I read a lot of White Papers for work, and most of them aren’t very good. It doesn’t mean that the projects themselves suck, of course. Brilliant teams often produce average-quality White Papers. I can even tell you why this happens: many project founders don’t have the experience of writing long, detailed, structured documents — and they are not ready to invest enough time to learn this skill.
The good thing is that most White Papers suffer from the same flaws, which you can easily avoid once you know what they are!
The five errors that follow are just a part of a much longer list I’ve compiled, but I hope they’ll be enough to give you some food for thought.
I know how frustrating it can be to revise a text that you considered finished, but believe me, it’s not a waste of time. True, many investors won’t read each and every page of your White Paper, but they will at least look through it to assess how professional and serious you are about your project. So give yourself a month or two to write the White Paper: study good examples, give it to other people to read, edit and rewrite as many times as needed. And of course, don’t forget to check if you’ve committed any of the common errors listed below. Here we go!
1) Abstract/Summary
Mistake: Writing the summary before the rest of the White Paper and sacrificing clarity for buzzwords
An executive summary is the first page that comes after (or sometimes before) the contents and explains in clear, simple words what your project is about. You can use the classic 5-paragraph essay structure as a model. Your summary should cover:
what you are building
2) why now is the best moment to build it
3) which pain you are solving
4) how your solution will work and why blockchain will make it better
5) why you are the best people for the job.
The executive summary is thus called because it summarizes your whole White Paper. That’s why it should be the penultimate bit that you write (the very last bit being the Contents page).
Very often the summary is the only part of the White Paper that potential investors actually read from beginning to end, so you have to make it as clear and accessible as possible.
If you are building a marketplace, then say so — don’t call it an “innovative model that will transform commerce”. If you want to sell dog food, then don’t describe it as “a new paradigm of interspecies interaction”.
Be concise, precise, and engaging.
I could say much more about creating a good summary, but I can’t keep you here all day — perhaps I’ll write a separate post on the subject instead. Three of the errors further down this list also apply to summaries, anyway, so read on.
2) Buzzwords
Mistake: a White Paper that reads like an arcane codex produced by a blockchain cult
Purge all cultic formulae like “revolutionize the way people do business in the digital age” or “transform financial transactions through a transparent ecosystem and immutable records”. Those are buzzwords without meaning; the more you use them, the more it appears like your project has no meaning, either. Crypto buzzwords were cool in early 2017, but too many failed ICOs and scams used them in profusion. Investors have learned not to trust this flowery lingo.
Different readers will roll their eyes at different buzzy expressions, but here are some of my “favorites”:
revolution, new era, libertarian philosophy, paradigm shift, global transformation, disruptive technology… you get the idea.
But what if you actually believe that your platform will revolutionize and disrupt an industry? Well, your potential investors aren’t really interested in a paradigm shift — they want a good ROI. True visionaries can bring a fantastic ROI, but there is a fine line between visionaries and dreamers, and using too many romantic buzzwords like “revolutionary” will put you in the dreamer camp (or even in the scam camp). If your idea is good, it should also sound good when described in plain English.
3) Stop words
Mistake: calling your token a utility and then waxing poetic about how its price will rise
A very experienced ICO advisor specializing in legal matters recently told me, “If you are raising money to build a platform that isn’t built yet, then most probably your token is a security”. Even so, it’s always better to take precautions and show to your potential investors that you do understand the legal complexities surrounding ICOs. Don’t write about the fantastic future awaiting your“utility” token once it hits digital exchanges. Why? Because if you claim that your token is a utility but assign security-like features to it, many backers will view you as a high-risk investment .
Words and expressions to avoid:
- Investments & investors
- token value/price growth
- digital exchanges
- profit & profitability
- raising funds
- earnings & dividends
- shares
- speculative growth
I took most of these from a list compiled by specialized crypto lawyers for a high-profile ICO I’m working with. So if you don’t trust me, at least trust them.
Instead of “investors” you can use “backers” or “ICO participants”. The whole topic of token exchange rates and resulting profits should be simply left out. Don’t worry, everybody understands that you’re going to get your token listed at exchanges and make x100 for your investors. The subject will have to remain an elephant in the room — it’s awkward, I know, but you’re safer this way.
Needless to say, stop words shouldn’t appear on your website, either. If you have a chapter or a separate document on project risks, check those, too. Don’t include embarrassing things like “we cannot guarantee that the token price will rise” or “there is a risk of losing the whole investment”.
An interesting issue arises when people in your Telegram chat start asking about your plans to list the token at exchanges. You can choose to avoid giving a direct reply and say something like this:
“Our token is utility, so at present we cannot comment on the matter”
or
“After the ICO, token holders will be able to dispose of their tokens as they see fit”
Or, if you are that there are no enemy agents in your chat, you can simply say, “Yes of course, we are already negotiating with several exchanges”. Whatever course you choose, be consistent.
Actually, one ICO I’m working with has this exact issue. They have labored very hard to be compliant with the Swiss law, so there isn’t a single stop word in their documents. Their official Telegram policy is to say that they can’t comment on the subject. Yet their own founder and CEO seems oblivious to this! He just replies “oh yes, of course we’ll be listed everywhere, our token will grow, etc.”. As you can imagine, this inconsistency confuses and annoys the audience. The lesson to draw: all members of your team must know what the official company line is.
Obviously, if you are positioning your token as a security, then these recommendations don’t apply.
4) Sources
Mistake: making unfounded claims or providing numbers without citing sources
This one is easy. Don’t make bold claims unless you have some numbers to back them up. Examples:
“The current dog food sales model is highly inefficient”
“Most people in the world have no access to banking services”
If you do have some figures, then show where you found them. Numbers are especially useful for the sections dealing with the problem statement and market opportunity. Chances are that your potential investors aren’t familiar with your industry, so they don’t know how large the market is or how fast it’s growing.
Don’t go over the top with your numbers, either: all the figures and percentage points you cite have to be relevant. More isn’t necessarily better: don’t include numbers that don’t prove your point.
As for how you should present your sources, there’s no need to follow complex style manuals like the APA Guide. In most cases, a link to a site is enough: you can place it in a footnote or in parentheses in the text, like so:
The travel industry is growing much faster than the global GDP (source: https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2017/world2017.pdf)
I prefer footnotes — they look neat and professional. One thing to avoid is listing all your sources at the end of the White Paper. Your readers must have ready access to any source while they are reading, so don’t make them scroll to the end every time. You aren’t writing a thesis, after all.
5) Disclaimer
Mistake: placing a disclaimer at the beginning of the White Paper
I can’t figure out why so many teams think that the beginning of their White Paper is a good place for a disclaimer. Come on, folks, it’s the scariest, most boring and unpleasant part of the whole document, so why would you give it the price of place?
Would you make your guests enter your house through the toilet? Would you want to see a huge garbage dump at the start of a city tour? A disclaimer adds absolutely no value to your proposition, so move it to the end!
And by the way, one thing that always cracks me up is that White Paper authors tend to write in the disclaimer that their token is definitely not an investment blah-blah… and then proceed with the “token price will grow” stuff.
As you see, in this post I haven’t dealt with grand questions like structure, clarity, problem statement, sales & revenue forecasts, or vision. I plan to tackle them soon, though, so stay tuned! Meanwhile, if you have your own pet peeves when it comes to White Papers — or if you disagree with my choices — then please do share!