I’ve been following “startups” – I define startups as small businesses with a global scale – for almost two decades. In that time I’ve watched them morph from unfunded pet projects by random geniuses into what amounts to an entire sub-economy dedicated to the creation, funding, and sale of these pet projects. Remember: Facebook, LinkedIn, and Twitter were once startups.
I also saw a brief period – probably in about 2008, just before the financial crisis – when startups were red hot. Everyone everywhere had one and desperate CEOs used “growth hacking” techniques – essentially tricks designed to make you click – to get attention. In addition to spam and ads, founders visited business writers and VCs uninvited, war dialed to get access to Sand Hill Road cash cows, and added sex and violence to their Facebook ads to get that last click that would put them into “exit” territory.
But those early days are gone, right?
With the rise of the unregulated ICO we are entering a new sort of startup era. This is an era populated by the growth marketers that got bad mobile apps to the top of app stores and who used spam and sex to get attention. This is also an era where the money on the table is untrammeled. An ICO can seemingly raise $850 million in a few seconds although smart people know that these sums are mostly smoke and mirrors. However, even if you capture a few million out of a multimillion dollar token raise that’s enough for a lambo, an off-shore bank account, and a life of relative ease.
I’ve even gathered a small team to research and write about token sales that may be more than just wishful thinking and we’ve found it’s surprisingly difficult. The primary reason most ICOs don’t get much press attention is that the the idea/product (if there is one) and even the team do not inspire confidence or even trust.
Change is coming. This much is clear. The SEC is currently attacking even the most stringent of ICOs and we can expect to see much more regulatory activity in the future. But that is not stopping bad actors from acting bad. For every successful ICO there are hundreds of frustrated founders who can’t afford the legal or editorial fees to get a white paper started and hundreds more scammers trying to eke a little Ether out of the unsuspecting investor.
And then there’s the ICO above that is proud to associate itself with the proud tradition using leggy models in sexy Facebook ads.
The crypto industry, as a whole, needs to grow up. The ICO corner of crypto needs to do it faster than any other aspect of the culture.
The answer is to think intelligently about the value propositions offered to us all in the wake of the ICO craze and, further, create a similar framework that gave rise to the best of the startup era. Right now we are in Deadwood-era Wild West complete with the sex, curses, and cheats. Where we need to be is a few decades after that in a world where the future is just peeking over the edge of a gilded horizon. Immaturity gives rise to distrust which can destroy this form of fundraising in the cradle. It’s important that all of us not to post pictures of semi-naked girls – or, for that matter, lie – in an effort to raise an extra $50,000.
Featured Image: TechCrunch