This guest opinoin piece is written by Anti Danilevski from KICKICO.
By all measures, my platform’s recent Initial Coin Offering (ICO) looks like a big success. KICKICO has raised more than $30.5 million since our ICO launched on Aug. 29. And before that, we had already launched several small campaigns to fund our 3-in-1 ICO, blockchain crowdfunding and crowdinvesting platform. Our closed round raised $140,000, and our pre-ICO generated $1.5 million (at the current rate of $2 million). During this time, we also successfully launched the first crowdfunding campaign on our platform, for the game Magisters of Magic. That raised 280 Ethereum (ETH)—a feat that could never have happened on Kickstarter.
Given all that, you might be wondering why this article is about our mistakes. That’s because I believe we could have easily raised twice as much if we did not make a number of critical errors. Most of these issues were laid down before the campaigns launched, some we fixed on the fly, and some were revealed only during the ICO campaign. But regardless, I’m sharing them with you now so that you can avoid these pitfalls when you launch your own ICO.
1. Forming a PR Team too late
One of the biggest mistakes we made was waiting too long to find the right people for our PR team and, as a result, starting the process of publishing in the media too late.
I always found myself wondering: How does PR actually work? Do articles in major, relevant media really drive any results? The answer is now crystal to me: Yes. After each major article about KICKICO was published, we saw tons of new people visiting our chats and groups. When I answered someone in the chat and saw 10-20 people come in at once, it became clear that someone had written about us somewhere.
Because our PR team was formed late, all these necessary processes were launched only one month before the start of our ICO. As a result, our efforts delivered results, but only for a small flash.
We also did not find social media managers early enough in our planning to help us develop public relations on key channels such as Twitter. As a result, we launched our ICO with 1200 people in our English-speaking chat and 350+ in the Russian-speaking one. There were about 9,000 registrations on our website, and we completed pre-ICO with 4,000. Moreover, we only found a competent CMM leader, who would know how to do everything “right,” a week and a half before the start of our ICO.
Why did this happen? Because we had a difficult time finding worthy people. First, we hired a foreign PR agency. Although we felt that they were not delivering results, we did not immediately break the relationship with them—leaving little time to find a replacement. This was my fault. I was too soft and decided to give them a shot. But we should all learn from our mistakes, and now I know to stop the relationship right away if I see some kind of “work” like this. I will not name the agency, but I think those who follow us will understand. Regardless, the result of the agency’s work was the partial execution of 9 out of 46 tasks.
I am 100% sure that the agency that failed on all its obligations will point to us as its customers and say that it was their work that helped us raise our funds. If I see that, or hear from someone that they did that, I’ll write an open note telling the real story.
Conclusion: if you are planning an ICO, find the right people to help you start appearing in the media as early as possible. This is very important and directly affects fundraising. You might not see a direct correlation, but believe me: it’s there.
Start working with a PR team well in advance of your ICO launch date. And in-house is better. If your in-house team lacks certain experience, then allow 1+ month for training to help them learn the features of your business and an ICO. You can work with third-party agencies, but by doing so you run the risk that they won’t deliver results but still take your money.
2. Waiting too long to create our Medium blog
We spent a long time searching for the best place to have a dialogue with our audience. Medium is a wonderful thing—especially if it is at least 3-4 months old, constantly updated, contains useful content (not just advertising about yourself) and has written content that is factual and interesting to your target audience. We made a blog on the Medium too late in the ICO process. This, of course, was also influenced by Mistake #1 above.
Our Medium has now become the powerful, high-quality tool it should have been at the time of our pre-ICO. We constantly update it, and it is actively developing. In the future, this will benefit all the campaigns that launch on KICKICO, because we will use Medium as an avenue for writing about the most interesting ones.
Conclusion: If you decide to use Medium, create it as early in your campaign planning as possible. To do this, you do not need anything at all—neither a PR team nor your website. Simply create your Medium blog. Then, use it to talk about your project, add some useful news for your audience, and even cross-post useful articles.
