The 4 most important ingredients for a successful ICO
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I’m a big fan of reviewing ICO’s, and I had a look at 100 in the last year. Some of them were successful and sold out in minutes, others reached their hard cap after a month only. And again others were just SCAM. But what makes an ICO successful? I want to share my thoughts and the lessons I learned while advising ICO’s in a series of articles calling it Phillipp’s ICO guide to success. Part 1: The 4 ingredients you need to run a successful ICO.
4 ingredients for a successful ICO 🌕
I identified four critical ingredients that are essential for a good ICO. If you are an investor, you can use them as a checklist:
Let’s go more into the details.
1. Product 💡
Yesterday I got a mail from a community manager, and he told me that they are running an ICO and he would love to pay me 100$ if I write about them. I replied to him and asked:
What’s your product and why there’s a need for running it on the blockchain?
He couldn’t answer it which is — you get it — a bad sign. And there are plenty of those guys out there in the wild crypto west.
It’s always good if you have a working product already but it’s also okay if you have just a vision written down in an excellent whitepaper. BUT — and that is a point that a lot of projects are missing — it needs to make sense to run it on the blockchain / in a decentralized way.
If “storing data safe” is the most persuasive argument you have for your ICO then you are in big trouble.
People outside this space won’t care if it’s centralized or decentralized. They want to have a product that works. But most of the crypto investors care, and if they aren’t entirely newbies, they will ask you the questions I asked. If you are running an ICO to become rich quick, it might only work if you are Manny Pacquiao or another celebrity. Otherwise, you should feel bad in tricking other people.
2. Team 🏆
If you see the product as a fast horse, you will always need a good jockey to handle it. A lot of famous investors I know invest in people instead of ideas. And that’s also true for the crypto space.
You will need a full team that is skilled in different areas. Do you want to build the new Google based on Artificial Intelligence? Great! But there are only Marketers in your team. Where are the developers that will create the product?
Another example: You want to build the new decentralized YouTube. Great! But you only have Developers on your team. Where are the guys that worked for big YouTube MCN’s? Or big Youtubers? Again a pretty one-sided project I wouldn’t invest into.
Also, the advisor side is often overrated because you can get some experienced looking people if you grant them 50.000$ worth of tokens. Some of them will say yes because they give their picture and name away for the money and they won’t do anything to help the project. In my opinion, the advisor doesn’t need to be a crypto celeb — I prefer people with 20 years of experience and a lot of contacts in the industry more.
3. Metrics 📊
You have a solid product and a solid team. But do you really need to raise 250 Million US-Dollars? There’s a high chance that you don’t want to build a solid product; you just want to become rich quick!
I prefer ICO’s with a hard cap of max 50 Million USD. There are also gems with max 12 Million USD, and I like them because on one side it shows that the team involved has a realistic view on their product & market and on the other hand you will have fewer tokens on the market so they will have a higher demand.
But the hard cap is only one factor to consider. It’s also important to see how the team allocates the money. Lately, I saw a project that raised 40% of the money in the pre-sale. That’s cool. Whats worse is the fact that those pre-sale investors bought the tokens for 1 cent each. The same tokens can be purchased for 50 cents in the crowdsale, so you guarantee your investors a 50x from the start but screwing up the other 60% of your investors that participate in the crowdsale. Don’t do this.
Same applies to the use of the money. If you want to build the next supercomputer but 80% of the allocations go into marketing YOU ARE DOING IT WRONG.
Lastly, you should also have a plan how you will distribute the tokens. Will they be available after reaching the hard cap? There are also projects who lock up all of the tokens and release only 20% month by month to prevent huge dumps right at the start. I prefer quick contribution times but locking up tokens isn’t a bad thing per se. You will need to have a reasonable explanation you do it then.
4. Marketing 🥁
No matter how great your team or product is: nobody will know it until you tell them. Marketing is one of the most important factors among the ones listed, and in my opinion, 70% of all ICO teams are pretty bad at it. In most cases, the CEO can’t even explain the whole vision in one sentence.
Market to the masses
I’m working in the marketing industry since ten years and helped big brands like RedBull, McDonalds or Sony to tell their stories online. They are facing the same issues like ICO projects: They don’t know what and how they should communicate their most important information.
I often visit ICO websites that are full of deep tech stuff that no one (including me) will understand without doing a one hour research. Its always like:
WE WILL BUILD THE WORLDS FIRST DECENTRALIZED DPAPP WITH A UTILITY TOKEN BASED ON ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING. JOIN THE REVOLUTION!!!
