Momentum Podcast: 609
Crisis Makes Startups Easier
by Alex Charfen
It may seem counterintuitive to start a business in the middle of this crisis, but it's something that Alex has done for his entire career. Just this week, our company has made a massive pivot in our business. We've started a new product. We've conducted a webinar, we've sold our first 20 clients into that product. In a normal market, this would have been incredibly difficult, but in a crisis, it's expected. In this episode of the Momentum podcast, Alex is going to take you through the multiple reasons for why it's so much easier to start a business in a crisis. If you're an entrepreneur or planning to start a business, this episode is for you.
It may be counterintuitive to start a business in the middle of the crisis, but it's something I've done for my entire career. Just this week, we created a massive pivot in our business, a new product, conducted a webinar, and sold our first 20 clients.
In a normal market, this would've been incredibly difficult, in a crisis it's expected. There are multiple reasons why it's so much easier to start a business in a crisis, and in this episode of the Momentum Podcast, I want to share them with you. Crisis creates massive opportunity, and if you can find it, you can make your greatest contribution.
Full Audio Transcript
Alex Charfen: This is the Momentum podcast.
Speaker 2: It may seem counterintuitive to start a business in the middle of this crisis, but it's something that Alex has done for his entire career. Just this week, our company has made a massive pivot in our business. We've started a new product. We've conducted a webinar, we've sold our first 20 clients into that product. In a normal market, this would have been incredibly difficult, but in a crisis, it's expected. In this episode of the Momentum podcast, Alex is going to take you through the multiple reasons for why it's so much easier to start a business in a crisis. If you're an entrepreneur or planning to start a business, this episode is for you.
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.
Good afternoon. Super excited to be here with you to share what I think is probably some counterintuitive information on working in a crisis. It's interesting when you look at a crisis market, or a crisis opportunity, what a lot of people start seeing is all the challenges, all the constraint, all the things that are going to break, all the things that aren't going to happen. And rarely do entrepreneurs say, "Wait a second. This crisis could actually create a massive opportunity." And it really does. Crisis creates an opportunity in so many different ways. I have a whole sheet of notes on it here that I want to be able to share with you. Because, well, here's the story I want to share with you.
to 2007, Cadey and I, actually, let's go back to 2006. Cadey and I had a really successful real estate business. We had three, we had a real estate acquisitions company, we had a rental management company, we had a rehab company. We were doing incredibly well. Business was going good, it was growing, it was a lot of fun. And then 2007 hit. And we literally got crushed by the market, and ended up bankrupt. And as we were going bankrupt, I was getting all this foreclosure paperwork. We owned a ton of real estate, and I kept getting foreclosure paperwork showing just how challenged the communication was from the bank. And so here Cadey and I were in the middle of a bankruptcy, and I'm seeing these challenges from the bank, and I had been a consultant for a long time, and I started to see an opportunity there, and I started to see an opportunity to fix something, in the middle of a crisis. And I was seeing the opportunity to fix it with Bank of America, and Chase, and Citi, and Wells Fargo, and these massive organizations.
And I was bankrupt. And I started looking at it and researching it and trying to understand what was going on. And I realized that these massive organizations, Bank of America, Chase, Wells Fargo, Citi, and the US Treasury, and the National Association of Realtors, and the Federal Home Finance Association really did not understand how we were going to handle the foreclosure crisis. And Cadey and I created a product that we could sell to real estate agents. Here's what I looked at. I looked at the whole market, and I realized if we could train real estate agents to talk to their clients, and put together packages for short sales, we could save people from foreclosure. And it was in the middle of the beginning of the foreclosure crisis, and it was crazy for us to be trying to do what we were doing. We were bankrupt. Everybody in our family was telling us that we should go get a job, well, Cadey's family was all telling us we should get a job.
