The evolution of ICOs and the rising importance of brand marketing

If you build it, they might not come

 

If you have been paying any attention to what has been happening in the ICO market as of late, you are probably noticing that ICO mania is tapering off: We are entering a new age of reason when it comes to blockchain fundraising. The ICO golden-era, lasting through 2016–17, saw projects raising a gluttonous amount of capital with little more than a technical white paper, website, social media growth hacking, and strategic PR (if that!). What followed was a number of projects stalling out or disappearing entirely as the obvious frauds came to light. 

The fact is more than 99% of all ICO projects will fail for many reasons including lack of a viable product, community abandonment, or the simple fact they were scams to begin with. Sure, some of the more legitimate projects have worked to continue building towards their vision, but there is no way of knowing whether they will ever reach their initial product milestone let alone the finish line of creating a sustainable business.

The projects that fall into this camp will fail because they cannot capture a market. They might have a product, a solid team, and notable advisors, but they are unable to differentiate or stand out in an overly saturated space. Unlike the classic 90s movie, Field of Dreams, if you build it, they will not always come. Products that have gained critical mass and exponential growth did not occur in a vacuum: there were standard, recurring attributes that aided in their success. Most huge hits are easy to understand, have evangelists to help sell the mission, tell stories that resonate, and possess a unique look and feel. In short, effective branding if often the critical element for these products to stand apart in crowded markets.

Last year’s FOMO will not sustain an industry. As we enter a bear market, active players are reassessing their participation. The excitement — and sheer volume of capital — surrounding the blockchain space over the last few years has attracted a lot of institutional players, and we are finally seeing some maturity in the area. Not only does your project need to present more than a flashy website and white paper to raise any kind of funding, but there is also a bevy of additional attributes that help show you are a sound investment — and having a strong brand to accompany your business vision is undoubtedly one of them.

Today, the amount of capital required for even a small fundraising effort has increased. New projects have to invest more in legal fees, product development, and business infrastructure before they can be considered by the institutional players. The crypto whales are not as generous with their crypto (nor do they have as much as they did last November), and founders are now employing more traditional tactics, such as convincing Wall Street that they have a viable business in the same fashion as any startup. If you are already contributing time and energy to other traditional business infrastructure but ignoring your brand, you are missing a massive piece of the puzzle. Your brand is your visual identity, your tone of voice, and the emotionally charged representation of your business. In short, your brand is the project’s SOUL. This crucial element often goes overlooked by founders prioritizing product over establishing their identity. However, branding can be a relatively easy thing to get right if you are proactive from the onset.

The ICO frenzy of 2017 created a lot of bad actors while also making a few people insanely rich. That was then and entering today’s market with the mindset that you will raise tens of millions of dollars in a few days is counterproductive to the long-term health and vitality of the industry. A blockchain project approaching the ICO phase of their roadmap has the opportunity to attract a lot of hype and attention, which is why building a real, relatable brand and storyline for your project is so significant early on. Good storytelling will render brand loyalty through your development phase and create avenues to attract users when you finally have a product in the market.

During the golden-era, ICOs leveraged FOMO to get attention for their tokens while implementing poor and lazy designs. Now they are taxed with all of the heavy lifting that is involved with building hype and community if they ever bring a product to market. And they will be fighting for the same attention as all of the other competing projects, given most that raised money last year are operating on the same 18–24 month development roadmap. Think about it: after bitcoin, Ethereum, ConsenSys, Ripple, and Litecoin, how many real blockchain brands can you really name? Probably not many.

As the industry comes of age, real brand marketing principals will start to play a more critical role in the entire lifecycle of a company just as they do in other industries. Brand marketing is one of the major components: it’s not an afterthought and is absolutely necessary for the mainstream adoption of a new paradigm. A healthy, well-thought-out brand will set the vision of your project and inspire a community to fall in line. The brand equity built up during the fundraising and development phases of the project (which can take years in some cases) will become an incredibly valuable asset as the product goes to market. On the flip side, basing your marketing efforts solely on fundraising is a strong indication to most institutional and private investors that you are not building a sustainable business but instead trying to raise money as quickly as possible.

If you are in the process of fundraising for your ICO or if you are considering initiating a blockchain-based project, storytelling and branding should be front and center. Good messaging will allow you to build a stronger foundation for a lasting and sustainable venture, and will certainly help you, your partners, investors, and future users get excited about the road ahead.


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

John Biggs is an entrepreneur, consultant, writer, and maker. He spent fifteen years as an editor for Gizmodo, CrunchGear, and TechCrunch and has a deep background in hardware startups, 3D printing, and blockchain. His work has appeared in Men’s Health, Wired, and the New York Times. He runs the Technotopia podcast about a better future. He has written five books including the best book on blogging, Bloggers Boot Camp, and a book about the most expensive timepiece ever made, Marie Antoinette’s Watch. He lives in Brooklyn, New York. Disclosure: Biggs owns and maintains cryptocurrencies in a private account and has been consulting with startups regarding blockchain-based products. He also edits and writes for startup clients.

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