# Dalton & Michael: Setting smarter goals

**Author:** Dalton Caldwell, Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/Id-dalton-michael-setting-smarter-goals
**YouTube ID:** rE2XaBGHN2I

---

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.

## Transcript

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 your mastery this is Michael Seibel with Dalton Caldwell today we're going to talk about setting goals more specifically all of the pitfalls involved in setting or trying to accomplish goals that startup Founders we work with tend to fall for

Dalton why don't you set this one up yeah you know when we were talking about it this morning the the phrase or the meme that came to mind was the one uh play stupid games Win stupid prizes you know and again what I think it means in this context is if if you set goals or if you start playing one specific game that is silly to begin with OR that ha it's like clearly a bad call um yeah the prizes the implications of that the things that you win are going to be equally silly or nonsensical or

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 those are those are maybe even more fun so you know I think it's it makes sense to split this up into mistakes that people make setting goals and then mistakes people make trying to accomplish these goals so I would say like the first one um and maybe I'll start with the simplest is when people set goals that

are so aggressive they aren't motivational and and they're basically missing the understanding of what the purpose of setting a goal is right like you want to motivate yourself to act smarter faster more intelligently than you would otherwise and oftentimes people are setting goals that are too aggressive um because they're motivated by fear you know NYC we see this all the time and what's an example of a too 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 day we want to have you know 30k in mrr and we want to do that because some Alum told us that like that's how much MRI you need in order to raise money on demo day and it's just like how many errors can be said in three sentences you know is is my thought what's an example comes in your mind my mom example is someone

that believes once they launch a product it will immediately succeed and take off and so it's like we're going to spend three months building this app we're going to put it in the App Store we're going to launch and then we're going to get a hundred thousand Dau yeah yeah and it's yeah like two minutes yeah it's always the plan is they're gonna put it out and then it's gonna immediately take off those are always the goals that um that are rough and what's funny 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 immediately take off top of the App Store 100 why would we launch something bad then it won't take off Dalton Jesus yeah we we we're going to talk to some influencers you know we're gonna do a social media launch we've got it all lined up we have a wait list so yeah top of the charts definitely game on so um both examples of being too aggressive um the next one that comes up a lot is uh fake metrics

um and we've talked about this a little bit but you know for companies who charge their customers money somehow creating a goal incremented in something that's not money um hey my product costs ten dollars a month but I'm measuring registered users I want to hit you know a thousand registered users and it's like that's weird like hell if users is going to be the metric like why wouldn't it be active users right like just like if we're going to be in that world well 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 fake metrics that goes way further than users right yeah okay counting hits on your website that's an oldie but a goodie yeah yeah um Counting downloads but not registrations is a good one yeah um Counting users as people that started the registration process and didn't finish it

counting users as people that downloaded your product opened it closed it after five seconds and never opened it again as users yes yes uh we've heard that one um just basically like a thousand and one different ways to avoid the actual um meaning of the metric which is to capture if it's working or not it's like every every which way people are so creative at finding ways to like

not actually measure the thing that they know they're supposed to be measuring 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 metric or if they think that no one else realizes that that's obviously like no one can tell what they're trying to do we can tell and honestly it's probably both right it's probably a combination of both right like

um okay so here's another one that I see a lot especially with fundraising stupid comparatives So like um in 2021 tiger gave this company a hundred million dollar funding when they accomplished blank 500 000 of ARR therefore we will be able to raise a hundred million dollars of funding when we accomplish 500 000 error right Michael right like there's no difference between you know summer 2022 and summer 2021

well that's how it works right is investors what they do is they just um are always consistent and they always make the same decisions and it's easy for you to tell reading the TechCrunch 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 the bag we got it and then the other one that I love about it is like no Michael like that round

was announced last week that just happened and it's like sorry but lots of things are allowanced way after they happen way way after and so again what I think what we're saying about what's the stupid goal in this case playing the stupid game here is trying to create superficial resemblance to other things yes as opposed to Deep the thing is working in or maybe there's a deeper analog to the other thing but

