If 2017 was the year of Bitcoin, 2018 is starting out as the year of the altcoins. The first few days of the year saw incredible gains for a diverse bunch of cryptocurrencies. Early 2018 might be the perfect time to launch a new ICO.
Altcoins Are Booming in Early 2018
The recent surge in altcoin value and overall market share has been incredible.
Here are a few examples of altcoin charts from the last week (chart snapshots taken on January 5th at ~ 10:30 am ET):
The cryptocurrency market grew from an all-time high capitalization of $200 billion in early November 2017 to one of more than $700 billion in early January 2018. Excitement has never been higher if Google searches are any indication:
Cryptocurrency has had a similar pattern, reaching new highs in late December 2017.
The trend is even more extreme if you zoom out to the beginning of Google:
There is more money in cryptocurrency now than ever before – and Bitcoin itself is making up the lowest ever percentage of the total cryptocurrency market. These conditions seem perfect for anybody who wants to launch an ICO.
This brings me to my first key to ICO success:
ICO Success Key #1: Understand that Now is the Perfect Time to Launch an ICO
You might be feeling like you are too late to the ICO party. After all, some early ICOs have already grabbed huge chunks of market share. Don’t let these feelings fool you.
It turns out that this may be the best time ever to launch an ICO. If your goal is to raise millions of dollars of funding, the conditions are great for that. To explain why let’s take a look at the ICO market:
Assessing the ICO Market for Early 2018
A lot of people are confused about the nature of the ICO market – is it oversaturated? Are ICOs failing more often now?
One thing is for sure: It *feels* like there is a lot of ICOs. Too many to keep track of. If we look at the data, we can check how accurate that feeling is. CoinDesk’s ICO Tracker (using data up to November 26th, 2017) shows that the general trend for money entering ICOs is to increase with each new month:
Meanwhile, original research from Hacker Noon shows that a higher percentage of ICOs are *failing* to reach their fundraising goals. They also show that the number of ICOs per month is much higher for August/September than for June/July.
When you look at the Hacker Noon article, you might come to this conclusion: The ICO space has become oversaturated and it will be hard to stand out from the crowd in 2018. If more money is entering the space, yet a higher percentage of ICOs are failing, that suggests that the number of ICOs is increasing faster (proportionally) than the supply of funds is.
However, I suspect that it’s actually a very different scenario. Let’s take a deeper look.
It’s hard to find comprehensive information on ICOs – but we can look at Coin Schedule as a loose resource. This is not comprehensive data, but it’s good with a grain of salt.
Out of 267 ICOs listed on https://www.coinschedule.com/icos.html, only 54 of them raised less than a million dollars in the ICO. Important: This does NOT list ICOs that completely fail – if they raise $0 or have to refund everything before the ICO ends, they don’t get on this list.
Here’s a breakdown of the Coin Schedule list:
- 54 ICOs earned between $5,000 and $1m
- 103 earned between $1m and $10m
- 100 ICOs earned between $10m and $100m
- 6 ICOs earned more than $100m.
Many of the “failed” ICOs from Hacker Noon’s article appears on this list. Regardless of missing their goals, many raised millions of dollars. A few examples were chosen at random include: SkinCoin, Obsidian, and Substratum.
We previously noticed that if you purely consider the number of ICOs who fail to reach their goal, it looks bad. Based on the Hacker Noon article, 66% of ICOs in September 2017 alone failed to reach at least 75% of their stated funding goal.
Yet, if one example of a “failed ICO” is Substratum – which raised more than $13m and is currently ranked 80th on CoinMarketCap, then maybe “failure” is not the right word. If you think about ICOs in terms of the raw money they earned, they are doing fantastic. Many ICOs are able to raise millions of dollars.
Here are my two main takeaways from the data: (1) People are willing to invest in ICOs, but, (2) ICOs are setting their goals (on paper at least) too high.
Now that we’ve determined it is a good time to launch ICOs… the question is, what will help us raise the most funds? The next two keys will address this question.
ICO Success Key #2: Get Influencer Support
We saw that the number of ICOs is going up with each new month, at least based on data from June to September 2017. If the market is oversaturated and the funds available for one project can range from $10,000 to $100m, you’ll want to do everything you can improve your fundraising.
A common theme among the most successful blockchain projects is that they have support from influencers. There are some powerful people in this space whose endorsements can put projects on the map.
Good vs. Bad Influencer Marketing
There are a right and a wrong way to solicit influencer support.
