In 1986 a book called “The E-Myth” attracted a lot of attention. The “E” in “E-Myth” refers to entrepreneur, and according to the myth in Michael Gerber‘s book, if you’re good at a particular skill then you’ll do well starting a business which requires that skill. So, for example, if you’re a good cook then you’ll do well starting a restaurant. Or if you take good photographs then you’ll do well starting a photography business.
As you might expect from the use of the word “myth,” the book presents a case that this myth is not true. The skills and inclinations of an artisan are not the same ones required of a businessperson, and most people don’t realize that starting and running a business require only a relatively small percentage of time devoted to the skill that underlies the business. Very little of a restaurant owner’s time is spent cooking; in fact, most restaurant owners hire someone else to cook. Very little of a professional photographer’s time is spent taking pictures; more time is spent marketing and running the business. Even for the highly-paid professions like dentists, doctors or lawyers, you might spend a lot of time doing your craft if you work for someone else, but if you start your own business then you’ll have to devote a lot of hours to basic business tasks that are unrelated to the profession itself.
The book goes on to say that when people who believe the E-Myth attempt to follow their dream and turn an amateur skill into an actual business, they either wake up to reality and scramble to learn the real skills required, or their business idea fails.
The E-Myth’s Impact on Information Technology Organizations
In Information Technology, we often run into people who follow technology columns in the press and so they claim to understand IT. Or they take a programming course in college and so they claim to know how to develop software. Or they own an iPhone and use Siri, and so they claim to understand mobile technology and artificial intelligence.
These people have fallen victim to the same erroneous thinking as the E-Myth: they’re equating an amateur level knowledge of a subject with the more extensive professional experience actually required to put that knowledge into real-life use. Fortunately, these amateur technologists don’t attempt to start their own business based on their knowledge, but they still manage to cause a certain amount of business havoc when they become customers of an IT organization or — worse — when they’re assigned to be the business project manager of an IT project.
Here are some of the problems these people cause:
- They don’t understand the level of effort required to create some of the products and services they’re used to, and so they expect an IT organization to be able to create something equivalent to a high budget commercial product with an amateur budget and timescale.
- They don’t understand the way software is licensed. In particular, they don’t understand the need for a licensing agreement that provides for growth and shrinkage of user seats as demand rises and falls.
- They underestimate the amount of time, money and effort required to adapt off-the-shelf software to use existing company data, and to interface or integrate with existing company systems. One recent survey found that integration cost is often seven times the cost of the off-the-shelf software being integrated.
- They believe a vendor when the vendor says that their total cost is $x, when in reality, (a) the vendor is neglecting the internal company cost of installing, maintaining, adapting, and integrating the system, (b) the vendor is omitting the vendor consulting cost required to help with internal company effort, and (c) the vendor is low-balling the estimate by leaving out things like the license required for the test or backup system.
- They overestimate the accuracy of company data. They propose systems which will automatically take action based on certain data values (e.g., automatically order parts when inventory is low) without having solid processes in place to ensure that the data is correct.
- They don’t realize that most programming effort is spent dealing with exceptions and that programming for the “normal” situation is the easy part. Their estimates for the programming time required are always too low.
- They tend to leave testing and the subsequent corrective effort out of their estimates.
- They tend to forget the need for training and for the learning curve associated with employees learning new systems and processes.
- They don’t understand the difference between a proven and reliable technology and an unproven state-of-the-art technology that has lower reliability. They tend to prefer the state-of-the-art technology, but aren’t willing to budget for the extra testing, debugging and workarounds that are required to use it.
- They don’t understand the difference between a preliminary estimate and a guarantee, and they refuse to include contingency time in a project budget.
- They don’t understand the impact of changing the scope of a project, so they allow major scope changes without changing the budget or the schedule.
- They don’t understand the difference between a minimum infrastructure and a fault-tolerant, resilient infrastructure that’s scalable to handle future volume increases, nor do they understand that software and hardware have to be designed and constructed to handle peak demand — not average demand. So they base the budget on the minimum infrastructure required to run a system during an average time of the day, then complain when hardware outages prevent use of a system, or when spikes in customer demand bring the system to its knees.
The E-Myth book is now 26 years old, but the myth persists, and it will continue to persist as long as human nature remains the same. The myth starts in childhood when we put a blanket over a card table and call it a house, or when we brandish a stick and call ourselves a warrior, or when we hold a toy bottle up to the mouth of a doll and call ourselves a parent. It’s fun to make believe that the world is simple. It’s nice to imagine that just because we know a little about a subject that the logic based on that little bit of knowledge will enable us to make big decisions. But it’s not true. Nor is it true that having a knack for a particular skill like art or cooking or video games will enable us to successfully start or run a business that uses that skill.
But if we recognize the limitations imposed by the E-Myth, and if we get help from professional advisors who have the proper experience, then with enough motivation and resources we can accomplish anything we want. The secret is to take the myth into account and to include the extra resources in our time and budget estimates. Reality can be very rewarding, but unfortunately it’s much more expensive and time-consuming than amateurs would expect.