if you're just focusing on the very surface level stuff yeah you're that is not a smart game to be playing one other example maybe an old one we talked about in the past you know with Facebook where you might be able to argue well they raise money when they only had a small number of users right and then you completely punt on 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 something versus replicating I don't know it's for college kids or I don't know people have very superficial um stuff there oh God you brought up one um on our list about sandbagging let's talk about sandbagging a little bit Yeah so sandbagging I don't know how much people are used to that term um I think it's think I'm it's a golf term but sandbagging is basically where you set goals that are intentionally way easy to

hit with the goal of blowing them out of the water right so say you know you can accomplish something in one week the sandbag version of the goal is to give yourself a month and then when you go around and you hit the goal you like look like a genius and what's funny is when you are working for the man when you are working at a company like office space you know you're in a cube Farm somewhere um it makes sense to sand bad goals and that's actually great career advice I suppose is that you you know you set

really you convince people that something's really hard to do and then you exceed their expectations what a great way to get promoted or whatever of course however there's a problem if you're used to doing that and that's how you think all things should work when you start working for yourself when you were Your Own Boss you are screwing 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 people do when you're the boss

do you see how that's like not great well and you better believe that big company you work for didn't have that culture when it was starting yeah the founders of that company were not doing that no all right let's talk about accomplishing goals so okay let's say I set a good goal right I I'm a post-launch B2B SAS company with a couple users and I am setting a goal of getting my first 10 paying users right great like we're in the right ballpark let's hear about how people screw

up accomplishing goals and somehow kind of still play the stupid game right out of the gate it's the way that you accomplished it is something that you know in your heart is not like how what's the word I want to use kosher I don't know what would you what word would you use it Michael like um I like using the word cheating like you know it's like you're taking a calculus test did you learn calculus and then get d a 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 something when accomplishing the goal maybe you didn't accomplish the goal you know you can fool investors you can full co-found you can fool please yeah yeah people are very trusting and so I think the way the mistake people make is they think

that because they fooled people in a short term they're like yeah you know what I actually did was I got my friends and family to do blah blah or what I act you know there's like something where you're like yeah this didn't we cheated but no one else seems to be aware of us you're like well I guess I guess this worked I guess this is how this goes so um another way that people screw up the accomplishing goals is not understanding how to take the L okay maybe you set the wrong goal

and instead of um realizing that and setting a new goal you cheat or do one of these other tactics to try to accomplish it because you feel as though not accomplishing your goal is a failure and of itself man I find Founders screw this up constantly it's like you don't have to assume you're going to be good at setting goals like you can give yourself some slack assume you're going to be bad at it and like you can adjust over time you can set better 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 and it's like first of all we're not grading we're not your teacher we're not your boss and second of all like your job is to work on the hardest problem in your company like that like if you've made progress on the hardest problems in your company you're doing well that's the that's the whole gist of this it's not like oh did you like release that feature when you said you were going to you know that No One's Gonna use

foreign oh man and then you talk about excuses a lot how do people screw that up when they don't accomplish their goal I just notice a lot that when folks set goals and they're not able to hit them that's okay but when folks are in a position where they really think it's important to make a lot of excuses on why it's not their fault and with everyone else's fault and they just have this like inner desire to like tell me all the excuses I think that's not helpful in that like again

I'm not the bot like I don't care okay you didn't hear a goal great let's move on like like it's like they want Redemption and so I just think that it's good if something doesn't work to accept it to acknowledge to look at it but realize you're the boss of yourself and you should just not feel a need to make a million excuses or have like like create this long narrative where you're the victim and everyone else it's not your fault and your heart was in the right place and you did everything right but

everyone else was wrong this is usually stuff about sales cycle well you know the sales cycle is just long like this is just too hard and it's just when people do this my message to him is like hey that's fine I'm not saying your excuse is wrong but like why are you spending all this energy trying to plead a case like you're in court that the thing didn't work as opposed to like well move on and make something that does work how about that spend energy in a positive proactive Direction then weaving The Narrative of yourself is the

