BiggerPockets Real Estate Podcast - 125: The Key to Business Success with Bestselling Author of The E-Myth Michael Gerber

Episode Date: June 4, 2015

What if you could sit down with one of the best-selling business authors of all time and pick their brain? Lucky for you, that’s exactly what you get to do today here on the BiggerPockets Podcast where we interview Michael Gerber, author of The E-Myth Revisited. The E-Myth has been one of the most-frequently mentioned books from past guests on this Podcast, so we just had to sit down with Michael to talk about what makes some investors successful and other’s struggle continuously! Hint: It’s all about the system. Stay tuned! In This Episode We Cover: Who Michael Gerber is How he got to where he is now Lessons that he learned early in life What exactly the “E-Myth” is The primary reason why businesses fail Working on your business vs. working in your business “Turnkey-ing” a business How to invent and implement a system One tip for a storage unit operator The four personalities in every business How to get a mentor And SO much more! Links from the Show BiggerPockets’ Instagram  BiggerPockets Webinar BiggerPockets Forums Get Things Done with David Allen (podcast) Zoom GoToMeeting Books Mentioned in this Show The E-Myth by Michael Gerber The Millionaire Next Door by Thomas J. Stanley The Book on Investing with No Money Down by Brandon Turner The E-Myth Revisited by Michael Gerber Marketing for Business Growth by Theodore Levitt Tweetable Topics: “Every small business is a school.” (Tweet This!) “Don’t get into something unless you’re changing the world.” (Tweet This!) “Passion is insufficient; persistence and dedication are absolutely critical.” (Tweet This!) Connect with Michael Michael’s Company Michael’s Email Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 125. In order for it to scale, is you've got to invent the system, this is how we do it. This is how we do it. This is who we are. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have been. benefited from biggerpockets.com.

Your home for real estate investing online. What's going on, everybody? This is Josh Dork and host to the Bigger Pockets podcast here with my co-host, Mr. Brandon Turner. What's going on, Brandon? What up? Not much. I'm sitting down today. Do you like this?

Look at me. You are. Normally I'm standing at my standing desk, but today I decided to be lazy and sit. Is that all right with you? That is awesome. All right. All of our listeners really give to a pot. All right.

good. No, today, today's a cool show. We got one of my all-time favorite authors of all-time, if that makes sense, all-time. All-time of all-time. Yeah. Yes, yes, we do. We do. And, you know, there's definitely some insight to be delivered. And we were very excited to bring this guest on board. And we're looking forward to sharing the interview with you. But before we get to that, lots of cool stuff going on. As you guys know, we launched the chat a few weeks ago. And that's been going super well. You know, we're continuing to build cool new features on the site. and hopefully you guys have been checking out Brandon's amazing webinars. There's just a lot of great information that we're sharing there.

They are pretty amazing. The podcast, the webinar, you know, the forums. I mean, there's just so much free information here on BiggerPockets. It's just crazy. So go on BiggerPockets.com if you are not already a member and check it out. Also, if you are a listener of the podcast, which you must be, since you're hearing me speak right now, please go on iTunes and leave us a rating and review, let people know what you think about the show. hopefully you love it as much as we do.

All right, guys, so here it is. Today's guest. He's a bit of a legend in the world of business writing. He's written one of the best books for small businesses that exist. He's very, very insightful. He's been on New York Times bestseller list, every bestseller list, you name it. The book continues to grow. It's fantastic.

Brandon's holding onto it right now. He can't let it go. It never leaves my hand, actually. I go to sleep with it at night. I take it to the toilet. I mean, everywhere I go, this book. That's great. I glued it to my hand, actually. It's called the E-Mith. It's called the E-Mith. It's by Michael Gerber, and we've got Michael for you today. You've upgraded how to buy properties, but did your insurance get the memo?

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landlord insurance designed for the modern investor. So let's just bring him in and get this thing going. Let's do it. All right, Michael, it really is a pleasure to have you on the show. Thanks for coming on board. And great to have you here. I'm a delight, Josh. You're not as cute as Hillary is. It was the invitation was Hillary, and I immediately said yes. And had it been you, I probably would have thought about it quite a bit more.

Now, you're ready. You're ready. Yeah. That is our secret weapon right now. That's how we're going to get the big guest right there. You know, pretty pretty cute, pretty cute, guys. Well, today we're going to talk about, you kind of your story, you know, where you, you know, how kind of you came along this journey to become known as such a, you know, influential business mind, you know, I guess you'd say. So just today, I mean, just to preface this, today I reread, basically reread the entire e-myth revisited.

It's been, I don't know, probably three years since I read it. And it's shocking to me how much, like, that book impacted my life. life in ways that I didn't even realize. When I read the book, I was like, well, that's a really good book. But like, I didn't think about it until today reading through almost every page. I was like, oh, that's where I got that from. Oh, that's why I do that. Oh, that's why I do that. So it's one of those books, you know, kind of like I said that a while ago with, we did an interview with David Allen and getting things done. And it was the similar thing, right? Like, just, that's why I love books. So anyway, let's get into it. Enough, enough chit chat from me.

Maybe you can tell us a little bit about yourself. I mean, who are you? Well, big question. It depends upon when you ask me that question. I'm Michael E. Gerber. I'm the author of 18 books. Wow. You should work harder, Michael. I'm trying. My books are on the bestseller list of all bestseller lists, New York Times, Business Week, Wall Street Journal, and on and on and on. But the reality is that those books were never promoted by us. We never went out and marketed the books.

