Momentum Podcast: 184
by Alex Charfen
The fastest and most effective way to grow a business is to be obsessed with the people you serve. In 2007, Cadey and I became bankrupt. We were served foreclosure papers and I saw first hand just how damaging it was. I became obsessed with helping families avoid what we went through. As a result, the US Treasury publicly stated that the agents involved in our CDPE designation pulled forward the foreclosure by five to seven years. Over the course of my career, I’ve been obsessed with supporting visionary entrepreneurs. I wake up in the morning and go to sleep at night thinking about how I can help my clients. What keeps you up at night?
Full Audio Transcript
I'm Alex Charfen and this is the Momentum podcast. Made for empire builders, game changers, trail blazers, shot takers, record breakers, world makers and creators of all kinds! Those among of us that 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, be obsessed.
There may be other ways to grow a business but I fully and totally believe the fastest way to grow a business is to be obsessed with the people you serve, obsessed with the outcome your business is creating, obsessed with what you're doing. And I don't think it's okay to be passively interested, in fact the only way I know how to coach entrepreneurs is to find the obsession that keeps you up at night that you want to fix in the world, the change you want to make and if you don't have it, you have to fall in love with your marketing until you do.
Coming off of yesterday's episode, seeker. I wanted to go into just how critical it is that you actually are obsessed, you know it was interesting um a while ago Elon Musk's wife answered a question on, I can't remember what site it was, but she answered a question on a site where somebody had asked how do I have the level of success of Elon Musk, and she said a lot. But one of the things she said was, you have to be obsessed and be committed at a higher level than anyone around you and it's absolutely true.
As entrepreneurs, for us to create our full potential, to create the full contribution that we know we're capable of making we have to create this level of obsession that would drive us to do what most people won't do. We have to create a level of obsession that will drive us to build the team and expose ourselves to vulnerability and feel challenged to be around the people around us and to be in situations that are difficult and to hire people and fire people and do everything that it takes to finally build the organization around you that is going to build the business that you really want. But if you're starting in any way other than being obsessed about the people you serve, you need to really like slow down and look at it.
When I was younger, one of the consulting clients I had was Targus, computer carrying cases. Howard Johnson, the CEO and founder, became a close friend of mine, I was, he was awesome. And Howard loved the business traveler, he had always been a business traveler. He had been involved in US and Asia trade, he had had a couple of other companies where he imported products to the United States and he loved business travelers, He was a business traveler, he loved business travelers. When notebook computers came out he started creating cases for notebook computers before anyone else really did and he had this passion for the business traveler carrying a notebook computer.
In fact, I would bring Howard into accounts and you know first it was rare for a CEO of a company like Targus to come into an account, especially after a while. When I first started with them, they were in the tens of millions, a couple years after I was done, I worked with them for about ten years and when I sold my company I still had Targus as one of the accounts and a couple years years later it was a billion dollar company, so it was really close when I left. And there was a reason, Howard and the team there were obsessed with the mobile traveler, with the consumer.
I mean if Howard, if I took him to see a buyer, he would ask the buyer about their briefcase but he was doing an avatar interview. If I, If we were in an airport or at a restaurant, you know I spent a lot of time with Howard, we traveled, I took him down to Latin America and wherever we were he asked people why they were carrying the case, what did they like about it, what did they not like about it. He was obsessed, he talked about it, like even when he didn't need to and that's why he was able to build a company that eventually had over a billion dollars in sales. A company where he built the category. When I started with Howard, he only had 40 SKUs, when I left he had hundreds of SKUS, because mobile computing became a category. He was obsessed, I watched the success happen through his obsession.
You know, today if anyone is listening to this podcast for any period of time, they know I have a couple of clients that have business that have just taken off like rocket ships. Brandon and Kaelin Pullen over a hundred thousand people have joined the Lady Boss movement in the last few years. Alex and Leila Hermozy, eight figure business in ten months. Both of them. Kaelin and Brandon, when Kaelin starts talking about the women she's helping lose weight in Lady Boss, when she starts talking about her avatar she literally gets choked up every time. But here's what's critical, so does Brandon. They both believe so strongly in how they're changing the world by helping one woman at a time love themselves and lose weight. Same with Alex and Leila, they are obsessed with helping gym owners. Leila was in the fitness industry, Alex was a gym owner, they've fallen in love with this avatar. They recommit to falling in love with the avatar all the time, they do events with them, they spend time with them. It's incredible but this is obsession, that's how you build businesses that have these massive effects, that have these massive numbers through obsession.
