the way, I’ve done this with you like three times now. I don’t know if you remember, but this isn’t my first rodeo. I just can’t get enough of it.

Michael E Gerber (12:45)

Solomon, I just turned 89. I don't remember very much.

Solomon Thimothy (13:01)

I know, I do remember. When you wrote the book, there was no AI and no automation like we have today. What are your thoughts about that? What do you think AI tools can do? Is there anything you’d like to share with entrepreneurs? They’re in a different world.

Michael E Gerber (13:44)

AI is simply a business format franchise prototype. It's simply a model. AI, however, needs to be integrated with what I call HI. First, HI - human intelligence. Second, AI - artificial intelligence. Third, BI - brand intelligence. When you bring all three together, you create an integrated intelligence system. This positions who you are and what you do in the most creatively expressive, human way possible, supported by intelligence at the operational level. It’s how everything is done in every successful company: this is how we do it at McDonald's, at Apple, at Gerber, at Solomon’s. And if there is no “this is how we do it here, this is who we are,” you're lost.

Solomon Thimothy (15:30)

Right.

Michael E Gerber (15:36)

Make sense?

Solomon Thimothy (15:37)

It’s clear as daylight. So here’s my next question: we’ve talked about the terrible 90% failure rate of businesses, and we’ve also talked about the solution, the eight systems you shared: the thinker, the grower, the leader, and so on. Why aren’t more entrepreneurs adopting this system? What do you think is standing in their way: ignorance, or something else?

Michael E Gerber (16:28)

When you say you've read the book, you understand there are actually 34 different E-Myth books.

Solomon Thimothy (16:35)

Right, I know about that. The one for doctors, dentists, chiropractors… There's one for everyone.

Michael E Gerber (16:39)

Yeah, you got it. There’s The E-Myth Manager, E-Myth Mastery, and The E-Myth Enterprise - the full evolution of the enterprise, as outlined in Beyond the E-Myth. It shows how a business grows from a company of one to a company of a thousand. And there’s also Awakening the Entrepreneur Within, which is an introduction to who an entrepreneur actually is and how to awaken the spirit of entrepreneurship.

It's not just starting something. It's creating something. Starting something and creating something are two completely different things. Creating something is the ball game. It's said, as you know, in Genesis: born in the image of God. We’re born to create a world fit for God. And that's the work we've been doing all these years.

That's what we're inviting every single individual listening to us right now to do, because it's the most important work for any founder, but they've got to learn how to do it. And before they learn it, they've got to be inspired to pursue it. And to be inspired, they've got to devote the time and attention.

That's what we've been inviting people to do. Join me in the Dreaming Room to awaken the true entrepreneur within, to discover your dream, your vision, your purpose, your mission, your job, your practice, your business, your enterprise. Every single person listening to us right now, Solomon, needs to do just that. I don't care what kind of company it is. I don't care what their product is, what their service is, how long they've been doing it. Every single company on the planet needs to do that. And once they do, something miraculous will happen to them. That's my promise.

Solomon Thimothy (19:26)

I love it. We spoke a lot about vision. So tell us more because I think you really hit the nail on the head about the lack of vision. Maybe it is the challenge some of these entrepreneurs face. How important is it?

Michael E Gerber (19:49)

Well, it's one of the four essential steps, but it's only the second step. The first step is the dream. When I started my very first company at the age of 41, the Michael Thomas Corporation (MTC), my dream, together with my partner Tom Traversano, was to transform the state of small business worldwide, to change small business on a global scale.

From that moment, I asked every founder I worked with, “What’s your dream?” Because until you have a dream - the great result you’re setting out to achieve - you can’t move to step two. Step two is the vision: how you plan to realize that dream. That was our vision back at MTC.

Solomon Thimothy (20:49)

I agree.

Michael E Gerber (21:06)

In 1977, my goal, my mission, was to invent the McDonald’s of small business development services. I had a dream: to transform the state of small businesses worldwide. I had a vision: to create a turnkey system - a business-format franchise prototype, the McDonald’s of small business development services.

Why the McDonald’s analogy? Because unless I build a system like that, I’m just spinning my wheels. But once I do, I can move on to my purpose - the storyteller’s purpose, the dreamer’s dream, the thinker’s vision. My purpose explains why all of this exists. It’s the story that lives at the very heart of it, the story that every great entrepreneur, founder, leader, and manager carries.

What story? Our story. Why? Because that story drives everything we do, everything we are determined to achieve. It’s the foundation: dream, vision, purpose, mission.