The books have been solely grown, read by the millions of readers that we have because somebody told somebody else about it. So it's been a complete word-of-mouth phenomenon. And it's astonishing to me as well because in one respect, doesn't stimulate my ego. It just simply says that the idea underlying the book is so genuine, so real, so authentic, and so significantly important that people just have to talk about it. And so accountants tell their business clients, you've got to read this book,

and coaches tell their business clients, you've got to read this book. attorneys tell their business clients, you've got to read this book, and on and on and on and on and on. And so the phenomenon of the story within the book really is at the center of everything we've been teaching for over 40 years now. But it didn't just start with the book because the book was the product of the business. So we started a business called the Michael Thomas Corporation in 1977. that's how long ago this was. And that business was the world's first business coaching firm. Very few people know that, in fact, we invented the world's very first business coaching firm.

And we invented the very first turnkey coaching system that had ever been created. Before coaching became coaching, we had already done it. We called it consult. but in fact it wasn't consulting at all because it really only required a relative novice plus our intelligent system to perform the relationship that we created with our clients. So all of this has been about that, that very, very first Michael Thomas business development program and a dream we had, and the dream was to transform the state of the state of the state of the first Michael Thomas' business development program, to transform the state of small business worldwide. So when I started this, without any experience

doing this, that's what we set out to do. So that's the story. And I think you've done it. I mean, like, I think the fact that millions of people have read your books is a testament to that. Congratulations. You are a success. Thank you. Hey, Michael, so what got you there? You know, did you wake up one day, I'm an 18-year-old kid that's suddenly going to teach people how to run better business? Or did you, experiences up into this point give you the knowledge that you needed to kind of launch us. What did you do prior to becoming the Michael Gerber that we all know as the teacher? Well, I was everything else. I was a encyclopedia salesman. I was a saxophone player.

All right. I was a framer of houses. I was a beatnik when they were beatniks. I was a hippie when there were hippies. I was everything and nothing. But I'd had in my life experiences with masters. The guy who taught me how to sell encyclopedias was a master of it.

The guy who taught me how to play the saxophone was one of the top five saxophone teachers in the world. The guy who taught me how to frame houses was a master of it. And each and every time, I went through this process of being stupid, which essentially was hello stupid because I started

selling encyclopedias. I had no idea what I was getting myself into. When I started at 12 years old to study with Merle Johnston, Merle told me that I was stupid and he hated kids. He didn't teach kids. Most of his students were already... professionals. So he didn't teach beginners at all.

And he said that most likely by the time we got through our first or second lesson, I'd be out of there because I'd be a major pain in the ass. So he said, you know, the rules of the game are you've got to practice. You've got to practice what I tell you to practice. You've got to practice exactly how I tell you to practice. You've got to practice as long as I tell you to practice three hours a day, five days a week. And then you've got to come up to Los Angeles from Anaheim, where we lived then. And you've got to take a bus.

Your parents can't bring you. And it's two buses. It's not one bus. And if your parents will walk through the neighborhood you're going to have to walk to, from the one bus to the second bus, they would be out of their minds if they said, yes, you can come here because you're a cute little. 12 year old kid and the worst section of Los Angeles possible. But that's all what you got to do to get here.

And then he said to my parents who were there standing with me as I'm standing in front of this about five foot 400 pound strange man. And I never want to see either of you again. And when Mikey comes home and complains about what I do to him here, just know it's truth. So that's like that's what my life is about. Wow. Long before I ever decided in quotes to become an entrepreneur, I never decided to become an entrepreneur. I decided to transform the state of small business worldwide, but I was already 41 years old before I ever did that.

Gotcha. So no, I didn't want to be in business by myself, but I was always an independent contractor. So meaning my whole life was learning how to do it, then really learning how to do it, and then going off and doing it by myself. Makes sense. So that's what it was. So what brought me to do this is everything I did brought me to do this. Right on.

Right on. And then that guy sounds like a real charming fella. All right. And one of the guys who taught me were real charming fellas. they absolutely, absolutely wouldn't broke any back talk from me. They knew how to do what they knew how to do when I didn't. And if I wanted to learn how to do what they knew how to do, then shut up, listen, and do it.

And that was their style. So that was my karma, if you will. That must have been a real asshole years ago in another... Because just came back and haunted me. Oh, man, I'm sorry. Well, listen, those lessons brought you to where you are today, and I think it's benefited millions of people. So let's get into this.

And we've got this thing, the e-myth, right? You are the man behind the e-muth. So what is the e-muth? Well, the e-muth is the entrepreneurial myth, and it's the primary cause that businesses fail. And so when you think about somebody going into business, instead of being an entrepreneur like everybody believes them to be, they're what I call technicians suffering from an entrepreneurial seizure.

So the cook starts a restaurant, the bookkeeper starts a bookkeeping business, the cardiologist starts a medical practice, and on and on and on and on. Each of them believing because they know how to do the work, they know how to create a business that does that work, and it's completely untrue. So why is that a problem? Well, because they go to work in the business, doing it, doing it, doing it, doing it, busy, busy, busy, busy, as opposed to what an entrepreneur does, which is to go to work

on the business. So the entrepreneur goes to work on the business, you might say from above. Yep. Ray Crock didn't make hamburgers, McDonald's did. Ray Crock never worked in McDonald's. Ray Crock worked on McDonald's to build, to design, build, launch, and grow. franchise prototype. Because if he didn't design, build, launch, and grow his franchise prototype, he never would

be able to scale it. So to the degree, my business depends upon me, I'm screwed. To the degree your business depends upon you, you're screwed. Now in a personality driven business, which most people believe is key, meaning Trump, and on and on and on. In a personality-driven business, everybody believes it's the persona of the individual. That's of value.

