Momentum Podcast: #641
Hoax Mentality Will Cost You
by Alex Charfen
There is one thing that every massive organization does that helps them be successful during times of difficulty, but most entrepreneurs struggle to understand it. The reality is that most entrepreneurs are unwilling to accept that they must be prepared for the worst case scenario in their business, and in the world around them. Right now, the challenge is that many entrepreneurs are looking at the things happening in the world with a hoax mentality, and the damage it could do to their business is devastating. In this episode of the Momentum Podcast, Alex is going to show you why a hoax mentality will cost you dearly.
I have had the opportunity to be up close and personal with some of the most influential and successful entrepreneurs in the world during my professional career. I was a consultant to Fortune 500 companies in my twenties, and during that time I had the opportunity to witness decision making at a high level when companies experienced crisis or challenges. There is one thing that every massive organization does that helps them be successful during times of difficulty, and I want to share it with you.
The reality is that most entrepreneurs are unwilling to accept that they must be prepared for the worst case scenario in their business and in the world around them. Right now, the challenge many entrepreneurs are looking at the thing happening in the world with a hoax mentality, and the damage it could do to their business is devestating. let me show you why.
Full Audio Transcript
Alex Charfen: This is the Momentum Podcast.
Voice Over: There is one thing that every massive organization does that helps them be successful during times of difficulty, but most entrepreneurs struggle to understand it. The reality is that most entrepreneurs are unwilling to accept that they must be prepared for the worst case scenario in their business, and in the world around them. Right now, the challenge is that many entrepreneurs are looking at the things happening in the world with a hoax mentality, and the damage it could do to their business is devastating. In this episode of the Momentum Podcast, Alex is going to show you why a hoax mentality will cost you dearly.
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.
I've had some pretty intense opportunities in my life. When I was in my 20s I ran a consultancy where I had the opportunity to work with a lot of very high level executives and CEOs, and people who did extraordinarily well, people who ran massive companies and ran massive businesses. And in that time I got to spend time with them during really difficult decision making. And when their companies were in crisis, when stuff was going on, when the environment was changing, when the competitive landscape was changing, I got to be up close and personal and see what was going on.
And here's what I observed and I heard from consultants, and I heard from advisors over and over again, was that when there's a crisis you want to quickly try and understand, identify, what is the most likely scenario that is going to happen. What's the most plausible, what's the most possible? Because if you as a CEO, as an entrepreneur, understand the most likely scenario, you have an unfair advantage over people who don't, over people who haven't done enough research or understood enough to know what will probably happen, what is the most likely scenario. And so in every crisis briefing I've ever seen and every meeting around a crisis I've ever seen, and more than one has been around a potential virus in Asia. I used to do a lot of business and consumer and computer electronics. And when I was in those types of meetings, they would talk about, this is the most likely scenario for this outbreak or this virus, or for whatever is going on. And that's the key to understanding, not just how to survive this, but how to take advantage of the crisis we've been presented with.
Crisis always creates opportunity. And the reason I titled this Hoax Mentality Will Cost You is if... I'm shocked at some of the stuff I've read on Facebook in comments. I actually wrote some of them down because I didn't want to misquote.
One is, "The virus will disappear on November 4th," implying that this worldwide pandemic is all made up just because of the election.
It's not a virus, it's the deep state." "We need to open everything up." "The deaths are fake." "Doctors are reporting that the reporting is fake."
"Doctors are over-reporting deaths."
There's all these... And I get it. I understand. If somebody dies of a heart attack and they died of COVID-19, they probably would've died of the heart attack and people are arguing that it's now being counted as another death. So even when you throw all of that out and you look at excessive deaths with this crisis, we know that there's a massive number of excessive deaths, and we also know that there's a tremendous amount of clarity around how viruses behave.
When I say hoax mentality will cost you... I talked to a friend of mine that I've known forever. I bought a car from him, I think about 20 years ago. His name's Mike. He turned $65,000 into 1.6 million in March because he saw the virus was coming in February and he did exactly what every CEO did, most likely scenario. He said, "This is a virus. It's going to behave in a very predictable way. I'm going to take advantage of it." And he looked at the stock market and he said, "What stocks are going to be affected by a worldwide pandemic?" And he shorted them all. And he made ridiculous amounts of money because he took a long shot based on a very logical, most likely scenario. If the virus is doing this in China, it's probably going to do this in the U.S. And so he just extrapolated that out, saw what was happening and made a big investment, 65K, but made a massive amount of money on it. So if you don't look at what most likely scenario is as an entrepreneur, if you join the it's just a hoax club, or it's not real, or it's fake news club, then what you're doing is you're not looking at what really is happening and what reality is and you will miss opportunities.
