Recently, I shared my thoughts on the good, bad and ugly sides of ICOs. Yet, there’s much more to the topic.
Without doubt 2017 was the year of the ICO. CoinSchedule reported 235 Initial Coin Offerings and $3 billion in year-end totals altogether. 34.5% of these projects focused on infrastructure, but other industries were also included - trading and investing at 13.7%, finance 10.2% and drugs and healthcare at 5.5%. The data is not limited only to the mentioned industries, yet there seems to be a trend which business sector is more innovative in terms of blockchain technology.
ICO’s concept defies any norm and solves the bridging gap between two funding rounds traditional businesses usually go through. Running an ICO implies proving an outstanding product, one that’s innovative and for which there’s a market and need. But what makes an ICO great?
First and foremost, the idea is crucial. It has to come with plenty of explanations, a motivation and be well illustrated. Ask yourself if the project solves a real-world problem and if it has commercial viability. Does it solve a daily issue you have? If the answer is yes, then you’re around an innovative product. Read the White Paper few times to make sure it all makes sense. A well written one will always appeal and be understood by everyone.
A great ICO will have a long-term vision and present itself as an initiative for the future, where the value of it builds over time. Remember - steady growth and long-term adoption strategy is the key. Often “pump and dump” projects reflect badly on all of us. Building technology is not that challenging nowadays but implementing it at a global scale can be a demanding exercise with obstacles surpassing the technical aspect. The ICO team needs to be capable of securing the adoption of their technology.
This brings us to the heart of every ICO project, the technological solution. This is, perhaps, the most difficult part to grasp but can be a great insight of the team’s mindset. The right balance will always be between tech and business. Reading the Roadmap will always help you understand how doable the technology is and how long it takes to be in place. A detailed roadmap helps you see the project in short-term and long-term. It also gives you certainty the team knows their deadlines.
Equally important is the presence of the project on the online. Is there a multi-channel infrastructure with social media profiles, and a solid community discussing the ICO? Community is paramount to any ICOs success and how it is reviewed gives you a sense of how serious the project is.
Finally, the team composition is important. Read carefully about each individual member and their experience. Do they have what it takes to pull together such an ambitious project? Certainly, every initiative starts small, but do the members have the professional maturity to deliver?
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