Today, I am announcing an end to the project known as Truffles.
After months of trying to find a market for our product, we have been unsuccessful at finding a profitable customer segment and have run out of the emotional energy and funding to continue building it into a business.
Our Chrome extension, website and social media destinations will draw to a close, leaving behind a bunch of lessons earned, some of which I share below.
WHAT TRUFFLES ATTEMPTED
Today, a proxy for influence on the internet is your follower count. In 2 years, the influencer marketing industry has come to be worth $2B a year, and growing. However, most people still trust the word-of-mouth from their friends, family and co-workers above social media celebrities in making purchasing decisions.
This disparity in value created vs value captured motivated us to close the gap by using affiliate network technology, like Amazon Associates. This way, we could use an established reward for purchase influence to bring the exact same value to individuals that motivate a purchase as a blogger doing the same.
The UX had to be easy for consumers to understand, so we started with a Chrome extension that swapped out a raw link for a tracked one in an autocorrect functionality (see below).
Though that rainbow might be pretty, there is also an unexpected pot of gold at the end of it.
By building a value exchange for detecting links sent privately, we found a way to tackle the age-old problem of word-of-mouth itself. Since most of our conversations are now digital, this is a new opportunity that affects all participants in the digital age. A more clear attribution model for word-of-mouth means more efficient targeting, clearer messaging and a more humane form of marketing that values the existing fans of a business.
In our time, we got to cross off some interesting milestones like going from a post-it to a prototype, pitched to rooms full of smart investors, earned media coverage and got dozens of users of our technology.
We reached a curious solution, but not one that we figured out how to turn into a business. As it became more clear what was required to pull this off, we had to revisit revisit an ethos that we carried from early on in our journey.
Credit here is due to Paul Saffo who wrote that we must reserve the right to change our minds. That is, to have “strong opinions, weakly held”.
Here are my biggest takeaways from the experience of building and killing Truffles:
1/ Product-market fit > Everything. A strategic misstep in our approach to was to race and do customer discovery while building a technical prototype instead of first finding a problem that needed to be solved.
Our thought process in starting with a solution, was that showing a proof of concept would convince consumers this was a good idea, and we could use it to credibly tell our story to convince them that this was worth doing. This is deeply flawed thinking.
Posts we found later on YC and PG’s blogs corroborates that you have strong proof of product-market fit when people want even the shitty thing that two people scratched together. There’s a reason there’s so much written on this topic, and it is worth actively keeping it a priority knowing that this foundational topic is still why most ventures fail.
2/ Uncertainty vs Risk. We often think about entrepreneurs as “risk-takers” — people who are willing to take the type of risk others won’t to build something new and useful.
In fact, entrepreneurs don’t just take risk — they embrace uncertainty. Freakonomics does a good job of describing the difference, but the core is this: risk is by definition measurable, but uncertainty is not.
When we started out to build Truffles, we knew there were no direct competitors. This could be a sign that there was no market to be had, or that the we had brand new market insight. We chose to believe the latter, and proceeded into uncharted territory.
Moving forward in a risky situation can be daunting, but uncertainty is like staring into the abyss. It is the source of destroyed health and well-being in our startup communities. Therefore, it is imperative to name and reduce risks, while clearly identifying and shrinking the amount of uncertainty buried in pursuit of a solution.
3/ Know your WHY. Know your partners’ WHY. At the early stages of manifesting an idea, things are necessarily rosy and optimistic. The famed boxer-philosopher Mike Tyson says, “Everyone has a plan until they get punched in the mouth.”
The Valley of Despair in one place that will keep punching you in the mouth with a tireless, everlasting vigor. And yet, on the other side is the possibility you’ll taste success — though it may not look like what you originally envisioned.
In truth, Truffles may live another incarnation somewhere else, but when it came down to it, finding our way of the valley was too daunting a task. It’s tough not to feel defeated knowing that success lays on the other side, but an objective assessment of where we are vs what resources are required to continue makes this an easier decision.
4/ Invest in yourself. I’ve been an early member of a number of growth-stage technology companies in Toronto. I thought I knew what it took to get something off the ground, but there are a thousand little things that happen between 0 and 1 that you have to live to understand.
Having spent time closely working with founders over the past few months, the truth is that founders aren’t that different from the rest of us — they just choose to lead a more uncomfortable, uncertain path.
I advocate that everyone take a stab at starting something new. The accelerated learning in a real situation is unparalleled. Even if you don’t build a unicorn — and statistically, most never will — it gives you an appreciation for the unseen work your leaders do to bring something to life, and prepares you to take the leap on a future opportunity.
In the weeks since Richard and I made the decision to stop working on Truffles, I’ve had a chance to reconnect with entrepreneurs at different stages of their growing businesses.
With so many interesting teams in Toronto showing traction, I am now meeting with with groups who are already on their way to solving an interesting, customer-validated problem.
If any of the words above mean anything to you and you’d like to chat, please drop me a line.
I’d like to thank Richard, Vahid and Annick for allowing me to grow with you. I’d also like to thank the hundreds of people around us that supported our vision through their countless words of support and helpful actions.
More to come :)
Thank you also to Julia who edited an earlier version of this post