You probably noticed how much the digital world has changed in the last few years. Cryptocurrency industry, the blockchain and ICO came to the forefront. The development and creation of bitcoin imply the departure from the banking centralized community controlled by bureaucrats to the free in which simplicity; ease, accessibility, and anonymity together with the low transactions fee are key points of ideology. Own cryptocurrency, blockchain and launching ICO are made this all possible.
Could my Business hold an ICO?
A scrupulous question, which we discussed in our other articles. Many experts do not give an unambiguous answer, so the Merehead team offers its answer. ICO is suitable for companies, entrepreneurs, enthusiasts, and ideologists who believe that their project is able to influence, if not the whole world, then at least a separate country. ICO is just a means of fundraising and launching your project. It fits both digital projects and offline projects equally.
How does ICO work?
The ICO process often compared to an IPO, but this is not entirely true. It is much closer in ideology to compare with fundraising campaigns like Kickstarter and later with the IPO process. The ICO process divided into several logical stages. At its core, it relies on blockchain smart contracts. Does not matter what blockchain you choose Ethereum, NXT, Hepyrledger Fabric or another. We’ll talk more about later in this article.
Therefore, smart contracts are the starting point, the core and foundation of the entire ICO. Obviously, the very first is to create own cryptocurrency or token, followed by pre-ICO and after ICO, or in other words – crowd sale.
How to Start ICO
Once you have decided the idea, have done the small competitors research, you are ready for the first active steps. You can rely only on yourself, your team, another agency or get rid of a headache and choose Merehead, which will accompany you at all stages.
Perhaps the most powerful and effective tool of your ICO. The white paper is a technical, operational and phased description of your project and ICO. It includes a detailed description of the team, the biography of each team member. Particular attention should be paid to education and previous relevant experience. If you run an ICO for the food market, or concerts, you will hardly succeed if your key team members worked only in the cinema. Relevance and expertise are key points. If after reading these lines you understand that none of your team members have relevant experience, do not worry – there is a solution. We will talk about it later.
White paper includes a roadmap. Please note, it should be both in the document and on the landing page. The fact is that white paper reads only a part of investors. Others pay attention to your site, presentation, pitch, graphical interface and about 5-7 other items.
The roadmap should be worked in details first six months – the year of your plans. Literally with a one-month gap. Next, quarterly will be enough. If you can add past despite small victories and achievements do it. The fact is that every investor wants to make money on your project. This is primarily for them investments that must be returned in tenfold or 20 times.
Do not expect that every passer-by reveres white paper, but this does not negate white paper has to be done badly. A white paper is interested in large-amount investors, cryptocurrency enthusiasts and influencers Low-quality documents can bring irreparable harm to your ICO and brand. If you need consulting, advice or help in writing an effective white paper – contact us, and Merehead experts immediately help you. Sometimes when building cryptocurrency exchange, owners write such a document as well.
The volume of white paper should not be large in 100 pages. However, even in 5-10 pages, it is unlikely that you will succeed in describing achievements, ideas, plans and the market. Pay attention to details.
Due diligence for ICO
Research and company and ICO analysis is extremely important for investors. In the last year, the market has been a lot of fraud and scams, investors “slightly” concerned about this. In each podcast, conference, and event, speakers pay special attention to the proper due diligence ICO. This and the analysis of social activity skills, white paper, team, research on the involvement of the team in your project, quality, training and many other items. Be sure that almost every second investor, if not 70% of them, does due diligence to be sure of your ICO. You must be prepared before the battlefield, and be aware of the weak-strengths. Contact the agency or Merehead for a deep due diligence. Identify the pitfalls as early as possible, and fix them. In the end, give your project due attention.
As mentioned earlier, the team must have relevant experience – this is extremely important. This by no means that you can not launch a successful ICO without it. Do not get me wrong, if your goal is to fundraise $10,000 then experience means little. However, with a target of $10 million, every point, every verge, and edge must be honed to perfection.
The ICO team divided into several groups. The first and most important is the founders and C-level managers (CEO, CTO, COO, CMO, etc.). The second is your developers, managers. The third, least significant of your ordinary employees. Customer support team, public relations managers, etc. On the question, how many to specify the team members on the site and the white paper there is no definite answer. If your team is small – specify them all with links to personal profiles LinkedIn, Twitter, VK – for Russian-speaking audience. If you have more than 50 participants, clearly the most important ones should be presented. For example, you can check hold.co.
