Cahill Puil: Here’s what great ICO’s do differently

If you’ve been keeping an eye on the cryptocurrency market over the past 6-18 months, you’ve undoubtedly witnessed the meteoric rise of Alt-Coins via ICO’s.

Dare I say, the exponential growth is on a trajectory to the moon.

Looking at data from Coinschedule reveals that in Q1 of 2017 a paltry amount of less than $75-million was raised. Compare this to Q4 of the same year – where an astounding $1.7-billion was raised.

And this pales in comparison to Q1 of 2018 – where an estimated $4.8-billion has been raised so for.

While the markets have slumped into a grim outlook – the ICO market is thriving. Here’s what the great ICO’s do differently, and how they stand apart from the crowd.

 

Product + Community > Token Price

As any great startup knows – if you don’t have a solid product, and you don’t have support of the community – you don’t really have a business. Blockchain based startups who are launching ICO’s also understand this – the product and the community are far more important that the token price.

Understanding this they will seek to share insights, updates and plans for the future of the product – not try to convince every token hold that they’ll earn a fortune.

While the market hype and a fear-of-missing-out has many investors making decisions based on emotion, the great ICO’s do little to tap into the hype – and instead focus on fundamentals.

Reality to Their Vision

Launching with no team, no product, and no customers – but promoting a massive valuation or token price is always a red flag. The best ICO’s – the ones who really survive the token market downturns and who will eventually pull through on delivering their solution tend to have:

  • Live product – a working model, business or proof point that you can see, use, and interact with. Even if there are no customers – a live version of the solution can give you improved understanding about what the product is, and where it’s going.
  • Live users – Even better than a standalone live product, is a live product with live users. Users who are paying are of course, when applicable, the best solution to have – but notwithstanding, any users are better than no users. User engagement, growth and feedback are critical to understanding how the underlying blockchain company will deliver their product in the future.
  • Live code – When a live, working product is not available for use, live code may be an option that investors can turn to to assess the underlying blockchain company and potential ICO. Look for code releases and frequency of release on Github. Typically the more releases or more constant frequency of releases signify the underlying blockchain startup is a strong performer.

 

They have a SpaceX style business plan to get “to the moon”

Elon Musk is no dummy. This is obviously clear from the multiple billion dollar companies he’s created. But while you maybe thinking “of course, so what?” – what’s often not as clear is how he manages to connect a seemingly impossible goal, to the very real necessity of keeping the company alive with money. Every company – yes, even blockchain based ones – need to earn revenue at some point to keep the operations going.

The best ICO’s, and underlying companies naturally understand this.

They SpaceX style business plan to disrupt whatever industry they’re focused on will often follow this structure:

  • Phase 1 – Trial & Error, Make Money to Fuel the Mission – With the goal being to get something that works to, well, make money for the company. This is often done as quickly as possible. In SpaceX’s example – it’s not going to Mars that pays the bills, it’s launching satellites and various payloads into space over and over again.
  • Phase 2 – Revolutionize Industry Aspects, Prep for Disruption – Every solid ICO has a plan to revolutionize the ______ (fill in the blank with the industry they’re targeting). Yes, disruptive, decentralized, cash-less, trustless systems are all the buzzwords. But great ICO’s understand that the preparation and advancement of key factors within an industry are necessary to change before they can truly change the industry. In SpaceX’s case – they understand that reusable rockets will drastically change the industry, and open the door – ever so slightly – to getting to Mars.
  • Phase 3 – Disrupt – At this point, once the industry is prepped for disruption, the blockchain company can then disrupt. Change the world. Alter the course of humanity with the mission they touted during their ICO. In SpaceX’s case – this would be multiple flights to Mars.
  • Phase 4 – Ongoing Improvements – From here there are constant ongoing improvements, as the blockchain startup that initially raised capital via an ICO, is now in a position to continually improve the industry. In SpaceX’s case – this would be the point where they lower the cost further, and become the dominant industry player in terms of space travel.

Ultimately It’s Calculated Mission Over Money

Surviving the Wild West of the cryptocurrency market isn’t for the faint of heart. It requires a strong team, with a calculated understanding of how to push forward with their business mission – while running a business.

Ultimately though, the best ICO’s, the founders, teams and ideas behind the ICO’s, are focused on something far greater than money. They’re focused on a calculated mission to revolutionize whatever it is they’ve targeted. And they have a plan on how to get there.

About the author: Andrew Beck