Published in 1986, Michael E. Gerber’s bestselling book The E-Myth remains remarkably relevant today. It is a book we recommend to every entrepreneur, especially for one simple but powerful idea: most businesses are created by technicians who master their craft and eventually decide to build a company around it.
Gerber argues that every business leader must learn to balance three complementary roles. The technician lives in the present, producing, delivering, and solving day-to-day problems. The manager looks to the past, analyzing results, controlling costs, tracking performance, and creating structure. The entrepreneur looks to the future, watching for major shifts, identifying vulnerabilities and opportunities, and imagining what the company needs to become.
After 36 years of working with thousands of business leaders, this framework closely reflects our experience. We estimate that roughly 80% of companies are founded by technicians, 15% by managers, and only about 5% by true entrepreneurs in Gerber’s sense of the word. That distribution has a profound impact on how small and mid-sized businesses are managed.
When a technician starts a company and begins hiring, one of the first structured roles is often a manager responsible for accounting and administration. That person helps track the numbers, manage regulatory obligations, and bring order to the business. That is exactly what I did more than 30 years ago.
Gerber suggests that business leaders should devote roughly one-third of their time to each of these three roles. In practice, technician-founders often spend most of their time running day-to-day operations, while managers organize and measure what has already happened. Preparing for the future receives only a fraction of the time and attention.
That imbalance is becoming increasingly risky. Artificial intelligence is advancing rapidly, geopolitical tensions are reshaping supply chains, economic growth is slowing across several advanced economies, and business models that once seemed solid can become vulnerable much faster than before. A company can be highly successful today and quickly lose relevance when its environment changes faster than it does.
The challenge is just as real for founders who are natural entrepreneurs. Managers use the rearview mirror to understand what happened, while entrepreneurs look toward the horizon to imagine what might happen next. Those two ways of thinking require very different capabilities and become increasingly difficult to embody at the same time as a company grows.
This is one reason many companies eventually hand leadership over to professional managers. That transition can bring discipline, structure, and efficiency, while also shifting attention toward optimizing the existing business model. Economic history is full of well-managed companies that became exceptionally good at improving their current model while the market moved on to something else.
In most small and mid-sized businesses, many people are paid to manage the present and several are paid to measure the past. A robust company also assigns time, skills, and resources to a third responsibility: deliberately preparing for the future.