3. Failing to prepare preliminary agreements with funds and large investors
The biggest headache for us was the absence of preliminary agreements with large funds. None of the team members who we entrusted with this task managed to do it 100%. It often amounted to a total screw-up, covered by the appearance of frantic activity. Our one-time payment of $5 million, which we received as a result of my negotiations with an Irish fund, was through fortune alone. I was lucky and the stars aligned.
Serious ICOs have preliminary agreements in advance, and these can make up the entire amount of target fundraising. Looking back, I regret not taking on this task myself. But at the same time, I probably wouldn’t have been able to perform it effectively due to the crazy load of other tasks on my plate. Now that we’re already known, we’ve established many relations that we could not have dreamed of before. If we had these relationships earlier, then we would have achieved our ICO goal in mere minutes.
Conclusion: Either you must have a very, very strong player on your team who can be entrusted with this task, or you just have to do it yourself. You need to organize events and so-called roadshows where you travel to different cities and countries to show them your project. Use these opportunities to personally communicate with large market players and make sales there.
4. Receiving (and testing) the working code too late
We experienced a series of attacks on our campaign. For security reasons, we were forced to stop it for 1.5 to 2 hours to secure the collected funds, and restart the smart contract and token contract. As a result, our fundraising rate fell from $18,000 or $19,000 to $4 000 to $5 000. It was exclusively our fault that it happened. We received the working code late, and we tested it late in a hurry. As a result, I have a feeling that we raised $5-6 million less.
We’ve learned our lesson and have improved our programming accordingly so that we can help campaigns that launch on KICKICO avoid this.
Conclusion: To prevent this from happening, it’s crucial to test and simulate attacks, different payments, stack overflows and other variables before launching. Now I understand that you need to have a ready emergency plan in advance. Develop a second token and second smart contract that you can use to quickly replace the current ones if something happens to them. This way you won’t be stuck waiting for several hours, losing investors with every passing second.
5. Choosing the wrong goal and naming it incorrectly
Due to changes in rate, we reduced the target fundraising to 50,000 ETH. This was a mistake. I think that if we did not do this, we would have collected not only 70,000, but up to 100,000. However, we thought it would be better to reach a goal than to risk not raising enough. Our thinking was: If there is more, then excellent; we will raise more than the goal.
The second mistake with our target was its incorrect positioning. Instead of naming it what people often call ICO’s first goal—”the soft cap”—we followed the traditions of crowdfunding and called it “the goal.” As a result, the audience perceived the goal as an absolute finale of the campaign and expected the fundraising to end when that goal was achieved. When this did not happen, some of them (those who did not read our Whitepaper or read the information on the campaign page) were disappointed and dissatisfied. They expected that there would be a huge part of the demand unmet, and that they would make their cherished 10X. Of course, only speculators reacted like that, as their only purpose is to sell the tokens as soon as possible when they appear on stock exchanges.
Now we have an updated widget on our site, which makes it much more easy to understand and no longer evokes questions. However, there is still a hidden cap. We would gladly get rid of it, but in accordance with the arrangements with our community, this can’t be done painlessly.
Conclusion: First, the most important piece of advice: Call everything by its proper name. Mind your own business, while you are nobody and don’t have a name. Second: Everything should be clear right away to your investors. Do not hide anything anywhere, even if your designers think they will get an Oscar for it (or some equivalent award in the design world). That is important.
6. Setting the cap too high and using incorrect logic
This is the biggest problem with our campaign. When we prepared it, set it up, wrote press releases and sent applications to the listings, Ethereum’s value was $250, after it costed almost $400. Accordingly, our cap and goal from $50 million suddenly grew by 35 percent. And although we were able to lower the goal, the cap was laid into the smart contract of the campaign. If we said that it was lower, and it remained higher in a smart contract, we would be accused of cheating and probably wouldn’t raise anything at all.