The businesses that I've built have been through obsession. You know one of the uh the most difficult businesses I've ever built was in 2007, you know when I sold my consultancy when I was younger. Cadey and I got into real estate in the early 2000s. I actually retired, so I sold my consultancy, I retired it was the longest six weeks of my life. I wasn't going to work anymore, it was the biggest joke, I was bored, I started buying houses. Actually, went to a class on how to buy houses and I bought even more houses. Then I started using a lot of our money to buy houses and other people's money, I started getting loans and I had signature lines and I started understanding how hard money worked and after a while, Cadey and I did 1500 deals in an 18 month period.
We were doing a ton of real estate and we built a massive portfolio and in 2007, we lost everything and we ended up going bankrupt. And I was in a position where for the first time ever, I had been served with foreclosure paperwork, I got served with foreclosure paperwork and you know I had seen, I was an investor, I had seen foreclosure paperwork before but I had never seen it with my name on it, it was terrifying. I realized just what an emotional transaction foreclosure was and how difficult it was to see your name and judge's stamp and get a process server coming up to your door telling you that you know you have this thing you need to take and they served me. And uh I remember telling Cadey, especially as we started getting more and more foreclosures, just how damaging the writing was, just how terrible the packages were sent out were.
And so in 2007, after we went bankrupt um I wrote a product out of a book we had called "Mastering Short Sales for Real Estate Agents" I turned it into the Certified Distressed Property Expert. The book that I had written that I thought was going to sell, we had been doing short sales in South Florida before the crisis. There was two years of hurricanes where thousands of people lost their homes, maybe tens of thousands of people lost their homes because they couldn't afford repairs, they couldn't make payments, um they had renters that moved out, they had damage that happened. So we were already negotiating payoffs in South Florida before the crisis hit. And I took that that course and we turned it into a designation because I was obsessed with helping homeowners avoid foreclosure. I was feeling what my family was going through and I realized I looked at, could I go teach homeowners to avoid foreclosure, not really. It was near impossible to get somebody in foreclosure to spend money. But what I realized was real estate agents could help. So I wrote this course, we sold it to real estate agents.
In the first year in 2008, we sold 1500 CDP designations. In 2009, we sold 5000. In 2010 15,000. Overall, we sold 49,700 plus or minus units of this CDP it was a 600 dollar product and it got discounted but the list price was 600 dollars. We had 46,500 people actually graduate the course because we were obsessed with getting them into the course but out of it so we had a 90 percent adoption rate. And Cadey and I set out to solve the foreclosure crisis, I wanted to stop people from going into foreclosure that was our goal when we started that business. And in 2013, the US Treasury came into our office, Laurie Maggiano, the Director of Foreclosure in on a recorded video said that not only had our organization changed the foreclosure crisis but that the agents involved with the CDP designation had helped what they believed was around seven million homeowners avoid foreclosure and that we had pulled forward the recovery of the foreclosure crisis five to seven years.
I remember just being blown away so so you know I was obsessed with helping homeowners and foreclosures so much so that the first information product I ever had sold almost 50,000 units, 25,000 of those people went through a continuity program where depending on the time in our company's history that 99 dollar continuity program had a stick rate from nine months to as much as two and half years. That's how how committed our membership was and that's how much of a change we were making. It was because I did not want to see homeowners go into foreclosure. And then what happened was right after ironically right after Laurie Maggiano came into our office and told us how we had pulled forward the foreclosure crisis, I was in the real estate industry, working with real estate agents, I care about the homeowners and foreclosure but realtors were not my obsession. They never have been.
