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Dalton + MichaelDalton + Michael

How to Spot a Terrorist in Your Startup

In this episode, Dalton and Michael discuss how to identify and remove startup terrorists.

Dalton CaldwellhostMichael Seibelhost
Aug 12, 202619mWatch on YouTube

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Transcript

0:00 – 0:26

Defining “terrorists” in startups: not difficult people, but value-destroyers

Dalton Caldwell 0:00 We're not talking about the, like, don't have difficult people-

Michael Seibel 0:03 Yeah

Dalton Caldwell 0:03 ... or don't-

Michael Seibel 0:04 No, no, no, no.

Dalton Caldwell 0:04 We're describing folks that effectively hijack everything.

Michael Seibel 0:09 [laughs] Yes, yes.

Dalton Caldwell 0:10 And create no value. [laughs] And like, you know who they are.

Michael Seibel 0:13 Yes.

Dalton Caldwell 0:13 Again, if you're watching this, we're not talking about the people on the line-

Michael Seibel 0:16 No

Dalton Caldwell 0:16 ... where you're not really sure-

Michael Seibel 0:17 No

Dalton Caldwell 0:17 ... and they, but they've done all this really good stuff.

Michael Seibel 0:19 We're using the word terrorist for a reason. [laughs]

Dalton Caldwell 0:20 But this is where you're like, "Oh, wow, this is a whole cloud of problems."

Michael Seibel 0:25 Yeah. [laughs]

Dalton Caldwell 0:25 That is what we're referring to.

0:26 – 2:13

Origin story: the “terrorist customer” who was bombing the business

Michael Seibel 0:26 Yes. Yes. Welcome to Dalton + Michael. Today we're gonna talk about terrorists and startups. [laughs]

Dalton Caldwell 0:39 [laughs]

Michael Seibel 0:39 What the hell am I talking about, Dalton?

Dalton Caldwell 0:41 Yeah. I mean-

Michael Seibel 0:42 [laughs]

Dalton Caldwell 0:42 ... look, this was always your thing. I remember, uh, over the years hearing this term from you and learning from you-

Michael Seibel 0:47 Yes

Dalton Caldwell 0:47 ... where you would talk about terrorist customers for startups.

Michael Seibel 0:51 Yes. Yes.

Dalton Caldwell 0:51 And so obviously, uh, this is some colorful language we were using.

Michael Seibel 0:55 Yeah.

Dalton Caldwell 0:56 Yeah. Can you just define what you meant when you-

Michael Seibel 0:58 It was interesting. I remember talking to a startup, and this startup was trying to help a customer that was almost unhelpable, to the point where the startup would have to do things that would never make them any money, things that would only apply to a tiny percentage of people. And it was almost like the startup was serving the customer out of pity versus out of, like, even, like, accomplishing their mission and goals. And I remember saying to this founder, like, "You can just fire this customer." And I, and I remember this founder had so much kind of emotional tie to this customer, and you know, when you're in office hours, sometimes you have to use kind of, like, aggressive language, right?

Dalton Caldwell 1:38 [laughs]

Michael Seibel 1:38 It's like, how do I, how do I cut this emotional tie? And it's like, this customer is a terrorist. Like, they are actively bombing your startup. [laughs]

Dalton Caldwell 1:47 [laughs]

Michael Seibel 1:47 You have to let them go. And I think that that word kind of, like, flipped something in their head, and they were like, "Oh, yeah, like, this customer is causing my business harm, and that's not... We're supposed to be doing this mutual exchange where we both improve. We're not supposed to be doing this exchange where I die." And so I think that's where it came from, and, and then lo and behold, we have found terrorism in other areas. It's not just terrorist customers.

2:13 – 3:37

How terrorist customers happen: leverage, hostage dynamics, and roadmap capture

Dalton Caldwell 2:13 I think in terms of customers, if someone's watching this, they're like, "Well, how do I know if I have a terrorist customer? Like, what are these guys even talking about?" Let's, let's give some of the properties.

Michael Seibel 2:21 [laughs]

Dalton Caldwell 2:22 Um, so I think one is where they're effectively holding you hostage-

Michael Seibel 2:30 Yes

Dalton Caldwell 2:31 ... because they might be such a large customer.

Michael Seibel 2:33 Yes.

