Momentum Podcast: 608
What You Haven't Lost
by Alex Charfen
As entrepreneurs, we love to keep score. We want to know when we're ahead and when we're winning. We're evolutionary hunters and we want to know when we're gaining on our prey. Understanding where we stand is so important to us. One of the most important metrics we use to track when we're ahead is money. The problem in a crisis like this is that sometimes it's the only metric we look at. In this episode of The Momentum Podcast, Alex is going to take you through where you should look right now to know what you have not lost. I hope you enjoy..
As entrepreneurs, we like to keep score. We like to know who's ahead, and we like the win. We are evolutionary hunters and we want to know if we are gaining on our prey. Understanding where we stand is important to us. One of the most important metrics we use is money.
The problem is that in a crisis like this, sometimes it's the only metric we look at. We look at what we're losing in terms of revenue. Property owners like me think about the equity that may be slipping away. We think constantly about all the plans we had for the money we are going to make with the business that we were running just before this crisis hit.
As entrepreneurs, we do what most people feel is impossible in order to make money. When we lose it, it's hard for us to think about anything else. I've coached entrepreneurs for years, and if you've lost money in this crisis, I have a perspective to share with you.
Full Audio Transcript
Alex Charfen: This is The Momentum Podcast.
Speaker 2: As entrepreneurs, we love to keep score. We want to know when we're ahead and when we're winning. We're evolutionary hunters and we want to know when we're gaining on our prey. Understanding where we stand is so important to us. One of the most important metrics we use to track when we're ahead is money. The problem in a crisis like this is that sometimes it's the only metric we look at. In this episode of The Momentum Podcast, Alex is going to take you through where you should look right now to know what you have not lost. I hope you enjoy.
Alex Charfen: 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.
What's up everyone? I wanted to check in and talk about what's going on in the world and what's going on specifically for entrepreneurs. And right now in the United States millions of small business owners are having trouble. They're not doing business. A lot of them are closed down. They're shut down. And as entrepreneurs we like to keep score, and one of the good scores that you learn to keep as an entrepreneur is the score of money. How much money you're making, how much money you have. And it is so important to us. We focus on it. Our whole career is on making money, on gaining wealth, on that one scoreboard. And when you lose money it can be so difficult [inaudible 00:02:26] all you think about. I know.
Cadey and I in 2007 were taken apart by a bankruptcy. It was one of the most challenging things I've ever been through in my life. It was completely overwhelming, and it was so difficult to very publicly and very clearly declare that we were financial failures. It was horrible. And for so long in that period I focused on what we had lost. And when I say for so long, we declared bankruptcy, and for a couple of weeks, Cadey and I barely talked. We live in two story house, and she was upstairs in her office, I was downstairs, and we would barely talk during the day because we were both trying to figure out how to cope with, how to process the fact that we were going bankrupt. And I remember calling a friend of mine, named Alan Waxman, and Alan called, and I haven't told anybody what had happened.
We lived in South Florida. We had a huge real estate portfolio, in 2005 and 2006 we had hurricanes Wilma, Katrina, our portfolio had gotten hammered. I process dozens of insurance claims. And then in 2007 the foreclosure crisis hit and we were at ground zero. Dade, Broward and Palm Beach counties. We had all our properties in those three. It was literally the worst declining equity values in any zip code in the United States.And I remember talking to Alan and saying, "Hey, here's what happened." It was my friend Alan Waxman, and I remember how I said it, I said, "Alan, we looked at our situation. We know our numbers. We know we're not going to be able to pay the bills. We didn't have any choices. So we went and we're declaring bankruptcy." And Alan said, "Alex, I think there's a different way to look at this." And I remember I kind of cried on his shoulder and told him all the things that were going wrong, and I said that. And he was like, immediately, "I think you need to look at it a different way." And I thought what?
And then he said, "You had choices. You could have pretend like you're doing nothing. You could have gone back to California, lived with your family, you could have run up your credit cards even more. You could have taken out more credit lines. You could have made more decisions to prolonged this. You could've just walked away like so many people are doing right now. You've made a decision, you're going bankrupt. Now own it. What are you going to do to move forward and how fast are you going to get past this?" And I remember thinking holy cow, I can't believe that aggressive he was. And then just seconds later, I thought to myself that's exactly what I needed to hear. I really need to hear this. I have a family. I had a young baby. Reagan, who's now 13, was just a baby at the beginning of the foreclosure crisis when we were losing everything. And that conversation with Alan spurred me forward to do stuff.
