Momentum Podcast: 418
Money Is Not The Only Metric
by Alex Charfen
As entrepreneurs, we want to earn money. We don't want to earn a living. We want to earn wealth. We want to be able to do what we want to do. Money creates freedom for us. Money is actually also an incredible way to keep score. It shows us that we're actually making a contribution because the more capital that flows to you, your business, what you're putting out there, the greater a contribution you're making. We can just assume that. Unless you're doing something illegal, and that's a totally different story. However, there are times in our lives where money is not the only metric that matters.
Entrepreneurs want to earn money. We don't just want to make a living, we want to achieve wealth and freedom. When we're tracking our success, money is most often the scoreboard we're working with. But, there are times when money is not the only metric that matters. When you take on a big project and there's not a big cheque at the end of it, it feels like a total failure, but, are there other gains that you can take away and count as a success? What about experience, understanding, leadership skills, and perspective?
Look at where the positives are and place your focus there. So often we beat ourselves up because money is the only metric we feel really matters. If you're going through a tough time right now and financially things aren't where you want them to be, rather than deny what's going on, sit down and ask yourself what are you currently gaining?
Full Audio Transcript
Alex Charfen: As entrepreneurs, we want to earn money. We don't want to earn a living. We want to earn wealth. We want to be able to do what we want to do. Money creates freedom for us. Money is actually also an incredible way to keep score. It shows us that we're actually making a contribution because the more capital that flows to you, your business, what you're putting out there, the greater a contribution you're making. We can just assume that. Unless you're doing something illegal, and that's a totally different story. However, there are times in our lives where money is not the only metric that matters.
I'm Alex Charfen and this is the Momentum Podcast, made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure we pay attention to their rules but only so that we can bend them, break them, then rewrite them around our own will.
We don't accept our destiny, we define it. We don't understand defeat because you only lose if you stop, and we don't know how while the rest of the world strives for average and clings desperately to the status quo. We are the minority, the few who are willing to hallucinate there could be a better future. And instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent positive human evolution. And we always will be.
Let me make something clear, I want you to be wealthy. I don't want you to be normal wealthy. I want you to be wealthier than you ever imagine you could be. I want you to have net worth. I want you to have a house that's paid for. I want you to have the cars that you want. I want you to be able to do what you want to do and to enjoy life to the fullest, to be able to just make decisions about what you want next and make them happen. Because here's what I know if you can do all those things, if you actually have capital coming in, if you have people that are paying for the value you create in the world, if you are becoming independently wealthy, then you are making a massive contribution.
And that's what we're all here for. That's the bottom line with entrepreneurs. We are contribution-driven, contribution-minded, and we want to change the world to make it a better place. However, there are times in your life where money is not the only metric that matters, and so often as entrepreneurs we completely forget that. I know I have, and I want to share with you why this is such an important concept to understand.
I want to do that through a story. I want to relate a story of a friend of mine who actually lives in my neighborhood. I haven't talked to him about this podcast so I'm not going to use his name, but I'll just kind of paint this scenario for you and tell you where he was and where he's come to and why money is not the only metric that matters.
So a few years ago, he came over to my house. And he's an entrepreneur just like I am. He has run a few businesses. He actually had a successful exit from one of them, generated some wealth. He had another business that did pretty well, struggled with it, ended up kind of having it still continue but not doing really well and was looking for what he was going to do next.
And he was considering a startup. He was considering doing something else and then he came over and let me know he had figured out what he was going to do. And here was the next step for this friend of mine, he was going to become the CEO of a company, a software company that had been funded by investors and was in a really tough industry and having a hard time with any type of sales or growth.
And as he started to explain this scenario to me, I got more and more concerned for the decision he had made. He was not only just taking over as a CEO of a software company, the company was completely underfunded like it was literally approaching the point where it wasn't going to have money to pay the bills. He was going to be not the first, not the second, not the third but the fourth CEO that had been hired. I used to make a joke about the third CEO in a company like three strikes you're out, dead man walking. I don't even know the joke to make about the fourth CEO.