Dalton Caldwell 2:33 They might be the only customer. So a common setup for getting a, a terrorist customer is you're a brand-new startup, and you get some nice inbound from a really fancy, great logo.

Michael Seibel 2:43 Yes.

Dalton Caldwell 2:43 And they're willing to pay you lots of money.

Michael Seibel 2:45 Yes.

Dalton Caldwell 2:45 And effectively, the rest of your startup is not going well.

Michael Seibel 2:47 Yes.

Dalton Caldwell 2:48 And so you have this one shiny-

Michael Seibel 2:49 Bright spot. Yes

Dalton Caldwell 2:50 ... bright spot when everything else is going bad, and perhaps that customer understands that they have that leverage over you.

Michael Seibel 2:57 Perhaps. [laughs]

Dalton Caldwell 2:58 And you effectively spend the next duration of your life as a startup founder catering to this customer.

Michael Seibel 3:06 Yes.

Dalton Caldwell 3:07 And this might mean your entire roadmap is dictated by them.

Michael Seibel 3:12 Yes.

Dalton Caldwell 3:12 It might mean you're losing tons of money to service them. It mi-

Michael Seibel 3:15 Customer service at the, just craziness. Yeah.

Dalton Caldwell 3:18 Yeah.

Michael Seibel 3:18 Yes.

Dalton Caldwell 3:18 It basically, they, they dominate-

Michael Seibel 3:20 Yes

Dalton Caldwell 3:21 ... your existence as a startup founder.

Michael Seibel 3:23 And this can happen to consumer companies and B2B companies-

Dalton Caldwell 3:26 [laughs]

Michael Seibel 3:26 ... which is interesting. Yeah.

Dalton Caldwell 3:27 Again, the, the point is they have this leverage over you, and-

Michael Seibel 3:30 Yes

Dalton Caldwell 3:31 ... there's often brinksmanship, where there's new crisises that, that happen because of the customer that cause you to not be able to make progress on your startup.

3:37 – 4:27

Sometimes you hand them leverage: desperation and the illusion of “good revenue”

Michael Seibel 3:37 Well, I think what's interesting about this, too, is that, you know, you're framing it as like the customer has leverage over you, which is totally true. But I've also seen it where, like, you give that customer leverage.

Dalton Caldwell 3:48 Yeah.

Michael Seibel 3:48 Like, they're not actually that good of a logo. They're not actually paying you that much. It's just that you're so desperate for anyone to be replying to your emails and getting on the phone with you that, like, you just don't want that to stop. And so you'll-

Dalton Caldwell 4:01 Totally

Michael Seibel 4:01 ... do things that have nothing to do with your company succeeding.

Dalton Caldwell 4:06 This would come in office hours where people would be surprised how often we would be like, after someone got into YC, "Oh yeah, you should, like, not service that customer anymore."

Michael Seibel 4:15 Yeah.

Dalton Caldwell 4:15 And they're like, "But you're, we're gonna give up all this revenue. What are you talking about?"

Michael Seibel 4:18 "You told me to grow, Dalton." [laughs]

Dalton Caldwell 4:19 I thought... They're shocked. We're like, "Yeah, you don't wanna be in that business anymore."

Michael Seibel 4:23 No.

Dalton Caldwell 4:24 Um, I think that's really surprising to founders sometimes.

4:27 – 5:40

Terrorist requests: when a decent customer asks for the wrong thing

Michael Seibel 4:27 I think it really is, too. I really wish startups could reduce down to just, like, one variable, which is, like, grow revenue. Uh, it just, it's not, not actually true, and the quality of your revenue kind of matters. I think the other thing that's tricky about a terrorist customer is that I'll move this to a s- to kind of like a, let's say the customer is actually okay. They're not in and of themselves a terrorist customer, but they're asking you to do something that you shouldn't do.

Dalton Caldwell 4:56 Yeah.

Michael Seibel 4:57 So let's call that, like, a terrorist request. So a terrorist request could be something like, "Hey, we're asking you to do some project where you're gonna lose a ton of money," right? Or asking you to do some project where it's like, "Oh, like, you did this really great software thing for us over here. Can you, like, I guess you're good at writing software. Can you just, like, write us more software over here, here, here, here?" Or one of them that's actually, like, really tricky is like, "Oh, can you build this feature for us?" Where when you really dig down, you realize that feature will not help the customer, but they're asking you to build it. But, like, you've now spent some time. You understand the customer's business, and you're like, "It will not move the numbers. It will not..." What do you do? What do you do when you have a good customer giving you a terrorist request?

