Why Did ICOs Fail?
By on Altcoin Magazine
The ICO market is dead! If not yet, it is just about to, anyway.
In fact, according to this Cointelegraph report, ICOs have raised $118 million in Q1 2019, which is over 58 times less than in Q1 2018.
Many ICOs were launched in 2017, but there are only a few that made it to the market. The number of failed ICOs is much higher than that of successful ICOs. That is why it is very important to have the proper planning, research, and good strategy before thinking to launch a new ICO.
Here are some reasons behind the failure of an ICO and how one can avoid them.
Inadequate Product Market
The inadequate product market is the main reason for the failure of an ICO. It means that the product or services offered do not add value and demand in the market. Most of the companies developing a blockchain-based project do not have a clear view of the audience or industry they are targeting.
So, it is very important for an ICO to make sure it has an audience who needs its offering before the launch.
Scams
What damages a project’s reputation? Either someone does it intentionally, a major coin theft or a data breach. During the past 2 years, scams have increased drastically and also the number of worthless projects.
Lack of Audit, Reporting, And Measurement
Majority of ICOs fail because they are launched by newcomers with limited knowledge of online marketing. They also don’t understand the continuous need for auditing, reporting, and measurement to improve ICOs.
To avoid this, ICOs should make sure that they know about the tools that can help in doing all these things. One such tool is Google analytics that allows tracking of conversions and user behavior.
Market and Advertisement
Nowadays, people are not brand conscious, and they invest in a good project rather than the one that looks good. This includes website elements such as logo, visuals, content, fonts, selection of color, ICO white paper, etc. If a website is unprofessional, people will start to question the brand.
And, ICO is all about branding and marketing, not just about the idea. Most ICOs fail because they don’t make sufficient investment in branding and marketing. But what advertising and market bubbles have in common? Find out here.
So, it’s important that ICOs spend quality time to create a brand identity since it will lead to a marketing aspect in the future.
Short-Term Investment
ICO founders fail to justify the long term value of the tokens and whether it will increase with time or not. Most cryptocurrencies present short-term investment options without emphasizing on what can happen in the future.
Ending note: Investing in ICO can be a risky business, so make sure you look at the project that is currently working and avoids the mistakes mentioned above. Just like any other investment, spotting spam and realizing when you are given a wrong concept is half the battle.
So, if you do your research and be careful where you invest, you can make a profit with ICOs.
