It was in 2017 that the initial coin offering (ICO) sector truly exploded. It proved to be a great way for startups to raise funds for their blockchain-related businesses without having to go down the traditional venture capital routes.
As time went on, established companies began to take note of the successful token sales that were happening and decided to get in on the action.
In total, there was more than $5.5 billion raised through ICOs in 2017 and the sector is only going from strength to strength, with this this total already being bypassed in the first three months of 2018 alone.
It is obvious that companies holding ICOs in 2018 have learned valuable lessons from those that took place in 2017, no more so than the largest offerings that dominated the markets.
Here are some of those key lessons:
1. Filecoin — $257 million raised
With the aim of creating a cloud storage network that is built on the decentralised blockchain network, Filecoin held the honour for the largest ICO of all-time before the Telegram ICO swept everyone away.
The great success that this ICO achieved was largely down to it being a very unique project at its core and having many potential use cases. They saw the need in the market and they were the ones who created a solution to fill this space. Their profile was helped by high-profile investors such as Andreessen Horowitz and Unique Square Ventures getting on board.
In terms of marketing, their presence on Angel List played a major role as they only opened the ICO up to accredited investors, most of whom would be highly active on Angel List.
However, the real win was utilising Coinlist, a cousin of Angel List. This is a new platform that had been created in order to connect startups in the ICO space with experienced investors. Instead of trawling through hundreds if not thousands of potential investors on a site like Angel List, with Coinlist, they know that the investors on this platform are interested in blockchain investments.
By going towards where their target audience was proved to be a great success, especially because this was the standout ICO to be held on the Coinlist platform at the time, meaning that the company heavily pushed this offering using their social media and email marketing platforms.
The key team members also attended and spoke at significant events, which allowed them to get exposure to a wider audience as these talks subsequently received decent exposure across social media and news outlets.
Key Lesson: It is vital to go to where your target customer hangs out. In this case as Filecoin were only dealing with accredited investors, they made sure to maximise their presence on Angel List. They also benefited from being able to speak at a number of key industry events.
2. Tezos — $232 million raised
While Tezos have been in the wars since holding their ICO, due to lawsuits being filed against them by the SEC, they still had the 2nd largest ICO in 2017.
Do note that the SEC lawsuits regard the misclassification of their Tezos tokens as being utility tokens as opposed to securities tokens. The SEC therefore is claiming that the securities laws were violated by the company.
However, they did have a solid offering as investors were excited about their self-amending distributed ledger which would make the process of creating smart contracts very easy.
Tezos focused the majority of their marketing efforts towards potential investors in the United States. The co-founders did a lot of interviews with mainstream press outlets, with these interviews often being also picked up by Asian media.
They also were one of the first offerings to truly tap into the social media networks that were entrenched in the crypto community. Many marketing companies just used the same approach that they would with a company in the traditional financial services sector, using Facebook and Google ads etc.
However, the crypto community is different, because they hang out in places like forums, Twitter, Telegram and Reddit. These are all areas which usually aren’t targeted by marketers. Tezos identified the potential these avenues held and they were able to get involved in conversations on these platforms, as well as connect with key influencers on these networks who could be leveraged to reach a wider audience.
They focused on spreading the message of the benefits this technology would have to the community rather than targeting those people who were merely profit-seeking.
One of the areas that Tezos were criticised for in some circles was the lack of press releases to update people on what stage they were at with the product development and the ICO itself.
Key Lesson: Focus on highlighting the unique benefits your product or service provides and the tech enthusiasts will come, rather than trying to appeal to those solely with a profit-motive.
Also make sure to have consistent press releases keep potential investors updated on progress. Fear of missing out is a powerful thing, so you need to stay at the front of these people’s minds so they invest.
3. EOS — ~$185 million raised
EOS was created with the goal of having a smart contracts platform that is scalable, with many people labelling it as being the “Ethereum of China.”
As the Ethereum network has been troubled by significant congestion issues, many believe that EOS had the potential to overtake it, because scalability is vital for the long-term success of a blockchain network.
They had a great team working on this project and they were helped massively thanks to some of the foremost blockchain investors backing them from the beginning, which gave them plenty of social proof.
One of the main ways in which they attracted users to their offering was the promise to have no transaction fees. Every transaction that a person makes through the Ethereum network leads to a fee they have to pay, but not with EOS.
They also knew that they needed to target developers with their marketing, as these are people who tend to shout the loudest about the best platforms because they are well-positioned to judge the strengths and weaknesses of a given market.
By listening to what developers had to say, they made the process of creating ERC20 tokens on the platform extremely easy, as well as hosting ICOs.
One of the interesting, more traditional marketing approaches EOS took when promoting their ICO was advertising in Times Square. The main reason they did so was because there were two major cryptocurrency events taking place in New York City at the time, which were Consensys and Token Summit.
This drummed up additional hype as crypto enthusiasts flocked to Times Square to see an iconic advertisement for the community in the heart of billboard advertising.
This also coincided with the very first day of the ICO, so this stirred up a lot of news stories. Therefore, it can be a good idea to arrange for some sort of publicity stunt at the beginning stages of an offering to get more eyes focused on the token sale.
EOS also knew the power of working with influencers who were in key positions within the community. This led to key team members, such as Brock Pierce appearing in crypto-related interviews on YouTube and podcasts whereby he eccentrically discussed the massive potential for their offering.
They knew where their target audience was and went directly to these shows that they knew could be leveraged to reach a significant audience. These weren’t drab interviews either, Pierce often dressed colourfully and spoke in a way that is atypical of a cryptocurrency founder.
Key Lessons: Make sure that you do something to stand out from the crowd and put all eyes on you during the opening days of an ICO. This could be some form of publicity stunt that gets the major news outlets writing stories and people on social media talking.
Conclusion
As you can see, in order to stand out from the crowd, all of these ICOs did something a bit different from the rest of their competition.
The most important takeaways revolve around going to where your target customers hang out.
If you are an ICO that is focusing on receiving investment mainly from institutional investors, platforms such as AngelList and Coinlist will be better for you. If it is an offering targeting individual investors, you’ll want to focus your efforts on the likes of Reddit, Twitter, Telegram and forums.
Make sure that you keep investors up to date with the latest developments in your ICO and finally, don’t be afraid to stick your neck to and have some publicity stunt that will place all eyes on you.
Biggest ICOs of 2017 — Lessons Learned Originally Published on LinkedIn