5:40 – 6:17

Don’t negotiate: hold the line, because ‘yes’ invites more demands

Dalton Caldwell 5:40 Well, I think you've gotta find a way to say no. Again, this is the, the terminology of terrorist customer is like you don't negotiate with terrorists.

Michael Seibel 5:46 No. [laughs]

Dalton Caldwell 5:47 So, so the, the point, [laughs] uh, the point is you have to find a way to not do it.

Michael Seibel 5:52 Yes.

Dalton Caldwell 5:53 And it's up to the founder to understand the nuance of the relationship.

Michael Seibel 5:57 Yes.

Dalton Caldwell 5:57 So I don't know if I wanna give too general advice on this video of, like, always just- Say no and go away.

Michael Seibel 6:02 Yeah.

Dalton Caldwell 6:02 But you do need to hold your ground and not get involved. Um, because what's, what's funny about these dynamics is once you start saying yes, it's not like they stop with the problems.

Michael Seibel 6:14 No.

Dalton Caldwell 6:14 The problems keep on coming.

Michael Seibel 6:15 Yes, and growing.

Dalton Caldwell 6:16 Yeah.

6:17 – 7:10

Customers don’t always know what they need: synthesize, don’t follow feature lists

Michael Seibel 6:17 One of the mistakes I see a lot of companies make is they don't understand their customer well enough to even know whether they're be giving a terrorist request or not. Their mental model is, customer tells me to do something, they pay me, I do it, we win. Instead of the mental model being, I need to do things that makes that customer's business better, or that makes that customer's life better if it's a consumer. Like, only delivering on those tasks will produce long-term victory. [laughs] Delivering on other things they ask for will not. And I think there's this embedded assumption that we've encountered a ton of times. There's like, the customer knows how to make their business better, right?

Dalton Caldwell 6:57 [laughs]

Michael Seibel 6:58 Right? Like, the consumer knows what they want, right? Like, all I have to do is do what they ask me to do, right? Don't- [laughs]

Dalton Caldwell 7:05 I, I think-

Michael Seibel 7:05 I'm talking to them. They said do this. You told me to talk to them. [laughs] They told me to do this. [laughs]

7:10 – 9:13

Case studies: Facebook ‘growth as a feature’ and Twitch monetization clues

Dalton Caldwell 7:10 I think we've talked about this in a video before, but it reminds me of this old thing Mark Zuckerberg talked about once when he came and spoke to the, to the batch.

Michael Seibel 7:16 Yeah.

Dalton Caldwell 7:17 He would argue with his employees because they had talked to their customers and done user research, and there were all these features that the customers wanted them to build for Facebook.

Michael Seibel 7:26 Yes.

Dalton Caldwell 7:26 And that the PMs were like, "Oh, we should build these features."

Michael Seibel 7:28 Yes.

Dalton Caldwell 7:29 And Zuck would shut all that stuff down and say, "The best feature that Facebook had, like early Facebook-

Michael Seibel 7:36 Mm-hmm

Dalton Caldwell 7:36 ... was having all of your friends on it."

Michael Seibel 7:38 Mm.

Dalton Caldwell 7:38 "And actually, growth is a feature, and they're not articulating this to us. We'll, this will never show up in, in-

Michael Seibel 7:45 No

Dalton Caldwell 7:45 ... user research."

Michael Seibel 7:46 No.

Dalton Caldwell 7:46 "But we should be spending all of our cycles on growth of getting everyone onto Facebook-

Michael Seibel 7:51 Yes

Dalton Caldwell 7:51 ... so that all the people are there."

Michael Seibel 7:52 Yes.

Dalton Caldwell 7:52 "And that's actually the number one thing we do to increase satisfaction, as opposed to building a laundry, laundry list of features." How smart is that?

Michael Seibel 7:59 And no one's asking for it.

Dalton Caldwell 8:00 Yeah, no one's, no one's-

Michael Seibel 8:01 No one's asking for it

Dalton Caldwell 8:02 ... articulating that feature. So again, the advice here is blindly following feature requests, it's a, it's a leaky bucket. There's a hole in the bucket, and you will never fill it-

Michael Seibel 8:15 No

Dalton Caldwell 8:15 ... if you're just blindly following feature requests.

