- The video discusses the pitfalls of setting and trying to accomplish goals for startup founders.
- One mistake is setting goals that are too aggressive and motivated by fear.
- Another mistake is using fake metrics instead of measuring actual success.
- Comparing oneself to successful companies in order to set goals is also a common mistake.
- Sandbagging, or intentionally setting easy goals to exceed them, can be detrimental when working for oneself.
- The video also mentions the mistakes people make when trying to accomplish goals, but does not provide specific examples.

- The video discusses how people often cheat or deceive in order to accomplish their goals.
- It emphasizes the importance of learning and mastery in achieving goals, rather than simply fooling others.
- The video highlights the mistake of not understanding how to accept failure and set new goals instead of cheating.
- It mentions the tendency for people to make excuses when they fail to achieve their goals, and how this is not helpful.
- The video also mentions the "stupid prizes" that people win when they play certain games, such as raising as much money as possible or having a large number of employees.
- These prizes often result in negative consequences, such as losing control of the company or having to do layoffs.
- The video criticizes the idea of building an executive team too early in a startup's development.
- It also warns against scaling negative margins and expanding without a solid foundation.
- Overall, the video encourages individuals to focus on learning, setting realistic goals, and avoiding deceptive tactics.

- The speaker discusses the consequences of certain actions that founders may take in their startup journey.
- They mention that raising funds by scaling negative margins can lead to problems when investors realize the company's finances are not sustainable.
- Acquiring companies too early can be a mistake, and founders should focus on making their core business work first.
- Defrauding customers can lead to legal consequences and harm the reputation of the company.
- Trying to become an angel investor instead of focusing on the startup can result in financial strain and strained relationships with employees.
- Founders should consider the negative consequences of their actions and focus on building a good business.
- Setting and achieving goals effectively can lead to rapid improvement and success for a startup.

The video discusses the pitfalls of setting and trying to accomplish goals for startup founders. It highlights the mistakes of setting aggressive goals driven by fear, using fake metrics, and comparing oneself to successful companies. It also mentions the importance of learning, mastery, and setting realistic goals. The video criticizes actions such as scaling negative margins, acquiring companies too early, and defrauding customers. It emphasizes the negative consequences of these actions and encourages founders to focus on building a good business.

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

Did you learn calculus and then get the A, or did you cheat and get the A?

Like, it's like, you know the answer to that question.

Like the A isn't the goal, it's the representation of your knowledge and your mastery.

This is Michael Saibel 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.

Yeah, you know, when we were talking about it this morning, the phrase or the meme that came to mind was the 1, play stupid games, win stupid prizes.

You know, and again, What I think it means in this context is if you set goals or if you start playing 1 specific game that is silly to begin with, or that's like clearly a bad call, yeah, the prizes, the implications of that, the things that you win are going to be equally silly or nonsensical or nonproductive, okay?

And so we see a lot of people who set goals to in effect play kind of stupid games.

Let's talk about the stupid games and then we'll talk about the stupid prizes at the end.

So, you know, I think 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 1, And maybe I'll start with the simplest, is when people set goals that are so aggressive, they aren't motivational.

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 because they're motivated by fear.

You know, in YC we see this all the time.

And what's an example of a too aggressive goal?

Yeah, you know, I'll see a YC founder who comes in to YC just starting to build their product.

And they tell me, by demo day we wanna have, you know, 30K in MRR.

And we wanna do that because some alum told us that that's how much MRR you need in order to raise money on Demo Day.

And it's just like, how many errors can be said in 3 sentences?

What's an example that comes to your mind?

My most common example is someone that believes once they launch a product, it will immediately succeed and take off.

And so it's like, we're gonna spend 3 months building this app.

We're gonna put it in the app store, we're gonna launch, and then we're gonna get 100,000 DAU.

it's always, the plan is they're gonna put it out and then it's going to immediately take off.

Those are always the goals that are rough.

And what's funny is we're always like, why don't you launch sooner?

So you have more time to make it grow after it launches.

We're gonna spend all the time making it good.