And the more he explained this scenario, tough industry, the software wasn't really working like it was supposed to. There was a lot of support issues. Customers that they had sold were frustrated with them. It didn't really sound like there as a lot of positives. And I sat there thinking what he needs right now is to increase his confidence, to get his swagger back, to be excited about what he's doing. And it sounds like he's taking on the impossible.
But to my friend's credit, he actually pulled it off. I mean I'm blown away by the level of talent and the level of insight and the level of vision he has because he took over the company that I just described to you, a failing software company in a tough industry with features that weren't working and a team that wasn't really aligned. And he was the fourth CEO and he actually turned it into a business where they started selling. He actually turned it into a business where they started selling quite a bit and having an influence in the industry they were in.
The business started doing better. The team started growing. He spent the last few years actually turning it around to the point where there's a saleable asset there. When he took over the company, it was on its way to bankruptcy like you could count it on calendar days when it was going to go out of business. And today, there's a saleable asset there.
Now all that being said, there are some challenges with the equity table and there are some challenges with the cap table and how things have been done in the past. And so it doesn't look like there's going to be a huge payoff for him in this deal. In fact, we've been talking about it where he doesn't really think that there's going to be an exit for him. It might be minimal. It might be something and there was some frustration last time we talked. And I had to stop him and say, "Hey, man. I need you to understand something. I've been working with entrepreneurs for a long time. And this is one of those situations where we shouldn't be looking at money as the only success metric."
And he looked at me and said like, "What do you mean?" Because isn't that how we always look at things? Isn't money the major number one absolute way to keep score and to know if you're being successful? Well it is, but then we have to back down sometimes and say, "What else has come out of this? What else has happened here?" Well, and I explained to my friend, "Here's what I've watched. Over the last few years, you've become an incredible CEO of a turnaround that really didn't stand a chance."
And I told him this. I said, "You know. you haven't pulled a rabbit out of your hat, you have consecutively jumped into this position and on a weekly and monthly basis pulled a never-ending stream of rabbits out of your hat. You've taken this company from approaching bankruptcy to actually making money. You've taken it from an asset nobody even wanted to talk about what where you were the fourth CEO to now an asset that might be sellable. You've taken a team that was totally disoriented and not working together and not really contributing together. You've pulled them together and you've actually created a cohesive team that's making things happen."
"And you and this," I told him this, like, "you have changed as a human being. You're a different person that I knew when you took over this business. You've got your swagger back. Your confidence is back. You're looking at the world differently. You have learned a ton about people and management and turnarounds and talking to investors and so much more insight in your career than you had before you started this. And now you know you can take a tragedy of a turnaround and actually turn it around."
And I told him like, "Hey, when you did this, I thought there was 1 in 10 chance you had any level of success and that this was going to be a major psychological cleanup issue afterwards because it was that hard what you undertook. And the fact that you've pulled it off means that you're in this tiny minority of people, of CEOs, of leaders, of transformational leaders that can go into near impossible situations and somehow rally a team for the cause. That is all of the benefit you've gotten out of this position."
So if there's not a check at the end, I think we need to stop and say, "Hey, was there still value?" Because let's look at all the other metrics, experience, and understanding, and leadership skills, and perspective, and how much you've really gotten out of this. And that's where we should focus right now because the time has passed. We can't go back and fix it. Let's look at where the benefits are and where we should place focus.
And so often this happens to entrepreneurs where we beat ourselves up because money is the only metric we feel really matters to us. I've been there. There's been times in my career, and in fact some recently, where I didn't even want to talk about how my business was doing because on a monthly basis sometimes we're making money and sometimes Cadey and I were writing a check just the same business. And during those periods of times, at time I felt vulnerable, I felt frustrated, I felt like I wasn't successful, I felt like I wasn't good enough like I wanted to hide. I'm not used to wanting to hide as an entrepreneur but at those points, I wanted to hide. I didn't want to be on social media. I didn't want anybody to ask me questions. I felt like an imposter like crazy.
But here's what I know today. Were there some tough financial times? Absolutely. Did I make some bad financial decisions? Go back and listen to my podcast called No Career is Perfect. I'm the king of bad decisions but I'm also the king of recovering from them, or at least maybe not the king. I do pretty well at recovering from them. And so that period of time, I can just write it off as a wash or I can look at it realistically. I learned a ton. I learned a ton about myself, thankfully, because I have an incredible wife. Cadey and I, our relationship actually got stronger through that struggle.
