Why do many ICOs die when they reach the market?
It’s a fact. During the year 2017 the birth of the ICO (Initial Coin Offering) became a global event and reached the end of last year, the trend exploded. What we are experiencing is a transaction phase and ICOs as we see them now, most likely will not be so in the near future.
Recently I have been contacted by several entrepreneurs and startuppers, many of them ask me the same question: how can I start an ICO on my project to raise capital? And I always reply in the same way: ICOs are not systems to collect money and funds. And when I answer them this way, some of them are even stunned. Do you know why? Now I tell you what I’m thinking about it.
Most people, professionals and amateurs, who approach the cryptocurrency and blockchain market, see this industry as something where it is easy to make money, make a lot of money in a short time. And in the same way, many companies and startups approaching this sector see the same thing: the possibility of collecting a lot of money and lots of funds in a short timeframe. Is it true? No, it isn’t. Most of them lose their attention on the main point and often this is the reason why many ICOs fail or do not reach their goals joing the market.
ICOs, soft cap and even hard cap are not goals to be achieved and therefore many entrepreneurs confuse this process as a goal to be achieved just to raise funds, like a crowdfunding campaign based on private equities. Rather, the ICO is an instrument whose goal is the creation of a token that must be able to be used (famous token usability) and on the basis of which it assumes a value, which is not only financial based on the price sold / bought during the various pre-sale, pre-ico and ico steps, but above all based on the use it will have in the immediate future and the relationship between supply and demand. If there is not this fundamental aspect in front of you, then any ICO created with the simple objective of raising funds, will not go very far and you will be disappointed.
So, which is the right solution? Should you not consider anymore an ICO? In my opinion no, this is not the answer. If you have approached the world of cryptocurrencies in the wrong way, this does not mean that it can not be useful for your business; on the contrary, it could help you change your point of view and develop your idea in an alternative and even more effective way. On the one hand, you can still develop a possible crowdfunding campaign to find new members and investors. The interest here is strictly financial and participation in the shares of your company. While in parallel what you could do is develop your business with another approach, tokenize it and exploit the potential of blockchain basing your idea on a token, which has a real and true use. If you can do this, you will most likely be a step ahead of your competitors and the outcome of your ICO will not depend only on the current trend that tomorrow could also fade, but above all thanks to your idea and your alternative way of offering it to market.
Read this post on Irish Tech News: https://irishtechnews.ie/why-do-many-icos-die-when-they-reach-the-market/
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