Have you ever wondered why 90% of initial coin offerings fail? As the ICO industry is relatively new, we have yet to see many successful projects, and too few resources exist for those who want to invest in them or launch their own.
The ICO Phenomenon
The rise of the initial coin offering (ICO) has been nothing short of meteoric. In 2017, ICOs raised over $5 billion dollars for blockchain and cryptocurrency projects. This is an incredible amount of money, especially when you consider that in 2016, ICOs only raised a total of $96 million.
So, what is an ICO? An ICO is a fundraising mechanism where companies or individuals can raise money for their projects by selling crypto tokens. These tokens are typically sold in exchange for other cryptocurrencies like Bitcoin or Ethereum.
The reason why ICOs have become so popular is that they offer a way for companies to raise money without giving up equity or going through the traditional VC route. For investors, ICOs offer a chance to get in on the ground floor of a potentially successful project.
However, not all ICOs are created equal. In fact, a large majority of them fail. In this article, we’re going to take a look at some of the reasons why ICOs fail and what you can do to avoid being scammed.
How to Invest in ICOs?
The first step is finding a reputable ICO to invest in. There are many ways to go about this, but the most important thing is to do your research and only invest in an ICO that you believe in.
Once you’ve found an ICO you’re interested in, the next step is to purchase some of their tokens. This can be done with Bitcoin or Ethereum, and most ICOs will have detailed instructions on how to do this on their website.
Once you have your tokens, you can hold onto them or trade them on cryptocurrency exchanges. If you believe in the long-term success of the project, it may be worth holding onto the tokens for future growth.
Why Do 90% of ICOs Fail?
The majority of ICOs fail for a variety of reasons.
#1 ICO Development Team
The most common reason is that the team behind the ICO doesn’t have the experience or expertise to successfully launch and scale a project. Other reasons include a lack of adoption by users, poor marketing, and unrealistic goals.
In order for an ICO to be successful, the team needs to have a strong understanding of the technology, the market, and the community. They also need to have a clear vision for the project and be able to execute it in a timely and efficient manner. All too often, teams underestimate the amount of work that goes into launching and scaling a successful project.
#2 Poor Customer Reach
One of the main reasons why ICOs fail is that they are not able to get enough people to use their product or service. In order for an ICO to be successful, it needs to have a strong user base that is willing to adopt the new technology or service. Without this critical mass of users, the project will likely fail.
#3 Lack of Utility
One of the main reasons why ICOs fail is because the tokens that are being sold don’t actually have any utility. The team behind the project hasn’t thought about how the token can be used within their ecosystem and as a result, traders and investors are left holding tokens that have no real use case.
#4 Less Marketing
Another reason why ICOs fail is poor marketing. Many teams do not spend enough time or money on marketing their project which results in low brand awareness and little interest from potential users. A good marketing strategy should focus on creating interest and excitement around the project while also educating potential users on what it is and how it can benefit them.
#5 Unrealistic Goals
Lastly, many ICOs set unrealistic goals that they are unable to meet which ultimately leads to disappointment among investors and users alike. It’s important to set achievable
What Makes the Successful 10% Different?
The successful 10% of ICOs have a few key differences that set them apart from the failures.
- They have a clear and concise whitepaper that outlines the problem they are solving and how their solution will work.
- They have a strong team in place with relevant experience and expertise.
- Lastly, they have a solid marketing strategy to reach their target audience and generate interest in their project.
These key differences are what makes the successful 10% stand out from the rest and give them the best chance at success. If you’re looking to launch an ICO, make sure you have these key elements in place before moving forward.
Where to Find Information on ICOs?
When it comes to ICOs, there is a lot of misinformation out there. A lot of people will try to sell you on an ICO without really knowing what it is or what the project is about. It’s important that you do your own research before investing in any ICO.
There are a few places you can go to find information on upcoming ICOs:
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ICO Alert
This website provides a list of upcoming, active, and completed ICOs. They also have a blog that discusses various topics related to the ICO industry.
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CoinSchedule
This website provides a list of upcoming and ongoing ICOs, as well as helpful resources and articles.
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Smith + Crown
This website focuses on providing an in-depth analysis of ICO projects. They have a team of researchers that analyze each project before it is listed on their site.
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CoinDesk
This website is one of the most popular cryptocurrency news sites. They have a section dedicated to ICO news.
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CryptoCoinsNews
This website provides cryptocurrency news, including ICO news.
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The Merkle
This website provides tech-focused cryptocurrency news, including ICO news.
It’s also important to keep up with the latest news in the ICO industry. There are a few places you can go to find the latest news:
Get Ready to Launch: The Steps of an ICO
When it comes to launching an ICO, there are a few key steps that you need to take in order to ensure a successful launch. Here are the key steps of an ICO:
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Whitepaper
This is arguably the most important part of your ICO and needs to be well-researched and thought out. Your whitepaper should outline your project, team, tokenomics, and more importantly, how you plan on using the funds raised.
A well-designed website is also crucial for your ICO. Your website should be informative and give potential investors all the information they need about your project.
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Social Media
Make sure you have a strong social media presence leading up to your ICO launch. This will help create awareness and interest in your project.
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Community Management
It’s important to have someone dedicated to managing your online community (e.g. Telegram, Discord, etc.). They should be able to answer questions and address concerns that potential investors may have.
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Token Sale
Once everything is ready, you can then start your token sale! Be sure to set a hard cap and accept major currencies (e.g. ETH, BTC).
How to Launch a Successful Token Sale?
When it comes to launching a successful token sale, there are a few key things you need to keep in mind.
#1 You need to have a clear and concise vision for your project. This means having a well-thought-out business plan and roadmap that outlines your goals and how you plan on achieving them.
#2 You need to make sure you have a strong team in place. This team should be composed of experienced professionals with a proven track record in the industry. Furthermore, they should be passionate about your project and believe in its long-term success.
#3 You need to have a solid marketing strategy. This includes creating compelling content that will generate interest in your project and drive people to participate in your token sale. Additionally, it’s important to build up a community of supporters prior to launch so that there is already buzz around your project when the sale goes live.
Finally, you need to ensure that your token sale is structured in a way that gives participants confidence in its long-term success. This means having a clear use case for your token and setting realistic targets for what you hope to raise during the sale. By following these tips, you can give your ICO the best chance of success.
Wrap Up
The sad truth is that the majority of ICOs fail. There are a number of reasons for this, but the most common ones are a lack of planning and preparation, an unrealistic business model, and a team that is unprepared to execute its vision.
If you’re thinking about launching an ICO, it’s important to be aware of these pitfalls so that you can avoid them. With proper planning and execution, your ICO can be one of the 10% that succeeds.