Michael Seibel 8:17 No.

Dalton Caldwell 8:18 You kinda gotta synthesize all of your information from what the customers are telling you versus taking them literally.

Michael Seibel 8:24 Well, and this was the classic issue at, at Twitch, where streamers, when we were pivoting at Twitch, asked us for all kinds of features, and they never asked us, "Can we get paid?" Because they never thought it was possible. You don't ask your, your dad for a Ferrari when you're 16. Once again, we had to use the context clues, and it was tricky. I remember the first time we got a hint was when we learned that one of our biggest streamers, like someone who could get 50,000 people watching them at any given time, pumped gas. And we were like, "Oh. Oh, it, this is a [laughs] this is a hint. This is a hint. Like, maybe these people who are good in this area are, aren't able to monetize their skills in the normal economy. Our bar is not how do we make someone as much money as an i-banker. We might just have to make them as much money as someone who pumps gas. Like, okay.

9:13 – 10:11

Survey trap: why literal feedback (like YC food requests) misleads

Dalton Caldwell 9:13 We used to do surveys for people in the YC batches-

Michael Seibel 9:16 Yes

Dalton Caldwell 9:16 ... about what they wanted.

Michael Seibel 9:17 Yes.

Dalton Caldwell 9:17 And if we took that stuff really literally, we would've spent all of our-

Michael Seibel 9:20 Better food. [laughs]

Dalton Caldwell 9:20 We would've spent all our time on food. We would've spent all our time hiring-

Michael Seibel 9:24 Yes

Dalton Caldwell 9:24 ... increasingly extravagant chefs-

Michael Seibel 9:27 Yes, yes, yes

Dalton Caldwell 9:27 ... if we listened to our users in the most literal way.

Michael Seibel 9:29 Yes.

Dalton Caldwell 9:29 That was the number one piece of feedback we got.

Michael Seibel 9:31 Also, what about my nightshade allergy?

Dalton Caldwell 9:33 [laughs]

Michael Seibel 9:33 I had to order DoorDash at the dinner. [laughs]

Dalton Caldwell 9:35 Yeah. But seriously, that was the-

Michael Seibel 9:37 Yes

Dalton Caldwell 9:37 ... number one recurring-

Michael Seibel 9:39 Yes

Dalton Caldwell 9:39 ... feedback we got from YC founders about the YC program-

Michael Seibel 9:42 Yes

Dalton Caldwell 9:42 ... was food related.

Michael Seibel 9:43 Well, and what was really funny, I remember reading those surveys, and it was, I felt like I was hunting for clues.

Dalton Caldwell 9:50 [laughs]

Michael Seibel 9:50 Like, some of the most interesting stuff would be, like, these offhanded, weird comments that, like, would not be reflected by the masses, but they would be like, oh, like, that would've been it better. Or, oh, wow, like you used something that we had different than everyone else.

Dalton Caldwell 10:07 Yeah.

Michael Seibel 10:07 But it was not build a word cloud and like, like-

Dalton Caldwell 10:11 [laughs]

10:11 – 13:02

Terrorists from inside: recruits and employees who come with endless demands

Michael Seibel 10:11 ... look at the biggest word. Like, no. Oh my God, no, no, no, no, no. So bad. Okay, so we've talked about terrorist customers. We've talked about terrorist requests. I think for the founder that's far enough along, they know that the biggest source of terrorism is from the inside.

Dalton Caldwell 10:29 Yes.

Michael Seibel 10:29 Terrorist employees.

Dalton Caldwell 10:30 Yes. [laughs]

Michael Seibel 10:31 [laughs] What do they say? Something's in the inside. What is it like [laughs] what is the-

Dalton Caldwell 10:35 Yeah, the call's coming from the-

Michael Seibel 10:36 Yeah

Dalton Caldwell 10:36 ... inside the house.

Michael Seibel 10:37 Inside the house. Yeah. [laughs] Let's talk about terrorist employees. What, any experience?

Dalton Caldwell 10:42 No. Okay, like, no, I don't know what you're talking about. Um, so let's start with folks that aren't in the company yet. And so the set-

Michael Seibel 10:49 Terrorist recruits

Dalton Caldwell 10:50 ... recruits. The, the setup is a founder is, like, desperate to hire. It's hard to hire.

