Common Denominators: Business Development Strategies for ICO Success
One thing lacking from many teams that have raised significant cash from an ICO is a business development plan.
For now, the cryptocurrency technology is still far behind what the average crypto-enthusiast considers it’s capable of. What we need is a heavier focus on commercial partnerships and mainstream adoption.
However this problem becomes one of chicken and egg type frustration. Many commercial partners or customers are risk averse. They want to see a working product before committing to a partnership or signing up. This is an age old problem, not specific to the crypto and blockchain industry. But let’s look at a few successful case studies from the ICO world to see how people have solved this conundrum.
Power Ledger
The Power Ledger team had considerable experience in Australia’s power and energy market which is part of why their ICO was so successful. The company’s founders were able to connect with other companies and research facilities who had an existing interest in this domain.
Power Ledger has a dedicated business development function that does more than marketing. We see this mirrored in companies like XRP, whose extensive list of partners is reflective of the importance they place on this function. The main difference is that business development is involved in actively outreaching and exploring partnership opportunities with other firms rather than being customer focused alone.
The other thing that stands out for Power Ledger is the uniqueness of the application of their idea. P2P platforms have long been established in many other markets. While the concept isn’t new, democratising power and energy using blockchain technology certainly is. The appeal to individual users is the idea of earning from excess power. The company set clear criteria for incentives, participation, and adoption. The earning potential for the end user may also inspire people to buy solar panels to participate, similar to how many people started renting out their apartments on Airbnb, or the large numbers of people in London who bought hybrid Toyota cars simply to have the opportunity to be Uber drivers. This seems to be another clear opportunity for BD & partnerships in approaching panel manufacturers to collaborate.
One thing which is actionable for those who would emulate the success of Power Ledger would be to mimic their early strategy of testing/market validation. They gained early traction by focusing on small scale trials and validations. The test they did in Banbury, Australia is an example of a local validation that allowed for organic traction. They then leveraged that early success by approaching commercial partners, energy providers and government entities with some social proof. A solid recipe for a successful upward spiral of adoption and awareness.
OmiseGo
Part of the reason OmiseGo had such a successful and highly anticipated token sale came from the fact they had all of their ducks in a row before they came to the market.
First of all they had a parent company, Omise, which was already successful in the payments processing space in Thailand, meaning they were leveraging an existing brand name, track record and successful founding team.
They made a strategic decision to acquire one of their competitors increasing their customer base, and received venture funding which made their ICO proposition more appealing. Another very smart partnership decision was that of envisioning and proposing to build Plasma, a scaling solution for Ethereum. This lead to public support from the Ethereum founders and significant support from the Ethereum user community.
To further capitalise in this effort and incentivise users, Omisego did an airdrop of free Omisego tokens to all Ethereum wallets with a balance prior to a certain block height. Imagine being an ETH holder and getting free tokens of one of the fastest selling projects in the crypto space — enough to incite some curiosity?
Civic
Aside from having Vinny Lingham as the CEO, Civic’s product inherently lends itself to being something that can boast of partnerships. Civic set out to solve a problem that is plaguing all types of businesses and consumers worldwide; identity security. As such, the value proposition to other upcoming ICOs was easy since the KYC requirements were always going to become stricter, and from the consumer perspective having a secure login portal which you only have to sign up to once is a no-brainer.
The company has a lot of mainstream press in publications like Forbes, WSJ, Techcrunch, Reuters, CNBC etc. From an investor’s point of view, the reassuring effect of seeing these authority/credibility “badges” on a company’s website is not to be underestimated. The choice for any upcoming ICO founders, therefore is either in having existing links with mainstream publications, or paying a quality PR firm who can get leverage their network to get exposure and press coverage.
Lessons Learned
Be an expert in your industry/Stick to what you know
These companies above, and many others we didn’t cover in this article had successful ICOs since they focused on leveraging their existing industry experience, networks and competency. Unfortunately, many ICO founders have little to no experience or skills in the business field they are launching in. Lesson one is in finding team members with relevant competency.
Anticipate and solve problems for adjacent firms/sectors
Another insight here is that anticipating and committing to solve the problems which may be faced by a company already working in an adjacent field often leads to significant support. We see this in traditional commercial activities like research firms in the medical space who build innovative device solutions that solve existing device flaws and then pitch to/partner with manufacturers who know their devices have that problem. Manufacturers who are receptive to the solutions and eager to talk.
Approach research institutions
Many universities and research facilities are looking for commercial application and validation of their in house research. In some instances this allows you to leverage the name of the research institution which may carry more weight than your own company, especially in the early stages.
Pay for PR
Unless you have the existing contacts, pay for a quality PR firm who can get you exposure. This helps your BD team leverage the social proof to get you in the door with potential partners, reassures investors and can also generate inbound enquiries.
Make sure the idea is novel or an improvement of something else
We see that the novelty aspect of the idea carries weight. A dichotomy exists in the traditional business world where some value ideas, and others value execution (obviously there must be a blend of both). Yet those who have made the biggest progress with commercial traction seem to have novel or anticipatory ideas which circumvent future business challenges.
Make sure you have seed funding in place before attempting any of the above
We see very few examples of companies getting very far in either ICO fundraising or business development without significant internal seed funding. The last thing you want is to create in roads with potential partners and then be seen as not able to execute due to poor planning / lack of funds.
Some people will say that business development isn’t actually important, and companies should just focus exclusively on the tech. A “build it and they will come” type of attitude.
Obviously I would disagree. It really comes down to whether you simply want to dress up a shiny looking product (which nobody will actually use) in order to raise funds via ICO… or whether you want to get consumer and partnership adoption and solve a real world problem.
Common Denominators: Business Development Strategies for ICO Success Originally Published on LinkedIn