person who did great but you're misunderstood by the universe this is an internal tool like this is a tool for 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 stupid prizes um let's talk about some of the stupid prizes that we see companies with where do you want to start here the last thing is if you sent that goal

if you start playing a silly game and we see lots of people win at the game and so one of the game one of the stupid games sometimes people play is just how much money can I raise the more money I raise the better my goal is most dollars raised and the bigger that number is the better I am so you're playing the game you won the game congratulations what's the prize you win Michael what's the stupid prize if you play the raids as much as you can game often you lose control of your company so like when you confront the challenges suddenly you know your board can fire

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 think you've made it who think that this is you know the next Google when in reality it's it's it it's not um and then last you might have to change what you're working on or change the problem or pivot in some significant way but now they're all of these people and all this money and all this momentum going down a

Direction that's driving a company off the cliff and that pivot becomes 10 times harder or or damn near impossible oftentimes um but you did win the fundraising game yeah it's like congratulations so congratulations here's your prize you have a messed up company that shouldn't have raised all the money and you've got to dig yourself out of a disaster and everyone's mad at you here you go you won the prize have fun

the next fun one is I want to feel like someone running a big company I want to have 50 employees I want to have 100 employees I want to have 500 employees I want to be a boss of a live number of employees I want a real big team I want to move real fast that's my game yeah it's always about moving fast that's the lies like if we had this we could finally move as fast as like uh you know we could finally 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 work at your company and you're like oh no and guess what it's now your problem because now you might have to do a layoff you might have to let people go you might mess up people's lives that believed in you you might mess up that or have moral issues there it's like the worst thing ever to over hire and have to deal with it and if you talk to

someone that's had to deal with this this is usually one of the more the biggest failures if you look at your life I know that's how I feel like personally is the biggest failures I've ever had were definitely having to let 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 I love this one um Dalton I need an executive team it's

it's time for my company to become a real serious company and to do that I need an executive team and so I'm going to spend the next year recruiting the executive team like it's time I'm I'm ready to grow up Dalton I'm ready to grow up what do you think about this one how many great Executives have we encountered over the years I mean look I think if all you do is consume like VC content you're this is some an idea that gets introduced into your brain and I think maybe there is a time where this

is a good answer 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 something like again I don't really know who a lot of this is the majority of the people the consume it or like two or three person startups and if you if all of your advice is like hire an executive team when you have like a three-person pre-pmf startup like

oh man like you can get someone to leave you can get someone with a title to leave Google or Facebook or somewhere really impressive and you think you're like a big winner that you got someone from this cool company to join your company but then you wake up and you're like wow what did I do like like what usually happens is they either are even though they join your startup because they're they weren't doing well I'm trying to think of a nice way to say it either there's a reason they joined your startup and left Google or they had expectations that you were

farther along or more successful than you actually are and they get very upset with you when they realize that your startup sucks tricky all right the next one the next gift that you receive when you play a stupid game we've touched on this a little bit is I'm now burning tons of money because I just scaled negative margins you know I had something that wasn't working in this city and I expanded that thing to 30 other cities and now it's not working at a massive scale

and I did it because my investors told me to and now those investors aren't taking my phone call and this is like so hard because I think people don't realize that either some stage of investors or at some point in your company someone's gonna pull out your finances and do basic arithmetic and ask themselves is this real and like eventually you will be judged based on like is this real and sustainable and if it's not like you know hey

sometimes you even get post IPO but like at some point those people are having a bad time we're not going to name any names it's not being post IPO and then having your stock with 95 of its value I don't think not fun those people are having a good they played a game and here's like the prize they have is um is having a rough time so I definitely feel as though Founders make this mistake of like if I raise the last

round by massively scaling my negative margins I'll be able to raise the next round and that luck runs out at some point um you know the next topic is on you know acquiring companies and I think that um this comes in a number of flavors one is once again we're finally grown up we can make our first acquisition or like we 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 this will help us grow faster so we're gonna we're gonna acquire them and by the way that doesn't mean that like acquiring companies is bad it it just often means the folks who are thinking about it in startup land tend to be thinking about it too early is this like another example of like taking later stage advice too early when like the advice you should be taking is make your core business work like just make it through pmf if you don't have product Market fit yourself

