The [sandbagging-unreasonable] continuum in goal setting
We’ve all heard the virtues of setting goals for oneself. We have New Year’s resolutions, SMART goals and even micro-goals. In the modern workplace, we have MBO, OKRs and KPIs. If you don’t know what some of the acronyms mean, don’t worry; what they all have in common is that when you set out to accomplish something, you need to define some measurable way to determine if you have achieved the goal.
Working at an established company, with stable and fairly fixed processes, this is a reasonably predictable process. While nobody can tell the future with great accuracy, and surprises do happen (remember 2020?), you will probably have much historical and trend data to help you and your team. If last year your business grew by 20%, maybe this year you will stretch and try to grow by 22%. Woo-hoo, goal-setting is done, let’s go have a beer.
At an early stage startup? Not so much. If you wanted to do just a little better than last year, then it would take you 10 years to grow to a reasonable size. You have 10 months.
As a founder, you totally get this. If you’re the CEO, you’re constantly checking your runway. Your choices are
- Spend more, hire a lot of people, run out of runway, fail.
- Spend less, hire fewer people, fail to grow, fail.
- Stumble upon the perfect blend, at the right time, live to fail another day.
At InOrbit, we are fond of using space analogies, to the chagrin of our marketing team who worries that our customers will think we’re like SpaceX for robots — for the record, we’re not, though that does sound pretty good 🤔. Let me put this in terms of the search for extraterrestrial life:
- Planet orbits too close to its star, water boils away, life fails to emerge *
- Planet orbits too far from its star, water freezes, life fails to emerge
- Planet is in the goldilocks zone, water is liquid, slim odds of life emerging
* assumes that life will develop like it did on Earth
Back to goal setting at your startup planet, what do you do? As CEO, you might work backwards from where you need to be for your next fund raise. You read every article out there about trends in venture investment, the metrics you’re supposed to hit, how much ARR, ACV, LTV, etc. In our space analogy, this is like figuring out that water needs to be above 32° F and below 212° F … or between 0°C and 100° C for the other 96.4% of countries around the world.
So you set what you consider an ambitious-yet-barely-achievably target. Then you share your target with your team, and you ask them to come up with the specific metrics within their sphere of influence that they will sign up for. The idea being that if everyone hits their metrics, then the company hits its overall metrics. Easy, right?
Not so fast. Keep in mind, not everyone on your team is on the same boat as you are as a founder. In order to be a startup founder, you need to suspend disbelief. As Scientific American puts it “It isn’t that we stop disbelieving — it’s that we believe two inconsistent things.” The inconsistency for a startup founder is believing that you will succeed while also knowing that most startups fail. This is a bit like playing a Jedi mind-trick on yourself.
So finally, we get to what I call the
[sandbagging — unreasonable] continuum.
At one end of this continuum, you will find some people on your team who want to play it safe and aim for goals that they are certain they can hit. While sandbagging has negative connotations (at least until there’s a flood), this is actually quite rational behavior. Perhaps they have a bonus they’re counting on that will be pegged to that number. Or they don’t like the feeling of missing their numbers, because they feel they’re disappointing their coworkers. Ultimately, this boils down to: why would anyone want to sign up for a target they think they won’t hit?
At the other end of the continuum is setting totally unreasonable expectations, like going from $1M ARR to $100M ARR in 18 months. As a visionary, you have big dreams, and you want everyone around you to share your vision. You turn up the reality-distortion field to 11, your team signs up for it, your investors throw money at you. In the back of your mind, you’re thinking “So what if you don’t hit it? At least we’ll do much better than if we had set a lower target.” This is the shoot for the moon strategy (sorry, marketing, more space references.) It may work for a cycle or two, but in the end reality catches up and you end up making pizza boxes.
Most people at your startup will probably fall somewhere between these two extremes. If they had no appetite for uncertainty, they probably wouldn’t have joined a startup in the first place and if they consistently underperform they probably wouldn’t be around. The challenge is that each person may fall at a slightly different point in the continuum. That’s a problem because you then have some people who are just cruising while others are in ultra hustle mode. While a bit of this is natural based on the different personalities, too much misalignment is sure to create friction and could lead to a toxic environment.
If that happens and you’re the CEO, it’s your fault. (That’s the default answer for all big issues at your startup — there’s a reason it’s called default.)
It’s up to you to callibrate your team, so everyone is in the same orbit (oops, I did it again.) Not too close, not too far. You may want to make some small adjustments, eg you may ask a VP to stretch more than an intern … although you may be surprised by how eager an intern might be to shoot for the unreasonable, perhaps because they don’t know yet what is reasonable or because they are hungrier to learn and grow.
Ultimately, every organization needs to find its goldilocks zone on the [sandbagging — unreasonable] continuum. It can’t be imposed from up high if you want people to stick around. You need to work together towards it with your co-founders, key executives and the rest of the team. You will get it wrong many times before you get it right. You just need to put in the hard work, be consistent, celebrate success, learn from failures and keep iterating, like with everything else at your startup.
That, my friends, is what makes this so much fun.
