Initial Coin Offerings, or ICO, have become quite popular in 2017, which is something that also continued throughout 2018. In fact, there were hundreds, if not thousands of them so far. However, no matter how many of them were organized, most never managed to make it into the market and achieve their goals.
Analysts claim that there are a lot more failed ICOs than there are successful ones, which has caused a lot of people to simply give up on the idea. However, many are still curious to know what went wrong, and while failed ICOs can be studied for years without discovering absolutely every flaw, some of the bigger ones can be spotted right away.
This is why we will now list top three reasons why so many ICOs failed, and everyone who is thinking about launching one should pay close attention.
1. The lack of demand for the product
According to estimates, around 60% of ICOs often fail at the first stage simply for the lack of interest in what they offer. When someone comes up with an idea and launches an ICO in order to raise money, they are presuming that people will be interested in investing in this idea. In addition, prior to making an announcement that an ICO is coming, it is wise to ensure that the announcement will be heard in the first place.
Additionally, ICOs need to be approved by appropriate regulators in order to protect themselves from failure in the future. Not only that, but by having an official approval, they can confirm to investors that the project is legit, and not just another scam. That way, ICOs gain trust, reputation, they spark an initial interest, and if there is a demand for their product, there is not a lot that can happen to prevent them from succeeding.
2. The project looks unprofessional
When it comes to launching an ICO, or any other such campaign, most people focus on the final goal. They would explain the focus, the method of achieving a goal, and everything else that a good project needs to have. However, they still fail to attract attention because they forget that the project needs to look good as well.
While looks are not important for the project itself, they can be everything when it comes to capturing the attention of investors. If investors do not immediately like what they see, they will hardly bother to read about the project at all. This is why ICOs need to plan out every detail of the website, such as visuals, logo, colors, fonts, content, white paper, and more.
Adding a professional and interesting face to a project can often mean the difference between its success and failure, which is something to remember if you plan to launch an ICO of your own.
3. Bad communication
After studying ICO failures, it soon becomes very clear that bad marketing techniques (or the lack of any) are another big cause of failure. This is often a mistake that newcomers make due to limited knowledge of how these things work. They forget that it is not over just because the ICO has had a good start.
Just because things started off relatively well, it doesn’t mean that the battle is won, and there is a constant need for new reports, audits, measurements, and alike. ICOs can always be approved, and there are numerous tools that can be used for this purpose. In fact, the audience can often suggest improvements, which is why communication is crucial.
The community that surrounds the project is what will decide whether or not the project will be successful, which is why they cannot be forgotten.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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