Cadey was a realtor working with real estate agents was was interesting, it was okay, but it wasn't who I really wanted to be working with. My whole life I worked with visionary entrepreneurs, my whole life I worked with organizations who are growing at an incredibly fast rate that are exploding. And the real estate industry, if you're going to coach real estate agents, you end up coaching a very large population of people who do most of the work themselves. And that's not a knock on real estate agents that's just reality of the real estate industry. If you're going to coach real estate agents, there's about a million real estate agents in the United States about three percent of them do 97 percent of the business. And about of the million in the US about half of them don't make any money as a real estate agent every year. About half of that make a living wage as a real estate agent every year and when you look at it, it's such a small percentage that are doing anything and then the largest real estate team, if you're going to coach agents, the largest team does about a half billion dollars in real estate a year. Which equates to about 15 million dollars in commission, so its a 15 million dollar gross product, gross business.
I was never excited about working with people to help them grow businesses that capped at 15 million dollars. I can't get excited about that. That's like, that's a nightmare for me. I mean I've worked with multi-nationals, I've helped people grow ten figure businesses, I've helped people. You know I used to do hundred million dollar deals. And to think about getting into a place where I was only working with people who capped out at 15 million. It was not my obsession and so what happened in 2015, I think 15 16, Cadey and I had built a real estate coaching business, we had hundreds of clients paying us 1000 dollars a month, we had coaches that worked with us.
We had um you know we had tons of realtors that were were on our roster and I woke up one day and told Cadey like I can't do this anymore. I'm not obsessed with real estate agents. I really don't want to talk to real estate agents anymore. The problems are similar, they're all kind of the same, none of them really want to grow a real business or a real team. They all want to have kind of this boutique business that kind of provides a lifestyle and and you know I'm not used to coaching that. I'm used to coaching Alex and Leila, let's hire thirty people in the last nine months and only drop three of them and you know grow by double digit percentages every single month and put millions away because you're doing it the right way. That's what I'm used to.
I'm not used to the biggest business sin the room is a 15 million dollar business. The biggest business in the entire population is a 15 million dollar business. I couldn't get obsessed with it. I couldn't grow a business around it and I wasn't having fun and I wasn't succeeding at the level I can because it wasn't what I wanted to be doing. And so we had to shut it down. And then when we switched to entrepreneurs, this is such an obsession that I recorded daily podcasts because I want to talk to you every single day. This is such an, except for Sundays, this is such an obsession that I haven't been able to stop doing, telling people about what we do and talking to people. This is such an obsession that just by talking to people at events and letting people know what's going on we've grown a a large high-end mastermind with tons of companies that are growing like crazy, all million dollar plus. And this is such an obsession that I wake up in the morning and go to sleep at night thinking about how do I make things better for my clients.
And that's what it takes to grow a business. Because when you start growing a business and there's other consultants, there's other coaches out there that will tell you, there's another way to do it, you can do arbitrage on Amazon, you can figure something out, you can you know they'll show you like techniques to do Ask Campaigns and then find a population you can sell stuff to. And there is occasionally the story and I've met a few guys that have built businesses around an avatar that they didn't really care about but they really did obsess over them. And they figured out everything there was to know about them. And that that's how they built those business so you're either going to obsess over this avatar because you do any way or you're going to have to get obsessed to be successful. But if you feel passive about who you serve and what you're doing, if you're not incredibly excited to talk to those people every day, if you don't envision a future where you're surrounded by them and you're talking to them all the time, then you need to take a look at who you serve. Because in the last episode, I shared with you seeker on the billionaire code it is that entry level level and how do we get out of it. We understand with certainty who we serve.
My suggestion is to pick someone you're obsessed with anyway because it will make everything you do infinitely easier as an entrepreneur. If you haven't yet, I've got a recommendation for you. Go back to the beginning of the momentum podcast and listen from the beginning. I've had so many people tell me that they've done that and I wanted to in the first twenty or thirty podcasts, give my manifesto, my manifesto of who the entrepreneurial personality type is, why we are so misunderstood, why we hold ourselves back and fail to create momentum and how we can create momentum ongoing everyday of our lives. So if you haven't yet, go all the way back to episode one and then do me a favor, if you do leave us a review, shoot me a message, let me know what you think. Uh doing this podcast has been one of the most exciting projects I've ever had and all of the feedback, the reviews, the ratings on iTunes, they mean the world to me. So thank you and I look forward again, I look forward to talking to you again, tomorrow.