But it's completely the opposite of the truth. It's not the persona of the individual. It's the persona of the system. Yeah, that makes sense. So the degree you wish to scale what you do, you have to turnkey what you do, so that anybody can do it. And what do you mean?

What do you mean my turnkey it? Well, just this. We're having a conversation. And that conversation is something you're either making up, making up, making up. And then you get sick tomorrow, Josh. And then Brandon's got to make it up, make it up, make it up. And then Brandon gets sick. And so Hillary's got to make it up, make it up.

Now, the good news is Hillary looks a hell of a lot better than he is. So Hillary's got covered for a while. You understand, but as long as Hillary keeps on fumping along, making it up, making it up, making it up, sooner or later, it comes crashing down. So what has to happen then in order for it to scale is you've got to invent the system, this is how we do it, this is how we do it, this is who we are, and nobody does it like we do it. So when you do that, it will no longer be Skype. it will no longer be this or that.

It will be this and only this. And nobody does podcasts like we do. Not because we invite the best guests. The best guests are simply a part of the system. But in the process of doing that, you're called upon to invent the system through which that best guest looks better than has ever looked before.

The product looks better than any product ever looked before. The questions you ask are not the same questions. Every single other podcast I've ever been on asks me, and right now they are. They are unique questions, uniquely positioned, to discover a unique insight into a unique mindset that has never been discovered that way before. Yeah, that makes sense. And I always make it difficult for people to interview me because I always call them on just that. So you become a client in the process of me being a participant in this process. And my hope is that when I'm done, something is going to happen with you that will transform the way you do what you do and how you do it.

and you then will have been gerberized. Oh, man. Free consulting. I'm scared, man. I'm scared. I was warned about you and clearly they were right. I like to say it's not true what they say about you, but man, Michael, it sure as hell is true. Well, I tell you what, you know, we, one of the things that, you know, Brandon and I have talked about for a number of years now is, you know, the working on the business versus being, working in the business, the technician.

versus kind of the owner. And, you know, I, you know, I've built our business up over, over 10 years, you know, and the first I'd say, eight, I was just in, period. That was it. My head was down. I was just working in the business. I was, you know, focused on it. And then one day it kind of clicked, I paid a consultant to kind of look over my business. And he's like, you know, you got to take a bigger view. You know, you can't just be doing everything. And I was like, oh, you know what? That made a lot of sense. This business can't just be about. Josh. It has to be able to exist without Josh. And so we've been building it up to do just that, is build this up without me. And it's been really exciting and really fun. And I think, you know, as we've

kind of read, you know, your books, we've gotten better at, you know, analyzing and recognizing why we're doing that. And so, you know, our audience, they're primarily real estate investors, right? So we've got investors, we've got agents, we've got other folks. You know, these are, small entrepreneurs, small businesses that are, you know, they're buying one, two, five properties, whether they're doing it on the side or they're doing it as a means, you know, to actually take over their former employment. How can somebody who's in that position build systems without first operating within the systems as a technician? Well, this is self-serving when I say this. But you understand that over the past 40 years, we've worked with over 70,000 business clients in 145 countries.

Every imaginable kind of business. So real estate, insurance, chiropractic, da, da, da, da, da,da, everything and anything you can imagine. Gas stations, graphic design, everything and so forth. And real estate investors. But we'll talk about it in that regard because essentially the platform for every single one of the folks who you're talking about, guys who are investing in real estate buy one property, two property, three property, four property, et cetera, and so forth, that they most often do that stupid. So please, I'm not criticizing your audience. I'm just saying, hello, stupid. And much the same way as my saxophone teacher said it.

My Encyclopedia sales manager said it. My framing teacher said to me, hello, stupid. You really want to do this? That's what they'd say to me. You really want to do this? Well, there's only one way to do this. It's called my way. My way or the highway.

You've heard the expression. So I would say that to these real estate investors. There's one way. and only one way to begin the journey of real estate investing or investing in anything. And that's what I call the dreaming room. And the dreaming room really is the platform upon which every venture, every practice, every business, every enterprise must go through to be able to say to somebody with such certainty that there's one thing you must do. The entrepreneur, which we're describing as an individual who starts a business, is really

four different personalities. And these are critical to understand because you each possess these four different personalities, everyone does, to one degree or less, to one degree or another. And those four personalities, I'm saying to your audience, I'm saying to you, I'm saying to myself, I'm saying to Steve Jobs, I'm saying it to everybody because when you recognize these four, you'll understand that they're each here for a different purpose. Sure. The first is the dreamer. The dreamer has a dream.

The second is the thinker. The thinker has a vision. The third is the storyteller. The storyteller has a purpose. and the fourth is the leader and the leader has a mission. The dream, the vision, the purpose, the mission. And those words are used loosely by everybody. Martin Luther King said, I have a dream.

Well, I would say to every single person who's sitting in your audience that they should go online right now and look up Dr. Martin Luther King, the dream, and listen to it. Because once you listen to that, you'll understand what's missing in your life. You understand what's missing in this picture. You understand what's missing in almost every business on the face of this earth. There is no dream. There's a daydream, but there is no intentional dream.

And that dream is what I call a great result. So essentially, I'm saying that within every human being in the face of this earth, we're born to create, we're born in the environment, in the image of God, we're born to create. A creator created us, human beings, to create a world fit

for God. Now you see what a lousy job we've done with that. You see also what a lousy job most people have done with their businesses. Sure. Because they didn't have a saxophone teacher like Merle. They didn't have a

sales manager like Lloyd. They didn't have a framing teacher, like the guy who between framing assignments was working in Hollywood, building Hollywood sets. They never had an artist, truly, truly, a severe and determined and passionate artist, truly take them on and take them through apprenticeship. They've never really gone through apprenticeship in an intelligent way. They just learned sloppy. Sure. Most people just learn sloppy.

