As a part of my transition from “wantrepreneuer” to entrepreneur, I’ve been indulging in a great amount of business and motivational content. While on my way to work, I was listening to one of my favorite podcasts, The Entrepreneur On Fire. One of the guests recommended a book that he said completely shifted his mindset about business and put all the pieces together. It got me interested, so I picked up a copy from audible.com. This post is dedicated to the review of that audio book, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. The following is a summary of the concepts that I thought were valuable and my reflections on those ideas.

Three Critical Roles

In order to create a business that’s going to stand the test of time and continue growing, you need to have the following three roles: Entrepreneur, Manager, and Technician. All three must be equal in the amount of strength, energy, and time devoted to it. The entrepreneur does the strategic thinking, planning, innovating, and has a vision for the future. The manager makes sure the established process is followed; she makes sure stuff gets done and brings order to the chaos. The technician works on the product itself.

Because software engineers are great at building things, we don’t necessarily notice or pay enough attention to the lack of other equally important roles in our business. We concentrate almost all of our energy on building things, which is only a one third of a successful business.

Work On Your Business Rather Than In It

When you work in your business, you become self-employed. Working on your business means developing it and creating a system so that you can leverage other people’s time and grow your business. The system has to be well-established and easy enough to be followed by your future employees.

This is where I have a lot to learn. While working on the idea, I really need to put together a list of things that can be completed by other people and not try to do everything myself. Even development work can be outsourced. I understand it won’t be as good as something that I would write, but I think it’s up to me to create a system that will have those quality checks built in. As an entrepreneur, there must be other more important tasks like talking to potential customers and figuring out their pain points rather than creating a perfect data access layer.

Divide Roles and Assign Accountability

When starting a new venture, it’s important to write down all the positions that you envision for your business as it matures. For example, you will have a Chief Executive Officer, a Chief Operating Officer, a Vice President of Sales, Vice President of Marketing, Vice President of Operations, and then you will have your managers and other staff. Once you have all those positions written down, you assign people to be responsible for those roles. You might end up with 12 or more roles. If it’s just you and your partner, then each of you will have to assume many roles. The point is to divide the roles and hold everyone accountable. So, if one of your roles is V.P. of Marketing, then it’s your responsibility to bring customers in the door, and you have all the decision-making ability in that domain. It is also important to have a different mindset when performing a particular job; you must make a mental shift and think to yourself that right now I’m performing job x and from that position I’ll be making my decisions and taking action.

When your business starts to grow, you will slowly hire people to handle some of your responsibilities, so you will no longer be responsible for them.

To ensure that I don’t make the same mistake twice, I will work on making sure that roles are clearly divided when I start a new venture. I’ve had many experiences starting with partners and arguing over many different subjects. Now I see that the problem was that we didn’t have clearly established roles and people assigned. If V.P. of Marketing is your role, then it’s your final decision—not the guy who does your development work—on how you want to send out those email campaigns. Finally, if you are not contributing efficiently in your assigned job, you need to be fired or replaced in that role.

Create a System for Average Skills

If your business depends on a person who is a genius, then you really can’t replace that person, and if he or she leaves, you would be out of business. Building a business in a way that enables an average person to perform a job well is very important because now you can hire anyone and your quality won’t suffer. You add safety nets and create checklists to ensure quality is met.

Focus on Building a Business Rather Than Building a Product

Building a system is more important than building a product. A successful business can build many different products and then change them to adapt to the market. If you lock yourself into a specific product, then you are really at a disadvantage because if the market shifts, you will be out of your job.