or probably it's probably not a great idea you're 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 pre-product Market fit we should definitely be spinning up Court Dev um here's another one that's in the news more and more lately um defrauding your customers selling your customers something and telling

them it's one thing and you know it's not that thing and your customers lose money or your customers are in some way extremely harmed what's the prize for doing that Dalton um no joke it seems like there's people going to jail and getting arrested and people whose actual lives are now irreparably harmed by the games that they were playing to get growth or to get money and um yeah they're gonna spend you know

best case scenario is spending years and years and years in court and in the court system and just having your life 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 like and and and um I think what's tricky is that oftentimes people don't think this is happening I think sometimes people forget

that they're not playing a game and I think especially in covet land I don't know like one of my explanations is if you spend all day on Twitter and Discord and everything's a game and everything to joke and everything's silly you can kind of I just have noticed some folks lose themselves and not realize that the numbers in the spreadsheet are real dollars and I don't know it's like we're not playing Monopoly we're not playing Sellers of Catan and I think that this 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 position as a startup founder to become an amazing investor and and I think this one's like really tricky because for one thing you definitely see a lot of famous startup Founders have written kind of Angel and checks into companies that that tend to do well and so I think sometimes people confuse that

for oh I should be spending a significant amount of my time looking around and trying to be an angel investor instead of making my company work and I think that what if I can try to explain to you what's actually happening when you're a good founder oftentimes you know other good people and the opportunity you have to give them money requires almost no time or effort and so you just and like if you're a good founder oftentimes people are are

offering you to Deals and so like you know you're spending five minutes saying yes this is an Obviously good thing I use it or this is my friend I want to support them and the amount of time and effort you're spending writing these Angel checks is 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 that he spent probably less than 15 seconds

um I think people don't see this so they think oh I need to copy what I see investors on Twitter doing I need to go Network I need to go meet Founders and advise them and do office hours and like all these things and it's like uh like classic example of cargo culting right like not really understanding what's going on the stupid game you're playing is the status game like if you play status games where what you want to do is level up you want to put angel investor in your Twitter bio or something okay you're playing a

status game fair enough the prizes that you win playing the game is congratulations now a bunch of your money is tied up in illiquid Investments that may or may not show up so now maybe you're like financially strapped maybe you're worried about other stuff you're worried about your startup so maybe you're performing worse because your money is tied up somewhere you have spent a bunch of time and stuff you've totally pissed off your employees 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 think enough about the bad consequences of the games they're playing and once they really do the whole logic tree down to the end they'll realize that maybe it's not worth playing those games and you might as well just build a good business

and even if that's a tricky message for you to internalize think about what you're teaching your team if you're making these mistakes right like they will copy what you're doing because you define success in your company and so even if you're like oh for me this is cool right like a perfect example if if becoming a status seeking angel investor is like what seems cool in your company people in your company can start trying to do it instead of doing their work and so if they see you make sure

yeah people in the company start doing it they like it's kind of like a little bit you know we're both parents it's kind of like hey like if you don't want your kid to be a screw-up you don't do screw up in front of them like it's like a pretty simple like like one-to-one here like um and on the flip side to kind of end with a positive note some of our best companies get so good at goal setting and accomplishing goals that they

they move faster than we would ever imagine possible like they are just machines at doing this well and I would argue that most people don't start doing this well most people who focus on setting goals and accomplishing them get better at it over time but man the rate of improvement is sometimes shocking you know sometimes they're Founders who are kind of fooling themselves who are thinking like hey I'm smart so I can Coast on this stuff it's like man outliers are smart and great

executors and great trainers right like they have multiple things they're great at they don't sandbag themselves [Music] foreign I think we're good I think it's well set thanks man awesome talk to you later [Music] [Music]
