Now that the 2017 ICO Class has some big names already in the book (Gnosis, Brave, Bancor, Tezos, Filecoin, EOS), we can start looking down the road a bit.
One of the things I like to say is that “the best technology doesn’t always win” (which is why you need marketing).
In a blockchain world, perhaps we could modify that to say “the best ICO doesn’t always win.”
A quote I’ve been very fond of recently is Ric Burton’s tweet “Your $100 million ICO is not a success. It is a debt to the community. You owe us a $100 billion protocol. Good luck delivering.”
I think it is very apt because it talks to the challenges ahead for these-or any- projects.
Given the number of projects out there and the amount of money being raised (especially if you are investing in these projects), it’s probably worth thinking about how to try and pick the winners vs. the losers.
4 Things to Look For in Blockchain Projects
I will admit that I did not come up with these myself, but the originator of the idea did not want to be quoted.
- Tech
- Team
- Token
- Community
Tech
Is the technology there? Does it work? If it’s not built yet, is the theory behind the technology solid or does it have holes?
Not every one of us can assess it, so I think you’ll start to see “Ratings Agencies” emerge that, ironically, provide some sort of trusted 3rd party verification of the code. Over time, these will get decentralized in some way, but Zeppelin Solutions led by Demian Brener (who contributed to “Blockchains in the Mainstream” e-book) is emerging as one of the leaders. They’ve audited smart contracts for some of the big ones, that have collectively raised over $350 million.
Team
This is where savvy VC’s traditionally add the most value, assessing the quality of the team responsible for executing. What’s interesting is that, in this environment, the VCs get disintermediated from the funding role, but could serve as the validator of the talent behind the tech and their ability to execute both on the technical and market vision. But, if there’s one thing that came up in the trip to Crypto Valley , it is that the tech may be brand spanking new, but the challenge of finding great talent is as old as putting the team together for the mammoth hunt.
Tokens
There’s been a ton of work done here in terms of assessing token design for its viability in creating circular economics. It’s not easy to design an entirely new economy from scratch. You have to think about game theory, behavioral economics, governance and more. This is difficult stuff.
William Mougayar is the godfather of this with “Tokenomics”. Nick Tomaino explains it as well as anyone in “Token Economy,” and Muneeb Ali offers some great thoughts as well in “a 5 star system for evaluation crypto-tokens.” And one of the best I read way back in the day was Aleksandr Bulkin’s “Crypto-economics is hard.”
Community
This is probably the single most important one, because community in a decentralized world, equals marketing power. Not just in terms of size, but in terms of my long-sought after “Raving Fan Index.” You can (and should) look at things like Slack, Twitter, GitHub, and more, but that only tells part of the story. It’s the engagement, commitment, dedication, and well, passion of those people who are committed to a project’s success. Now that I think about it, I’ll probably explore this more deeply in the weeks and months to come.
For passion, I will say that the IOTA community’s energy is mind-blowing. Not only do they have 25k people in the Slack, but there is constant energy and activity. It’s really impressive. That’s subjective, of course.
The 3T-C Framework
Now that I’ve coined it (pun intended), the 3T-C method for evaluating a project becomes my personal standard for assessing if a project has a reasonable chance to succeed.
Obviously, much work needs to be done in driving deeper on the analysis, but hopefully, this framework will give us all something to think about.