Michael Seibel 10:54 Yes.

Dalton Caldwell 10:54 And then someone amazing comes along, and they're like, "Holy cow, they used to work at Google. They used to work here. They w- used to work there"

Michael Seibel 11:00 They're like a top 10 in the world at this thing-

Dalton Caldwell 11:02 Yeah

Michael Seibel 11:02 ... we need.

Dalton Caldwell 11:04 Um, and unfortunately-

Michael Seibel 11:05 And they wanna work for our shitty startup. [laughs]

Dalton Caldwell 11:06 Yeah, can you believe it? And unfortunately, there's a really complicated laundry list of demands of what the person wants-

Michael Seibel 11:13 Yes

Dalton Caldwell 11:14 ... around where they work, how they work, when they work. You know, just-

Michael Seibel 11:18 Yes

Dalton Caldwell 11:18 ... a very com-

Michael Seibel 11:19 Weird life circumstances sometimes. Weird, like, well, I can't commit to a start date or da, da, da, da, da. Like, all these, like, weird things where, like, if you were to hear your brother or sister talk about their, like, boyfriend or girlfriend and they would say these kinds of things, you'd be like, "This is not- [laughs]

Dalton Caldwell 11:36 [laughs]

Michael Seibel 11:36 ... this is not good" But for the employee, it's like, oh, but what about the upside?

Dalton Caldwell 11:41 And so what happens is you come up with justifications to say yes to all these things-

Michael Seibel 11:47 Yes

Dalton Caldwell 11:47 ... and ignore the clues.

Michael Seibel 11:48 Yes.

Dalton Caldwell 11:49 And then you end up where if you do get them, um, it's not like the laundry list of problems goes away. You've only begun the process of the person increasingly coming up with more complicated demands.

Michael Seibel 12:01 Yes. And I think what's tricky about a terrorist employee, there are difficult employees For sure. And, and I worked with some who were so valuable to the company, it was incredible. The thing about terrorist employees, like when you do the PNL, the cost benefit analysis, it is always negative with potential.

Dalton Caldwell 12:21 Yeah.

Michael Seibel 12:21 Like no matter how long, it's been three months, it's been six months, it's been two years, it is always negative, but you always are like, "But if I just did da, da, da, da." As opposed to hard to work with employees, the PNL's always positive.

Dalton Caldwell 12:33 That's a great point. And again, this is a nuance thing.

Michael Seibel 12:35 [laughs]

Dalton Caldwell 12:35 We're not talking about the like, don't have difficult people-

Michael Seibel 12:38 Yeah. No, no, no, no. No

Dalton Caldwell 12:39 ... or don't... We're describing folks that effectively hijack everything.

Michael Seibel 12:44 [laughs] Yes. Yes.

Dalton Caldwell 12:45 [laughs]

Michael Seibel 12:45 And create no value. [laughs]

Dalton Caldwell 12:47 And like, you know who they are.

Michael Seibel 12:48 Yes.

Dalton Caldwell 12:48 Again, if you're watching this, we're not talking about the people on the line-

Michael Seibel 12:51 No

Dalton Caldwell 12:51 ... where you're not really sure.

Michael Seibel 12:52 No.

Dalton Caldwell 12:52 And they, but they've done all this really good stuff.

Michael Seibel 12:54 We're using the word terrorist for a reason. [laughs]

Dalton Caldwell 12:55 This is where you're like, "Oh, wow, this is a whole cloud of problems."

Michael Seibel 13:00 Yeah. [laughs]

Dalton Caldwell 13:00 That is what we're referring to.

Michael Seibel 13:02 Yes. Yes.

Dalton Caldwell 13:02 Um-

13:02 – 14:18

The meta-pattern: you can’t finesse it—cut bait and accept sunk costs

Michael Seibel 13:02 A dark cloud. Maybe the meta point, and you touched on this earlier, is that in all of these situations, it is really hard to negotiate your way out of them.

Dalton Caldwell 13:15 Can't finesse.

Michael Seibel 13:16 There's no like-

Dalton Caldwell 13:17 Well, and once you give... Basically, usually the solution is, "I'll give them their ask."

Michael Seibel 13:21 Yeah.

