As Initial Coin Offerings have grown in popularity and notoriety over the past year, and with the number of people investing in or launching ICOs skyrocketing, it is important that you read this article on ‘The six things you need to consider before starting an ICO / investing in an ICO’.
1) Build a good team
Surround yourself with an awesome team! Think technology experts, marketers and investors. Having experienced and relevant industry professionals working behind the scenes will add credibility to your ICO and product.
A lot of startups make the mistake of not hiring the right people in the first place. It’s so important to have a team who understands your goals and knows how to leverage your varying skill sets to build and offer a value-added product to your target market.
2) Have a clear vision and product roadmap
Developing a clear vision and product roadmap to sustain and achieve that vision is one of the most important things you should do before starting an ICO or investing in one. Ask yourself, what am I trying to achieve here? How am I developing a blueprint for the future?
To answer those questions properly, there are two things you should do:
Create a watertight whitepaper introducing your product, and explaining your approach, the problems it’s going to solve, how it’s going to do it and your business development plan in as concise a manner as possible. Go beyond the typical whitepaper and be able to show something more to people. That in itself brings a lot of value to startups.
Develop a product roadmap with clearly defined and realistic goals and timeframes.
3) Adopt the right technology
Once you know what your vision is, the next step is to think which technology are you going to use to actually fulfill the problems that you are making with your product. Ask yourself, which blockchain should you use? Should you use more than one blockchain? Or should you build your own?
Next, decide on the token design and economics you want to use. This is important because it is part of your product. You have to think, what does my product do? Who is the user of my product? This is one of the core parts of the product so it’s important to really think about the token economics and design.
4) Decide on your distribution strategy
A good distribution strategy cannot be underestimated. So, begin with the end in mind. Ask yourself, how will you acquire new customers and keep existing ones? On the blockchain, distribution has taken on a new dynamism and become extremely competitive, so how will you market your products or services effectively?
5) Conduct due diligence
Dot the i’s, cross the t’s and develop a due diligence process. Like any business venture, before starting an ICO you must meet certain requirements. Find out what taxes you have to pay, when you must pay them and what regulations exist in the country you are based in. Plan your ICO along with the local tax authorities to provide legal certainty and enable more reliable planning.
Deciding on your ICO’s terms and conditions is also worth doing early on.
6) Look at your investors
Be selective with who your investors are. Every single person who is investing in your company should genuinely believe in what it is that you do and have values that align with yours. Leverage the community that are investing in you and learn as much as possible from them. Remember, it’s important that your ICOs obtain smart as well as connected capital and not just any capital.
Written By Gabriele Giancola, Co-founder and CEO of blockchain-powered loyalty ecosystem, qiibee.