And he said something to me in that phone call that was so important. He said, "Alex, you've done a lot. You had a huge real estate company here. I've seen how much you've been able to accomplish. You've got an advantage. When you say you don't have any choices, you've got an advantage right now. You need to figure out what you're going to do next. There's so much you have now that you've never had before. You have experience, you have perspective, you have insight you didn't have, and you're going to be able to do this so much faster than you've ever done this before." And I remember listening to Alan and having him say, "You need to deal with immediately," and then realizing I needed to do something. And Cadey and I put together a plan, and we built the CDP designation, and we put it out there, and I started going office to office and selling it to real estate agents. And in our first year we paid our bills. In our second year we made a half a million dollars. In our third year we made seven million.
It exploded because at a time of crisis is when businesses take off and explode. At a time of crisis is when opportunities are there. And so here's what I want all of you to know who have lost money, who have lost business, who feel like you're losing right now. And I want to talk to some of you who feel like your whole business is shut down right now and it's going to require a major pivot or something completely different because the realities of this crisis are that viruses are very predictable. It's probably going to last somewhere between a year and 18 months. We're going to see some type of a reduced movement for a period of time, then a slow return to normal, and that slow return to normal is going to include people being scared of each other, people being afraid to go out, people being afraid to do certain things. So if you're in a business that requires normal movement of people, and crowds, and those types of things, you need to pivot.
If you're in the events business, you need to start looking at what you're going to do for the next couple of years, unless you have the cash to hang on. And here's what I want you to know. Just like what Alan told me, we look at the money as the most important metric. What about experience, and perspective, and understanding, and your ability, and all of the tools you have that you didn't have when you started what you lost that you have now. And there is a massive shift going on right now in the market. There is so many changes and so much opportunity. We're watching a forced evolution that has been happening already, but now is going to happen at an accelerated pace. We're going to see the move from in-office or in-person offices to virtual accelerated, fast accelerated pace, from brick and mortar retail to e-commerce, massive accelerated pace, from medicine to telemedicine. We're going to see massive changes in a number of different industries and that's going to create opportunities for entrepreneurs all over the place.
And I want anyone who feels like they're losing it, anyone who feels like they've lost, and anyone who feels like they've taken a massive step backward to remember that we're entrepreneurs, and part of what we love is the actual hunt, the chase, making it happen. And if you've lost something, if you've had to face losses in this crisis, I want you to know I've been there, like I said. And here's what I know about when I've faced losses in my career, because it hasn't just happened once. I've lived through a bunch of crises. I'm 47 years old. And each time here's what I know has gotten me past it. The second that I have been able to let go of what I've lost, and accept it, and understand it, and be able to move forward, that's when I've been able to start building, and pivoting, and understanding.
And so if you're holding on to last month's revenue, if you're holding on to what this quarter was supposed to be, if you're holding onto the plans that you had for this year, I want you to know the faster you let go and start facing the realities of this situation, the faster you're going to get back into momentum and start orienting towards the future and moving forward. Because remember right now, coming out of this, you're going to have the experience you've always had, and right up until this you're going to have the abilities you've had, you're going have a brand new perspective, and this is an opportunity unlike we've ever seen as entrepreneurs.
Here's what I know having been around for 47 years. I've grown businesses through every major crisis I was alive for, through 9/11, through the .com crisis, through the foreclosure crisis. I also had offices in Latin America, so the Argentine currency crisis, we did business with Asia, so every Asian financial crisis, including the Asian stock market crisis. So I didn't just have businesses, I grew businesses through all of those. However, every time, at the beginning of the .com crisis, the beginning of 9/11, the beginning of all of those, I lost money. And the faster I was able to get over it each time, the faster I recovered. The first time it took a while. Then the second time it took less, and the third time it took less, and the last time it was a few weeks.
And this time I've pivoted so fast I haven't even stopped to calculate what I've lost because I know I need to orient towards the future and get real about where I'm going, understand what my runway is, know what reality is in this crisis, and know that I'm going to build the plans to come out ahead, and I'm going to understand this market, and know what to do with it, and move things forward. And that's what every entrepreneur needs to be doing right now. And so if you've sustained losses, if you've gotten hit, if you've had some cashflow issues, I want you to know we have all been there. Take a walk, get some bilateral stimulation, take some deep breaths in and out through your nose. Let's get real about the world we live in. Crisis is a constant. You can't fight with it. You shouldn't get upset with it. If you get anxious with it, if you get angry with it, those are all things that we're just experiencing that are not going to move us forward. What we need to do is get real with it, and understand it, adapt and overcome.
