We recently celebrated our 18th ICO launch and it feels like we’ve really matured and entered into the adult world of cryptocurrencies. There have definitely been problems, stressful moments, and hacking attacks, but there have also been great success stories and victories. We thought we’d share some of the most important lessons we’ve learned so far.
- Don’t Reinvent The Wheel
Every company founder who considers an ICO as a fundraising tool is tempted to disrupt the industry. There seems to be a misguided desire among founders to make the user experience unique and to stand out from the crowd. Some do this by not displaying soft cap and hard cap amounts, some do it by creating extra hoops for potential pledgers to jump through before giving the smart contract address, and some do it by improvising with the ICO user interface to the point where backers give up on cracking the secret path to participation. Here’s a real life example: one of our clients, a pharmaceutical company, was planning an ICO and they really wanted to disrupt the space. They came up with a 4 stage authentication process before allowing poor users access. This caused confusion and we saw a tremendous percentage of abandoned participation. Users felt like something was wrong and that the campaign was possibly being hacked. We had to react quickly and produce detailed video animation instructions to educate participants on how to proceed. The crisis was luckily resolved, but the whole thing could have easily been avoided, and the campaign could have gotten much closer to its hard cap, if they didn’t try to tinker with a trusted method. Don’t try to be too unique, except when it comes to your password. Follow the well tested and proven routes. After 4 years, ICO users have gotten used to certain formats, and every deviation from the usual scenario scares them. If you have extra creative energy spend it on marketing.
2. A Mark, A Yen, A Buck, or A Pound… We know you want all of them. We know you want users to be able to contribute any currency they have, even if it’s a gemstone, a traveler’s check, or a car title – but you have to draw a line. If your smart contract is going to be based on an Ethereum platform, accept ETH and define your soft and hard caps in ETH. The most ambitious and quickly funded ICOs have managed to achieve their goals solely by utilizing ETH as a currency – being inflexible on this has never stood in the way of fundraising. Don’t be afraid to lose contributors because of currency preferences, your loyal backers will always find a way to acquire some ETH in order to purchase your tokens. This doesn’t mean that you should absolutely avoid accepting other cryptocurrencies, like Bitcoin or fiat money, you just need to evaluate the risks and understand what the technical challenges are. An issue that can arise is that currencies other than ETH don’t have a way to interact with smart contracts. If you absolutely want your campaign participants to be able to contribute something besides ETH be prepared for a much more complex infrastructure for your smart contract, which will result in higher costs for testing, auditing, and deployment complications. More information about issues arising out of multiple currency ICOs were well described by our team members SONM ICO.
- Soft Cap, Hard Cap
If you’re going to execute a plan according to the ICO roadmap then you have to know how much money you need to raise. We immediately filter out companies who start their communications with “I need 10 – 20 million dollars, do you think it is realistic?” First of all, an ICO might not be for you if you don’t believe you can raise the money. We are not counsellors, here to help you with self confidence, we work with people who believe in their product. Second, if you can’t provide a ballpark figure that means you haven’t done your calculations or even planned to determine how much money it will take to bring the concept to life. You’re either a scam or a naive dreamer hoping to hit a jackpot simply by announcing your ICO intentions. There have to be defined soft cap and hard cap amounts. Put together your project’s roadmap for both scenarios and explain to backers where the soft cap will get you, and then explain how reaching the hard cap will impact the timing and development of the working product. Don’t try to manipulate those amounts either – stick to industry standards. Anti Danilevski from KICKICO shared his thoughts on this matter after his recent successful ICO – a very important read for those in the midst of ICO preparations.
- Communication Channels.
Before launching your marketing campaign it is very important to understand where your target audience is and what the best communication channels are between your supporters and your team. A non-updated Facebook timeline is worse than not having one at all. It’s better to not have a Slack channel than to have a non-moderated one that is abused by scammers. Based on our experience 80% of all ICO related hacking attacks are not even technology related, but instead are caused by team negligence. Some of the most common mistakes are: the same passwords on all the accounts, non-aligned activity announcements on different social media accounts which results in major confusion, hashtag campaigns that were already in use, the absence of access controls for collaborators, team members, and contractors. In most cases the core team members are inviting trouble with these things. No need to overestimate the targets of evil hackers, they aren’t sitting around working on complex viruses to steal your money – they go for low hanging fruit. If you can be assured that your team has the proper ethical and work discipline you are 80% of the way there, and the other 20% can be taken care of by the tech experts. We will gladly help you with auditing and reviewing your readiness for an ICO campaign. The full list of ICO related services can be viewed here. BigBreak101 Team