You know that, I know that, we know that. That's why most real estate salespeople don't sell real estate. They just jerk around. Yeah. In San Diego County, there are listed 28 plus thousand real estate agents. But in San Diego, they only did about 27,000 deals last year. So we got 28,000 real estate professionals who did less than one deal a year each. Yep.

Now, of course, there's the 80-20 rule, which tells you that 80% of the results are produced by 20% of the people, blah, blah, blah, blah, choke, choke, chug. I know all about this. But what I'm saying is most people suck. So how do you not suck? How do you not? I mean, how do you not suck besides? You start anew. Okay.

You start anew, meaning you start with a serious guy. That's why I say I had a saxophone teacher who was a serious guy. I had a sales manager of a serious guy. I had a framer who, each time I'm attempting to do something other than what I've done before. And so I'm constantly searching for what I'm here to do. I'm speaking personally, continually searching for what I'm here to. I didn't find it until I was 41 years old. And when I found it when I was 41 years old, my saxophone teacher, my sales manager, and my framing teacher had brought me to a point where I wasn't here to screw around.

I didn't say I want to buy six properties or three properties or two properties to say, I want to transform the world. Yeah. Yeah. You know, that's the beatnik. That's the hippie. That's the Gerjeff student. that's that you understand I want I want to do

something. Yeah. So that makes sense. Do something. Go ahead, Brian. Well, I want to pull it back into the apprenticeship thing you mentioned, right? So when, when I mean, are you saying

that when a person should want to get into any field, like real estate investing, they should find an apprentice, I mean, a, what do you call it, a master, right? Now, like somebody who's doing it, who's in maybe a, hopefully in your market, something that they can attach to and learn from. I mean, that's what you're saying.

Absolutely. Love it. Absolutely. I mean, that period. Yeah. I mean, don't do stupid. Be stupid. Yeah.

Recognize you are stupid and say, I want to learn this. What do I have to do? Yeah. Yeah. And when the guy tells you, well, I don't take many students because they're a pain in the ass. I don't want to, I hate working with. novices because they have no idea what they're getting themselves into. You've just got to accept the fact that you're going to have to practice three hours a day.

You're going to have to come to Los Angeles. You have to take two buses. Your parents can't bring you. Are we having nightmares? Yes. Are we having nightmares about this? No, no. I'm just kidding.

The greatest experience I ever had. Yeah. It set me up in a way that very few kids are ever set up. Yeah. I mean, I was 12 years old. So my parents are looking at me when they're standing there and saying, no, we're not going to do this. We're not going to do this. And so when he said, so do you want to do that?

Because the only thing I teach, Merle says, people want to become the best saxophone players in the world. And this is how you do it. So it was not a small aim. It was a huge aim. So, for example, we do these dreaming rooms. and we do them online. And the dreaming room is a 12-week process in three intense three-hour sessions each week

with a dreaming room facilitator. The dreaming room is a system, and it's turnkey. And the facilitator isn't a coach or a trainer, but a facilitator, meaning they're guiding the participants in the dreaming room through the process to discover their dream, their vision, their purpose, and their mission.

And it's not easy, but it was not intended to be easy. It was intended to produce a great result. For everybody who commits to that. So we're doing a dreaming room in Riverside. It's our first city-sponsored dreaming room. We're creating the prototype so we can scale it to every Riverside-sized city in the United States. And making it on your own in America is essentially essential. you just don't go out and make it on your own.

You truly have to understand the rules of the game, and the rules of the game are truly critical. So a guy who's one of the participants in the streaming room Riverside that we're working on while we're working in it, working on it while we're working in it, he comes to me, he dropped out after the second session. He said, I listen to you and I understand it, but you got to understand, I don't want to create a big business.

I'm going to shut my business down. And I don't want to be surrounded by a lot of people and hire a lot of people and blah, blah, blah, blah. And I said, well, congratulations. You're now finally come to the point where you realize stupid, meaning what you did was stupid, how you did it was stupid. And suddenly you're hearing smart, but it's challenging you to stop being stupid. In short, you heard what I said, but you didn't apply it in the way that I took. told you to apply it. You came to the conclusion that growing a business is about a lot of people and a lot of

people are really trouble and I already know that because I already experienced that and so I don't want to do that again. And I'm saying, yeah, but no, stupid is as stupid does. The solution isn't to not have people. The solution is to do it right so that when you have people, people are smarter. than you are right now. Yeah. Because they've got an intelligent system that you brought to them because every small business is a school.

And if it isn't, it's over. Yeah. That's great. But when it is, something happened. So these folks you were talking to, and I'll shut up, you just say, Michael, I want to ask you another question. The folks were talking to, I'm saying to them, understand you. will do stupid. Yep. So start out smart.

Understanding you are stupid. And if you wish to be stupid for the rest of your life, then get somebody who is stupid to teach you how to do it. But if you truly want to be the best of the best of the best, get the best of the best of the best, to teach you how to do it. But understand then, you're allowing your... yourself to become vulnerable to the lessons you've got to learn. And when I learned out of frame houses, I had made the decision.

I wanted to stop making money with my mouth and start making money with my hands. I wanted to become a carpenter. I was 38 years old. I had knocked on doors in remodeling companies and said, hi, I'm from Los Angeles. I'm from San Francisco. I've just come down. I'd like to get a gig and, you know, start working, well, do you know anything about this?