Dalton Caldwell 13:21 And that fixes the problem, right?

Michael Seibel 13:23 Right. [laughs]

Dalton Caldwell 13:23 The problem is there's, it's an invitation to get more asks.

Michael Seibel 13:28 Yes.

Dalton Caldwell 13:28 Over and over-

Michael Seibel 13:29 Yes

Dalton Caldwell 13:29 ... and over again.

Michael Seibel 13:30 This is why we use the word terrorist. Like this is the definition almost, right? And I think that, um, what's hard, especially in office hours, is that usually you and I will pick up on this pretty fast and be like, "Cut bait."

Dalton Caldwell 13:43 Yeah.

Michael Seibel 13:43 And then we'll do the other office hour like three months later, and it'll be like, "Well, for three months we didn't cut bait and just got punched in the face, and now we've cut bait, and you were right." And it was like, you don't deserve terrorists. This is hard enough without terrorists. [laughs] Like...

Dalton Caldwell 14:00 Yeah. It's almost like it's hard to admit that it's a sunk cost. Like you-

Michael Seibel 14:05 Yes

Dalton Caldwell 14:05 ... there's like this moment where you have to be like-

Michael Seibel 14:06 Yes

Dalton Caldwell 14:06 ... "This is a sunk cost. I just need to-

Michael Seibel 14:09 Shut it down

Dalton Caldwell 14:09 ... get out of the situation," versus coming up with justifications it'll get better.

Michael Seibel 14:13 Or assume somehow that like success comes from dealing with terrorist situations.

14:18 – 15:58

Terrorist investors: time sinks and faith-destroying pessimism

Dalton Caldwell 14:18 Yeah. And maybe one other aside, um, this comes up with investors too.

Michael Seibel 14:23 Oh, fun.

Dalton Caldwell 14:23 The, the classic terrorist investor-

Michael Seibel 14:24 Investors can never be terrorists, Dalton. Are you kidding me?

Dalton Caldwell 14:26 I think the classic one is someone that wants to take up a lot of time of the founders.

Michael Seibel 14:32 Yes.

Dalton Caldwell 14:32 And by the way, they may be very nice, and they may-

Michael Seibel 14:34 Yes

Dalton Caldwell 14:34 ... not realize they're doing it.

Michael Seibel 14:35 Yes.

Dalton Caldwell 14:35 But effectively, you get a bunch of emails or requests or questions, and so the founder spends a lot of time line by line answering the questions.

Michael Seibel 14:43 Yes.

Dalton Caldwell 14:44 And guess what they get? More questions. [laughs] And they answer those questions, and they get more questions. And you actually end up spending like a huge percentage of your time talking to an investor, effectively managing their feelings.

Michael Seibel 14:57 On a 15-year journey. [laughs]

Dalton Caldwell 14:58 Yeah. And like, there's no upside. You can't bury them in so much time they stop asking for your time.

Michael Seibel 15:06 Fundamentally, their feelings are based not on the work you're producing for them, but on is your company working.

Dalton Caldwell 15:12 Yeah.

Michael Seibel 15:12 That's the only way to change their feelings. I think there's actually an even worse type of terrorist investor, and it is a type of investor who's lost faith in the founder. I think sometimes investors don't realize, and I've probably made this mistake a couple times, where it's kind of like you can't help but be kind of a father and mother f- figure for this person in a weird way, right? And like the worst thing a parent can do is be like, "You know, it's not gonna work out for you." [laughs] Right?

Dalton Caldwell 15:37 [laughs]

Michael Seibel 15:37 Like it's like, they were like you, it's like, it's like [laughs] That is the worst thing. And, and like, you know, your, your brother and sister might be like, "I hate my gut- your guts," but like when it's your parents, it's a problem. And I think that sometimes investors don't realize that they're just communicating pessimism.

15:58 – 18:17

Belief as leadership: giving hard feedback while still expressing faith

Dalton Caldwell 15:58 That's such a great point. I think about this a lot, where I've seen a lot of people critique our advice/my advice-

Michael Seibel 16:05 Yes

Dalton Caldwell 16:06 ... um, over the years of like, "Don't give up."

Michael Seibel 16:07 Too neg- Yeah, yeah. Yes.

