Do You Need MVP Before Your ICO Launch?
Should You Be Concerned About MVP Before ICO?
Recently, ICORating released ICO Market Research 2018. According to the report, the number of ICO projects launched has grown exponentially, and it is estimated that in 2018 Q2, the amount of funds raised by ICOs exceeds $8 billion — more than in any previous period.
However, more than 50% of ICO projects failed because they did not manage to collect at least $100,000. So the question of how to increase the chances of ICO success remains real among project heads.
One of the issues being disclosed in the report is the influence of project stage on the probability of completing fundraising goals. Here is a graph showing the amount of funds collected by projects in different stages of development:
As you can see from the chart, the projects at MVP (minimum viable product) tend to be much more successful than products at any other stage. ICOs at MVP collect seven times more than those that only have a code.
Here is another chart showing the distribution of launched projects according to development stage:
As we can see, only 20% of projects are at MVP, and the majority of projects are launched with an idea only. As the statistics show, MVP projects collect more. This trend remains current over long periods of time (i.e., years), as proven in the sections below.
Top Examples of Potentially Successful ICOs at MVP
In this section, we are going to disclose in more detail successful ICOs with MVP on the ICO launch date.
DeNet
DeNet is a blockchain-based platform that aims to provide secure hosting from anyplace on the planet. One of the main features of the project is the anonymity granted when using DeNet for hosting purposes.
It sounds promising, but what really makes the project successful is the MVP provided by the project developer and the accomplished alpha version of the app.
Of course, not all features are available, but investors are able to estimate the prototype and perspectives on the project. So when the ICO takes place in October-November 2018, the project has high chances of accomplishing its ICO goals.
Unchainet
Unchainet is a decentralized platform that connects owners of computing resources and those in need of computing resources with each other. We are not going to talk about what the service platform offers. Instead, let’s talk about the roadmap:
This project launched at MVP in April 2018, and the ICO start date was in August. Unchainet developers provided potential investors with the opportunity to try the platform out.
This kind of approach is highly appreciated by investors, since among the majority of projects with nothing but an idea, Unchainet provides a solution that already works.
Examples of Successful ICOs with MVP
Here is a list of projects with MVP at the presale stage that have successfully completed ICOs.
TrackInvest
The project provides a social-investment platform connecting both newbies and dedicated contributors with projects. At their ICO launch, the project had a working platform, and had gathered funds to integrate blockchain into its platform.
Project had a success story before the launch of the ICO: the TrackInvest platform was already in operation, with tens of thousands of active subscribers. As a result, it was easier for those running projects to collect funds, as they already had an audience and proven experience. All investors had to evaluate was the idea.
Mobilink
The Mobilink project provides users with mobile telecom services and the ability to earn cash on a monthly basis. Mobilink launched its ICO with a ready demo to let users try out the platform.
The project is going to offer free calling worldwide. SIM cards will be manufactured and used for calling. The company’s demos have shown how the product really works in practice.
Examples of Good ICOs at the MVP Stage That Have Failed
MVP doesn’t mean you are guaranteed to succeed. Unfortunately, many good projects have not managed to gather funds by the ICO stage because of mistakes that were made with no connection to the product.
Moirai
Moirai is a prediction platform. It has a demo of the project, an experienced team of developers, and a launched ICO. With such a promising idea, it could be said that Moirai is likely to succeed.
Unfortunately, Moirai failed to complete its ICO because the team dealt with the wrong ICO advertising company. Having failed, Moirai leaders have issued a statement on their website claiming that their advertising company did not manage to cope with their task, and that it will provide a refund. With Applicature, you are welcome to reserve marketing services for your ICO.
Linda Health Coin
The project’s goal was to provide changes in healthcare. Project developers had designed a platform, and had even integrated an AI. They had an optimal roadmap, and every chances of completing their ICO successfully.
However, due to uncertainty in the regulation of ICOs, they did not manage to deal with a legal issue, and project had to stop collection of funds. As a result, a promising project with MVP failed.
Global ICO Trends
The level of individual ICOs is growing. We are seeing more and more ICO projects with proficient teams, an advanced understanding of client needs, and established businesses behind them. Attitudes toward ICOs are changing as project runners begin to offer more responsibly towards investors and clients.
As a result, the next iteration of crowdfunding for crypto projects is already here:STOs (security token offerings), which are likely to replace ICOs. STOs for the crypto industry are like shares for non-virtual economics. This is more likely to look like an IPO for the crypto industry. STOs offer a more stable, secure investment tool, as they allow participation in profits. Usually, when investing in an ICO you can only earn on the growth of the token price.
Today, the share of projects with security tokens is small, as it is not the most popular way to crowdfund.
In the future, implementing security tokens could become a strong factor for investors, as security tokens have more of a chance of becoming regulated on a permanent basis. Safety, reliability, and security are what even the best ICO projects are lacking now now. If they break their commitments, they cannot be penalized — there is no legislative grounding for that. With security tokens that have been submitted to regulations S,A+, and D, investors have more rights and guarantees. Moreover, some ICOs now have geo-limitation, which will make it much easier to bypass them with security tokens implemented.
In the future, ICOs that comply with SEC and FINRA will have a greater chance of gaining investments. For example, Overstock is launching a trade platform for SEC-compliant ICOs. This will be beneficial for traditional investors, as there won’t be any intermediaries like stocks, brokers, or banks. It will be beneficial for those investing in ICOs now, as it will become completely legit, and the chance of scams will decrease dramatically.
We already have examples of companies that have conducted tokenization of their funds: Harbor, Polymath, and Securitize have been the first to cope with this task. It looks like in the future, we will see more examples.
Of course, it is going to be harder for developers to launch ICOs that have to comply with regulations. On the other hand, it will be safer for investors. The most important thing here is to make sure that regulations do not make it harder for regular people to invest in the projects they like.
Why Do You Need MVP?
“To raise more funds during my ICO” is not the only reason to provide MVP as soon as possible. The thing is, there are three sides that win if you have an MVP:
1. Investor
According to the ICORating report, the number of venture companies investing in ICOs is growing;, however, the majority of investors are either crypto enthusiasts, people who operate in the industry, or individual investors seeking new opportunities.
When you deal with venture companies, you have more opportunities to make a good presentation of your project and answer questions as you adjust the meeting.
However, when it comes to other types of investors, such as those you have not seen or met, you need to provide more information and list arguments for investing in your ICO in the most convenient manner. A regular investor may not be able to correctly evaluate an idea, but he or she can be convinced with a working prototype and a good white paper. Investors have already managed to create basic principles to distinguish scams from reputable ICOs.
In order to attract regular investors, MVP is a must.
2. Regular User
If your project is going to offer something more than a cryptocurrency, it’s better to think about the people who are going to use your solution. Of course, an ICO is conducted to raise funds for development, mainly, and you may not be able to make a working prototype now, before the funds are raised.
However, if you have such an opportunity, it should be used for your benefit. One of the reasons Telegram has managed to collect $1.7 billion is the fact that they already had more than 200 million users. This created a viral effect for their ICO.
Moreover, investors will have more reasons to invest in your project if your service already has active users.
3. ICO Developer
ICO developers need MVP to test their hypothesis and evaluate their product correctly. If MVP is reached before your ICO, there are fewer chances that you will make promises in your white paper or ICO presentation that you cannot cannot keep.
Conclusion
Any idea deserves to be considered; however, in order to bring value, it has to be realized. Fundraising with an ICO allows you to engage millions of people in the development of the crypto industry, but it is much easier (and fairer) to start your ICO once you have reached MVP.
