How to Launch a Successful ICO: How Important Is Marketing?
The rise of Bitcoin has many potential investors jumping on the cryptocurrency market bandwagon, with entrepreneurial risk-taskers all wanting a piece of the digital coin pie. Just as buzz is often generated from an initial public offering (IPO), or the first sale of stock a previously private company issues to the public, we are now seeing a swarm of activity surrounded by an initial coin offering (ICOs) as well.
Before you rush to join the cryptocurrency exchanges frenzy or countless blockchain startups, it is important to understand the ins and outs of how ICOs work. We will explore what it takes to launch a successful Initial Coin Offering and exactly what you need to do to get your “crypto ducks” in a row to make it happen.
Before You Proceed… Know This
Launching an ICO is not easy and it’s not cheap. Be prepared for a significant financial investment to make your ICO happen, whether you are spending your own money or if you have investors and backers willing to supply the funds. A general rule of thumb is that you are probably going to spend upwards of $50k to launch your ICO. If that figure did not scare the living daylight out of you, continue reading for tips on how to get started!
Compare Your Idea to the Competition
Before you proceed with plans to launch an ICO, spend a considerable amount of time looking at how your project competes in the marketplace. Does the basis of your project justify tokenization? How does it compete against similar services? You will need to both define and study your target audience to understand whether you can stand out from the crowd.
Stay on the Right Side of the Law
In addition to understanding your target audience, you will need to be familiar with cryptocurrency regulations in your country. This is where an ICO launch can get particularly expensive as you may need to hire a lawyer to navigate this phase for you. While ICOs are legal in most countries, this is the most heavily regulated area of cryptocurrency and you will need to stay abreast of the ways those regulations develop and change while working on your project. Legal assistance may be a significant expense but a worthwhile one in the long run. Scam ICOs have been rampant, which is why there is so much regulation and this is likely to increase going forward. Play it safe and follow the rules and be prepared when the rules change!
Your Token: How to Make it and How to Manage it
Making your token will be relatively easy with the Ethereum website (the platform used by the majority of projects), provided you are relatively tech savvy. If you are not, this is another area where you will need to seek out (and pay) someone with the appropriate expertise!
You will need to map out exactly how many tokens will be issued and distributed initially AND you need to consider any scenarios for issuing additional tokens. This is effectively the “distribution plan” of your overall business plan.
Speaking of Business Plans… The White Paper
Just like “old fashioned” business models that predate cryptocurrency, you still need a white paper. Even for a project as “modern” as an ICO, there is no substitute for a meticulously researched and carefully crafted white paper that details every aspect of your project, from its inceptions to projections. There are myriad in-depth guides available for writing your white paper, but the general points you need to cover are your overarching vision for the project, a bio of your team members, your strategy, your goals, and any pertinent legal issues. Know that the investors you are trying to attract are likely to have a good working knowledge of cryptocurrency projects and blockchain technology. They will have seen projects that both succeeded and failed, so your job in writing this paper is to convince them that you have a solid plan with capable expertise ready to carry it out.
A Digital Project Demands its own Website (Duh!)
Here’s another significant expense for you: you will need to launch a website. And a quality website at that! Your site should be user-friendly, visually appealing, and secure. The last thing you want is for your site to be hacked (which is common when it comes to ICO projects), so use a reputable provider with close attention to security. The website mimics the content of your white paper, only in a less detailed format though still chock full of the most important items. You will highlight your team members, use visuals to outline a plan and timeframe for your project, and focus on specific milestones that will be of interest to investors.
Just as you would carefully proofread a white paper numerous times before sharing it, you will want to ensure your website is error-free, polished, and professional. Even the tiniest of errors can be off-putting and reflect poorly on your project and its chances for success.
Now… Tell Everyone about It!
Just as you can’t sell the world’s greatest running shoes or the pillow that eliminates snoring if no one knows they exist, you cannot launch an ICO without a big focus on marketing. You may have done a bang-up job on that white paper and created the slickest website around, but without a significant marketing and PR push your efforts will be for nothing. Once again, this is an area where you may need to seek outside expertise if you do not have a marketing background.
While some social media outlets have banned paid advertising for cryptocurrency projects (boo, scammers), you can still engage in social media marketing via groups and online discussions. There are a number of online forums such as BitcoinTalk where you can generate interest in your project.
Now that you have created a thorough plan with documentation, a website, and marketing activity, you are ready to launch your ICO!