We got involved in an ICO project last year – out of sheer temptation. After all, who were all these people raising tens of millions of dollars by offering no product, no service, just promises? We decided we might take the same chance and try our hands at launching an ICO for ourselves.
Though the project raised some money, we decided to refund our investors after all – as we did not hit the soft cap target. It wasn’t nearly enough to build things according to our vision, and we owe the responsbility to our investors (and advisors who trusted us). While we did the right thing, and deserve a pat on the back, some friends told us that we should have kept the money anyway. So now, not nearly broke yet, we will share our learnings.
1.Facebook, Google, Twitter are ESSENTIAL
Projects which raised much earlier, before the ban on cryptocurrency related products (and services) were instituted by the major media platforms, were very lucky. The truth is, we found that it was probably the only source of “reliable” traffic, where there were real users. While Facebook, Google and Twitter were out of the question, we managed to use Linkedin, but the traffic was prohibitively expensive, at cost per click (CPC) of at least US$3.00.
There were some service providers who touted their ability to create deception so our ads could show on Facebook or Google, but we didn’t test them out. Given that we saw a few ICO ads on Facebook, Google (and Youtube) after the “ban” – these people might have had their own “ways”.
2. Telegram and bounty programs are the best tools
From the start, we knew that our best tool of spreading the word about the ICO was through a carefully choreographed bounty program; where users who joined our Telegram group, or shared about our project on social media would get paid in tokens. We were right, our group grew to 40,000 users in less than 2 days. But, as we later found out – at least 50% of the users were “fake” users, or bots – who were in it to game the system. Still, it’s probably the best tool out there.
3. Affiliates, crypto and PR sites – few are good, most are SCAMS
We also pushed traffic from affiliate networks, crypto sites, it was proven to be completely unreliable. Infact, we encountered what many would describe as fake traffic, and even sites that charged thousands of dollars for a press release article did not result in us getting more than a few clicks.
Short of calling these sites a scam, we really advise people against using these services, unless you know what you are doing.
4. Crypto events rarely work
The two of us (partner and I) also had assumptions that going to a crypto event (touted as the biggest at that time) in Seoul, Korea were going to help us improve our odds of raising money. In our mind, we wanted to meet as many people as possible – to also get their thoughts about our project. The tickets costed us US$1,000 each, but the turnout was “lacklustre” – probably the most polite word I could use. Infact, we knew we were in for a “treat” when we saw the organizer dropping the prices in the last minute.
We did breathe a sigh of relief, as we didn’t opt for a sponsored booth at the event. Perhaps it was bad timing for the market. We estimated less than half of the hall was filled on the first day, and on the second day, it was probably down to 20-30%. On the bright side however, we did meet a few VCs who were in the space, which brings us to the fifth learning. Oh, and we did get free-flow of drinks.
So what else to do at such events, other than to party?
5. Build your product
No one’s interested in a half-baked idea, or to know that your product isn’t ready for the market. Perhaps in 2017, when the ICO market was still new – it worked. But, what we found in 2018 is that it doesnt “f_king” work. People vote with their money, perhaps the most sobering point of all in the ICO business. The truth is, too many projects have raised too much money in the past, with no progress (in terms of product/platform development) to to date. In many ways, people (investors) do learn. Unfortunately for the “honest” entrepreneur, you are not going to raise money if you do not have a product to show for.
6. Get prepared to SPEND
Services in the industry don’t really come cheap. For one, if we were to hire someone to prepare the smart contract, and setup the website – it will would have costed us US$25,000. Luckily for us, we did it in-house.
Other than those, the single, largest expense probably goes to marketing. For example, to setup a Telegram group, and to have someone moderate it would cost you between US$3,000 and US$4,000 per month. So, if you think spending that setting aside US$250,000 (that’s the average cost for conducting an ICO) is too high, then you’d be better off calling up VCs to ask for a proper, traditional-style funding.
But, we do get the alure of doing an ICO. After all, if spending US$250,000 could net you US$25,000,000 – why not?
Rocket Internet by training, he has worked as a professional marketer for Lazada/Alibaba & Bamilo (Ecommerce) and Easy (Transportation). Later, he honed his skills in operations, logistics, and management by launching and growing the Thai business (worth tens of millions) of a popular cross-border ecommerce platform (in Southeast Asia). Headhunted to join a public-listed tech company in Singapore, he led its Thai business until early 2018. Regarded as a trusted advisor by venture builders, Chong spends his time advising and investing into tech and crypto projects.