A couple of important details about how to build a team for ICO and properly manage it. Our company was contacted by the founders with a team of 15 and up to 30 members. At each stage, all of them encountered certain difficulties in managing. Namely, at first it is a problem to find qualified candidates. Fortunately, there are right candidates from other countries on the IT market, including cryptocurrencies. If you could not find the right person in your country, ask for help in nearby countries. For example, for the ICO from Russia, it is worthwhile to look closely at the candidates from Ukraine, Belarus. As language is the easiest way to understand. For Germany, this is Switzerland and Austria. For the English-speaking audience, you can look out to the Philippines. There is always a solution. But it’s worth remembering the mentality and approach to work. The devil is in the details.
Time zones, it is that one more splinter. For one team where people from all spectra are very difficult to work. Therefore, you will have to use corporate accounts in Trello, GDrive, Calendar, Skype, Slack and much more. Including Zoom for Gulf countries. Alternatively, you can contact a specialized company like Merehead who will solve your headache and help you.
How to Choose Advisors for ICO
Advisors are a significant part of the team, strongly influencing the project. Not difficult to find right advisers the same as a mentor. They either believe in your project or ignore you until you impress them and they will see significant results.
Their role in your ICO is to prompt the road in a subtle niche. Remember when I mentioned there is a solution, if the team does not have relevant expertise? The answer is advisers. If they have such experience this is much steeper.
Relationships with advisers are rarely paid. Project share is a typical situation. They are definitely worth publishing on your ICO landing page because they are influencers in this industry. Be sure, they will pull you to the top.
You can found advisers for the ICO at conferences and professional events, LinkedIn.
Own Cryptocurrency or Token
Determined the idea, technical documentation, and white paper, it is time to choose and create own cryptocurrency or token. Which one should I choose? What blockchain to choose for creating cryptocurrency or token? Let us look at a few options:
– Fork of popular cryptocurrency. In due time, many cryptocurrencies started, such as Litecoin (Bitcoin fork), Bitcoin cash – also Bitcoin fork. Core customization, new packaging and you are ready to work.
– Token-based upon Ethereum. Almost 90% of the tokens in circulation in Coinmarketcap list based upon Ethereum. About details read on how to create cryptocurrency and ERC20 token upon Ethereum. To date, there are about 7 ERC standards, the most popular among them is the ERC20 with the option of settings and additional functions. Cryptokitties, Binance coin, Venezuelian Petro are all tokens upon Ethereum.
– Neo, NXT, Ripple, Waves tokens. Fortunately, other blockchains also have the capabilities and functionality of smart contracts – the basis of cryptocurrencies and tokens. Pros can probably vary individually from blockchain. For example, Waves tokens handle more transaction comparing with Ethereum. On the other hand, there are opportunities and functionality. Often the creation of a cryptocurrency on the NXT is more expensive, longer and less efficient. If you are not sure which type of cryptocurrency you should choose – contact the consulting agency, or our managers.
– Own blockchain development. The least effective for ICO in terms of complexity, and just incredible investment. Why reinvent something from scratch if there is a ready rich functionality on the same Hyperledger Fabric? Significant importance has blockchain in healthcare.
– Cryptocurrency creation upon other blockchains. Hyperledger Fabric, Corda, Ethereum, NEO they all have blockchain. In addition, on each of them, you can create a cryptocurrency.
It does not matter which platform you choose, because for decentralized cryptocurrency exchanges own coins are fuel.
There are dozens of marketing and PR channels. However, within the ICO, we are interested in the most effective. These are forums and social networks, ads on Facebook, Google, Bing; conference and of course your landing page. We described details of ICO marketing plan in our article.
I want to remind you, marketing should be carried out during all stages of pre-ICO, crowd sale and even before the launch of the cryptocurrency itself. The point here is that marketing includes both internal and external. You have to work for the brand. Lead generation and further work with them. Investors base is much more important than the users base.
Localization and Translation
Marketing’s assistant and servant. The richest investors are in the US, China, Korea, Japan, and Russia. If your site does not have localization to these countries, you are making a serious mistake. Always remember Pareto principle. 80% of the result brings 20% effort, and the remaining 20% result in thanks to 80% effort. This can be projected onto the above-mentioned countries
Do not forget that localization is not so much a translation into another language but an adaptation to another audience. It manifests itself in their manner, orientation, mentality, language, writing, and other aspects. Of course, this does not negate that you must do localization in other languages. But what if there are no right team members, or simply the language is poorly mastered?