And so then when it goes, it's gonna immediately take off top of the app store, a hundred percent.

That's- Dalton, Why would we launch something bad?

Yeah, we're gonna talk to some influencers.

You know, we're gonna do a social media launch.

So both examples of being too aggressive.

The next 1 that comes up a lot is fake metrics.

And we've talked about this a little bit, but for companies who charge their customers money somehow creating a goal incremented in something that's not money.

Hey, my product costs $10 a month, but I'm measuring registered users.

Hell, if users is going to be the metric, why wouldn't it be active users?

Just like if we're going to be in that world.

Oh, that's too hard, Michael, that's why.

Well, fair, but if we're charging them, why wouldn't it be the amount of money we make?

But I think you've seen a wide variety of fake metrics that goes way further than users, right?

Okay, counting hits on your website, that's an oldie but a goodie.

Counting downloads but not registrations is a good 1.

Counting users as people that started the registration process and didn't finish it.

Counting users as people that download your product, opened it, closed it after 5 seconds and never open it again as

Just basically like 1,001 different ways to avoid the actual meaning of the metric, which is to capture if it's working or not.

People are so creative in finding ways to not actually measure the thing that they know they're supposed to be measuring.

And I can never tell if they're doing it to fool themselves or to fool investors or authority.

It's hard for me to tell when someone is practicing self-deception that number of downloads is the right metric, or if they think that no 1 else realizes that that's obviously, like no 1 else can tell what they're trying to do.

It's probably a combination of both, right?

Like, okay, so here's another 1 that I see a lot, especially with fundraising, stupid comparatives.

So like in 2021, Tiger gave this company $100 million funding when they accomplished blank, 500,000 of ARR.

Therefore, we will be able to raise $100 million of funding when we accomplish 500,000 of ARR.

Like there's no difference between, you know, summer 2022 and summer 2021 at all.

As investors, what they do is they just 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.

Like I read the article, you know, this VC invested in this company, we're kind of like that company in some superficial ways.

And then the other 1 that I love about it is like, no, Michael, like that round was announced last week.

And it's like, sorry, but lots of things are announced way after they happen.

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.

As opposed to deep, the thing is working, or maybe there's a deeper analog to the other thing.

But if you're just focusing on the very surface level stuff, yeah, that is not a smart game to be playing.

1 other example, maybe an old 1, we talked about in the past, you know, with Facebook, where you might be able to argue, well, they raised money when they only had a small number of users, right?

And then you completely punt on the fact that that small number of users were 95% 2 hour a day Facebook users.

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 stuff there.

Oh, God, You brought up 1 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.

I think 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 1 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 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're in a cube farm somewhere.

And that's actually great career advice, I suppose, is that 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.

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 are your own boss, you are screwing yourself.

And what may be a good strategy to rest invest working at Google or Facebook and to just do as little work as possible by sandbagging goals and working 3 hours a week or whatever people do.

When you're the boss, do you see how that's 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.

All right, let's talk about accomplishing goals.

So okay, let's say I set a good goal, right?

I'm a post-launch B2B SaaS company with a couple users, and I am setting a goal of getting my first 10 paying users.

Let's hear about how people screw up accomplishing goals and somehow 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...

It's like you know the answer to that question.

And 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 fool co-founders, you can fool a lot of people.

And so I think The way, the mistake people make is they think that because they fooled people in a short term, they didn't hit the goal.

They're like, yeah, you know, what I actually did was I got my friends and family to do blah, blah, blah.

Or what I act, you know, There's like something where you're like, yeah, this didn't, we cheated.

So you're like, well, I guess, I guess this worked.

So, another way that people screw up the accomplishing goals is not understanding how to take the L.

And instead of realizing that and setting a new goal, you cheat or do 1 of these other tactics to try to accomplish it because you feel as though not accomplishing your goal is a failure in 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.

You can give yourself some slack, assume you're going to be bad at it, and you can adjust over time.

You can set better goals over time, you can not accomplish your goals and learn from it.

There isn't this, you know, sometimes in YC 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.

If you've made progress on the hardest problems in your company, you're doing well.

