Writing a Whitepaper for your ICO in 2018

The landscape of Initial Coin Offerings (ICOs) is changing everyday. As trends come and go, many entrepreneurs looking for equity-free fundraising via a tokenized business are finding themselves redoing work every few days — just to keep up.

Having done this myself for MAKE Token, here’s a few tips on how to stay relevant and competitive in this rapidly growing market.

ICO Investors in 2018

Investors are much more savy now than they were during the Crypto Boom of late 2017. The market cap is down over 70% since January. There’s still gains to be made, but there’s no more free ride out there.

Unless you’re disrupting EOS or Ethereum (you’re not), people dropping serious investment on new projects don’t care much for technical details. Above all else, they want to know that the value of your token is going to appreciate quickly after your ICO. In the face of regional regulation, whales aren’t really looking for long term gains. They want to get in, get rich, and get out while they still can.

Many of the investors and blockchain gurus we’ve talked to this year have revealed something unsurprising: not that many people actually read the whitepaper. Having a 70+ page diatribe full of jargon just dissuades people from reading any of it. So what should today’s whitepaper consist of?

Your Whitepaper is a Marketing Document

Most investors in this space don’t need to be sold on practicality anymore — they are simply looking for new, sexy, and innovative ideas.

Security, decentralization, consensus voting schemes, old news.

For this reason, you need to write the whitepaper as a sales pitch.

Like any pitch, you can’t afford to lose your audience. Points need to be brief and powerful — leave out details that aren’t important. Many crypto investors today are venture capitalists and angels moving into a space with massive potential. They do their due diligence, but at the end of the day your ability to sell is what is going to make them money. Regardless of how the political climate surrounding ICOs changes in the coming months, this will remain true.

To illustrate how this works I’ll outline some critical whitepaper aspects for the fictional RideShare Coin, a blockchain Uber/Lift below:

Introduction: Tell a Story

This is the bait. It takes your topic and makes it relatable to any reader. Keep it short and sharp.

“People worldwide love ride sharing; It’s improved the way we commute, travel, and even run errands. There’s no mystery to why X million people use it every day. A $Y billion industry under Z years old, dozens of companies have rushed to get in on the action, but even the most successful have failed to solve the three persistent issues causing drivers and customers to walk away.”

First, we state a suggestion as fact to force a positive opinion of our industry on the reader (Donald Trump-style). Most people just take this at face value. For those who don’t, we give a palatable amount of data to back it up.

“Everyone is talking about X. So many people in fact that…”

Next, we illustrate that the industry is being damaged by poor execution and that improvement is required. In the vain of YouTube clickbait titles, we leave something to be answered by not revealing what the problems are. In the end the point should be ride sharing = good, companies = bad.

Problem

Now it’s time to get the pitchforks out by exposing the issues.

“Ride sharing companies:

1. Underpay drivers to maximize profits.
2. Overcharge customers using hidden algorithms.
3. Distribute private user data to advertisers and hackers.”

This strategy puts fault on the execution of companies and not on the industry. It shows that competitors are upsetting their customers and creating opportunity.

It’s a good idea to give evidence of each problem with some data, but don’t overdo it; save the technicals for later. In this case, I’ve placed links to articles that can be used for ammunition.

The goal is to illustrate a clear and obvious niche for a business in this industry that removes the middle-man. These problems should make it clear that users are going to leave the current system when a better one shows up.

Solution

Token price is driven by demand. This is where we need to prove that our platform will attract users so that our token increases in price. As good as our implementation or product is, this is what we need to address.

“RideShare costs less and pays more than all other ride sharing platforms without any risk of giving out private user data. Our app uses blockchain technology to connect drivers and customers directly and offers several innovative features that disrupt the status quo.”

Simply put, we’re hooking our users up. How? Blockchain. Notice that I didn’t harp on security, scalability, or technology. It’s all about the value our project offers users and how this translates to demand. Again I inject some clickbait mystery that urges the reader to continue. It’s good practice to follow the solution with relevant market data to support your claims, but again, not too much.