I believe I became a better leader, and I believe that time where I wasn't making as much as I wanted to, where financially I wasn't really proud of what was happening, I was more like trying to hide it, well that time has given me incredible perspective as a coach. And it's given me so much more insights into how we are wired as entrepreneurs and how we feel about our day-to-day. So when I look at that period of time, was I making the money I wanted to? No. But did I learn? Were there other metrics that moved? Was there a benefit to that period of time? Did I gain life experience? Is it going to help me moving forward in my life? Absolutely.
So rather than deny that period of time, which I've been doing for a long time, I felt in denial of it. I didn't want to talk about it. I didn't want to put it out there. Rather than deny it, I'm at the point now where I'm like I want to explore it. I want to take it deeper. I want to really think about that period of time and make sure that not only I learn the lessons but they stick around indefinitely. I also want to make sure that I understand why things happen like they did because the same challenges that took me there and the same issues that I had where we got into that situation, I'm going to use those as a learning experience so that I don't end up there again. And so that moving forward, we do make the money we want, and we do make the contribution we want.
And so when you go through a tough period of time, when you're in that place where you're not making enough money, when you're in the place where you're maybe not making any money where you're going backwards, I want you to think to yourself, "What am I learning? What am I actually gaining from this? What is moving forward in my life? Where can I show momentum even though the one metric that's moving backwards is money? Where am I actually moving forward?" Because we don't have to only realize this in retrospect, we can realize it in the moment. If you're in a tough time right now, if financially thing aren't where you want them to be, rather than deny what's going on and deny what's happening, I want you to sit down and ask yourself. What are you gaining? What are you learning? How are you moving forward?
Cadey and I have actually been in a point in our lives where we were totally bankrupt. It was 2007, and the real estate crisis hit and most of our revenue was from real estate. And we got to the point where we went from making well over seven figures a month to wondering how we are going to afford groceries and food. And I remember even in that period of time feeling like, not feeling like a failure, feeling like so much worse than a failure, feeling like I've failed myself, feeling like a fraud, feeling like I should just go back and deny everything I've ever done. I had trouble even seeing what my strengths were. I had trouble feeling like what should I be able to do.
But again, so thankful that I have Cadey. She started right when we went bankrupt, started having us say what we were grateful for and focusing on the positive and where we were learning and where we were growing. And that discussion, every night before we went to bed, as we were in the throes of bankruptcy, as we were seeing the trustee, as we were doing the one-year history on all of our finances which is essentially an autopsy where you see every mistake you've ever made so we could turn it into the bankruptcy court, Cadey was making us declare where we were grateful and make sure that we still lived in gratitude and talk about what we were learning and what was moving us forward and how this experience was making us better.
And it was a point where if we look at money as a metric that influence our confidence or our success or our ability to lead, we would have had nothing. We would have been going backwards. But instead, Cadey forced us look at what are we learning, what are we grateful for, what are we still moving forward. And because we knew money was a metric that was important, but we made other metrics important. We made other situations in our life just as important. We were able to make it through, and if you're going through a rough time, you can too. Money is crucial. Money is how we go out and make the investments to change the world. Money is confirmation of the contribution you're making, but there are times in your life where money is absolutely not the most important metric.
If you're in a point in your life where you want to move everything forward at once, and if you're at a point in your life where you want to make radical changes to the keystone habits that are moving you forward as an entrepreneur so that you can do more, be more, stop letting the people around you down, and accomplish more and make a greater contribution, go to MomentumMasterclass.com. We have a masterclass on how you create momentum in your personal life, how you create momentum in your relationships and how you create momentum in your business right now, more than you ever thought possible.
We've had people take Momentum Masterclass and double the size of their business, have way more time for the people and their family, make discoveries about who they are and what they want so that they can actually create the momentum in the world they want, and they're satisfied with and excited about. Go to MomentumMasterclass.com. There's a short video there. You can watch an explanation of the entire course and then I would love to have you join. Go to MomentumMasterclass.com. Let's start creating more momentum than you ever thought possible right now, MomentumMasterclass.com.