I’ve been thinking about token sale marketing lately mostly because it’s been so bad. I’ve gotten hundreds of emails asking me to be an ICO advisor or evangelist or influencer primarily because the ICO marketing techniques come to us straight out of the spammiest corners of affiliate marketing. I’ve gotten emails from founders who have been promised “posts on TechCrunch” by content marketers with no relationship with the site and I’ve seen founders bribe writers on Forbes and Medium and other user-generated sites to simply add a link. The bottom line?
You’re doing it wrong.
Why will your token sale fail? It’s not because you didn’t get Posh Spice or Richard Branson to tweet about you. It’s not because you didn’t pay Floyd Mayweather to stand in front of a pile of cash and suggest, in the most winking way, that you, too, can be as rich as him. It’s because you did do these things but forgot the core of startup growth: you need fans. And those fans have to be so dedicated, so in love with your idea, that they stay up all night clicking away, chatting, and talking about you product.
You need red-eye fans, fans so dedicated to your crazy cause that they become crazy themselves.
The tech hype cycle is quite simple. For a tool to get mass adoption you first need a core group of users who can’t live without your product. Foursquare created this group a SXSW in Austin and Uber created it in San Francisco. These users fit those products into their daily lives and those companies grew and grew. Word spread when those core users opened their phones and checked in or called a car or made a reservation in a few seconds. People around them were fascinated.
“What is that?” they’d ask.
“Let me show you,” said the early-adopter. And thus a behemoth is born.
What happens if you don’t have a product? Then you have to build the hype based on other things. You have to talk about your development experience, how hard you’re working, and how cool you and your team are. Think about the best Kickstarter campaigns you’ve seen. They’re run by personable, excited people, they are staffed with not only programmers but social media managers who get the word out about every wrinkle, and the feedback boards are pep rallies rather than information booths. This works – check out Kickstarter and Indiegogo for confirmation – but it’s very hard.
Now we’re entering a weird world of token sales, a world in which the story is quite confusing. How does it work? A company aims to “raise” $40 million on a team and a dream? That sounds amazing and impossible! It’s actually far less interesting than it sounds and no one will admit that token sales are essentially currency-generating events with little bearing on reality.
A company creates millions of smart contracts for a few pennies each. The company keeps a few million contract tokens for itself and its founders, sells millions of tokens to initial “investors” (really crypto whales with lots of cash), and then, if all goes according to plan, releases tokens to the general public. The company actually “raises” a few million at best and then has to spend the rest of its life propping up that token to keep investors and purchasers happy. It’s a juggling act that most founders don’t expect.
So how do you market this effort? This process and the fact that you are doing it is not news. No one cares except, of course, your red-eyed fans. In short, then you run an ICO you walk a tightrope in a storm with only a few people to at your disposal for help. Once you get to the other side you find only more tightropes.
Your job, then, is simple. You make a good product and tell the world. You spend on product market, show your product to people and hope they become fans, and do regular old outreach via blogs, Facebook, Twitter, and everything else. A token sale isn’t a shortcut. You grow the old-fashioned way: you earn every percentage.
Your users, users who have tried a version of your product and found it amazing, are key here. You need red-eyed users, users who refuse to stop talking about what your product will do not how much money they will “make” in your ICO. You need users who are in love with your team and who are excited about what you will produce.
Making a product is hard. Making a great product is nearly impossible. But if you drop everything to run an ICO you will not make a great product. And it’s great products that get all the attention, all the press, and all the support.
So don’t waste your time or money on influencers, advisors, scammy book makers, and rich people who are getting high on the fumes of a new financial scam. When you pay someone to spread the news about your potential scam sale you’ve lost. When you hire influencers you’ve lost. When you create a list of advisors who may or may not be aware they are on your deck then you’ve lost. The only time you win is when you lead with product.
Token sales have added a massive distraction to the startup founder’s life. A founder’s goal, at the end of the day, is to produce. If they fail, then all the tokens in the world won’t save them. The game hasn’t changed from the old VC days. It’s just gotten far more important to produce a scaffold – financial, personal, and future-forward – to support your dreams. And those red-eyed fans, the fans that will stay up all night to get your next release, are the only relationships you need to cultivate.