My family didn't know what to tell us. They knew I couldn't get a job. I hadn't ever had a job, and it would be weird. All kinds of people were telling us how at risk we were, and how we should figure out something that was really stable, and Cadey and I decided to launch a business called the Certified Distressed Property Expert. And here's why I share this story. I want to share the story to show you how much different it is to start a business in a crisis, than it is to start a business in a normal market. So we started this information product in a crisis. We trained about 500 real estate agents in our first year. By our second year, we were training thousands of them, and they started doing well in the market. And here's what happened. Because we were a startup, because we were a new product, because we were a new solution, we started getting attention. Here's why the crisis, any type of crisis calls for a new solution.
You want to know who's dead in a crisis? The existing solution. You have a brand new crisis, you have an existing solution that wasn't crisis-ready, wasn't crisis-made, people are not going to trust it. But in a crisis, the new solution, the thing that hasn't been proven, the thing that's brand new, that's novel, is the one that's going to get the most attention, especially in a crisis like the one that we're in. And so here's what happened, at the beginning, Cadey and I started training real estate agents. Within a year and a half or two years, we were training partners with, communicating with, or supporting Bank of America, Chase, Wells Fargo, Citi, not the National Association of Realtors. We never supported them, because they actually competed with us. But RE/MAX, [inaudible 00:00:05:56], Century 21, Prudential, all the major brokerages. So Cadey and I sat in the middle of these multibillion dollar organizations, like Fidelity National Title, and in fact we train their entire sales force. And our product generated over $70 million in revenue. We went from bankruptcy to liquid millionaires in a year.
And the reason I'm sharing this story, again, because you've heard it if you're on the podcast, is to demonstrate that in a crisis, starting a business, starting a new product, putting something new out there is easier than in a normal market. What's up Raji? Thanks for being here, man. Do me a favor. Share this for me. I'm using this new Live producer. I can't even tell how many people are actually watching, so I don't really know what's going on. I'm hoping that it's pretty good. I'm hoping there's anybody there, but here's what was amazing about, consistently in the crisis, I would walk into rooms and say, "Cadey and I were bankrupted by this, and this is a brand new product that we'd come up with. I've bought and sold a lot of real estate, and I know that this is going to work." And we convinced people that it would, and to go from brand new product, to partnering with multibillion dollar organizations shows you what's potentially possible in a crisis.
In a normal market that never would have happened. In a normal market, when everybody has the products that they're already using and they're happy with the products that they're using, and they're working, no one is ever saying, "We need to go out and find a new product. We need to go out and find the thing that was just made yesterday" but in a crisis right now, if you are starting a business, you have a crazy opportunity. Let me tell you the different ways in which a crisis makes things easier to start up. Because here's what I want all of you to know. If you're in an existing business, and you have to pivot. If you're in an existing business where you don't have to pivot completely, but you have to adjust messaging, and maybe adjust your product like we just did. I'll tell you the story in just a second.
If you're in an existing business where you have to like start over and change all of it, if you're an existing business where you just need to make a minor shift, here's what I can tell you, in this crisis, everyone's going to have to shift. Everyone. And because this is so pervasive, so big, and it's going to go on for a while, and here's what I want you to understand about crisis. So number one, crisis makes it easier to be the startup. New solutions, and new products are expected in a crisis, not questioned. They're expected. So when we came in and said, "We have a brand new product," we were partnering with some of the biggest organizations, literally, some of the biggest organizations in the world. We partnered closely with the US Treasury. So think about that. When we first started working with the treasury, we had about eight people, so we were eight people in Austin working with the US Treasury. I sat one seat away from the director of the United States Treasury that was going from the meeting I was in directly to a meeting with the president.
That is some crazy stuff. Impossible in any normal market, but it happened for us in a crisis, because crisis makes new solutions expected instead of questions. Question, here's another one. Crisis creates exponential growth opportunities. Over and over again. This is really all about your mindset. If you want to think about what you've lost, if you want to think about what you've given up, if you want to think about what you don't have anymore, you are going to stay in the past and be constrained by it. But those who let go of what they've lost and look towards the future, will grow like crazy. And right now in this crisis, the exponential opportunities are overwhelming. I'll share one. I'm just going to share one, really quick. I'll share some more. But one of them is our client Chris DeFay, a good friend of mine, one of the most amazing human beings on the planet. Chris shows in-person gyms, how to go virtual. And he recently signed up a gym that was going out of business in-person. So in the gym in-person, they were going out of business.
