Out of the thousands ICOs that start every day, just a small percentage actually succeed in achieving their capital goals. The Pareto principle is at a full swing here, literally with a handful of ICOs taking in the majority of the investments. EOS is a great example of this principle seen in crypto reality. The era of ICOs as the go-to fundraising methodology for so many projects is constantly developing and growing, but at a fundamental level there are a few common mistakes that these projects make.
What are the reasons behind the failures of the majority of ICOs? Reading this article will provide you with some clarity regarding this fundraising model, challenge the status quo, and enable you to cross-reference with your own situation and evaluate it better. For readers that don’t have an ICO, or are not involved in one, it should still be an interesting read if they want to learn more and expand their mind.
1. Investors don’t see a good deal
Investors, people with money that are looking to get their capital working for them. They are looking for opportunities to increase their financial power, and if you don’t position your project to make sense to investors you are setting yourself up for failure.
Investors, people with time and energy looking to support a cause. This is your community, and they might also be capital investors, but the most important part is that they share in your vision and mission. That leads us directly into the second reason.
2. No vision or mission
Beyond wanting to get money and make a copycat, your project does not strive to do something truly great and become a real company that solves problems. There is close to nothing in place that provokes feelings of “I want to support this” for your community. That’s the vision, and the mission statement is a specific explanation of what you are going to do.
For Microsoft, in the past, it was “we are going to place a personal computer in every American household”, and this is not only important for investors. Your team also depends on strong leadership to thrive.
3. You don’t need an ICO
Many ICOs out there proposed projects that do not actually have a working business model. What they promise is to create something that already exists, is easily replicated, but they still need finances to work on the project.
I’m sorry, but if you need money to get something that you can get for free, then it’s a terrible deal for everybody involved, and investors can clearly see these poorly designed “businesses”. Roll up your sleeve and work on your project. Be realistic if you don’t need investments, and be clear about why you need them when you do. With so many ICO scams in the mix, it is an absolutely horrifying amount of competition that you need to surpass in order to achieve success.
4. Marketing functions are suspended
Your telegram is not working, your ICO trackers are not updated. Along the way, changes happen, but they need to be communicated. Email inboxes are full of unread emails. There is a reason you have a marketing email, and that’s not to stockpile cold emails from marketing providers.
If you already have a full email list, there are a lot of scams there, and I can say this with certainty. That does not exclude the possibility of real advertising opportunities for your project, collaborations or partnerships, and invites to a research project (there is a great relevant story here). Recently we created a successful ICO list for the first week of September, and out of 36 ICOs only 12 succeeded, and out of those only 6 were featured. The other success stories had their sales functions open, their homepages were not updated.
These factors prevented us from being able to cover their success. In fact, when reaching out to one of the success stories, we find out that their ICO is still not finished, after waiting for more than 24 hours for one of their admins to reply on Telegram. You tell me if marketing is important. Keep up the pace, don’t let up. Consumers are brutal and will psychologically eliminate you from their choices. Also, don’t play the number game with bots. It’s better to have 100 real people than 100.000 bots.
5. Your team has no credibility
Top to bottom your team needs to be able to believably accomplish all of the requirements of your project. There should be no room for doubt in the minds of investors about whether or not your project has the ability to succeed at all.
The team needs to come from a place of experience and understanding. Advisors are also part of your team. If you are doing something in agriculture, you better have at least 30 years of combined experience, preferably even more.
I also need to know who I am investing in. This means allowing me and my assistants to achieve a couple of things:
- Have an easy way to reach you by email or phone.
- Watch regular content updates coming from your project.
- Perform due dilligence on your team.
- See that you’ve passed KYC checks.
- Call local individuals and arrange a visit to your offices through a representative.
Investors don’t blindly give you money. There was a time when ICOs started that people would hype up, and believe there is easy money to be made. Promises given back then, and there were a lot of people multiplying their BTC, but all of that has to come from somewhere. How many of these projects are still around and produce cash flow for their investors?
Align yourself with the industry whose problems you want to resolve. Communicate your experience with the public, and inform them who you are looking for if you don’t have the necessary manpower to tackle the problems and challenges ahead. They will not judge, but rather respect your transparency and honesty. Take a look at Gary Vaynerchuk and how public his day-to-day life is. He is earning his credibility, showcasing his team, and communicating all of the values that his investors (clients) are looking for.
You gotta be more like Gary. Powerful, assertive, clear communicator, and even a little bit over the top. Make your project visible, show more, have live streams, run around the office and scream, “We want to change the world!”. The competition is great, and there is no room for shyness in marketing. Give it your best shot.
Featured Image via BigStock.