Oh, yeah, yeah, I know all about this. And so I talked my way into a job. I lost the first job in four minutes. How'd you do that? Oh, very easy. I didn't know anything. So I walked and I started looking around. Now, the thing I learned when I started looking around is, first of all,

nobody who is good at this has new tools. So you understand, I went out and bought new things. Now I'm 38. You got to say, what are you, stupid? I'm going out to learn a lesson by seeing the job. So I can learn, the first thing I learned is used tools. I mean, it was just obvious. I'm walking in with craftsman tools from Sears Roebuck.

The minute the guy see me, you know, I've got a new belt on, I get it, yeah, they see me. Who is this, schmuck? It's instantaneous. Yeah. So the long and the short is, and so what I'm telling you is you learn by doing, but get yourself a teacher. And that's what I got. In my fourth job was that teacher. And that teacher took me this 38-year-old guy with a beer down to here, a hippie.

Looks like Brandon. Yeah, but no, I mean, I had a real beer. Ouch. And I looked like Rabbi McCull. Oh, nice. Berber McClough. And he's, okay, now, the first thing on the job, I was his assistant. So what I got to do, I got to lift lumber.

I got to take it up to the top of the wall that there's being going. Suddenly, I'm on a ladder lifting lumber onto a top of, I'm 38 years old. I've never done this shit before. You understand? So I'm learning it, learning, learning it, learning. He's teaching me how to hold it. teaching how to climb it. He's being patient with stupid.

Yeah. But he's saying, but until you learn how to do this, the way you need how to do this, and I'm going to tell you the way, but you're going to have to follow it exactly, and they're going to be laughing at you all day long here on the job. So if you're not committed, go away. That's great.

But if you are, I'll take the time to teach you. Yeah. So that's what I'm saying to your audience. That's great. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties.

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beat guarantee. That means faster closing. The best terms. Zero guesswork. That's Dominion financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. That's great. Yeah, you know, we get the question all the time. How do I get started? What do I do? and there's, you know, we always try to point people to, you got to find that guy. You got to find somebody local in your market. You know, you want to learn. You want to read up and kind of get the fundamentals. But, you know, like you said, yeah, at some point you got to do it.

You know, you got to get your hands dirty. You got to jump in. And the way to do that is not to do it stupid. It's to do it, you know, whether it's find somebody you can partner with and they can kind of walk you through your first X number deals, find somebody who can guide you and mentor you. just find somebody to show you the basics of this business. And, you know, those people, I think, that do that tend to find a lot more success, at least in what we hear from our users and listeners than others. So, yeah, I mean, I think it works. You talk in a couple, I've heard a couple, you know,

speeches from you on the internet, and you talk about kind of changing the world. And you even mentioned it earlier in our conversation here. Don't get into something unless you're going to change the world. So if I'm looking to be a doctor, you know, and hey, I want to be, you know, the best doctor I can be, but, you know, I may not be thinking, hey, how can I change the world? If I'm looking to get into real estate and I just want to be able to pick up an extra rental property a year and build a portfolio, I still want to work my job, but I don't want to change the world, you know, but I want to find a way to go about building this business in a sustainable manner. Are you saying that I can't do that? Are you calling me stupid for having that dream? Or, you know, do I have to subscribe to this way of, you know, unless it's something that kind of, quote, changes the world, it's not worth doing. I'm just trying to kind of clarify a little bit. What I am saying very simply is that anybody who I just want, I just want, I just want, I just want, I just want, it's a waste of my time. Gotcha. You understand, Merle would never take anybody like that.

Yep. You got to be committed. Yeah, my sales manager would never take on anybody like that. It's a waste of his time. He's a master. My framing teacher would never take in anybody like that. I was a dreamer. You understand, I was always a dreamer.

I was always a dreamer. Even at the beginning with the saxophone, I was always a dreamer. Even with the sales, I was always a dreamer. Even with the framing, I was always a dreamer. It wasn't to become a framer. I want to then become and then I want to become and then I want to become and then. So you understand, I'm finding the channel through which I can express myself. But my expression of myself was like E. E. Cummings expressed himself or like any great poet expressed himself or any great artist expressed himself.

I'm saying that inside everyone there is a Michelangelo waiting to come out. And the problem is we have learned our lessons so well that we limit our scope to the most easily doable. We don't risk ourselves because we learn from our parents that risk is exactly the opposite of reward. And I'm suggesting the dreaming room as the first stage, because until we begin to rumble a bit, about what it means to be human, a dream, a vision, a purpose, whatever your dream, your vision, your purpose, your mission might be. Until we rumble a bit about that, until we really engage with each other about that, nothing is going to happen other than just sell, maybe you'll get a little this, I get a little of that, like you were saying. And then it's to become, who cares? who's interested.

Go, you know, do anything you want, but don't bother me. Because I'm 78 and I don't have the time or the interest to spend with somebody like that. I want to drill in on that because this is something that, you know, I noticed a lot of times in my, okay, so people come to me a lot. You know, I'm the co-host of the podcast here. So people ask me, hey, will you mentor me? Will you teach me what you know, right? And I mean, at least five, ten times a week, right? You probably get it 500 times a week, you know, people like wanting to be wanting to learn from you.

So my question is, what sets somebody apart when you're looking at somebody who you actually want to take under your wing? And maybe you're different because, you know, you're running a company that does this for other people. But like the average master, your, your saxophone teacher or the carpenter, I guess, what do they look for in a person? Is it just that passion to want to change the world? I mean, how does somebody listen to our show who wants to learn from a master? How do they appeal to the master to have them teach them? Does that make sense? Yeah, well, of course it does.

