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The Secrets To Setting Smarter Goals
22 segments available
If you're looking to maximize your startup's potential, start by setting the right goals. Michael Seibel and Dalton Caldwell provide tips and strategies for setting goals that will help keep you and your new business focused on success—plus provide examples of bad goals to avoid as a startup. Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00 - Intro 00:17 - Setting Goals: The Stupid Games 01:18 - What's a Too Aggressive Goal? 03:35 - What are the Fake Metrics? 05:43 - Stupid Comparatives 08:03 - What is Sandbagging? 09:39 - Why People Screw Up Accomplishing Goals 11:25 - Take The L 12:41 - Excuses 14:29 - Stupid Prizes Companies Win 14:48 - Most Money Raised 16:16 - Most Employees 17:45 - Execution Team 19:33 - Burning Money 21:07 - Acquiring Companies 22:22 - What's the Prizes for Defrauding Your Customers? 24:11 - Become an Amazing Investor
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Playing Stupid Games
Michael Seibel and Dalton Caldwell introduce the concept of setting goals in startups, emphasizing the pitfalls of playing 'stupid games' that lead to 'stupid prizes.' They discuss how setting inappropriate goals can result in non-productive outcomes, highlighting the importance of understanding the purpose behind goal-setting.
"did you learn calculus and then get GA or did you cheat and get the a like it's like you know the answer to that question yeah like the a isn't the goal it's the representation of your knowledge and y..."
The Danger of Aggressive Goals
Seibel and Caldwell explore the issue of overly aggressive goals that fail to motivate. They provide examples of startup founders who set unrealistic expectations, such as aiming for high monthly recurring revenue (MRR) without a solid foundation, illustrating how fear can drive poor goal-setting.
"non-productive okay and so we see a lot of people who set goals to in effect play play kind of stupid games let's talk about the stupid games and then we'll talk about the stupid prizes at the end tho..."
The Myth of Instant Success
The speakers discuss the common misconception among founders that launching a product will lead to immediate success. They share anecdotes about entrepreneurs who expect their apps to skyrocket in popularity right after launch, emphasizing the need for realistic timelines and growth strategies.
"aggressive goal like what do you think I can give you an example of what do you do yeah you know I'll see a YC founder who comes into YC just starting to build their product and they tell me by demo d..."
Avoiding Fake Metrics
Seibel and Caldwell highlight the pitfalls of using misleading metrics in goal-setting. They caution against focusing on registered users instead of active users or revenue, stressing the importance of measuring what truly reflects a product's success and customer engagement.
"is we're always like why do you launch sooner so you have more time to make it grow after it launches and like no no no we're gonna spend all the time making it good and so they want to go it's gonna ..."
Creative Misleading Metrics
The discussion continues on the topic of fake metrics, with examples of how startups often misrepresent their success. Seibel and Caldwell point out various deceptive practices, such as counting downloads without registrations, which obscure the true performance of a product.
"that's too hard Michael that's why it's not fair but if we're charging them why wouldn't it be the amount of money we make like that seems even simpler um but I think you've seen a wide variety of fak..."
Stupid Comparatives in Fundraising
The speakers delve into the issue of using flawed comparisons in fundraising efforts. They explain how startups often base their funding goals on superficial similarities to other companies, neglecting the deeper factors that contribute to a successful investment.
"and cells are default to fool like investors or authority you know what I'm saying like it's hard for me to tell when someone is practicing self-deception that like number of downloads is the right me..."
The Illusion of Superficial Success
Seibel and Caldwell discuss the dangers of relying on superficial metrics when comparing startups. They emphasize the importance of understanding the underlying engagement and value of a product rather than just its surface-level statistics.
"announcement why the investor made the investment right it's clear like I read the article um you know this VC invested in this company were kind of like that company in some superficial ways it's in ..."
Understanding Sandbagging
The concept of sandbagging is introduced, where individuals set intentionally easy goals to exceed expectations. Seibel and Caldwell explain how this strategy can be detrimental for entrepreneurs, as it fosters a culture of underachievement that doesn't translate well when running one's own business.
"the fact that like that small number of users were 95 percent two hour a day Facebook users yes so the engagement was like incredible yeah if you can replicate Facebook's engagement then you've got so..."
The Pitfalls of Cheating Success
In this segment, Seibel discusses how founders often cheat to achieve their goals, leading to a false sense of accomplishment. He compares this to cheating on a test, emphasizing that true success should reflect genuine learning and mastery. The conversation highlights the dangers of misleading investors and co-founders by presenting inflated achievements.
"yourself and what may be a good strategy to like rest invest working at Google or Facebook and to just do as little work as possible by sandbagging goals and working three hours a week or whatever peo..."
Embracing Failure and Learning
Seibel encourages founders to accept failure as part of the goal-setting process. He emphasizes that it's okay to set the wrong goals and to adjust them over time. This segment promotes a growth mindset, urging entrepreneurs to focus on learning from their experiences rather than feeling pressured to meet every goal perfectly.
"or did you cheat and get the a like it's like you know the answer to that question yeah like the a isn't the goal it's the representation of your knowledge and your mastery if you didn't learn somethi..."
