5 Reasons Your ICO Will Fail (and How to Save It)
An ICO is the easiest way to raise money today, but success depends on several factors. Here are 5 reasons your ICO (or any ICO) will fail, and how you can save it.
The author, John Lewis, is the CMO at TokenTarget; a full-service crypto and ICO marketing agency offering complete, branding, marketing and communication services which help blockchain projects thrive.
ICOs are popping up left, right and center now and what we saw in 2017 was only the beginning of a trend that is very likely to make even more waves in 2018. If you have an idea, you can launch your own ICO and raise capital for it, but here are 5 reasons your ICO will, most likely, fail.
1. Your Product/Offering Has No Market
58% of initial coin offerings fail because their product or service has no need or demand in the market. Before you launch an ICO, make sure there is a major audience base for your product and a real need for your offering.
Additionally, your idea should legitimately require a token-economy. Most ICOs today are selling tokens solely for the purpose of raising money – such projects are very likely to fail in the long-term, if the SEC or other regulatory bodies do not catch up with them sooner.
The community really wants to see projects which have a clearly defined market and future utility. The aim of any blockchain-based product or service is decentralization and putting control in the hands of the users, if your offering fails on this account, you might have to go back to the drawing board.
2. Poor Brand Identity
People make subliminal decisions in seconds, and the way your brand looks and is represented, in respect to your website, logo, fonts, colors, visuals and content, says a lot about your offering.
If any of these elements is half-baked, people are going to question your target, whether it is raising $1 million or a $100 million. Before you get started, a good idea would be to either secure some private investment, or put your own money into the project to get a professional website, whitepaper and accompanying content.
ICOs are just as much about the branding and marketing, as they are about the project and technology. Perception sells, and you need to make sure you invest in brand building.
Please understand that your Brand is the face of your offering and the better you take the time to create a good brand identity the better all of the rest of your marketing communications can be made.
3. Poor PR and Marketing Content
At any stage of the ICO, good communication and PR are key, and here are some factors to keep in mind:
1) Website Content
Poorly developed websites which lack the key elements investors are looking for, or have low quality content, hardly inspire confidence. An ideal ICO website should include all of the elements below:
- VIDEO EXPLAINER
- OVERALL CONCEPT
- MULTI-LANGUAGE SUPPORT
2) Video Explainers
Video explainers with hand-drawn white boards have been done to death. Not having any video is better than a poor one, but ideally, the project’s founders should create a compelling video explainer with visual aids helping the audience understand the technical aspects.
While video content can be expensive to produce, if done right, it definitely pays off in the long term.
3) Advertising Banners
Firstly you have two main formats for banners, static and dynamic. Static image banners are great when you want to keep the message short with a compelling call to action. Dynamic HTML-5 banners offer more possibilities for animation. It is recommended that you have these banners professionally designed and ready to complement your marketing campaign.
4) Social Content
Twitter, Slack, Discord, all these platforms are critical for the success of an ICO, and you need a proper social team with a dedicated community manager if you want to leverage them and generate traction for your project.
Prospective investors are typically impatient and value quick responses and availability. By ensuring that your social channels and content is handled properly, you can significantly increase your chances of success.
4. Unrealistic Budget & Objectives
The higher you set your hard cap, the more budget you will need for marketing, design, development and PR. Always keep your budget and the scope of your project in mind when you are setting objectives.
If you are a small team bootstrapping your way to an ICO, it might be best to reconsider and conduct a private sale first to raise enough capital to launch a proper public sale. Do not go cheap on your campaign if you want to succeed.
It also goes without saying that you need a proper business plan with a complete breakdown of all the budget spending you are willing to do and the objectives you wish to achieve.
5. Lack of Reporting & Measurement
A lot of teams behind ICOs are newcomers to the online marketing space and do not understand the importance of analytics and reports before it is too late. In order to succeed, you need to make sure you have properly set up tools like Google Analytics with the necessary goals to track user behavior and conversions.
Remember, like any other product or service, ICOs depend heavily on marketing, which itself is a multi-faceted exercise. In order to truly thrive, you will need to understand exactly who your target audience is, how you will find them and then ultimately convert them.
If you are launching an ICO and need professional marketing, communication and PR support, contact us for details.