Dalton Caldwell 16:08 And they're like, "Oh, why is he so stupid?" Like this whole don't give up thing, like blah, blah, blah. And it's not that I think they're wrong, I just like, no, I, I, I have no apologies for encouraging people to not give up.

Michael Seibel 16:19 Yeah.

Dalton Caldwell 16:19 And encouraging people to stay, I still believe them.

Michael Seibel 16:21 Yeah.

Dalton Caldwell 16:21 Believe in them. And even if it is going bad, I do say, "Are you having a good time?"

Michael Seibel 16:26 Mm-hmm.

Dalton Caldwell 16:26 And as long as you're having a good time, and you, it's fulfilling the work that you're doing, don't give up, right?

Michael Seibel 16:34 I think this has been the hardest thing for me in office hours. I think my personal KPI for office hours when I started was like, does the founder feel good at the end?

Dalton Caldwell 16:43 Yeah.

Michael Seibel 16:43 And that produces zero value. And when people have overheard me giving office hours, they're just like, "You sound incredibly critical," or like, "You're talking about the things that are like the biggest problems in the company." And it's this weird balance to try to talk about the hardest things, but to communicate like, "I believe in you."

Dalton Caldwell 17:07 Yeah.

Michael Seibel 17:07 It's this very weird balance, and it's like, to me, like that's what a great advice giver give. 'Cause like they're not a great advice giver if they're not talking about the most important things in the company.

Dalton Caldwell 17:16 Yep.

Michael Seibel 17:16 And if it's a startup, those things are going wrong. [laughs] Like...

Dalton Caldwell 17:20 For sure.

Michael Seibel 17:21 Some number of them. But they're also not a great advice giver if they're not communicating faith. And I think like PG actually did this really well. Like he would, you know, he would have these things like, "If you just figured out a couple things, you could be the next Microsoft." And he would say it, and you'd be like, "No, I can't." But then like, "Maybe." [laughs] Like...

Dalton Caldwell 17:41 Well, and you know what the secret is, knowing PG as well as we do-

Michael Seibel 17:45 Yeah

Dalton Caldwell 17:46 ... is he actually believed it.

Michael Seibel 17:47 Yes.

Dalton Caldwell 17:47 And so the trick-

Michael Seibel 17:49 Yes. Yes

Dalton Caldwell 17:49 ... so again, the trick for you all-

Michael Seibel 17:50 'Cause sometimes startups work. [laughs]

Dalton Caldwell 17:51 The trick to help people by inspiring them is to actually believe they can succeed.

Michael Seibel 17:57 Yeah. Yeah.

Dalton Caldwell 17:58 That's it.

Michael Seibel 17:58 That's it.

Dalton Caldwell 17:59 And you can't fake that.

Michael Seibel 18:01 No.

Dalton Caldwell 18:01 Trying to pretend like you're someone's fan and you're not, not likely to work.

Michael Seibel 18:06 Probably better to not give them advice.

Dalton Caldwell 18:09 Yeah.

Michael Seibel 18:09 Yeah. Probably better not to talk if you can't believe. Yeah.

Dalton Caldwell 18:12 Yep.

Michael Seibel 18:13 Even if you know everything they need to do to win. [laughs]

Dalton Caldwell 18:16 [laughs]

18:17 – 19:01

Wrap-up: avoid the potholes—don’t give an inch, and keep building

Michael Seibel 18:17 So we've covered customers, we've covered requests, we've covered recruits, we've covered employees, we've covered investors. That's a lot of terrorists.

Dalton Caldwell 18:26 [laughs]

Michael Seibel 18:26 Um, dodge them. Get, get, dodge them.

Dalton Caldwell 18:30 Don't negotiate with them.

Michael Seibel 18:31 Don't negotiate with them.

Dalton Caldwell 18:31 Don't think that if you give them an, an inch-

Michael Seibel 18:34 Yeah

Dalton Caldwell 18:34 ... they won't take a mile.

Michael Seibel 18:35 No.

Dalton Caldwell 18:35 They will.

Michael Seibel 18:36 And don't think that these people will significantly impact the success of your company. Like the, these are not the folks that determine whether your company wins or loses. These are just the potholes to avoid on the road. Like steer around them, keep going. Great chat.

Dalton Caldwell 18:50 Cool. Thanks, Michael. [upbeat music]

Episode duration: 19:02

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