5 reasons why our ICO failed

As company we began our business in DOOH industry serving venues in developing countries with their own branded TV channels. According to our business model, we install thin computers based on Intel Atom processors to locally broadcast video and on-line feeds from social networks. When we had more than 150+ installations, we decided to use them for additional purporses and maximize their profitability. The idea of decentralization perfectly fitted our needs and we decided to launch via ICO a decentralised data center with 1 ms latency worldwide. But it wasn’t as easy as we thought. Our ICO failed and here I explain why.

Let’s go through our main insights, hope it will help you avoid the same mistakes.

Your business and your ICO — are not the same thing

That’s obvious, isn’t it? For me it wasn’t.

The successful ICO cannot guarantee the successful business. But otherwise, the successful business can dramatically increase your chances to launch good ICO. At this point of view, I would like to mention Telegram ICO, conducted by Pavel Durov. It was done very well and he achieved impressive results. In our case, we had networks of thin computers but hadn’t the confirmed hypothesis of any services built upon our network.

So,

• Firstly — test you hypothesis, than — launch your ICO.

Fit your market needs

So, we had to test our hypothesis before ICO.

Not at the same time or after. In our case we started to tests after private pre-ICO stage (thats at least one good idea).

What ideas we tested?

• High-density CDN mesh with 1 ms latency worldwide will be interesting for web-developers and video services (test period — 3 weeks);
• VPN services will be interesting for corporates and consumers (test period — 2 weeks);
• Local storages with low latency up to 10 Tb will be interesting for local SMBs (test period — 4 weeks);
• Local VPS with low latency for Forex brokers will be interesting for traders (test period — 1 week);
• Local VPS will be interesting for crypto users to work with their BTC/ETH wallets In encrypted cloud (test period — 5 weeks);
• Local VPS will be interesting for remote mobile workers and small business (test period — 2 weeks).

Overall we spend 17 weeks or more than 4 months just to test all our assumptions. I can’t say, that all hypothesis were totally mediocre, some of them didn’t bring real value, some had a unit economy where CAC > (ARPPU*LTV) or there were another reasons.

So:

• Again, test before you start. Even if market isn’t ready now, but you have to find early-adopters of your service (not tokens).

ICO team matters

If you hear that some people at conference assure you that their are professionals and for 20 000 USD make your the best ICO in your life — check two times. As a sales person, I used to use the same tricks in B2b sales, thats why we decided firstly to test team at some easy task. Well, it was quite famous crew and I will not disclosure their names here, but they worked awfully. It was incredibly difficult to connect with them during this initial task, all deadline were skipped. Probably they were too busy, but for us it doesn’t matter.

So,

• Make decisions only on facts and not on opinion, implement penalties in agreement and assign your ICO only to trusted teams.

Events are not about sales

Of course, during the Road Show, I personally participated at several events as speaker and participant. In particular, we presented our project in Moscow and Dubai. For me it was a great experience, but in case of token sales it was a waste of time. Conference’ participants are mostly people who don’t make decisions at the event, they just want to get familiar with crypto and blockchain. However, events are very useful for networking and partnerships.

So,

• if you aim to sell tokens, choose another sales channel. If you want to chat or make new contacts — you are welcome.

Token (not unit) economy — the corner stone

Depend less of the service, token economy (TE) in decentralization plays the main role. When we worked under ICO we understood — it’s quite deferent form traditional unit economy (UE). For example, even if we have good UE, we also would have a downsizing market of our tokens in future. And in our case it would be difficult to obtain results, desired by initial investors. We had to prepare token economy before we started an ICO. We made it too late.

If you want to look at example of our TE — ping me here or in Telegram. I send you a private link.

So,

• If you token economy doesn’t counted properly in clear figures — don’t start an ICO.

Eventually, when we realized that mistakes, we made our mind to stop ICO and return money to private pre-ICO investors. For us it was an expensive lesson.

But anyway, I still believe in the decentralisation and blockchain.

And I also encourage everybody to try as fails only the one way to wins.