And you understand that's the weak link in all of this. You know, I have the spirit, but I don't have the will. I have the spirit, but I don't have the will. Passion is insufficient. Persistence and dedication are absolutely critical because it's not. going to be easy to go through this process. Not at all because the size of the requirement is measured by the size of the dream. Now most people don't have a dream, they daydream.

And they think of the word dream in the relationship to a personal desire. I want to get a bigger house, I want to make more money. I want to get a prettier girlfriend. I want to get a barry. I'm going to get all the bullshit that everybody thinks about. Sure. So the minute I hear somebody saying stuff like that, they're driven by lust rather than love.

They're driven by greed rather than true desire. I'm not interested because they'll never demonstrate the patience it's going to take to learn these lessons. In short, the dream doesn't just pop up. Oh, got one, week one, done, did week one. You know, don't go through 12 weeks. I've had people come to me when I did my individual dreaming rooms. You understand, to start this, I did my first dreaming room myself.

It was a two-and-a-day intensive. And then I did another one. Then I did another one. Then I let another one. Then I led 59 dreaming rooms while I was working on the system. that would enable me to delegate that to facilitators who I can certify to do that. But until I truly did both in it, on it, in it, on it, in it on it, to develop it to scale. So now we have master licensees in Australia, New Zealand, Japan, Canada, the UK.

And now we have dreaming room central in the United States. and all the launch of all the dreaming rooms will happen out of dream room central here in Carlsbad, California, and soon to be in Orange County, California. And then to every city, Riverside, you understand what I'm saying, the dream, the vision, purpose, the mission, transform the state of the world. So I'm going to spend my time with a guy who wants to create a taco stand where he's making tacos because he loves to make tacos. I mean, spare me.

So just by asking the right questions, I'll know whether I got the right guy. Yeah. And yeah, I do mentor very few people personally, but very, very, very few. And nobody can afford me. So one, they can't afford me and two, they can't stand me. Come on. What's your right? We got this.

I call myself the chief aggravator because that's what I do. Yeah. I aggravate people. I aggravate them because they're unwilling to truly expand the way they see the world and the way they relate to it in themselves. So it's more than passion. It's dedication. I'm in this.

My mentee's got to say, come hell or high water. Yep. I'm not going to quit this sucker, no matter how difficult you make this for me. because I want to learn what you know. Because until I know what you know, which means I can do what you know because you've done it, until I have that,

I'll never quit this because that's so important to me. But Michael, that requires... That requires... But it's not important to me just personally. It's important to me impersonally. Because then I could teach that to my kids. Then I could teach that to women with three kids, but no father in a house.

Then I could teach that in the inner city. Then I could teach that in Africa. Then I could teach that. You understand. So called by something, not just to make a little money, but even like that, it just drives me crazy when people talk to me like that.

So, you know, and sorry for interrupting you. I'm trying to get in there. I'm trying to time it. I can't get it quite right here. But the average guy, gal, person in this country on this planet in 2015 wants stuff handed to them on a silver platter,

wants to be able to come up with an idea on a napkin and have $25 million in venture funding given to them for the next... The next guy is stupid. But the actual guy is stupid. Exactly. That's stupid stuff. Right. Stupid stuff.

So most venture capitalists will not invest in anybody listening to me right now. Oh, sure. You understand that haven't even gone through the trouble to relate to, in quotes, their dream. Right. I mean, this is a wrestling match. Well, it's hard work. So, Mike, my question is then it's hard work. Absolutely, without a doubt, you've got to work your backsides off to get anywhere

and to really build something sustainable and scalable, you've got to work at it. So let's really quickly turn to business plans, not really the document per se, but planning for the future of your business. How much planning is necessary? And what do I need to do? Again, let's take it back to the real estate investor or somebody in the business. I want to build a real estate business. I'm going to, you know, jump in and, you know, sit down and be focused.

what do I need to do to kind of plot my course and plot my path beyond the mentor? No, well, the first thing, forget mentoring. The first thing that, because mentoring is way down the line. Yeah. First thing they got to do is go into the dream room. You understand for a long, long, long, long, long time, we were coaching small business owners how to create, in quotes the franchise prototype, how to go to work on their business rather than in their business

to produce a franchise prototype so that that business is scalable. And the purpose of that was first so the prototype works. You understand? Because if the prototype doesn't work, like McDonald's, if the prototype didn't work,

then the franchise wouldn't either. And so in order for your business to work, you've got to turnkey it. You have to have a lead generation system, a lead conversion system, and a client fulfillment system. You've got to have a management, system and you have to have a financial management system. And you've got to have those five essential

ingredients in order for you to get anywhere. But before you create those five essential ingredients, you have to have a dream, you have to have a vision, you have to have a purpose, and you have to have a mission. It's got to be a reason for doing what you're doing. You understand? First, it's the what and the why of it. The what and the why of it. So what do you want to do? Why do you want to do that? And for whom do you want to do that? And why is that important? Because the only person important in all of this is your customer, not you. You understand?

It's not about you. It's about them. Absolutely. Yeah. And in fact, it's not about them. You don't care about them. Then forget it. Yeah.

It's funny. It's greed. Well, so I've been, you know, we're hiring. We're constantly hiring. and I was hiring for a graphic designer, somebody who can help us with our site and build out our collateral and things like that. One of the questions I like to ask for those people is,

who's the most important person in the process? And almost all the other hires, you know, interviewies got it, got it right. And this guy just said, well, it's not, it's me. And I'm like, dude, it's not you. It's the customer. they are the most important part. They are all that matters.