All of a sudden, there's this massive crisis. Everybody has to self-isolate, they have to quarantine. Chris showed this business owner how to turn his gym into a virtual gym, and the results are mind blowing. So amazing. I get chills just talking about this. Because we have a business owner that was going out of business, switched to a virtual model, and did over $100,000 in a weekend. In a weekend. Crisis changes everything. So here's another reason. Crisis creates the most significant opportunities for contribution. In a normal market, you might be improving somebody's life. You might be moving them in the right direction. You might be helping them. In a crisis, you can create solutions. You can help them where they're feeling pain. You can put painkillers in their market. In a crisis, if you're selling a painkiller, something that makes things better, something that makes things easier, something that helps people, you are going to kill. So in a crisis, the growth opportunities are massive. And the opportunity for contribution is incredible.
We did a webinar yesterday for a brand new product called the Foundation by Charfen. It is the product to help any entrepreneur build a foundation in their life and their business so strong that you could drive a truck into it. And we had 700 people register, no paid advertising. This is what crisis does. You have the right messaging, people will come to you. We had 300 people show up. I went for almost two hours, and we had barely anyone drop off. And, of the 300 people who showed up, over 20 bought our new membership. Why? Because crisis narrows focus, and people act much faster for the right solution. I'm going to say that again, because anybody who's thinking about getting into business right now, I want you to know this could be the best time ever. Everybody's panicked. So many people are consumed by this. They're not protecting their focus. They're not guarding their focus like their life depends on it, because it does. Instead, they're getting caught up in this. They're letting the subject matter of this crisis become a distraction.
I can't tell you how many entrepreneurs I'm seeing go down the rabbit holes of wasted time on conspiracy theories, and politics, and opinions, and conjecture, and BS news stories, and so much other garbage. That will distract you like crazy, and will take you out of growing in the crisis. But here's what will grow like crazy. If you create a solution, that helps people in this crisis, any type of solution, and the opportunities are so overwhelming, they're hard to explain. I get a new business idea every two or three minutes, I'm starting to post them to my Facebook page, so somebody else can go and take the business and run with it. Because this crisis has created so many opportunities. It's crazy. And it will continue to create opportunities. So when we shift our mindset from how much we're suffering, to how much we can contribute, when we shift our mindset from how much we've lost to how much we can go out and help and make things happen.
When we shift our mindset from we are in a crisis to we are overcoming this crisis, that is when we as entrepreneurs do what we were put on this planet to do. And don't ever forget for a second, we live for crisis. Is this hard? Yes. Is this difficult? Yes. Is it maybe one of the most difficult crises in the history of humanity? Absolutely. But as entrepreneurs, we have been through things like this throughout history. And every entrepreneur I know has had personal crisis in their lives, and they've gone on to overcome it, and move forward, and make things happen, and I know you can do. And yesterday on the webinar, I shared the story of an entrepreneur that I believe is maybe the most inspirational crisis entrepreneur in the history of the world. So I want you to know, if you don't think you can start a business in a crisis, I want you to see what a massive advantage you had above this human being. See, Madam C.J. Walker started her business in a... God, I can't even bring up her name without getting emotional.
