5 Strategies to Successfully Communicate an ICO (Part 1)
According to Coindesk, since the start of 2017 Initial Coin Offerings or “ICO”s have raised over $2.5 billion. So it stands to reason that comprehending what an ICO actually is might be a good idea. So here is our take…The name takes after the capital markets anachronism for Initial Public Offering (IPO) However, the two fund raising processes are very different. During an Initial Coin Offering (ICO), a company offers digital assets called “tokens” which interested parties ‘contribute’ to. These tokens allow the startup to raise funds from a huge range of investor types.
According to the Harvard Business Review, here’s how an ICO typically works: “A new cryptocurrency is created on a protocol such as Counterparty, Ethereum, or Openledger, and a value is arbitrarily determined by the startup team behind the ICO based on what they think the network is worth at its current stage. Then, via price dynamics determined by market supply and demand, the value is settled on by the network of participants, rather than by a central authority or government.”
Robert Hackett explains in Fortune, “It’s effectively a Kickstarter campaign that uses blockchain-based “tokens” (aka app coins, cryptocurrencies, digital assets) to raise money.” These tokens can be traded in the future for the company’s goods and services, or traded in cryptocurrency exchanges. Regardless of your opinion on the ICO market — there is some significant innovation at the core of this process. However, due to the current lack of regulation in the space there remains a lot of concern on companies with poor intentions and flat out scams.
With that in mind, if you have a genuine business concept and your company is considering an ICO, you should be ready to build trust by conveying your idea or business model to your stakeholders. Most importantly you need to talk about, write about, tweet about, and publicize your company and ICO in order to build awareness for a successful ICO. You also need to have a great customer service/business development team in place to help people understand what they are investing in. This two post series will dig into the must have strategies to successfully communicate an ICO.
Identify Your Audiences
The first step of a successful communications campaign is to identify and understand your target audiences. Here are a few key considerations in this area:
- What type of contributors are you targeting?
- What are their identifying characteristics?
- How will the ICO impact your prospective customers?
- How will you get your employees and staff involved in the process?
- How will you communicate and leverage your key stakeholders and strategic partners?
- How will you target centers of influence in your industry, such as key members of the media, bloggers and social media or industry leaders?
Whether you have a pulse on all of them or not, your business has multiple target audiences and you need to effectively connect with all of them at the right time in order to ensure your ICO is successful. Every other element of your communications strategy should be developed with your specific target audiences in mind.
Develop Compelling Messages (and Then Use Them)
Messaging is perhaps the most crucial component of your communications strategy when preparing for an ICO. In an environment constantly bombarded with more and more opportunities, a company looking to enter the market must have a clear value proposition that resonates with the public. Companies should clearly articulate their value proposition and the problems they solve, present detailed information about the management team, outline growth prospects and, most importantly, offer compelling reasons for why investors should believe in their potential.
Building Trust for an ICO
The importance of trust cannot be emphasized enough, especially in a hyped market with many suspect ICO candidates. In addition to engaging with investors, companies must work to develop a sense of trust with the public at large, centers of influence and key stakeholders. This is done in part by being transparent, forthcoming and honest when addressing potential concerns that investors may have. Cryptocurrency and blockchain companies in particular have to work hard at establishing trust, amidst media attention questioning the safety of Bitcoin, exchanges losing all their investors’ funds to hacking or theft and online trolls running rampant in the industry. People do not want to invest money or say positive things and share good news about individuals and companies they do not trust. Trust is the center of your reputation management.
If you’re entering a foreign market for your ICO, investing in translation for written media and language coaching for video and podcasts will ensure that your company’s white paper and other materials are free from errors that could make readers suspicious of your company’s legitimacy. This error-free policy includes social media posting, advertising copy, essentially anything external facing.
For more trust building resources, David Amerland speaks about establishing trust in Establishing Knowledge-Based Trust in an Uncertain World, and Entrepreneur magazine has a great list of 10 Ways You Can Gain Trust Online.
Now that we have tackled a few of the key steps for communicating an ICO, the second part of this series will dig into core fundamentals like timeline planning and internal and external communication strategy.