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Watchout for these common mistakes entrepreneurs make in launching ICOs

  • mm
    by Aharsh MS on Wed Jun 27

Initial coin offerings or ICO have gained much wider attention over the past couple of years. In 2017, the ICO funding market exploded with a whopping $1.2 billion with more than 94 ICOs. It is expected to reach $1 trillion valuations at the end of this year. However, most of the ICOs launching nowadays has failed to provide a good response to the investors. This is mainly due to the lack of awareness for the ICO founders 0n what to provide and expect during an ICO launch. Understanding what to expect from investors is really important and making mistakes while presenting your project can really degrade your ICO. Let’s see a few common mistakes which happen for an ICO launch.

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Having no clear understanding of ICO project

One of the most important factors that you shouldn’t avoid in an ICO launch is the knowledge of what a potential investor might think when they approach your ICO. Always be prepared to answer every aspect of your ICO project. You can expect questions like “Why do you need blockchain in this project? ” or even “When will you list this token in a public crypto exchange?”. It is very important to know what your product does and how it solves a particular problem. How the tokens can benefit the investor and how the token value can be retained in the long run. The solid answers you give about your project can build the trust in investors. If you are not capable of providing a solid answer, it reflects the immaturity of the team in executing the project. So in a nutshell,  always be ready to answer about each bit and bytes of your ICO.

Forming a PR Team too late

The first rule is to have a PR team for your ICO. The second rule is to start PR as early as you can. Hiring PR team late will only delay the marketing and outreach of your ICO. It’s best to have a plan on how you can make your ICO’s name to be popular. And the best and effective way is to build a public relationship by making use of social media platforms. Facebook, Linkedin, Twitter, Telegram, Reddit, everything helps you to outreach better. Write about the most relevant topics about your ICO and publish it in platforms that can achieve the attention of potential investors.

Avoid improper use of social media platform

When you decide to make use of social media platform for promoting your ICO make sure to have a proper management of what happens in the facebook, twitter, LinkedIn and other accounts of yours. Never leave any of your channels unnoticed. Have a frequent and regular post update about your ICO on the social media sites. This can help your customers to get feeds about the ICO and thereby building trust in your project. Always make sure any queries related to your ICO that comes into the media is noticed and answered.

Missing out an announcement

A common mistake often noticed in ICOs is that the management team fail to announce an update. Someone from the investor community notices the update and post it in the ICO’s official channel. This is not good for the reputation of the project. Investors do invest in an ICO because they believe in the idea of the ICO. They expect transparency on what is happening in the ICO management team. Always have an open conversation and regular announcements. Every updates, news, changes, partnerships should be announced and it should be concise so that there are no doubts.

Giving away too many tokens

Quite often, ICO founders give away ICO tokens to people to meet immediate impacts and short-term benefits. For example, giving away too many tokens in the name of bug bounties, rewards etc can backfire in the long run. Remember that the token you give away is effectively having zero valuation. This can affect the overall value of the token when the recipients cash out the tokens for whatever value they get. As the tokens are sold, the value of the token will be driven down which is unfair for the investors who trusted in your ICO for its increase in the token value.

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Abandoning community halfway

It is natural to fail and succeed in an ICO crowdfunding. Even after the expiry of your ICO token sales, make sure to maintain an active communication with the community you have created. Always remember – Fundraising is not the end, its only the beginning. Sending newsletters, articles and other relevant items about your company to the community can help in building the brand value and customer loyalty.

Breaking compliances, regulations

The most important thing you should avoid is violating any regulatory compliances. Manipulating regulatory statements to the benefit the fundraising can result in severe consequences. Make sure to consult a legal team who have experience in ICOs. Any signs of potentially fraudulent activity will serve as a red flag in front of the audience. Therefore make sure you maintain a trustful relation with the community.

Launching an ICO is easy, but taking it to success is hard and getting harder each day. The best move is to learn from the mistakes of others so that you don’t make the same mistakes.

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Aharsh MS

Aharsh is a tech entrepreneur, a visionary. He believes that each of us is here to do something purposeful, ... Read more

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