10 Steps to do an ICO Series: Step 1 What is Your Business Idea

In the past, startups raised money primarily by pitching their ideas to VCs—Shark Tank-style—in hopes of a big-ticket investment. Today, many startups are instead looking to do an initial coin offering (ICO) to fund their big idea.

ICOs are generally for companies that build technology based on the blockchain. People that have and believe in cryptocurrency, will help crowdfund your idea in order to grow the overall cryptocurrency market. If your idea does not fit with the blockchain, you will not attract people to participate in your ICO.

In addition to having an idea that works with the blockchain, you’re going to need a few things in place before getting started. A team, for one. Advisors with expertise in your field, an attorney, and at least 1 person who has been through the ICO rodeo themselves are a plus. 

Let’s look at a few aspects of launching an ICO.

What’s Your Product?

The product is the most important aspect of your company, and therefore the long term viability of your token. 

If you have a weak product, your business will fail. Full stop.

If you are doing a token sale just for the sake of doing a token sale, I don’t recommend it. A token sale is too difficult, and it will hurt your reputation in the long run.

One of the blockchain’s primary use is to keep track of things that change hands, eliminating the need for a central authority. Businesses centered around privacy or transactions—think payments, health care, or supply chain management—work well with blockchain technology. 

Your cryptocurrency can also be used to incentivize your customers. For example a social media platform where ‘likes’ are actually bits of cryptocurrency that people send you each time they ‘like’ one of your posts.

The better your understanding of the blockchain, the more interesting business ideas you will think up.

There’s a strong business case for integrating the blockchain into your business idea even if there are possible technical alternatives. I get into that in further detail here.

Who’s on your team?

An ICO is as valuable as the team of rock stars standing behind it. Who is on your team now, and who else will you need to make your idea successful? Your core team should consist of a CEO, CTO, CMO, and a Creative Director. I suggest you make it clear what they are getting into because conducting a successful ICO is a 12 hours/day, 7 days/week job for about 6 months. (In reality I wish I only spent 12 hours/day working on ZILLA!)

  • CEO—This is the person that says, ‘I’m a pretty good driver, I think I should make a racing team’. The CEO is the one who sees opportunity, assembles and inspires the team to work towards that goal. Think Steve Jobs. The CEO is a generalist that needs to understand the blockchain and other engineering concepts, marketing, design, sales. Salary is typically extremely low for startup CEOs, but I will save this conversation for another day..
  • CTOThis is the race car builder. The CTO thinks of the technology needed to execute the company’s mission. The CTO should also know about the blockchain, and should be able to assemble a team of blockchain, front end, back end engineers. Depending on the project, you will need anywhere from 3-10 engineers. Blockchain engineers cost about 10k/month. 120,000 USD – 200,000 USD/year *You probably cannot afford good blockchain engineers, so your idea has to be good enough to excite them to join your team. 
  • CMOThis is your race team promotor. The CMO is your MVP of your crowdfunding campaign, and ideally the CEO should have this skillset. Personally, I am a mediocre marketer. I can cobble together a strategy, and execute given the time, but I am in no way a rockstar at this. The CMO has to be able to create an overall marketing strategy, then bring together social media, PR, content marketers, and community managers. They must also plan events, collect data, and adjust the marketing strategy. Salary: 120,000 USD – 200,000 USD/year
  • Creative DirectorThey design how your car looks, as well as the team colors/logo, etc. The creative director combines marketing strategy, technology, and design. They assemble a team of (1-3) designers to make your project look like a billion dollar company, and make sure that your site, social media posts, etc not only feel polished, but also the user experience is frictionless so that as many people successfully join your crowdsale as possible. 120,000 USD – 200,000 USD/year

The Blueprint

Once you’ve got your idea, and your team of all-stars, it’s time to get to work. How will your team design and build the platform, and how does your token fit in? 

Things to think about:

  • The Token—Creating a token, means you’re creating a tradable good; it can be loyalty points, an IOU, digital currency, or in-game purchases—they don’t have to be the next iteration of bitcoin, but it is absolutely real money. 
  • The Platforms that you create your cryptocurrency on—Once you’ve figure out what your cryptocurrency is supposed to do, next you will need to choose a blockchain platform to build your token on. Ethereum is popular, but NEO, Stellar, NEM, and others work as well.
  • White Paper—The white paper is the business plan for the digital age, and a key step in launching ICO. This document must describe in detail everything—the technical aspects of your product, the problem that you are trying to solve, your solution, your timeline, the team, etc. Your whitepaper will also lay out the marketing plan, your coin distribution strategy, and the milestones for building the actual product. 
  • Marketing—Of course, you’ll also need a well-crafted marketing plan. Your campaign should include a strong social media push, media outreach, guest posts, influencer marketing, and speaking engagements. Launching an ICO is about connecting with others and educating the public. 

Because blockchain solutions require significant education, content marketing, influencer outreach, and a comprehensive social media presence will help you get the word out, well before you make any major announcements.

The Advisors

You’re a blockchain pro, do you need advisors? Most likely, yes. 

Advisors bring credibility and experience to your project. Since ICOs are so new, and there’s not a well-defined way to conduct one, this is an extremely valuable asset. Someone who has worked with ICOs will help you move through the process swiftly. Along with that, they can give guidance and mentorship, help you vet your idea and bring your solution to market, structure the sale, and introduce you to investors.

Advisors usually charge from 1-5% of the amount that you raise. 

Wrapping Things Up

ICOs are changing the way companies raise funding.  However, there’s a lot you need to do before heading into your launch. 

You’ll need a rockstar team, you’ll need to decide what technology you will use, an airtight marketing strategy, and your landing page will need to be professionally designed.

Once your core team is in place and you begin building a following, advisors will hear about you and become interested in your project. From there, (with relentless outreach on your part) influencers will talk about your project. The next thing you know, you’re on your way to raising 1,000,000 +

Next up, in the the 10 Steps to Launching in ICO series:

Step 2 – How to Write a White Paper

Jul, 9

Up Next

10 Steps to do an ICO Series: Step 10 Get to work!

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