Everything else has to revolve around how to make sure your customers are the happiest, most successful at whatever it is that your services and most satisfied. And that's it. That's your mission. If you can do that, then you've built a business that kicks ass. And if you're going to hire somebody that's going to come in and say, yeah, I'm the most important person because I'm the guy with the brains, the design guy, whatever it is. It doesn't matter what the job is. I mean, they, you know, they're wrong and they're not the right person to bring on board. They're crazy.

You're right. So it's about them. It's about them. It's always about them. And in order for me to be really, really good at that, I have to really know about them, both demographically and psychologically. I have to know them. And the last thing in the world I want to do is to pander to them.

so you'll note when somebody's selling something which isn't authentic they're actually pandering to the worst side of their customer well merle never pandered to the worst side of me merle didn't really care about the worst side of me were merle was only interested in the part of me that wanted to become one of the best saxophone players in the world why because i was cold So Merle didn't teach anybody other than those who are called. And so it's always called beyond how I am to become who I'm not. And I want to know who they want to be my customer. What is it that moves them to go beyond where they are to become who they're not?

Describe for me who you're not. Describe for me who that is and who that you desire to be and then I'll be able to tell you whether I can help you or not. Because if what you want to be is insignificant, meaning just getting by, then I'm just not interested because it's such a tedious, tiresome conversation. You're not going to do the work you need to do even to get that if you're not interested in doing that. Sure. This is kind of a, I guess, maybe it sounds like random question, but do you still play saxophone?

I'm curious of how that plays into, you know, like things like you went through the course, you went, you went through the training from a guy, you know, who was an expert. Like, how did that play into your later on life? And why didn't you become a, you know, professional of that for the rest of your life? Why did you switch over to business? Well, I didn't switch over to business until much later. Okay. I guess that was 12 versus 40, yeah.

I switched up to being a salesperson. I switched over to become a framer. I switched over to becoming a spirit seeker. I switched over to become a poet. I switched over, switched over, switched over, switched over, switched over, because I'm with the wandering Jew. I'm looking for the, called the Holy Grail. I'm looking for meaning in my life.

Sure. That's what it was driving me all the time. I'm looking for meaning in my life. And so when I became really quite brilliant saxophone player, and I did, very young, I began to play with small groups. And as it began to play with small groups, I began to turn off. Because the whole world of it was different than I imagined it was going to be. It was a competition. And that competition was just ugly.

Sure. So there's a huge amount of ego in playing. And my ego wasn't strong enough or my spirit wasn't willing to. I don't know which two of that was, probably a bit of both. I just didn't enjoy the world within which I'd found myself. Sure. And so I look for another world. And the reality is I had to make a living.

Yeah. And so, you know, blah, blah, blah. And it goes on and on and on and on. So all I'm saying is the realization that you find yourself happens when you find yourself. And it happens over time. So it's rarely something that somebody like this young guy who's, you know, a whiz at, finds himself at 18 and boom becomes a smashing success. You understand that that is so rare a phenomenon for anybody to wish for that to happen is an idiot.

Now it does happen. Sure. Like Steve Jobs did create Apple. The Google boys did create Google. Yeah, right. There is a Microsoft created by that charming little boy. Bill Gates, who was extraordinarily different and unique and special. Yeah.

So all I'm saying is to want that is to want that as a gift when in fact it's an exercise. For the vast majority of us, it's an exercise. And most people are unwilling to exercise to do the work. And I was going to say, you know, before we kind of move to the very end of the show here, I was just going to say, and I think you were kind of going in that direction. What one piece of advice then would you give to people

who are looking to jump in and start something off? And I know this is... Your vision, your purpose, and your mission. That's why I sell this self... You know what I mean. It's like a product. I got a product to sell and I'm selling it. And if, in fact, it's true that most likely all...

small businesses fail and they do. Most relationships fail and they do. Most marriages fail and they do. Most jobs fail to satisfy anyone and they do. But obviously there's something wrong with the way that we're doing it. Yeah. So that's why I created the dreaming room to wake people up to the possibility that they can't possibly see right now until they go through the problem. process. And that's our commitment. So that's the first step. The second step we call design, build, launch, and grow. Design a practice, build it, launch it, and grow it. Replicate that practice to design a business, which is nothing more than an aggregate of up to seven turnkey practices, plus a management system, and then replicate the business to create an enterprise, which is which is nothing more than up to seven turnkey businesses plus a leadership system.

So there's a hierarchy of growth. And we have mastered the process for doing that. And that's what we're offering to anybody we speak to. That's cool. So let me just ask about the dreaming room real quick. I just, I'm curious, like, I mean, just big picture idea about the dream. I mean, are what you saying is you go to this, is it like a, you said it's an actual physical place, right? This isn't like a.

it's online okay so it's an online yeah we do it on zoom okay zoom i don't know it's like video how does that work it on zoom it's like um go to meeting we do it on zoom and um we have four different versions of it okay the dreaming room is can be one to one one facilitator one participant the dream room can be one to ten that's a small group dreaming room The dreaming room can be one to up to a hundred. That's a large room dreaming room. Or the dreaming room can be self-directed, and that's strictly online without live facilitator. And so there's a way for everybody to do it.

So our intent was to be inclusive as opposed to exclusive. There are very few people who can afford to hire me. and there are very few people I will ever work with. But there's a guy making $2 a day in Rwanda. I want to be able to reach him and teach him and take him through the process. And so we've organized it so that it's inclusive rather than exclusive.

