ICO gone wrong? Team’s underperformance the likely culprit

From an investor’s standpoint, a solid project team is among the leading investment motivators. A team force is actually the most critical aspect when investing into an ICO because, at the initial phase, the backers are investing in a group of developers who can successfully execute an idea.  “An idea is worth nothing without execution, so you need to look at the team and the idea and consider whether they have the expertise and knowledge to bring the idea into reality,” says Ben Way-CEO of Digits.io. Nowadays, many ICO teams are badly composed that you’ll struggle to understand how they can keep a sense of purpose. We know for a fact that people are much more likely to succeed if they pool their creativity and skills towards the same aim. Investors are also keen to identify teams that have previously demonstrated a good sense of teamwork in solving problems. Dr. John Mathews, Bitnation’s CFO says most investors like to be convinced that an ICO team “have traction and have already solved key problems.” After all, if the aim is to launch a project and raise money from the public, there has to be an established level of trust between the investors and developers.

Inexperienced or an unproven team is another obvious red flag for investors. Launching an ICO isn’t a piece of cake; it requires a spirited team with a solid track record. While the majority of companies running ICOs are usually relatively new, chances are that the members of the team have been involved in similar work. Patrick Byrne, the CEO of Overstock expresses the need to dive into a team’s background and review individual members’ experience and track records. Peter says it’s crucial to ensure the team has the relevant competencies to deliver on their proposed solution. However, a great team isn’t necessarily composed of seasoned folks; new talents should be incorporated to maintain creativity and freshness. Even so, very large teams do not always perform optimally like their moderate-sized counterparts. ICOs with bigger teams (obviously meant to instill trust) are a bad sign since blockchain itself is aimed at fostering trust. Some ICOs even list up to 16 people in their team before they write a single line of code! And yes, it’s as ridiculous as it sounds.

With every group of goal-oriented individuals, rivalry is bound to crop up. Conversely, this isn’t necessarily a negative thing in the ICO industry. David Drake, a cryptocurrency investor, advisor and Chairman of LDJ Capital believes a healthy competition propels the inherent urge to win: “A healthy dose of competition among developers could ultimately add value to the platform as it fosters positive engagement, individual desire to achieve the best and profound mastery of tasks.” Some team compositions can also bring some complications. For starters, a multidisciplinary team may prove difficult to automatically gel right away. This brings to light the case of Tezos, a platform that started with a record ICO but was reduced to a pile of lawsuits. All this began with mistrust and disagreements between the team members, who constantly postponed the launch of subsequent stages of the project because of squabbles. Finally, its investors filed a lawsuit charging the team with fraud and demanding a refund. For this reason, Andrew Stanford–Asset Token ERC20 Partner- insists on the need to understand the risks associated with investing in ICOs- team’s commitment and interpersonal attraction to the group is obviously among these risks.  “We all know there’s some type of risk involved when choosing an ICO; I believe the team members involved is one of the few things to keep in mind when choosing an ICO to invest in.”

Once all the initial hitches are overcome, the pros of having a solid team are unmatched. The success of an ICO largely depends on the team behind it. Without a form of collaboration, thinking may stagnate and jeopardize ideas and solutions.