From the beginning of this crisis I've been saying, the world is always in crisis. Crisis is part of the human condition. Crisis is normal. You could also say the world is always exposed to viruses. Viruses are part of the human condition. Viruses are normal. So this virus has been acting predictably along most likely scenario. On April, I think 8th, April 9th I did a webinar where, this is months ago, I said that viruses are relatively predictable. We've had viruses in the past. It's going to continue to spread based on human behavior and human proximity. Current estimates that the viral activity will be sufficient enough to require modifications in human behavior for at least the next 12 months, but potentially the next 18-plus, and it is highly likely that we are going to have a second wave in the winter. Well, we've already kind of had a second wave. I bring this up because back on April 9th, I said what is most likely scenario? I've been in virus briefings before. What do I think is going to happen here?
Then I sat down and I put it in a webinar and I shared it, and everything I said is now consistent. In fact, I updated the webinar and said, when I did it again, I told everyone as numbers go up, we will see restrictions roll in, in areas, and as numbers go down, we're going to see restrictions roll out, and this is globally. I also said that we're probably going to start seeing travel restrictions from the U.S. to other countries because of what's happening with our numbers based on other countries. And now we're seeing predictably, that we have travel restrictions from the United States to the European Union, to Canada. I was born in Mexico. I never thought I would see the day that Mexico closed the border to the U.S., but that just recently happened.
And again, this is relatively predictable. And when you look at, when numbers go up, people are also going to modify their behavior, and we're seeing that. We're seeing that people are not, there's a lot of people who are very vocal about thinking this is a hoax, but the majority of the population is actually really concerned by this. And they're challenged by it. And they're not running out to just pretend like it's not real. And so if you join the hoax club, what happens is, you start thinking this isn't real, and you tell both your conscious and subconscious mind, you don't have to worry about this massive crisis that's creating this massive opportunity, and you are going to miss opportunity. You may believe in a conspiracy theory. You may believe that there's something that's not right here. You may believe that there's something that's fishy, that the numbers don't look right, that something doesn't look right. At the same time, as an entrepreneur, your reality is going to be determined by what you understand of this and how you respond to it. And for me, I want everyone to know where I stand.
Our company right now is responsible for coaching over 200 businesses worldwide. And we're adding businesses all the time. We just added one in the last five minutes. And we show entrepreneurs how to grow and scale their businesses in a predictable way. Well, if you want to be able to do that, you really need to truly understand what's going on and react to what's actually going on. And not conjecture, not conspiracy theories, not guesses, not people who've just said, "Hey, I'm just not going to believe in this."
What you really should be looking at is what's really happening here? And there are some consistencies with how this virus has predictably behaved. Now, I want you to remember, viruses have a predictable way of behaving. They are affected by the mode of transmission, which in this case, since the beginning, they've said it was droplets or aerosol. So in the air, droplets or on surfaces. And viruses, they behave predictably based on their R0 value or R naught value, which is how fast they spread from person to person. And then they behave predictably on their mortality rates based on usually an age range and preexisting conditions. That's pretty much every virus. They also behave predictably in that viruses sometimes cause longterm issues, and viruses sometimes can cause issues years down the road that you don't know of. And this virus is behaving predictably in that, like some other viruses it's leaving longterm effects on people, especially younger people that are coming out of it, they're not really coming out of it. Having heart issues, having issues with mental health, serious mental health issues. And having issues with breathing. So cardiac issues. And by mental health, coming out with delirium, with other things of this crisis, so it's behaving predictably.
And as entrepreneurs, what we should understand is you can look at how past viruses have behaved, and look at what has happened in the past and then understand what will happen now. So, here's what most likely scenario is. And again, let's really think through this, because if you can predict the future, you can create massive opportunity like Mike did. He made over one and a half million dollars, cleared it in a month, because he was thinking ahead and saying, "Hey, if this happened in China, it's going to happen here." So when we look at what's going to happen in the United States, what's going to happen internationally, it depends on the country. What type of restrictions are they putting in place? How much are they limiting host behavior and the fact that humans can get together? And then are they making it harder for something that's transmitted with aerosol or droplets, like wearing masks? And I've heard every argument for how masks do work, masks don't work, all kinds of stuff.
Nothing's 100% effective. Seatbelts are only 55 and 45% effective. Sorry, 50% reduction in death, 45% reduction in injury. They're not perfect. But they're mandated because they work well enough that they should be mandated, and they improve your percentage chances dramatically. So what do masks do? Masks improved percentage chances. In a malaria outbreak and in viral outbreaks throughout history, when people covered their faces and they weren't creating the cloud of droplets that we do when we speak or when cough or when we sneeze or anything else, then the transmission of viruses dramatically goes down. And if you want to predict most likely scenario, go look at all the countries where they've had mandated mask usage and they've controlled host behaviors. The virus has plummeted in those places and in the countries where we haven't done those things like in the United States.
We actually have a microcosm here where you can look at certain states in the country and look at them as like their own countries, because we have areas that are that big and with that much population. So you look at New York and what happened in New York, as soon as they enforced host behavior, mask wearing and social distancing, numbers started to plummet. You look at today, where I live, Texas, and Florida, numbers are going up like crazy.