And the mission? That’s the leader’s mission. The leader speaks to every chosen participant, in our case, every small business owner, every founder on the planet, and says: Discover your dream, your vision, your purpose, your mission, and follow me to that. Do you get my point?

Solomon Thimothy (23:45)

I do.

Michael E Gerber (23:47)

And that's the platform upon which a great growing company is designed, built, launched, and grown to the next four steps in Dreaming Room Two. So Dreaming Room One is the dream, the vision, the purpose, the mission. And Dreaming Room Two is the job, the practice, the business, the enterprise.

At the heart of the job, the practice, the business, the enterprise is the dream, the vision, the purpose, the mission. The dream, the vision, the purpose, the mission is the platform upon which the job, the practice, the business, the enterprise is designed, launched, and grown.

And once that's done...There we go. Onward and upward - McDonald's.

Solomon Thimothy (24:39)

I want to ask you two last questions. Where did you get the inspiration for that book?

Michael E Gerber (24:47)

It's a gift. It's just a gift. What am I doing here? What's the problem? What am I trying to solve? And on, and on, and on. God gave me a gift. God's given you a gift. God has given every human being on the planet a gift to create.

So if we're all born with the gift to create, then that's what we have to pursue: the Creator within. And that's what I do in the Dreaming Room. I awaken the Creator within every participant.

Solomon Thimothy (25:47)

Love it.

Michael E Gerber (25:48)

What's your dream? I don't know. Let's find out. And the process we use to do that evokes that in every single individual who joins us.

Solomon Thimothy (26:08)

I can see that. I can see how you can finally get the dream out of your head. My last question, Michael, is what’s one piece of advice you would give to an entrepreneur starting a business today?

Michael E Gerber (26:20)

Let me rephrase the question: what is the one piece of advice you’d give to every founder of every small startup on the planet? My answer - read the book. Which book? The E-Myth Revisited. And then what? Read Awakening the Entrepreneur Within, the second book. And then? Beyond the E-Myth: The Evolution of an Enterprise: From a Company of One to a Company of 1000.

Read book one, then book two, then book three. And read them again, and again, and again until it’s absorbed into the very fabric of your being. Because as long as it’s not, you won’t discover the passion - what Steve Jobs and every great entrepreneur on the planet talks about. The passion. Without passion… where is it?

Solomon Thimothy (28:01)

I get it. It's true.

Michael E Gerber (28:02)

How could McDonald’s have been created by Ray Kroc, a 53-year-old peddler of milkshake machines? He started his first McDonald’s franchise at the age of 53. Are you kidding me?

Solomon Thimothy (28:07)

Great.

Michael E Gerber (28:25)

The passion.

Solomon Thimothy (28:29)

Amazing. Thank you, Michael, for joining me. You have no idea how much I appreciate you.

Michael E Gerber (28:38)

Thank you, Solomon. I'm going leave you with this point.

Solomon Thimothy (28:43)

Please.

Michael E Gerber (28:45)

Seek to become a licensee of the Dreaming Room, and then attract dozens, then hundreds, then thousands of participants alongside other Dreaming Room facilitators, as we spread it worldwide. Now, in my 89th year, because this year, Solomon, we’re going to be acquired.

Solomon Thimothy (29:22)

Wow, it's amazing.

Michael E Gerber (29:24)

And we're going to be acquired by the one candidate who understands the profound power of the message we've just shared with you. And that company is going to acquire all of it, all of my books, all of our work, all of our content, everything we've designed, built, launched, and grown to the point where they're now going to be able to replicate it exponentially in every language on the planet.

Solomon Thimothy (30:05)

Congratulations! Sounds amazing. Thank you, Michael, for sharing all the words of wisdom. God bless you.

Michael E Gerber (30:08)

Wonderful. God bless, Solomon. Take care.

Books, Frameworks, and Resources Mentioned

Scale Smarter, Not Harder

Loved the insights in this episode? Pass it along to a founder or entrepreneur who’s ready to level up their business systems.

The Host: Solomon Thimothy

Solomon Thimothy is a digital marketing expert with over 20 years of experience helping businesses scale through SEO, systems, and data-driven growth strategies. As the founder of IMS, Solomon has worked with companies across industries to drive organic traffic, dominate search results, and build predictable revenue engines.

10X Franchise is the podcast for franchisors and founders who refuse to settle for average growth. If you want to stop guessing and start scaling with proven frameworks, systems, and leadership principles, this show is for you.