The second serious mistake was in the logic, which is closely related to the previous point. For convenience and ease of perception, we made the campaign widget in such a way that the cap would appear when the campaign met the goal. This happened. Then, when the cap opened, we received rivers of burning hatred, accusing us of greed and cheating. Along with the disappointment that the goal was not ultimate, this circumstance also led the collection to nearly stop after the change of the chart’s data display—falling to $300 to $350 per minute. The fact that the goal and cap were shown absolutely everywhere, even in the picture right in the middle of the campaign, did not help.
The most painful and unpleasant thing about this was not that the cash flow was down, but that our reputation decreased in the eyes of our community, which was greatly loyal to us before. Our team’s morale also dropped. Hearing accusations despite our best intentions was hard for the guys. Nevertheless, we overcame this crisis and launched the first update, then the second, then the next. Each of them gradually corrected the situation, making the widget and campaign again more clear to current and future participants.
On another note: I would like to thank our community, as it supported us and helped to minimize the negative results of this situation. For instance, an unpleasant article on Steam was written about us. Thanks to those who believed in and support us, and thanks to their participation and comments, which completely disproved the article, it was deleted. By the way, this fact inspired the team and helped us cope with this situation more quickly.
As a result, we cut the cap by half. As stated in the previous section, this clears up almost all questions, and the decrease has had a positive impact on our relationship with the community.
Conclusion: Everything should be called by its proper name. The “soft cap” should not be called a “goal,” and the hard cap should not be hidden—even if it looks cool in the design. It’s important to understand that many people, in the hype and fear of missing the campaign, simply do not read the terms of the campaign, let alone your Whitepaper. All campaign conditions should be clearly visible and large and so that no one misses them.
7. Using Slack
I would like to suggest a new slogan for Slack: “Create a chat in Slack and get an endless stream of spam for free, 24-7!”
Of course, Slack is a very good and convenient tool for communication and interaction. There is the possibility of creating separate chat rooms, direct messages inside the general chat room, calls (paid, to be fair) and other very convenient, useful features. But as I wrote in a previous article, Slack also has a huge disadvantage: Security. Or more precisely, its complete lack thereof, which gives an infinite number of opportunities for scammers and frauds. We experienced a flood of spam, fraudulent users and much more on Slack.
Conclusion: Don’t use Slack. Just don’t do it.
8. Not deleting wallet addresses, or enabling moderation, on comments
Comments during the start of our ICO were basic: write and forget. Links were forbidden, wallet addresses were not deleted, and there was no moderation by users. That’s why it was very easy to publish a scam wallet and collect money. It’s strange that this was discovered only on the third day of the campaign. After that, we had to prohibit the possibility of commenting immediately.
As a result, the last comment in the feed is now a message about the reason for its blocking and a link to our Telegram chat, https://t.me/kickico, where we gladly answer constructive questions.
Conclusion: Automatically delete all messages containing 0x and the similar, and enable moderation. We will soon have both. Authors that have websites or forums should watch them 24×7.
9. Don’t make clif high angry!
We received an incredibly cool review of the company from the world-famous blockchain guru “clif high.” (This is written in small letters according to his own comment, by the way). We quoted part of his review on our site, and that was okay. But our contractors, engaged in advertising, made banners with his image without our knowledge.
To make matters worse, near the banner was a button that said “BUY KICKCOINS NOW,” or something like that, which made it look like clif high himself recommended that you should buy them! These banners were published without our approval, and this caused Cliff’s displeasure and a flurry of resentment in the crypto-community. We immediately contacted the advertisers and the banners were stopped within a half-hour, but even now we are still resolving the negative consequences of this event.
We immediately contacted cliff. He replied on Twitter that he had no complaints against us and that we were not bad; advertisers did it all. We were lucky that this ad emerged only on the third or fourth day of our ICO, and not before.
Conclusion: When working with a third party, make sure that no banner or other advertising materials pass without your approval. One incorrect move can kill you.
That’s all for now, and I hope that we won’t have additional mistakes to add to this article. When you launch your ICO, heed this advice so that you can avoid these errors.
Last modified: October 15, 2017 14:25 UTC