There you go. Cool. Cool. Very cool. All right, let's move on to the end of the show, which we call our famous for. These are questions we ask every single guest when we come in, and so we're going to throw them at you real

quick. I altered the first one a little bit because usually we ask what their favorite real estate book is, but I'm going to alter this a little bit to say, what is the favorite book? Do you have a favorite book that you've written personally? Like, of all the books 18 you've written now, is there one that if people only read one book of yours, it should be what? The E-Mith

Revisited. Okay. Why most small businesses don't work and what to do about. There you go. That's the primer. That's the book. That's the premise. What about your favorite business book, one that you haven't written, just a business book that you've read? Well, the business book that I've read? Well, just something that you're not the author of that has impacted your life.

Best business book I've ever read. Yep. I've read 40 years ago. And that book was called Marketing for Business Growth by Theodore Levitt. Okay. I've never read a more important business book than that book. I have to read that now. I guess we got to read it.

Yeah, there's nothing else we can say about it. It's not been reprinted, but you can find it online. Well, let me ask you this. Listen, if you had to choose between somebody reading that book or the E-Mith Revisited. Oh, boy. Read that book first. Wow. It is a good book, then it must be.

I will read it now. It is a great book. It's the most intelligent business book I've ever read. That's great. Ever. Well, thank you. You know, that has bought business at Harvard. Cool.

That's not the reason to read it because that would typically be the reason not to read it. But it is the most brilliant business book I've ever read. And I don't read business books anymore because most of them are stupid. Sure. There you go. I gave up. That was it. That's what we like to say about Brandon's book.

So if they want to reach me, they want to reach me at Michael, M-I-C-H-A-E-Gurber. com. Michael at Michael Egerber.com or go to Michael Egerber Companies.com, our website. And you'll find out more and more and more and more. Hey, we got two more quick ones for you, Michael. What are your hobbies? What are you do when you're not, uh, just this thing? I don't have any hobbies.

Not just work. I read, um, maybe 12 books a month. Wow. So I relax, reading, reading. And those books are either poetry or fiction. Okay. I don't read nonfiction books because they're fiction. I'd rather read fiction that says it's fiction than nonfiction that doesn't. That's funny. Nice. Nice. Cool. All right, my final question of the whole day, and then we'll get you out of here. If you could pick one trait that sets apart successful people from those who are not successful

over all of the last, you know, since the, I don't know, the last hundred years, you know, what is that trait that sets apart successful people from those who give up fail? Absolutely determined. Okay. And determined to do one thing. So when I meet people who say, well, I want to do this, I want to do this, I want to do this, I already know it's over. so they're leading a life of distraction. It's the shiny penny syndrome.

Sure. Something always looks better. Something always looks better. I've been doing the same damn thing for 40 years. Yep. Once I've found it, once I've found it, I put everything of myself into it. No matter how many mistakes I've made. And you've got to understand I've made every mistake ever made by any human being on the face of this earth.

but even worse. So when I say stupid, you've got to understand you're talking to stupid. Me. And my whole life has been about smart. Not smart, clever. Not smart, tricky. Smart, smart. About one thing.

And this one thing is making it on your own in America, which will then become making it on your own in Japan and Canada. in Australia and on and on and on and on, because it's the most critical ingredient that anybody can possibly learn. And nobody teaches us how to do that, but nobody. Yeah, cool. Right on.

Michael, how do we do? Was this just like all the other crappy podcasts out there? No, you did fine. You did fine. One because you allowed me to just ramble on, but two, because you asked me smart questions. Well, good. So I appreciate it, and you're here.

so oftentimes when I'm being interviewed I know they're thinking about something else while they're interviewing me so I've got to beat them up a little bit when I do that probably what you've heard well that's great okay hey well listen thank you thank you so much we really really do appreciate it

lots of good insight and we really do thank you for your time and again and the books really really fantastic and so much appreciated and you know lots of good luck continuing to spread the mission. Well, thank you. The dream, the vision, the purpose, and the mission.

I have a dream transformed small business worldwide. I have a vision to invent the McDonald's of small business consulting. I have a purpose that everyone I teach will succeed in business. And I have a mission to invent the system so that even a novice can do it. the dream, the vision, the purpose, the mission, and they're with me deeply in everybody I speak to every single day. Fantastic. Michael.

Love it. Thank you so much. Thanks, Matt. Thank you. All right, guys, that was Michael Gerber, author of the E-Mith with some sage wisdom, lots of cool information. And if you have not yet read the book, we definitely recommend you check it out. We didn't even hardly talk, although we didn't talk a lot at all about, because this is a 30-year-old book.

right. So, like, we talked about a lot of the newer stuff, but like, honestly, if you've not yet read the E-Mith revisited, I'd pick up that one. They have the E-Mith and then E-Mith Revisited. Pick up a copy of the E-Mith Revisited. You can get it for like 99 cents used on Amazon or buy it new, whatever. Seriously, it'll change your life. It changed mine. So it's great. It's great. Awesome. And we've got a link to that on the show. Now it's at biggerpockets.com slash show 125. There you go. With that, big thanks to Michael once again. And otherwise, guys, thanks for being a part of our world. Thanks for listening. Be sure to join us on biggerpockets.com. So you can interact with other successful business owners, other folks in real estate. You can find

mentors and folks in your area, local, successful people, not just the get rich quick gurus, but the actual people whose feet are on the ground making things happen. Those are the people that you want to link up with. Those are the people that you want to apprentice you, if that's a word or verb or whatever it is. You know, those are the masters that you. You know, those are the masters that you want to connect with and work with. And so jump on BiggerPockets.com and you can meet them. You can connect with them and you can make that happen. So with that, I am Josh Dorkin. Signing off. You're listening to Bigger Pockets Radio. Simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype,

you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer.

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