The Excuse Trap
Seibel addresses the tendency of founders to make excuses when they fail to meet their goals. He argues that instead of dwelling on blame, entrepreneurs should redirect their energy towards finding solutions. This segment highlights the importance of accountability and proactive problem-solving in the startup journey.
"goals over time you cannot accomplish your goals and learn from it um there isn't this you know sometimes NYC I think people feel this like oh we're grading them on whether they accomplish their goals..."
Winning Stupid Prizes
In this segment, Seibel and Caldwell discuss the concept of 'winning stupid prizes' in the startup world, particularly focusing on the pitfalls of raising excessive funds. They explain how chasing fundraising can lead to losing control of a company and creating unsustainable growth. This segment serves as a cautionary tale for startups to prioritize sustainable practices over superficial achievements.
"you to use your help yourself this is not a tool for you to please someone else like that that's kind of irrelevant so let's do the takeaway here you know you set this up with play stupid games Win st..."
The Illusion of Employee Count
Seibel critiques the obsession with employee numbers as a measure of success. He warns that focusing on hiring more employees can distract from the core mission of the startup. This segment emphasizes the need for startups to prioritize effective team dynamics and productivity over simply increasing headcount.
"you often you find yourself burning tons of money because a lot of people who gave you money expect you to spend it um oftentimes you have the wrong people on your team you have a bunch of people who ..."
Scaling Negative Margins
Michael and Dalton discuss the dangers of scaling a business with negative margins. They explain how expanding a failing model can lead to financial disaster and emphasize the importance of sustainable growth. This segment highlights the critical need for startups to ensure their business model is viable before attempting to scale.
"build all the things that I want us to build so what's the stupid prize on that one Dalton now you wake up one day and you look at the spreadsheet of your burn and you you look at all the people that ..."
The Risks of Acquisitions
Dalton Caldwell addresses the premature urge for startups to make acquisitions. He warns that many founders seek to acquire other companies without having a solid product-market fit, which can lead to further complications. This segment stresses the importance of establishing a strong core business before considering acquisitions.
"people go that I shouldn't have hired so congratulations you win the prize you hired a bunch of people you're a big important person now you're responsible for all of this yes um here's the other one ..."
Defrauding Customers: A Dangerous Game
Michael Seibel discusses the severe consequences of misleading customers for short-term gains. He highlights the legal and ethical ramifications of such actions, emphasizing that knowingly harming users can lead to irreparable damage to both the customers and the company. This segment serves as a stark reminder of the importance of integrity in business practices.
"but it's like so much of the the VC content is aimed at late stage Founders which is pretty weird um it's like putting out content that's like you know how to care for your um your Ferrari or somethin..."
The Pitfalls of Early Acquisitions
Michael Seibel discusses the common mistake startups make by pursuing acquisitions too early in their development. He emphasizes the importance of achieving product-market fit before considering acquisitions, warning that focusing on growth through acquisitions can distract from building a solid core business.
"want to get good at this acquisition thing so we gotta start doing it there's a lot of talent out there Michael and some really talented failing startups would love to be able to be acquired by us and..."
The Consequences of Defrauding Customers
Dalton Caldwell highlights the severe repercussions of defrauding customers, including legal consequences and the potential for irreparable harm. He stresses the importance of maintaining ethical practices and being aware of the real-life implications of business decisions, especially in a startup environment.
"laughing but people are probably like wait really yeah really you know I I Dalton I uh you're right I am laughing because that's like that's an inconceivable Concept in my mind you're like oh we're pr..."
The Reality of Startup Games
Caldwell warns against treating business as a game, especially in the context of startups. He discusses how founders can lose sight of the real stakes involved, leading to harmful decisions that affect customers and the company's integrity. The segment emphasizes the need for a serious mindset in business.
"changed like this isn't making a mistake we want to be clear here like your state of mind is is extremely important here this is like knowingly pursuing a strategy that you know is harming your users ..."
The Illusion of Angel Investing
Seibel and Caldwell explore the misconception that startup founders should prioritize angel investing over their core business. They explain that successful founders often receive investment opportunities with minimal effort, cautioning against the distraction of status-seeking behaviors that can detract from building a successful startup.
"the the the prize that you win is the knock on the door um from the police and that's when you're like oh wow this is this was real life and the last one on our list um playing the game of using your ..."
Avoiding Status Games in Startups
The discussion shifts to the dangers of playing status games as a startup founder. Seibel and Caldwell emphasize that focusing on external validation can lead to poor financial decisions and negatively impact the startup's performance. They encourage founders to prioritize their business over superficial accolades.
"basically nil like you know I remember when I was uh starting social cam I emailed Brian chesky saying do you want Angel invest he was like sure that's it like that was like that was the entire time t..."
Building a Successful Business Culture
Seibel concludes with a reminder that founders set the tone for their company's culture. He stresses the importance of leading by example and avoiding behaviors that could mislead employees about success. The segment highlights how effective goal-setting and execution can lead to remarkable improvements in a startup's performance.
"whether or not they would say it to your face that is not a great way to win Awards with your team yep you're seenster congratulations yeah so I think to wrap this up right sometimes Founders don't th..."