ICO Insider. Companies expectations and results
“Most companies and specialists in the ICO market are scammers or incompetent specialists” — Nikolay Sviridov, CEO BasisNeuro
The number of ICO continues to grow every day. Despite the cryptocurrency market crisis. There are many cases of huge ICO fundraising. There are many failed cases. Occasionally events develop at odds with logic. Perspective companies with a huge community raise relatively small sums and not reach hard cap. Same time startups with a seemingly not great community and early adopters reach hard cap in matter hours or even minutes. So what is the key to the success ICO? Is there a universal remedy? Are there any key mistakes which can break all?
The research “ICO Insider. Companies expectations and results” is a series of interviews with top officials of companies, which have already conducted or are in the process of ICO. This is an attempt in practice to appreciate first-hand the complexities faced by companies in ICO, expectations, results and of course success stories. It can be both startups and long-established innovative companies. The main criterion for company selection is ICO implementation. The goal is to look through the eyes of the token issuer.
The first company decided to give a frank interview was BasisNeuro and its CEO Nikolay Sviridov. Basis Neuro is an innovative company with more than 10-years of experience in researching and developments in Neurotechnology. The company successfully conducted Pre-ICO, collecting a total of $2,300,000, and preparing for main ICO now.
Nikolay, why did you choose ICO as a means of attracting funding instead of venture investors?
Nikolay Sviridov: First of all, it is very important for venture investors to show the result here and now. This applies both to a result of the product (single sample, pilot batch, small batch) and results in sales. Sales should preferably already be put on stream, rather than having a single case. This is not really relevant to us, given the specifics of our company innovative activity. Yes, not single sales already exists. But most of the funds at the moment are needed for the “packaging” and the creation serial batches. Physical, high-tech, science-intensive product is not to sell without that. For 10 years we have developed a huge unique database with real products and sales. But brain activity researching is a very science-intensive field and it requires ongoing researches, improvements, and new technologies development. Taking into account this section of science for the moment is in the initial stage, it becomes clear the bulk of the funds is necessary specifically for innovative developments.
Secondly, the venture investors offer inappropriate terms. In fact, they are giving an ultimatum describing the situation as follows: either you work on my terms, or you will remain only in Russia without the main growth abroad. The conditions are put forward incommensurable with the contribution to the project. We were ready to consider investor participation. But we were interested not only in a cash receipt but also in additional competencies. When offered a small amount for the actual ownership of the company it doesn’t look attractive. Therefore we had to use personal means, for example, has sold the apartment, the car and so forth (laughing).
How would you describe in a few words the general impression from the conducted Pre-ICO?
Nikolay Sviridov: In a nutshell, it was very hard. It was hard financially, physically and mentally. Companies in preparation for ICO for 3–4 months will have to go the way, which in another case would take at least a year. With most of the pitfalls in the preparation had to face for the first time — bounty campaigns, Whitepaper, token economy development and etc. Whitepaper alone we have been developing for 3 months. And I can personally vouch for every letter in it.
Taking into account it is necessary to work with all time zones and key investors are in countries with a working day opposite to the Russian working day, we had to develop a schedule is not the most favorable for sleep and cheerful spirit. Therefore, it remains only to adapt.
Do you conducted Pre-ICO and its preparation on your own or used the services of third-party companies?
Nikolay Sviridov: Eventually, we did everything ourselves. Most companies and specialists in the ICO market are scammers or incompetent specialists. Especially a lot of scammers are presented like “crypto celebrities” in Telegram chats.
In the beginning appeared about 10 Marketing companies offering services in preparation for the ICO. Some of them declared they have a lot of experience and the staff of 30 professionals ready to work. Meetings were conducted with company representatives. In the end, it turned out their team have 3 specialists and rest connect as needed. But there is a lot of time already spent on them. Someone declared a lot of experience, but in fact, it turned out guys do not understand anything.