And again, I don't want to get into any arguments about the Republican versus Democrat stuff. Like, enough. Here's what this really is. I'm sharing with you what's most likely to happen so as an entrepreneur you can make the best decision. I'm not trying to make, this is absolutely not a political argument. I don't belong to either party in the United States. I pay attention to politics around the world. It's really hard to belong to one of the parties that we have in the United States because they both contradict like crazy. What I'm saying is, that as an entrepreneur, your best chance of not just surviving this, but understanding the opportunities around you is to know what's most likely to happen.
And this isn't going away on November 4th. What's most likely to happen is we're going to have the same stuff going on now. So in your state, if there is social distancing and mask swearing, you're probably going to see numbers go down. If there isn't, you're going to see numbers go up. So in Texas we have a very Republican governor who wanted to open up very quickly and did not want to enforce masks. And now things have completely shifted because our numbers have gone up, because hospitals in Houston are now getting overwhelmed. They are now shifting and requiring masks. And in Austin where I live, now I think there's, I don't know, like a thousand dollar fine if you don't.
And so as entrepreneurs, here's what we need to do. We need to understand most likely scenario. As numbers go up, restrictions will be imposed. As numbers go down, restrictions will be repealed. And human behavior is going to modify in the same way. As the numbers go up, people do less, they're not moving around as much. Most of the population actually does think that this is real. And as numbers go down, you'll see people move around more and start doing more. And so as an entrepreneur this is what we need to understand, and this is what we need to be looking at, that this is a virus with a predictable course of action and it's going to be with us for awhile, and it's not going to be over in November, and so we should start looking at longer term planning for the next year or more. How are you going to deal with this scenario?
Now, here's the beautiful part about this. If I'm crazy, and I'm wrong, and November 4th, everything dries up and everything's perfect and we go back to how it was before which, we are so building a new normal. How it was before is never coming back. But, let's just say I'm wrong. Let's say I'm 100% wrong. Here's all you've risked. All you've risked is looking at normal virus behavior, making a guess that if it was real, and there's a small percentage chance you're wrong, that now you're looking at what probably is going to happen, what's most likely scenario, which I guarantee you every major CEO of every Fortune 500 company... Maybe not every, absolutely almost every, I don't want to use infinitives, but almost every CEO of a major Fortune 500 company is doing exactly this. And if you figure out what most likely scenario is, you're going to be head and shoulders above anybody around you. This is what they're doing. This is how you don't just survive this, you make it through and you understand this is going to be with us for a while.
And like I said, if I'm wrong, here's what's amazing. See, in crisis planning, you plan for the worst, like what's most likely scenario, and if anything better happens, everything just gets easier. And so if I'm wrong on November 4th, heck yeah man, I'm excited. We can go back to live events. We can do what we were doing. I can't wait. However, realistically and logically, I don't see that happening especially here in the U.S. where we've let this virus spiral out of control to the point where we are now literally getting blocked from traveling to other countries. We are going to have a long term economic effect here. The fact that travel is restricted. The fact that trade is restricted. The fact that people aren't buying and selling as much. 40 million people losing their jobs. You look at all of this, this is going to be a long term issue that is going to take us many years to figure out how we get through, in all different types of markets.
We're going to see the retail market, the entertainment market, all of these markets completely reset. So as an entrepreneur, that is most likely scenario. If I'm wrong, we all win. If I'm right and we start planning for this, then as you build your business, and as you build your strategic plans, you're building them around knowing that this is going on, and you're at least adding this into the equation, and you're allowing your conscious and subconscious mind to at least consider what could happen. Because, as an entrepreneur, if you cut yourself off from the possibility that this is going to be a normal crisis that runs... Or sorry, a normal virus that runs its course like... Not runs its course, a normal virus that acts in the environment like viruses act in the environment, then this will help you understand what's going to happen next.
And so, as an entrepreneur, predicting the future is our job. Being able to set up a strategic plan and knock it down, set up a plan, knock it down, set up a plan and knock it down. That is our job. Part of predicting the future, especially when you're in a crisis like this one, is understanding what is most likely to happen and so add that to your toolbox. And if you believe something completely, radically different than I do, then leave open the small percentage chance that you're wrong and perhaps I'm right. I'm doing the same thing. I'm like, you know what? I'm going to leave open the possibility that everything gets better, leave open the possibility that everything moves in the right direction. And so as I'm planning, I'm saying this is most likely scenario. This is possible and let's make sure we have a way to take advantage of if everything does get better. But I'm planning. I'm putting my strategic plan out right now based on what I'm seeing and what's happening and what's going on in the world.
So I hope this was helpful to you. If it was, share it or tag an entrepreneur who needs to hear it. If they need to hear it there's a high likelihood they're probably going to yell at me or come back and leave a comment that I'm probably going to want to argue with. But, and if any of you want to join a membership where you can grow and scale your business, and things are based on logic and data and reality, and understanding how to make the best percentage chance so that your business doesn't just survive, it grows like crazy and you make the impact you want in the world, reach out to us. Go to billionairecode.com, check out the video that I have on the Billionaire Code, the nine levels that entrepreneurs go from, from startup to $100 million and the transitions we must make in between. And then if you're compelled or if you want to, you can sign up for a call with my team. It's billionairecode.com. I appreciate you listening.