What makes a ‘good’ ICO?
As our ICO is progressing, it is fascinating to get feedback from people. Every time you present the project, you are challenged, questions are asked, and it makes you think more and more about your own project; how to improve it and how to anticipate these questions in your next pitch. Online the feedback can be even stronger. Often bolstered by their online anonymity, people don’t hold back with their opinions of ‘what’s good’ and ‘what’s bad’.
Interestingly, the range of potential token buyers is broad; from die-hard crypto nerds (in the positive sense of the word!) that are looking to implement their vision of a better internet and better technology options, to first time, personal or institutional buyers, hoping to make a (quick) financial gain. As a result, the opinions on what is perceived to be a ‘good’ ICO and what is not, vary wildly, and are of course down to each person’s preferences and intentions. Which made me think; ‘what would make a ‘good’ ICO for me?’. Despite having put the materials together for our own project, I had never stepped back and structured it, so it was an interesting exercise. I am certainly no specialist, but this is what I came up with. I would love to read what you think and how you evaluate the projects out there!
The package — Straight of the bat, maybe a controversial one. Call me superficial, but I think the overall package needs to look and feel good. In my eyes, it says a lot about the people you’re dealing with. They are selling; are they aware of that? Do they have eye for detail? If the whole thing is not put together well at this early stage, what can you expect later on? As the saying goes; you’ll never get a second chance to make a first impression!
The proposition — For me the idea is crucial. I love product, I love innovation, but it has to be well explained and illustrated. It has to solve a real-world problem, today, and it HAS to have commercial viability. I’m not a big fan of technology for technology’s sake. Having said that, I love reading through ICOs and see the future potential — where could it go? Especially if there is a route from it being an application now, to some sort of infrastructure play in the future.
A lot of ICOs focus on being the ‘first’ or ‘the only one’, which is great for marketing purposes, but to a certain extent, there’s nothing bad about having competition; not only does it make you better, it gives people choice and above all, it shows there’s a market. What’s more important for me is to acknowledge there are others and knowing why you are different.
The money — The central point of the ICO, almost unfortunately… I don’t mind the size of the number (of money raised), but I do mind if there is no bearing on reality with regards to the investment required to deliver a product. And that goes both ways; there are low, single digit ICOs that simply will not raise enough money to deliver their ambitions, and there are ICOs with incredibly high numbers, that make you wonder what it’s all going to be used for, outside private jets and champagne. It takes a very skilled team to spend a lot of money wisely!
And whilst we’re on private jets, I’m certainly not a fan of schemes where the teams get rewarded disproportionally. Although I appreciate rewarding founders, this should be mainly done through other schemes like shares and KPI driven bonuses, not by giving them a lot of money/tokens upfront. Also, focusing rewards solely on the management team and not on the employees, is a big ‘no, no’ for me. It is the commitment from your team that you will help you through the dark times. Not acknowledging that is a big mistake.
The economics — I personally prefer longer term initiatives, where the value of the project builds over time; steady as she goes. I’m not a big supporter of marketing-hype, pump and dump type projects. It’s great for a certain group of buyers, but I don’t think it’s really beneficial for the market/industry we’re in. Failed projects, unfortunately, reflect badly on all of us.
For utility tokens in particular, I like to understand how the coin is used; will there be plenty of liquidity around the coin, will there be an ongoing stream of continuous and, ideally, increasing demand?
The regulatory framework — I am not someone for extensive paperwork and endless rules, but believe that the cryptocurrency world in general and token sales/ICOs, in particular, would benefit hugely from more regulation. It helps speed up global adoption and stabilise the market. So, I will always look at the legal framework an ICO is being deployed in.
Related to this, I always consider the legal impact of the project. Is this something that could run into legal issues in certain countries and have these issues been considered by the project team? Building technology is relatively easy, but deploying it globally is a very challenging exercise, hampered by many obstacles that are often far from technical.
The technology — At the heart of every project lies the technology solution, and it’s crucial. However, I like to see the right balance between the tech and the business side of the proposal. This is probably the hardest one to get right for everyone, with so many different personal preferences out there. However, it does give you an indication of the mindset of the team; do they only think about the commercial side, or are they into their tech as well?
Looking at the technology and architecture itself, I personally don’t have to know all the detail, but like an appreciation of the problems the team believe they will face and how these will be resolved. With so many unknowns yet to be uncovered, it is important that these surprises are catered for in the solution, but also in the plan. Accurate dates in roadmaps, provided many months ahead of time, may give confidence to some people, but reality shows that anything planned further than 6 months out, will typically be subject to change. The world around us simply changes too much to be accurate over a longer period of time.
The team — Last, but definitely not least, and a huge factor for me is the quality of the team. Do they have the experience to pull of a project of this magnitude? Have they done it before, do they have the subject matter expertise, the management skills, the network? Or, probably as important, have they acknowledged they need help in certain areas and have attracted the right advisors or partners to complement the team? Of course, every initiative has to start small and not all people can be in place on day one, but having the maturity to admit that is an important step.
Well, that’s my list. Maybe a bit more extensive than anticipated. These are certainly not intended as a set of guidelines; everyone has their own intentions and vision of what ‘good’ looks like. I would certainly love to hear yours! Leave your comments below or join the conversation on Telegram — https://t.me/MomentumToken.
