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The Book that Made Me a Millionaire

2024-10-15 · Long video (solo, talking head or whiteboard) · Ali · recording, 21:50 · watch on YouTube

Topic: Business and entrepreneurship · mode: Explanation and tutorial · tags: Lesson from a book, His own numbers, His medical past, Sponsor segment present

In a Book Club episode on Michael Gerber's The E-Myth Revisited, which he says took his business from about $100,000 a year to millions, Ali sets out three lessons: the triple threat of entrepreneur, manager and technician, the infancy trap of working in rather than on your business, and the systems strategy of building a business whose results depend on systems, not people.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Introduction: the book that took Ali's business from six figures to millions

  • ★★★ Ali first read The E-Myth Revisited in 2019, after finishing medical school, and says it took him from making around $100,000 a year in his business to multiple millions a year. — 00:00:00 · The E-Myth
  • ★★ Ali started his first successful business in 2013, six years before he read The E-Myth Revisited, and says he made every mistake the book describes in those six years. — 00:00:00 · 6med, The E-Myth
  • ★ According to the statistics, Ali says, apparently 80% of businesses fail within their first five years. (hedged) — 00:00:21
  • ★★ Ali thinks that reading and applying the insights of The E-Myth Revisited gives a new business better odds than the usual failure rate. — 00:00:21 · The E-Myth
  • ★ This Book Club episode, in the series where Ali has distilled highlights from favourite books for four years, gives three lessons from The E-Myth Revisited. — 00:00:21 · Book Club, The E-Myth · first in: 2024-04-16, How to Do More in 12 Weeks than Others Do in 12 Months
  • ★★★ Ali massively recommends reading The E-Myth Revisited, or at least applying the lessons of this video, to anyone starting a business, however big or small. — 00:00:50 · The E-Myth

00:01:03 — The story of Sarah's pie shop and Ali's first business

  • ★★ Michael Gerber (quoted): In The E-Myth Revisited, Sarah opens a pie shop because her best friends told her she was crazy not to, since she was so good at baking pies, and she believed them. — 00:01:49 · The E-Myth
  • ★★ Michael Gerber (quoted): In The E-Myth Revisited, Sarah tells Gerber she has been in her pie shop since 3 a.m. and will be baking, serving customers, cleaning, shopping and banking until 9:30 or 10 at night. — 00:02:25 · The E-Myth
  • ★★ When something you enjoy, such as teaching, baking pies, making YouTube videos or writing software, becomes a business, Ali says you end up on a hamster wheel doing everything other than what you set out to do. — 00:03:09
  • ★★★ In his first business, which made courses helping people get into medical school, Ali spent maybe 5% of his time teaching, the part he enjoyed, and 95% on marketing, logistics, printing books, making materials and DHL deliveries. (hedged) — 00:03:37 · 6med

00:04:37 — The triple threat: entrepreneur, manager and technician

  • ★★★ Michael Gerber (quoted): The E-Myth, the entrepreneurial myth, is the belief that people who start businesses are entrepreneurs; Gerber says most are technicians who enjoy the technical work and start a business to monetise it. — 00:05:01 · The E-Myth
  • ★ Ali calls The E-Myth a terrible title for the book. — 00:05:01 · The E-Myth
  • ★★★ Ali repeats for emphasis Gerber's fatal assumption: understanding the technical work of a business does not mean understanding a business that does that technical work. — 00:05:42
  • ★★★ Ali calls Gerber's argument that everyone who goes into business needs to be three people in one, the technician, the entrepreneur and the manager, the game-changing insight for him. — 00:05:42
  • ★★ Michael Gerber (quoted): In Gerber's triple threat, the entrepreneur is the visionary who lives in the future, like Steve Jobs; the manager is pragmatic and organised and lives in the past; the technician is the doer who lives in the present. — 00:06:11
  • ★ Ali films this video during a heat wave in London, with the windows open and construction drilling outside. — 00:06:11 · London
  • ★★ Michael Gerber (quoted): Gerber says the typical small business owner is only 10% entrepreneur, 20% manager and 70% technician. — 00:07:24
  • ★★★ Ali's practical takeaway: you cannot build a successful business as just a technician; you need to be the triple threat of entrepreneur, manager and technician at once. — 00:07:24

00:08:13 — Sponsor read for Make

00:10:17 — The infancy trap: work on your business, not in it

  • ★★ Michael Gerber (quoted): When Sarah asks what if she only wants to do the technical work, Gerber tells her to get rid of her business as quickly as she can, because she cannot have it both ways. — 00:10:25
  • ★★ Ali often sees people start a business as their ticket to financial freedom or to doing what they want, then find that running a business is about much more than doing what they enjoy. — 00:11:39 · work optional
  • ★★ Ali says you can find a way to enjoy the parts of running a business beyond the work you love, but there are a lot of them, so be ready for that when you start. — 00:12:06
  • ★★ Michael Gerber (quoted): Gerber describes three stages of building a business: infancy, adolescence and maturity. — 00:12:06
  • ★★ The infancy stage of a business ends when the owner realises there is no way to do all the work alone; then, Ali says, it is time to outsource the technician role and bring in the entrepreneur and the manager. — 00:12:36

  • ★★★ A takeaway Ali thinks about weekly: if you want your business to grow as its owner, you cannot be working in your business; you need to work on it. — 00:13:05

    “you cannot be working in your business. You need to work on your business.”