Finally, we started working with one company. After some time, the final assessment of work in accordance with the action plan revealed that all possible terms are disrupted, the work is not progressing. In an attempt to clarify the circumstances and further action was the verbatim response: “What’s the difference what we promised!”. The relationship was broken. It should be noted all possible information and documents which this company had access, was destroyed. Therefore after several lost months, we had to go back and start all over again but on our own.
Many third-party specialists we have contacted also could not fulfill their promises. For example, an article writer with a seemingly good background set to work and after week informed us that the job could not be performed. But this week is already lost. Here every day counts and sometimes hours and minutes.
A bounty-company is a whole different story. As it turned out there are a lot of fake accounts. That is, one individual opens 10–15 accounts. Then reposts between their own and the same accounts. In the end, several individuals have an agreement among themselves, 5000 reposts per account, and zero results. Over time we learned easy to determine these “users”.
Eventually, we have done all preparation almost on our own. But by our own, I means including third-party specialists involved by our
Why did you choose model Pre-ICO+ICO? How necessary is a Pre-ICO?
Nikolay Sviridov: The model Pre-ICO+ICO was chosen for several reasons. First, of course, we need additional funds to conduct a full-fledged ICO. Secondly, it is the running-in of the main processes and pitfalls almost repetitive but in much larger scale in ICO. Thirdly, it is a looking for strategic investors and partners. We were able to achieve this. Moreover, in addition to the acquisition of strategic partners in key countries, partnerships have benefited in areas we did not count on. For example, a large Asian IT company helped us find and engage a qualified specialist in industrial design, who previously worked in one of the largest and most famous companies in the United States. In Russia such specialists, to put it mildly, lack.
How was the process of conducting Pre-ICO?
Nikolay Sviridov: In addition to the complexity of the process, there were many pitfalls. There were competitors who appeared out of nowhere, without a scientific basis, serious research and experience in this field, who seriously claimed that they are our competitors. The only achievement of which was purchased of the device abroad for 300$ and an attempt to upgrade it. We have more than 10 years of developments, finished products, and innovative technologies. We have conducted a personal presentation for Minister of Information and Communications Nikolay Nikiforov. Our developments were evaluated by Minister of Defense Sergei Shoigu in order to assess the applicability to the needs of the Russian army. We have much to exhibit.
The feature of marketing warfare such companies is to attempt to discredit competitors. To do this, they use their advisers, who in turn leave negative not backed up comments for our company, impacting on the community only with their authority.
Sometimes out of nowhere appears advisors, who initially express a desire to help the project. Eventually, it all comes to ordinary blackmail. Under the pretext of the alleged not satisfied conditions, required to pay us a certain amount, although nothing was done for us. Otherwise, threatening to make trouble in the official channels. Of course, all these difficulties are solved, everything can be proved and bring to light. But it also takes a lot of time and effort.
What is the amount from Pre-ICO you expected?
Nikolay Sviridov: Within Pre-ICO our soft cap was $200,000. Everything else wouldn’t make sense with the smaller amount of funds. I believe Pre-ICO was successful and very convincing. In total, according to the results of Pre-ICO, we collected about $2,300,000. It made this clear that we were doing the right thing. And also showed investors highly appreciate our technology and our activity. Moral support from investors and followers is a very important factor in the conditions of constant pressure and risk.
How much time did it take to prepare ICO?
Nikolay Sviridov: In fact, the preparations have begun and are continuing to this day. Since July 2017 we began to think about the ICO. In August we started to delve deeply into the topic. At the end of December, it became clear that the third-party company broke all terms, and we began to work on our own, but in an even more enhanced mode. So this is all one big long process.
What do you think is the main criterion for the success of ICO?
Nikolay Sviridov: Success at the ICO depends on a set of factors. The main conclusion is that nothing can be predicted. It could pass as well, and not so. The idea is very important. Without a good idea will not go far. But marketing is also important. Without it, even with a good idea, you can not demonstrate itself.
It can be concluded the ICO is a powerful sprint, accompanied by sleepless nights, burning deadlines, and often unscrupulous market participants. But if everything is done right and put on a good idea, then success will justify all costs.
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