So you want to launch an ICO?
It seems that everyone is jumping on the bandwagon and wanting to launch an ICO with or without a dedicated application to go with it. There's a feeding frenzy of buyers hoping to make a fortune from investing pennies.
This is to say the least, unrealistic, yes, people who bought bitcoin at $0.000001 may have made millions from their initial investment, but bitcoin was a 'black swan' not a regular occurrence. The rest like Ethereum have not shown such growth - yet.
And therein lies the rub and the lure. The rub is that as with any start-up, success isn't guaranteed, the lure is that as long as you have a successful ICO, you can make a lot of money and, you don't actually have to have a working product. That said, this is the very reason that more and more countries (and people) are calling for regulation.
So if you're looking to "Pump and Dump" this is not the place to learn anything. If on the other hand, you really do want to launch an authentic token/coin then read on. This advice is distilled from the huge number of articles based on "How to invest in cryptocurrencies." Which are based on what constitutes a 'good' ICO/DApp.
Purpose - What problem are you solving?
Bitcoin came into being to solve the twin problems of inflation and government manipulation of fiat currency. Yes it had other features but that was the actual problem it was trying to solve.
So what problem are you addressing? What problem needs blockchain to solve it? Because if it doesn't need blockchain to solve it, you're most likely wasting your time, efforts and initial money. Consistently, people are advised to check out the platform;
- What does it do?
- How does it add value?
- Most importantly, if it's not unique, how does it do what it does better than the established players?
A part of this is what blockchain are you using to build your DApp on? Can you explain why you've chosen that particular blockchain protocol?
White Paper - Your pitch to the investors and developers.
I've read a lot of white papers this year, some are sparse, some are over 60 pages, none follow a consistent formula. All need to answer questions.
- Technical stuff to excite developers and crypto experts.
- Investor stuff to entice and excite potential investors.
Some of the papers I've read are so technical, that as a layperson, I just don't understand them. This is not good because if I don't understand the what, why, how and when of your white paper, why should I invest? Sure, there are investors that have technical backgrounds but there are far more potential investors that don't.
Therefore, you want your white paper to appeal to both sides. The technical information is very important, especially if you're creating something that others may want to build on or integrate with. But explaining to the layperson why your ICO is worth their time and money is equally important. If any token/coin/DApp is to succeed it needs more than the inner core of enthusiasts, it needs to go mainstream.
Have you got a coherent 'road map' showing how you plan to develop your token, with clear dates that shows how things will progress over the next 18 - 24 months?
Have you shown what will happen to any tokens not sold in the ICO? If your token is 'proof of work' do you clearly set out how people 'mine' along with what they'll need and, how quickly (or not) they'll get tokens? Remember that most 'small' people won't understand about hash rates, blocks, block sizes etc. You need to explain clearly.
The white paper also needs to include the following.
The Core Team - Who does what and what experience do they have?
Once you have your concept, know what it's going to do, who it will benefit, you need to show that you have the people to carry it through to completion.
The team should be part of both the white paper AND the website (which we'll get to soon). Developers are often thought of as the key personnel, and it can't be denied they are incredibly important. They need to have experience in blockchain and to be able to show that experience. Depending on the individual application of your offering, you also need people on board who have (and can show) experience in developing the platform. You wouldn't really expect and insurance underwriter to have great experience in developing the next big social media platform, or vice versa.
Do you have experienced people in the following disciplines?
- Successful Business Owner/C-Suite
- Customer Service
- Experienced Financial Advisors
- People with experience in other cryptocurrencies or Fintech solutions
You need these people because you want people to trust you, trust you enough to gamble that you can do what you say you will. Taking the trust idea a little further, don't forget to explain how the coins are distributed, You need to show how and why the dev team get what they get, how much is for actual development, marketing, bounty programs etc. Transparency is the key here, especially if you want people to trust you.
What next for your ICO
You now have all in readiness, you're going to launch, but is it and are you ready?
Community and Communication
During the time you were developing your ideas and recruiting your team you should all have been talking about the project to stimulate interest and generate a community of dedicated followers, even a weak platform can succeed if the community is strong enough.
Prove that you're not afraid to answer difficult questions, deal with sceptics politely. Have as many channels as you can manage, including Slack, Telegram, Facebook, Twitter and Reddit.
You should also be on Github, where others can verify your code and be seen to do it. don't forget to announce your token in the Bitcointalk forum. It may not attract the casual investor/user but the tech community will certainly expect to see you there and, will undoubtedly ask difficult questions.
Be clear in your communication and encourage people to spread the word by having a 'bounty program'. Make sure you give definitive guidelines about how to join and what they must do to earn a bounty.
Consider using 'game theory' to encourage participation with random 'drops' of extra coins.
This is not a definitive list but it should point you in the right direction, we've not touched on getting your token listed on an exchange, nor how to go about it and whether it's worth it. So keep an eye out for that one!