I've spent my career studying entrepreneurs, and entrepreneurs lives, and what they accomplished, and what they were able to put together, and who they became in their lives. And I've read about some inspirational people. Reading about Bill Gates, incredibly inspirational, reading about Benjamin Franklin, unbelievably inspirational, reading about Steve Jobs, and Leonardo DaVinci, and all of these amazing human beings. But the most inspirational entrepreneurial story I have of startup in a crisis has to be Madam C.J. Walker. She was born December 23rd, 1867. Her mother died in 1872. She was an orphan. If you want to talk about being born into crisis, she was born into a family of slaves, where she was the first free born human being in her family. Her entire family was still enslaved. And her siblings were enslaved. She was married at 14 years old to escape an abusive relationship in her family. At 20 years old, her husband died, and she had a two-year-old daughter. And she started a business exclusively for ethnic hair.
She was a black woman entrepreneur who started a business for black women in the middle of a massive personal crisis, in a time when the world was in crisis, and she went on to become the first female millionaire in the United States. And let me make it very clear, she was not the first black female millionaire. She was the first female millionaire in the United States. To me, she has to be one of the most inspirational entrepreneurial stories in the history of man. Because the other men that I've named, they had some advantages. They had some privilege. Madam C.J. Walker had none of that. She had to make every part of that happen for herself. So if you're thinking of doing something, and if you're thinking of picking yourself up and starting a business and making something happen and moving forward and creating a new direction, I want you to think of Madam C.J. Walker.
There's no way any of us, even right now in the middle of this crisis has it anywhere near as challenging as she did, and she went on to become the first female millionaire in the United States, even though she was black, and a minority, and had to overcome more than anyone around her, and to me that is the story of what we as entrepreneurs are capable of. Whenever I start feeling beat down, or overwhelmed, or frustrated with my business, I check myself, and remember Madam C.J. Walker. And I remember her being born into a family of slaves, and losing her mom, and then having to get married to get out of her house, and then losing her husband, and having a two-year-old daughter, and what could she have been facing. This was during the time where she had to drink out of different drinking fountains, and segregation was at its maximum. And here she was moving forward and growing a business and making things happen. And it makes me believe I can to, and I want you to believe you can too.
Because in this crisis, we all have to be like her. We need to rise above the considerable noise we are feeling, and you know she felt it. We have to identify an opportunity where we can make a contribution. And what did she do? She solved the problem for people just like her. And when we identify that opportunity, and get into momentum and make it happen, we take the world with us, and then we leave stories behind like she did to inspire entrepreneurs for lifetimes. Because I know as long as I'm around, I'm going to be telling her story, and I'll make sure that anybody I coach and train does the same. So I want you to be that next inspirational story, and we want to be a part of it.
Yesterday, we introduced a brand new product we've never had in the market before. It's a new solution for a new crisis, just like I was talking about. It is called our Foundation product. And we are already helping entrepreneurs with building a foundation in their lives, and in their business, so that there is a strategic plan, so that there's clear outcomes, so that they have an execution system so that they can move forward fast. I've helped entrepreneurs build some of the fastest growing companies on the planet, and we want to help you too. So go to Charfen.com/Foundation, and check out this new product. If you are an entrepreneur who's had a business, and you are looking to pivot, or you know you need to make a change, or something's happened because of this crisis, whether you're a practitioner with a practice closed down, whether you had a service business that's challenged, come let us help you make this pivot, adjust your messaging, move in the right direction, and create a plan to get there.
If you are somebody who's starting a business right now in this crisis, and people around you are telling you you're crazy, come to us. We won't tell you you're crazy. Well, we might pretend like you're crazy, but we're going to show you how to do this, and go out and build a massive business so that you can make a major contribution. And if you're in a business that's doing incredibly well, reach out to us. Because if you're growing faster than the businesses around you, I know how disorienting that can be in a crisis. It's hard to talk about success when everyone else's lives is challenged. Reach out to us too. But if you're looking for help right now, on making the pivot, starting up, getting a business going, understanding what you should do in your business that has just gotten knocked sideways, go to Charfen.com/Foundation. Check out the information on the page, and let us help you. Remember, crisis makes starting a business, starting a product, starting a new product line, putting a new solution out in the market easier, because the whole world expects you to. Charfen.com/Foundation. Thanks everybody.