It's not like, oh, did you like release that feature when you said you were going to that no one's going to use.

How do people screw that up when they don't accomplish their goal?

I just notice a lot that when folks set goals and are 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 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 boss, like I don't care.

Okay, you didn't hear a goal, great, let's move on.

And so I just think that it's good if something doesn't work to accept it, to acknowledge it, 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.

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 them is like, hey, that's fine.

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.

Spend energy in a positive, proactive direction, then weaving the narrative of yourself as the person who did great, but you're misunderstood by the universe.

Like this is a tool for you to use your help yourself.

This is not a tool for you to please someone else.

You know, you set this up with play stupid games, win stupid prizes.

Let's talk about some of the stupid prizes that we see companies win.

this thing is, if you set that goal, if you start playing a silly game, you can win at the game.

And so 1 of the, 1 of the stupid games sometimes people play is just how much money can I raise?

And the bigger that number is the better I am.

What's the stupid prize if you play the raise 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 all the people who gave you money expect you to spend it.

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 the next Google, when in reality it's not.

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 there are all of these people and all this money and all this momentum going down a direction that's driving your company off the cliff and that pivot becomes 10 times harder or damn near impossible oftentimes.

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.

The next fun 1 is I want to feel like someone running a big company.

If we had this, we could finally move as fast as like, we could finally build all the things that I want us to build.

What's the stupid prize on that 1, Dalton?

Now you wake up 1 day and you look at the spreadsheet of your burn and 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 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 1 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.

It's time for my company to become a real serious company, and to do that, I need an executive team.

I'm going to spend the next year recruiting the executive team.

How many great executives have we encountered over the years?

I mean, look, I think if all you do is consume like VC content, this is 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 VC content is aimed at late stage founders, which is pretty weird.

It's like putting out content that's like, you know, how to care for your, your Ferrari or something like, like, again, I don't really know who a lot of this

of the people that consume it are like 2 or 3 person startups.

And if you, if all of your advice is like hire an executive team, when you have like a 3 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 what usually happens is they either are, either they joined 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.

All right, the next 1, 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 is this real and sustainable?

And if it's not, hey, sometimes you even get post IPO but At some point.

It's not being post IPO and then having your stock lose 95% of its value.

having a good, they played a game and here's, like the prize they have 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.

The next topic is on acquiring companies.

And I think that this comes in a number of flavors.

1 is, once again, we're finally grown up.

Or like, we wanna 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 acquired by us, and this'll help us grow faster.

And by the way, that doesn't mean that like acquiring companies is bad.

It just often means the folks who are thinking about it in startup land tend to be thinking about it too early.

This is 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.

Yeah, if you're pre-PMF, if you don't have product market fit yourself,

You're laughing but people are probably like, wait, really?

You know, Dalton, you're right, I am laughing because That's an inconceivable concept in my mind.

We should definitely be spinning up core dev.

Here's another 1 that's in the news more and more lately.

Selling your customers something and telling them it's 1 thing and you know it's not that thing, then your customers lose money or your customers are in some way extremely harmed.

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 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.

We're gonna be clear here, like your state of mind is extremely important here.

This is like knowingly pursuing a strategy that you know is harming your users.

Like, and 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 COVID land, I don't know.

Like 1 of my explanations is if you spend all day on Twitter and Discord and everything's a game and everything's a joke, 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.

And I think that the prize that you win is the knock on the door from the police.

And that's when you're like, oh, wow, this was real life.

And the last 1 on our list, playing the game of using your position as a startup founder to become an amazing investor.

And I think this one's like really tricky because for 1 thing, you definitely see a lot of famous startup founders have written kind of angel and checks in the companies 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 offering you deals.

And so like, you know, you're spending 5 minutes saying yes, this is an obviously good thing, I use it, or this is my friend, I wanna 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 starting SocialCam, I emailed Brian Chesky saying, do you wanna angel invest?

Like that was like, that was the entire time that he spent probably less than 15 seconds.

So they think, oh, I need to copy what I see investors on Twitter doing.

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The Secrets To Setting Smarter Goals