How to do Bounty Program for ICO
Bounty program comes to the rescue. For example, a user who writes a localization receives +2% of tokens. Very solid contribution for help in localization, agree? The referral system, bonus program, and gratitude for sharing in social networks are the 3 pillars on which the basis of promotion is built.
In details worked out to marketers, approved by the founders of the incentive program or bounty program is able to make an explosive avalanche effect to your ICO. A sin not to use it. With proper application, it can reduce marketing costs several fold. However, requires a well-coordinated work of the marketing department and technical specialists, and customer support department.
Therefore, we came close to launching pre-ICO campaign. At conferences, people often ask why, after all, is Pre-ICO stage is necessary, can ICO be without it? The answer is you can do ICO without a pre-ICO stage; it is not a mandatory requirement for the projects. However, the price of mistakes can be enormous. The pre-ICO stage needed for several reasons. First, this is a palpation and a detailed study of the audience. If on a pre-ICO you have reached a hard cap, then this can be for several reasons. Either you underestimated the amount, or you overpaid for marketing. Cannon on sparrows can be shot, but is it necessary? It is like hiring a development team to make your own cryptocurrency exchange, instead of using a white-label crypto exchange. Second, the cost of ICO varies from $15,000 to $80,000. Not always, the founders have such amount on their hands to cover everything because there are still costs for marketing. Pre-ICO allows you to fundraise a little money that you can spend on marketing and on further improvement.
From the analysis to realities and forecasts. How much should the Pre-ICO last? Normally, 1-2 weeks. In our practice, there were projects with a pre-ICO duration of 1 month. More than this period I strongly do not recommend conducting, it will negatively affect the brand.
At this stage, users are often very interested in investing in your project and therefore it is very easy to achieve the soft-cap. This is due to one simple reason. The cost of tokens/cryptocurrency on the Pre-ICO is much lower (3-5 times), in order to attract the attention of the audience and the primary processing of it. Here, an avalanche effect arises. In addition, because coins are cheaper, then the margin and revenue will be greater.
What should I do after the Pre-ICO is over? Is it worthwhile to start the crowd sale? No way. After the end of this stage, first analyze, evaluate your abilities, expectations and in the end how realistic you are to achieve the amount that you planned. After making changes, improvements and iterations into your smart contract, test it and you are ready to move on to the next stage.
Crowd Sale Stage
The main life stage of the ICO, which shows whether your product will be alive, developed and successful. All efforts should be spent on successfully overcoming the previous stages. The average duration of the crowd sale is 2-4 weeks, sometimes extending up to 2 months. However, it is worth remembering that successful projects reach the hard cap in just a few days.
What is it necessary to know about crowd sale stage? Only constant communication with the audience. Perhaps this is the only thing that can be corrected and improved at this stage. No changes in the contract, nothing. Only positive, deep and understanding communication with investors. Any contact, any lead is your potential investor.
What to do After ICO
If you thought that after the crowd sale project is over – take your time with conclusions. The most interesting begins here. After launching a successful ICO, it is important to constantly maintain communication with investors, keep them informed of developments and news. Perhaps guerrilla or aggressive marketing is a bit thick, but to managing business pages in social networks is important.
Fundraised money you can spend on development, marketing and further movement with your project. However, is it possible to increase the capitalization of the company, and if so how?
Quite a reasonable question. The fact is that after you have sold your tokens or cryptocurrency to investors, they want to exchange it for bitcoin, altcoin or cash. You can list your cryptocurrency on the exchange. That is exactly the way companies’ do that have launched their products and gained popularity. Cryptocurrency listing on the exchange is a catalyst for capitalization. If things go well with the company, such news will drive new investors and increase the price. Otherwise, if the product has not yet been launched you risk everyone including ruining the company. After all, the logic of investors is simple; they want to make money by investing. If after selling tokens you list them on the cryptocurrency exchange, be sure that your investors will rush there to sell them and roll the rate. That is why ICO compared to an IPO. You need to know the psychology and the way investors think.
How to List Cryptocurrency on Exchange?
On the one hand, an ambiguous question and mainly based on the human factor. After all, on the other side of the exchange are live people with their own needs. There are many cryptocurrency exchanges like an admin-base exchange, trading peer-to-peer exchanges, and margin trading. All they divided into 3 types large, medium and small. Requirements and criteria for each type vary at times. However, the minimum for small exchanges is your cryptocurrency or token should be an open source. The exchange team will analyze vulnerabilities and security. If results are satisfied, they will gladly list your precious coins. However, if there is not a proper daily / monthly trading volume on it, it going to be immediately closed down.