The right way is to get clear and explicit support from the influencer. You will need to use your networking skills to get time with influential people and convince them to advise or otherwise endorse your ICO.
The wrong way is to be sneaky or misleading. For instance, if you meet somebody once and briefly discuss your ICO, that does not give you permission to list them as an advisor.
I know this should be obvious, but it’s worth a quick mention. Always err on the side of caution. If you are not 100% positive that you have permission to publicly use someone else’s name/image on your project, as an “advisor” or “special thanks” or whatever, double check before you do it.
Otherwise, this happens:
The most important tweet from that Vtalik tweet chain is this: “took way too long to internalize that advisorship is about marketing, not advising”
Don’t be sneaky with advisors for marketing purposes… You’ll do much better by building genuine connections with influencers. Here are two quick examples:
Two Examples of Influencer Marketing in Action
Example #1: You may have heard about TRON recently, an early-stage blockchain protocol focused on revolutionizing the gaming industry. How did this token go from its ICO in 2016 to being a top 10 coin as of early 2018?
It may have something to do with charismatic founder and CEO Justin Sun. Previously the founder of successful mobile app Peiwo, he is the protegé of legendary Alibaba CEO Jack Ma.
Can you imagine working with a mega-entrepreneur like Jack Ma? You may not have access to businesspeople of quite that caliber, but you can identify similar influencer relationships in your own life.
Example #2: John McAfee, the legendary founder of McAfee antivirus and generally loudmouthed cryptocurrency expert, is the perfect case study for influencer marketing of ICOs.
He’s been endorsing ICOs on Twitter and doesn’t seem to plan to stop anytime soon. Here are a few examples:
You can see that these tweets are getting immense engagement, and McAfee’s audience is precisely the target market for an ICO. This is a clear example of influencer marketing in action.
(3) Be Clear About Your Mission
With so many blockchain projects in the world, a clear mission is crucial for spreading the word about your ICO. People need to be able to describe what you do with no confusion in one sentence or less.
Bitcoin offers the best example of this. The underlying concepts of Bitcoin are difficult for newcomers to grasp, but the idea of “Money without banks” is easy enough to grasp.
Blockchain Protocols with Clear Missions
There are great examples of altcoins with crystal-clear mission statements. It’s no coincidence that the following coins are all in the top 50 of CoinMarketCap’s coin list:
(a) Augur sums up its mission in three words: “Decentralized Betting Market.” That’s particularly impressive because the concept of a decentralized betting market is easy to understand at a glance, but very nuanced at the core.
(b) Litecoin is often referred to as “ the silver to Bitcoin’s gold.” This simple slogan is remarkably effective, because the metaphor offers a ton of information on the Litecoin ethos. Just like comparing silver to gold, Litecoin is less valuable than Bitcoin, offering more affordable prices and some other benefits.
(c) EOS’s definition as a “blockchain operating system.” The only problem is, this will come across as jargon to a lot of people who don’t have technical skills. For them, the EOS crowd worked out one more slogan: “The Ethereum Killer.”
In each case, the simple description becomes a big part of the branding and gets people excited.
How can you simplify your message? Here are a few ideas:
The Refining Process
Start big and shrink it down.
Start by defining your mission in as many words as you want – at least two pages. Wax poetic about everything that makes your ICO amazing.
Then rewrite it, but with a maximum size of one page. Do that again, but the second time, restrict yourself to a single paragraph. Then do it yet again, but with only one sentence.
Finally, if you are feeling bold enough, refine that sentence down to a single phrase.
Going through this process, again and again, is helpful. You will arrive at a different result each time you do it. After a few iterations, you may come up with a great phrase that sums up your ICO.
The Prioritization Process
If you have multiple goals, try to determine which one is the *first* one that people are likely to adapt.
For example, Uber started as a luxury taxi app that only targeted wealthy people in San Francisco. Over time, they moved to a broader market, offering rides for anybody. Can you prioritize your own goals in a similar way?
You Can Launch a Successful ICO in 2018
Now is a great time to be launching an ICO. Funds are plentiful and interest is at an all-time high for the cryptocurrency.
Some naysayers will suggest that the ICO market is oversaturated. There will be talk of bubbles and other future problems that could get in the way of an ICO. However, based on the data we looked at throughout this article, it doesn’t seem to be true.
There will always be obstacles to overcome, but now is a great time to overcome them. Above all else, I hope this guide gave you some more confidence that you can do it.
Good luck and here’s hoping that your ICO is a huge success in 2018.