ICO Details

List out the details of you ICO as they fit your economics.

This should include total tokens, payment methods, sale dates, distribution methods, and so on. This is a snapshot of your token sale and should be worked out before releasing the document. We won’t go over the specifics here, but this whitepaper has a good format.

Product

At this point, if all has gone well above, you should still have your reader’s attention.

You’ve sold the industry (growing and worth lots of money), the problem (unhappy users because of poor execution) and the solution (blockchain). Now its time to sell your product, how do you intend to execute this solution?

The strategy that seems to work best historically (Bitcoin, Filecoin, Tezos) is to keep it brief. If there is pertinent technical information, put it in the tech section, reference it, and keep moving. Leave everything in layman’s terms for now.

This section lets you list your features. Describe the actual software, the web interface, the mobile app. Show off your UI shots here if you have them. Talk about the user experience, demonstrate how even a child could use it and how despite this being a blockchain app, it’s not confusing. Lay off on the node arrays and network layers. You’re still trying to sell the product at a casual level.

Example:

“RideShare is a decentralized app that utilizes tokens and smart contracts on the Ethereum blockchain to provide a true peer-to-peer ride share service.”

No good — you should be able to explain your idea to anyone in just a few sentences. The response shouldn’t be “I think I get it” it should be “Tell me more.”

“RideShare connects drivers directly to customers with no middle man using blockchain technology[5].”

At this point I’d hand this over to a complete outsider to get some feedback. The less technical the better. If you can sell the users, you’ve won half the battle.

Team

Now that you’ve inspired some confidence in a well-though out product with mass appeal, its time to sell the capability of your all-star team.

You’ll need to prove that you have people who can:

1. Run a business
2. Promote and sell an idea
3. Build your product

These are the core players. If you’re lacking any of these, you’ll be a hard sell. Once these are established, the more advisers and team members you can list, the more clout you gain.

Give your core team in-depth bios that highlight the skills and experience required to get their job done. As before, leave out irrelevant details.

“Juan McAfee | CTO

Juan is an accomplished business executive with 10+ years as an industry leading product developer. His last projects include X Corp and Y Group where he served as technical lead and architect, bringing both companies from concepts to full-featured applications with millions of users. John is an expert in systems design, security, and agile development and knows what it takes to build a robust product.”

Pretty on-the-nose, but it should be clear from this brief blurb that Juan handily fills role #3 with crossover into the other two. Above all else, make sure you sell your team as well rounded and experienced. It always helps to use buzzword titles like “Digital Marketing Strategist” or “Blockchain Consultant” to reinforce competence in a role.

Technology

By this point, if you provided a quick and easy read, you will have closed the deal for most readers.

This section is where you put all of your jargon. It serves to define the terms you’ve used elsewhere and describe how you’ll use blockchain technology to the more technical users.

As a bonus, when people start to nitpick your project in your communication channels, your admins can direct them here instead of creating confusion.

As before use as much practical knowledge as is required and no more. In this case, it’s pretty straightforward:

1. Create a progressive web app using React Native
2. Develop smart contracts in Solidity for all transactions.
3. Interface with Ethereum/JS API
4. Come in/out of network through transfers and exchanges

It helps to use as many figures as you can afford to appeal to the less technical people. Prioritize highlighting new tech trends over boilerplate technical details; if you teach someone something new, they tend to be more trusting of you.

Milestones

Finally, we’ve reached the end. At this point its time to provide a schedule of major milestones. The more big events we see in the near future, the more token demand we can expect. Provide modest milestones for at least the next three years. In addition to major events like product version launches, also include some marketing moves like social media contests or partnership launches to show that your company has planned out more than just product development.

Conclusion

The market for ICOs is quickly saturating with dozens of new projects surfacing every day. To be competitive you need to be unique, flashy, and interesting. Though the whitepaper is just a tiny piece of the puzzle, its important to provide a cohesive and convincing document that helps others rank you above the rest. Good luck and remember — keep it casual.