6 Things You Can Do To Ensure Your ICO Is A Success.
ICOs are the hottest trend in cryptocurrency. There are dozens of new releases weekly. Today, we’ll break down what distinguishes an ICO from the pack.
ICO SUCCESS AND FAILURE
ICOs are the hottest trend in cryptocurrency. There are dozens of new releases weekly, adding to the hundreds already out there. Most of these releases you can find by browsing through our online ICO calendar.(if you have a token you can submit it to our site here). Sifting through the new releases can be overwhelming. For this reasons we’ve organized our calendar so you can view upcoming ICOs or ICOs which are ending soon. You can also search through ICOs by categories.
As you start to navigate around our site, you’ll find yourself swimming in a sea of ICOs. If you’re thinking about launching your own ICO you’re probably a little intimidated by some of the projects in the race. However, rest assured that there are a few key factors that lead to creating a well-known ICO. We’ll break down today what distinguishes an ICO from the pack.
For those unfamiliar with an ICO, it’s similar conceptually to an Initial Public Offering, or IPO. Investors pay money to get shares of a hot new token first. Ideally, the coin will grow and flourish, and the tokens acquired early will be significantly more profitable down the line. Investors usually pay in Bitcoin or Ethereum, two established cryptocurrencies. ICOs have a lot of benefits. The fundraising process is leaps and bounds faster than normal means of raising capital. This can get the money into the development team’s hands as quickly as possible, so they can get to work. But it’s not all rainbows and roses; many ICOs fail, or are labeled scams.
1. WHITE PAPERS ARE GOOD BUT A WORKING PRODUCT IS BETTER
The best way to avoid being labeled a scammy ICO, is our first and quite possibly most important key. Have a working product! Just like anyone can brainstorm a nifty app idea, coming up with the concept of a currency is the easy part. A good whitepaper can be immensely helpful to investors. But at the end of the day, having a working product (even if it’s not perfect) brings tremendous credit to a coin. In the real world, a team with no prototype would never receive tens millions in hours. Just because cryptocurrency is still in the Wild West days, doesn’t mean due diligence should be discarded.
2. TRANSPARENCY IS CRITICAL
A second key to a successful ICO is transparency. Investors big and small pour money in to projects with no precedent, to a team they’ve never met, over the internet. Cryptocurrencies don’t hold press conferences, or issue financial statements. It’s easy to understand how token holders get jittery. Successful ICO teams take a number of steps. They interact heavily with the community. They post on the coin’s Reddit, or use Slack or Telegram to provide updates. Some livestream meetings. Still others post samples of their code on their website or GitHub. Bancor has done this, and StorJ’s code is actually open-source. Cryptocurrencies can’t be physically held, so being able to look at a coin’s code is a phenomenal way to reassure investors.
3. HAVE A PLAN FOR THE MONEY
A third key is related to transparency as well, but important enough to list separately. Have a plan for the money. And make it public. Some of the best whitepapers I’ve seen listed clear, step-by-step plans for how funds from ICOs would be spent. An investor can look at a spending plan and clearly identify where their money is going, and what the project should look like by certain dates. This is particularly helpful with uncapped ICOs who raise more money than planned, something we’ll get into more later.
4. MARKETING GENIUS IS REQUIRED
A fourth pillar is marketing. Seems obvious, but with the staggering amount of coins out there, the world isn’t going to beat a path to your doorstep. TenX used a YouTube channel to tremendous effect. The team posted videos of them using the product in action, to perform everyday activities like ordering pizza or grabbing coffee. This allows investors to envision the product working in the real world. Other companies have advertised on Reddit, Facebook, and even Tinder. It’s too early to tell if those particularly mediums will work, but a company simply has to get the word out. NXT is a case study of a failed ICO due to poor marketing. In 2013, NXT’s original ICO was an anonymous user posting a Bitcoin address in forums soliciting donations. Shockingly, it didn’t set the world on fire. The team raised only $6000. However, NXT is a fascinating platform with many real world applications. It’s sad to see an amazing concept not reach its full potential due to avoidable marketing failure. With scams around every corner and coins blowing up daily, it’s uber-important for a team to market itself well.
5. NAME POWER HELPS
Lastly, name power. Having a good team with relevant work experience is essential to the down and dirty work of building a coin. But big-name backers and advisors have huge sway with investors. TenX listed Vitalik Buterin, founder of Ethereum as an investor. Bancor proudly boasted of having Bernard Lietaer, one of the creators of the Euro, on their team. The cryptocurrency space is young, so having proven experts on a team is a huge win. However, they must be actively involved. TenX listed Vitalik as an investor, but in an interview, Vitalik admitted he has not personally invested in the project. Just because a celebrity endorses a product, doesn’t mean they use it.
6. BE CLEAR ABOUT YOUR DECISION FOR HARD CAP VS UNCAPPED
On that note, we’ll swing into the dark side of why some ICOs raise so much money. They’re uncapped. A capped ICO only accepts a certain amount of Bitcoin or Ethereum. An uncapped ICO swings for the fences, and takes as much as they can get. This seems like a good problem on the surface. The team gets more money to work with, and more investors get the coin they want. Bancor is a prominent example; the team kept their ICO running longer than planned, and raked in an extra $51,000,000.
But if a team sets a hard cap, then changes it, the investors who got their currency early watch it be devalued. This is a common complaint from those who bought into ICOs that take more money than planned. On a darker note, uncapped ICOs are an easy way for teams to scam investors. Cryptocurrencies aren’t audited, so a team could easily pocket some of the money, with no one the wiser. Or they could simply change how much of the currency they’ll withhold. This is another reason teams should publish plans for how the money will be spent, as we touched on earlier. $200 million can test the morals of many people with good intentions. Tezos, Bancor, and many of the other biggest ICOs were all uncapped. The numbers are eye-popping, but uncapped ICOs are a mixed blessing.
If you have your own token and you’re looking for additional exposure, consider adding it to our ICO calendar here.
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