5 Reasons Why Most ICOs Fail

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Over the last few years, ICOs have been considered as a premium fundraising mechanism for blockchain based start-ups. With the growing buzz around cryptocurrencies and the scouting of a hassle-free funding technique, ICOs have tasted a lot of success.

Ethereum raised about 18 million USD in its 42 days long ICO and is one of the most successful ICOs of all times. Apart from that, there have been many success stories like EOS (4 Billion USD), Telegram’s TON (1.7 Billion USD)etc.

It is however very luring to fall for these numbers and overlook the other side of the coin. The cold hard truth lies in the fact that most ICOs, about 90% of them fail miserably. Investors need to look out for these to save themselves from potential losses.

In this article, we shall look at the 5 main reasons why an ICO fails. To put it in a different way, you can look at these points as clear hints, while spotting a “not so convincing” ICO campaign. We suggest fundraisers to avoid these mistakes while launching an ICO.

1. An incomplete vision of the project idea: Launching an ICO with a vague and incomplete idea often leads to its early failure. You need to ask yourself, whether your project offers a unique solution to an existing problem or not. In case you cannot convince yourself, then I am afraid, your ICO is most likely to be unsuccessful, as the project would not sustain for long among a thoughtful audience.
2. Technological glitches: A common example is Ethereum based DAO, wherefrom millions of dollars were hacked out and the project failed instantly. Developing a secured platform for seamless transactions is very important. People vouch on blockchain for the sole purpose of security and if you cannot convince them on this front, then your venture is most likely to fail sooner or later.
3. Crypto economics: A flawed economic model leads to an unbalanced crypto economic scenario, where there is tremendous token price inflation. Investors tend to invest in vague ideas rather than judging the potential of the end product due to the fear of missing out on high profits (as the number of issued tokens are limited). Developers tend to focus more on luring investors to buy tokens, based on flashy and impractical ideas, than improving the main product offering. Eventually, the project does not sustain for long.
4. Inefficient marketing strategies: Marketing and branding is an integral part of an ICO campaign. You are trying to convince people to invest in your idea, and they would not do so without enjoying the look and feel of your entire presentation. A well-designed website, a strong community engagement, positive word of mouth, regular PR activities, social media presence, everything matters. This can actually decide the fortunes of your ICO. If you miss out on these, you have already given up on the chances of making the ICO realize its full potential.
5. Unconvincing whitepaper: Here lies the opportunity to send across your idea to the community lucidly in the form of a well-structured and well-designed whitepaper. Presenting impractical ideas wrapped within a flashy design does not work a great deal. Firms make the mistake of over-committing, without convincing the reader about its true capacity of delivering the promised ideas. A weak whitepaper will ensure that you have lost half the battle!

In a nutshell, ICOs are a great way to raise funds provided you have an actual intent to deliver a useful product and you tick all the boxes as I have mentioned above.

We at Orion Stride can take up half your job, which includes, marketing, branding, PR activities, community management, whitepaper crafting etc. Get in touch with us and let’s ensure that your ICO performs to its full potential.

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Hope this helped. Thanks for reading.