  • ★★ Michael Gerber (quoted): Gerber says that if you want to work in a business, get a job in somebody else's business, but don't go to work in your own. — 00:13:05

00:14:43 — Affiliate plug for Shortform

00:15:08 — The systems strategy: McDonald's, medical guidelines and SOPs for YouTube videos

  • ★★ Michael Gerber (quoted): In Gerber's story of McDonald's, Ray Kroc partnered with the two kids running a hamburger stand and franchised their system of making hamburgers, the birth of McDonald's. — 00:15:30 · McDonald's
  • ★★★ Michael Gerber (quoted): Gerber advises thinking of your business as though it were the prototype for 5,000 more just like it. — 00:15:30
  • ★★★ Ali's team approaches every venture as if creating the next McDonald's: the goal is a clear system that delivers results for the customer without relying on people. — 00:16:00 · McDonald's

  • ★★★ Michael Gerber (quoted): The question Gerber says to keep asking: how can I give customers the results they want systematically rather than personally, with a business whose results are systems dependent rather than people dependent? — 00:16:29

    “how can I create a business whose results are systems dependent rather than people dependent?”

  • ★★ Ali says there is not much difference in patient outcomes between a doctor who came bottom of medical school and one who came top, outside very niche territory: the system delivers the results. — 00:17:23

  • ★★ In his two years working in medicine, Ali says, he was mostly following guidelines, such as those for antibiotics, early pregnancy bleeding and elderly care. — 00:17:23
  • ★★ Ali says you do not want a healthcare system that relies on the talents of individual doctors, since doctors fall sick, swap in and out or quit to become YouTubers. — 00:17:23
  • ★★ Systemising is harder in creative industries, Ali says, but he points to Creativity Inc., the book about Pixar's system for creativity. — 00:18:09
  • ★★★ Ali's business writes standard operating procedures, or playbooks, in Notion, so that anyone smart could join and learn how the team makes one of his YouTube videos. — 00:18:57 · Notion
  • ★★ The editing of Ali's videos looks consistent although he has multiple editors, because they follow a generalised standard operating procedure. — 00:18:57
  • ★ Ali's team teaches this video-making system to students in the Part-Time YouTuber Academy. — 00:19:24 · Part-Time YouTuber Academy
  • ★★★ After reading The E-Myth Revisited, Ali realised that if Pixar can systemise making a film, he could systemise making a YouTube video; he says this helped his channel scale. — 00:19:24 · The E-Myth
  • ★★ Ali does not follow a word-for-word script for his videos; he riffs a lot, but within the constraints of a system. — 00:19:24
  • ★★ Ali's business has about 22 team members, and much of its work is building playbooks and systems around what it does. — 00:19:54
  • ★★ Ali recommends Get Scalable by Ryan Deiss, who has recently become his friend and mentor, as a companion to The E-Myth Revisited, a kind of 2.0. — 00:19:54 · The E-Myth

  • ★★★ Ali's key takeaway: the product a business owner creates is not what customers buy but the business itself; think of yourself as creating the business that makes the pies. — 00:20:23

    “The product you're creating as a business owner is the business itself.”

00:20:52 — Ali asks viewers for their biggest business struggle and plans more business videos

  • ★★ Ali thinks of himself as an entrepreneur building a business that creates YouTube videos, books and courses. — 00:20:52
  • ★★ Ali asks viewers who have or want a business to comment with their single biggest struggle in starting or growing it, so his team can make more business videos. — 00:21:18
  • ★★ Over about seven years of building his YouTube channel and business, Ali says, he and his team have reached several million a year in revenue and profit. — 00:21:18
  • ★★ Ali says he really wants to make more videos about business and will share them in his Business Class newsletter too. — 00:21:18

Threads in this video

Where the stories that moved here went next

Mentioned

Central: infancy trap · Michael Gerber · Sarah (character, “The E-Myth”) · standard operating procedure · The E-Myth · triple threat · working on the business

Also: People: Ray Kroc · Ryan Deiss · Steve Jobs (entrepreneur)

Projects: Book Club · Business Class · Part-Time YouTuber Academy

Works: Creativity Inc. · Get Scalable

Organizations: 6med · McDonald's · Pixar

Concepts: work optional

Places: London

Products: Notion

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