And the first step is understanding, and the amount of noise out there right now is overwhelming, so I want to give you my brief summation of what I believe is going to happen here. Our economy, the world economy, is experiencing fractures it never has before. By the way, if you're listening, could you share this for me? I would really appreciate it. I want as many people to hear this as possible. So the world economy is experiencing fractures it's never experienced before. We are seeing stimulus checks written that are extraordinary. 2 million, or $2 trillion. During the foreclosure crisis, when they wrote a $100 billion in stimulus, it was thought of as just extraordinary and crazy, and now we're at 2 trillion and they're already talking about adding more. Already.
And so here's the predictable part of this. Viruses are predictable. This is just science, and I don't say science in a political sense. I don't want to have an argument about the politics of science. Just the reality of science that viruses have been around for a long time and flattening the curve is not a new thing. They did it during the pandemic. The cities that flatten the curve recovered much faster and experience financial success, and so those places in the world where they flatten the curve and do it as fast as they can, they're going to experience the higher levels of financial success and less distress, and viruses act predictably. They usually last about a year, 18 months, a little bit longer in the environment, and during the summer months they usually are suppressed, and they don't transmit as much, and so there might not be as much activity. So what we might see is a flattening of the curve and a reduction, then we could have the virus come back after the summer. And we need, as business owners, to plan for those realities.
And that is the reality of viruses. Short of a miracle vaccine, or some other treatment that's being found that is just going to make everything okay, people are going to be very scared of this for a very long time. I'm now at the point where I know people whose family members have passed away, and I know people whose family members have been diagnosed in the past few days and are expected to. And when it gets that personal and that real, it is going to modify people's behaviors for a while. And so as entrepreneurs we need to understand this is a brave new world, and we are going to be building a new normal for a while, and people are going to be coming out of this for a while, and it's going to change behaviors. And so start anticipating what those things are and then we will build the future like we always have.
And I want all of us to remember that we want to change the world, and we want to make a massive contribution, and we want to be able to step up and make things happen. And that's who we are. That's who you are at your core. You know you're just like me. Every day you've been alive the need to make a contribution has gone up a notch, and then another notch, and then another notch, and another notch. And if you think about right before this virus hit, didn't you want to make a contribution more than you ever had? Weren't you at that point where that little whispering voice in your head saying you can do more, you can be more, you can leave more behind, you can make more happen here, weren't you at the point where that was the most persistent thing you were hearing?
So if you've lost in this crisis, if you've had to give stuff up, if you're going to have to say goodbye to what you've lost, here's what I want you to know. That voice telling you you could contribute and do more and be more, it was talking about right now, because this is one of the biggest opportunities in human history to innovate, to contribute, to make new things happen, and to create the new normal. And there's going to be insane opportunity in this crisis, like there has been in every other crisis. In fact, if you track back all the way to the great depression, and you look at financial crisis, billion dollar businesses are born out of every one of them because fissures in economies create massive gaps, and gaps create opportunities, and as entrepreneurs, we will fill them.
This Thursday I'm doing a webinar and I'm going to share the research that I've done on this crisis, the most likely outcomes and scenarios that we're going to face as entrepreneurs, what industries are going to face serious challenges, and which ones are going to experience massive growth and resurgences. And I would love for you to join me because here's what I can tell you about being an entrepreneur in a situation like this, if you understand what's going on in the crisis, not the politics about what's going on, but the actual facts, the reality of what's going on, you can make better decisions than your competition, and that's an unfair advantage. And if you can overcome what's going on in a crisis, first you have to understand it in order to even overcome it, so you have to ignore the politics, ignore cable news, get away from all of that. You have to understand it. And then in order to understand it, you need data, and you need sources that you can rely on where the data is real, and I want to share those with you so you can understand what's happening.
And if you can understand and adapt, you can overcome. And I want to share with you what it takes as an entrepreneur to overcome in a crisis like this so that you can come out ahead, so that you can make a massive contribution, so you can take care of you and your family in what promises to be one of the most significant challenges in modern economic history, when 10 million people lose their job in two months in the United States, the entire world economy has entered a massive crisis. And so join me on Thursday. Go to clarityduringcrisis.com. I appreciate all of you being here. Go to clarityduringcrisis.com and I'll see you on Thursday.