5 Steps to Launching a Successful ICO
Launching a successful Initial Coin Offering (ICO) has become just as important as a business launching its Initial Public Offering (IPO). Here what you need to know to launch a successful ICO.
We are in the midst of the blockchain era (or bubble, depending on how you want to look at it), and many believe that cryptocurrency is the next frontier in the world of money and finance. Launching an Initial Coin Offering (ICO) can be a great mark of success for a cryptocurrency platform - but it requires overcoming major hurdles that currently plague the industry. Popo Chen is the CEO of COBINHOOD, a zero-fee cryptocurrency service platform that recently closed its own successful ICO. He shares what drove his successful ICO and what other pre-ICO hopefuls can learn.
Step 1: Understand the Cryptocurrency Space and Its Unique Problems
"I first jumped into cryptocurrency and blockchain because I'm a trader myself", says Chen. "As a daily trader, I became frustrated when I saw so many flaws in the existing exchanges. High trading latency, difficult account applications and poor customer service are just a few issues that traders like me have dealt with - not to mention exchange downtime due to high traffic and high trading fees".
When Chen would review his ROI from trading cryptocurrency, he felt robbed by 20% margins that he would need to pay as trading fees, and he didn't think that platforms providing such low quality of service deserved to charge such a high fee. He recently launched COBINHOOD's zero-fee exchange platform to help solve this problem.
"To me, it's about building a solid ICO project that aims to solve these pain points in the industry. COBINHOOD is supporting the cryptocurrency industry while helping the people within it", says Chen.
Step 2: Build Confidence and Legitimize Your ICO
As with any new industry, legitimacy is a big hurdle to overcome - this is especially true for cryptocurrency. "Being a startup, launching our ICO was a challenge. In the very beginning, there were people who said that COBINHOOD was not real; they claimed that the company was fake", says Chen.
Marketing and publicity are also important for legitimizing ICOs. Some solid ICO projects do not have effective marketing plans and channels to promote themselves, so they get lost in the shuffle when other ICOs scams take center stage. Meanwhile, it doesn't help that most of the newly issued tokens are lacking liquidity as they are not able to be traded on top exchanges, so these ICO tokens can only be traded in a secondary marketplace. Be ware that your ICO faces all of these challenges.
Step 3: Learn to Navigate Cryptocurrency Regulations
"Though cryptocurrency and ICOs are trending, the industry is still lacking regulations, which creates ups and downs for businesses", says Chen. If you are new to the industry, getting to know other ICOs is vital, and reading up on case studies can help you to quickly understand how the industry is regulated.
China recently banned ICOs one week before COBINHOOD's ICO launched, followed by the ban of cryptocurrency in September of 2017. South Korea also banned ICOs in late September. As a result, all cryptocurrencies dropped. Luckily despite this, COBINHOOD successfully received more than 45,000 ETH (approximately $27 million USD), making it one of the top projects during this period. However, a lack of understanding of these regulations could be the difference between success and failure for many ICOs.
Step 4: Participate In the Cryptocurrency Community
Managing community interaction continues to be one of the most important parts of achieving continued success in the cryptocurrency space. "At the very beginning of the project, about 70% of COBINHOOD's time was dedicated to the community", says Chen. "We had to answer questions that were sometimes harsh and critical, in an effort to keep the conversation open". As time went on, people realized that COBINHOOD is dedicated to building a cryptocurrency ecosystem and working on the crypto-based financial future; the resulting support came shortly thereafter.
The COBINHOOD team was able to stay focused on putting effort into developing the product, effective communication with traders, preparing the demo page and delivering a whitepaper ahead of the ICO launch. In these ways, COBINHOOD was able to prove to the cryptocurrency community that the company was committed and therefore would likely make it through its ICO.
Step 5: Have a Vision for the Future
Much of preparing for an ICO involves a solid vision, and thinking about how you can shape the future economy through a company's cryptocurrency. It's essential to align the short term mission by providing a positive trading experience that maximizes the trader's profit. Focusing on the long term cryptocurrency ecosystem, financial derivatives and future services is equally important to overall success. Following its ICO, COBINHOOD underwrote its first ICO project - CyberMiles.
Chen states, "Cryptocurrency and blockchain technology are new to the world, so the best advice I can give is to put effort into every possibility even for a small win. If you find the result doesn't hit your expectation, you learned something from it and you will be able to find a more efficient way to make it even better next time around".
Launching a successful ICO has become just as important as a business launching its Initial Public Offering (IPO). With the continued drive to improve businesses, now more than ever, it's incredibly important to understand the true value of blockchain and all the ways blockchain will enable entrepreneurs in 2018.