So that’s why it’s important to communicate your messages in an easy to understand manner. Try to explain it to your audience like they were a crowd of five years old. You can go more into the details in your whitepaper of course. But an ICO crowdsale is mostly B2C, not B2B. Oh damned, buzzwords alarm. Let’s try it again: You want to reach the bright mass of people with an ICO crowdsale. Make sure you explain it to them, not for the 40 years of experience industry professional.
Community Building
Even if you manage it to communicate directly, you won’t win the battle. To generate as much hype as possible, you need to build a community of foot soldiers that love what you want to do and who will support you across all networks.
Telegram became the place to be for all crypto enthusiasts so it’s essential to have a public group out there and an announcement channel, where you are the only one allowed to post.
In the public group, you can answer questions from interested investors. But don’t underestimate the workload — you will need admins that filter out the spam and ban trolls 24/7!
Besides Telegram, I recommend Twitter as a second social channel because there are also a lot of crypto enthusiast active there. You can use Twitter for sharing news and support.
For broadcasting news, I would establish a news section on the website AND a newsletter where you can share the essential information weekly.
If you have the team, time and budget, I would also recommend being active on Bitcointalk and Reddit.
Content
One of the most asked questions people sent me is: But what should I post/ publish/communicate?
To market your ICO successful, you’ll need to become a content production studio.
Create videos that explain the different parts of your project better. Throw your CEO or other essential team members in those videos. Present yourself humanly and authentically. Set up infographics. Write articles on Medium. Produce as much content as you can because with every content piece you increase your chance to be noticed by others in the crypto space.
A high number of ICO projects don’t do it. They pay a significant sum to one of ICO listing pages for promotion, that’s it. But you can outperform all of them with quality content quickly.
Traction
Something else everyone is asking me is: How do I get traction on my ICO without spending to much money? Well, it’s easy — while it’s not.
Paid Ads
Back in 2017 everyone was just spending money on Facebook or Twitter ads. That was the strategy of the lazy ones but it doesnt work anymore because all of the big networks banned crypto related ads.
Influencers
That’s why crypto influencers are becoming even more critical. With crypto influencers, I mean people with a lot of reach on Twitter, Medium, YouTube whatever. You can reach out to them and offer tokens if they help you. But be aware: There are a lot of fakers out there. Make sure that the person you want to work with fits to your project and has an active community. It’s easy to buy followers and interactions these days… So spent some time on those influencers, checking their comments, interactions, etc. to be 100% sure that they don’t have any bodies in the basement as we say in Germany.
Bounty Program
Another strategy could be running a bounty program. It means you are rewarding people to create videos, articles or something else to promote your ICO in return for tokens. But you have to outline and track everything and make a quality check. It’s easy to publish an article on medium — but I prefer content with some depth.
Free Airdrop
You can also do a free airdrop for everyone that signs up to your newsletter and joins your Telegram group — it will work and will bring you, 10.000 followers, overnight (I tried it with a fake project). The problem is: Those guys are not your foot soldiers, and 99% don’t care for you ICO.
Promoted ICO Listing
The last idea might be to pay some of the ICO listing pages for promotion but again — I doubt that this will bring you an active cheering community in the end.
Information distribution
The last part of my marketing agenda is the information distribution. That’s also a game with rules you’ll need to understand to become successful.
You can create buzz around your product before, while and after your ICO with the following news:
1. New exchanges listening
2. New Partnership
3. The release of a new/first product
4. Rebranding / Coin Burn
You would be stupid if you release all of the information at once. You have to become the conductor of a news-orchestra. Always keep some massive news for times where the growth of your community / ICO might struggle. That’s what politicians do. Copy this!
Summary
As I said at the beginning this whole topic will be divided into different articles. With today’s opener, I want to show you that an ICO is a fulltime job for a team and I cant be handled by just one person. The most important thing in my eyes is and will be marketing, just look at TRON: They don’t have a product yet, just a vision and a high-frequency tweeting CEO. That’s enough to have a 3.017.506.719$ market cap and being the 12th biggest crypto coin on the market.
In the next episodes, I will dive deeper into the specific areas with examples and lessons that I learned.
If you need any help, feel free to reach out to me via LinkedIn, Twitter or via Mail (contact@philippsteuer.com).
Thanks for reading 🙌
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About the author:
Philipp Steuer (B.Sc. Online Editor, University of Applied Sciences Cologne) helps big media brands like RedBull, Warner or Disney to tell their stories online. His journey into the crypto & blockchain space started in 2013. TheCC team member. More than 200.000 people are following him across all social networks (e.g. Twitter), and one of his three published books is a free getting started guide for cryptocurrencies to enable everyone entering the space. His actual focus is on advising blockchain startups in running successful ICO’s, and he’s passionate about researching upcoming ICO’s.
