Recently, a startup that had tried to raise funds using ICO reached out to us. The reason why they did this was that their crowdfunding campaign had failed, and they had hardly managed to get 50% the set hard cap. At first glance it seemed that they had everything: breakthrough technology, experienced team, roadshows, representation on all major social media platforms, and a large online community. However, for some reason the ICO wasn’t a success. We have decided to examine their mistakes and see what can be learned from them.
Please note that for legal reasons we cannot disclose any names or other confidential information.
1. A jungle of a website
When we first saw their website, we were totally overwhelmed. First of all, it was poorly designed and badly structured, which instantly created an unfavorable impression of the company itself. Second of all, navigating through it was like hacking our way through dense jungle: it had too much information. These mistakes made the website unreadable and user-unfriendly. And, no doubt, they repelled a lot of potential investors, who visit tens of ICO websites daily and have neither the time nor the desire to get a handle on all of them.
2. Community without community management
One cannot stress enough the importance of good community management, especially in the world of crypto. As Jenny Goldberg said in her interview, it is “one of the first criteria that investors/funds take into account during the consideration process.” The problem with this company was that, while they had a large community, it was built solely thanks to bounty campaigns, so it was absolutely lifeless. The conversion was low; although their Telegram group had more than 50,000 members, its members were totally inactive. Many people who saw that must have immediately thought it was a scam. So the valuable lesson here is that it is not enough to have consultants who will respond to questions coming from users. Your community management strategy should be aimed at encouraging active interaction and discussions, building long-term relationships with community members, and inspiring their loyalty.
3. And again abundance
As we’ve mentioned before, the company developed state-of-the-art technology which had no parallel on the market. Describing such innovation in the white paper or one-pager is, naturally, not easy. The mistake that the startup made was that, again, they included too much information, which was neither relevant nor comprehensible for a person without a PhD. So when writing a white paper for your ICO, don’t forget that it should be well-structured, to the point, and not liable to leave your audience dazed by technical terms. When writing a one-pager, try to present information incorporating more effective visual aids rather than using only text.
4. The art of pitching
Another reason which helps account for the startup’s non-success was uncovered when we took a look at their pitches. The team had had plenty of roadshows all over the world and presented their ICO project to numerous investors. Why didn’t that bear fruit? Well, first, their speeches failed to explain and highlight how unique the technology was. Second, they didn’t state why their product would easily establish its niche on the market and would be in buoyant demand. Pitching is a process of selling your idea and persuading investors that it’s worth their money. Hence, your speech should be thought-out and eloquent.
5. The international aspect
The company’s team and their partnerships also account for driving investors away. And it’s not that the personnel and advisers were unprofessional or that they lacked business associates. The issue is that both the employees and the partnerships weren’t multinational enough. The blockchain market is probably more globally interconnected than any other market in the world. Therefore, intercultural collaborations are of particular value when it comes to cryptocurrencies and ICOs.
The moral of the story is that developing leading-edge technology is not enough for succeeding on the crypto market. Launching an ICO is a complex process which requires entrepreneurs to consider a lot of factors. In a nutshell:
- Your website should be user-friendly and contain only the most relevant information
- Your technical documentation should be well-structured, pertinent, and visually appealing
- Your community management strategy should be focused on creating a lively atmosphere which will win the loyalty of community members and inspire them to spread the word about your startup
- Your pitches should clearly state why your ICO is worth investing in and why your product has a promising future on the market
- Your team and partnerships should be multinational and open to collaborations with both the on-chain and off-chain worlds