Why So Many ICOs Fail?
According to Coindesk, over half ICOs fail within 4 months. A mere 44.2% of ICOs manages to stay active into the 5th month and beyond. And stay in touch with the community. Many of this 44.2% have to deliver their promised value to their token-holders.
Let's look at outright projects and a team. Why so many of them fail? There has been an observation of the industry trends for a while, and we have come up with a few conclusions. What is the road?
Irrelevant Product Or Service
Before launching an ICO, it is viable and unique. If you are a child, it’s literally exceptional and one-of-a-kind. Chances are your own unique idea. It doesn’t have to be as cool as it’s possible.
It’s not worth it. Make sure that your concept will be in demand.
No Clear Understanding Of Why They Blockchain
We hear a lot of ideas like ‘Uber on blockchain’ or ‘Airbnb on blockchain’. But the thing is that you can’t simply add blockchain on top of anything and get profit from it. We often ask founders, why do they need tokens and blockchain in their project, and we hear nothing but vague generalities. It all comes down to using tokens as a means of fundraising, but that’s lame, let’s admit it!
The cryptoeconomics of the project has to be properly mapped out. To keep the tokens valuable, the demand for them should always outpace their inflation in the long run. Unfortunately, many of the founders don’t have an understanding of why their tokens will be valuable in years to come. This results in a growing inflation level: the more specific tokens are offered for sale on cryptomarketplaces, the less becomes their price.
To avoid that, take your time to develop a flawless tokenomics. Your tokens should be absolutely integral to the whole project and increase the value of your product or service.
Your team members can be awesome guys, but when it comes to surviving on a tight ICO market, their skills and efforts can be insufficient.
Are these people good enough for their jobs? Do they know their tasks and KPIs? If they are a remote team, can they exchange information fast enough, and do they all speak the same language — both literally and metaphorically? Do they have enough experience both in blockchain-related projects and in ordinary business? Are your advisors only smiling faces on the main page, or do they really contribute to the project development?
Sometimes you have to re-evaluate your team members and even replace some of them before it’s too late.
Placing The Bar Too High
The unrealistic goals and objectives always put an ICO in difficulties. The higher you place the bar, the more funds you will need to achieve your objectives by spending money on delivering the product, promotion, marketing, PR, design, and rewarding the team. Your goals and objectives should match the scope of your project.
Your concept, team and tokenomics can be flawless, but the real challenge is to make people notice you and your project. With an ICO, you have a limited time frame to make your offer known by the community. So do your best to make use of all the available means of communication to engage with your audience. It may sound controversial, but you can’t afford a cheap DIY marketing strategy. The times of I-can-handle-it myself promotion are long gone, and to stand out from the crowd you have to take full advantage of the top-notch marketing tools.
There are more reasons of ICO failures, but these 5 are the most common and fatal for a freshly launched project. To make your way on the flooded market, apply for professional assistance and don’t expect to raise millions of dollars to be an easy job.
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