https://hackernoon.com/what-i-look-for-as-an-ico-advisor-26d854e93175Reposted here:
What I Look for as an ICO Advisor
It’s no secret: there’s a lot of noise in the cryptotoken world.
No matter who you are, it’s hard to decipher between projects that are game-changing and those that are problematic, questionable, and scammy money-grabs.
While running the benjaCoin ICO this summer, I was eager to share the experience especially as it related to the topics of governance and regulation. Tens of thousands of people read The SEC Called About Our ICO, I Answered, and it wasn’t long before I graduated to the next level in the cryptotoken world: I was invited to be an advisor on a number of projects.
At first, I was hesitant. I weighed a lot of different questions, the most important of which were these: how do I choose which projects to work on, and what value can I offer? These are not easy questions to answer. I asked to read white papers, I had coffee with founders, and I entertained different levels of involvement.
The first advising gig that I accepted turned out to be a mistake. I signed on only to realize things weren’t what they seemed — I resigned quickly and ran the other direction. I’ve since figured it out, and I’m currently advising two projects.
The purpose of this post is to share why, what I found in the project, and what value I’m delivering. I hope this serves as a data-point for advisors and token-issuers alike as they consider advisory relationships.
My four commandments of crypto advising:
- There needs to be a real product where I can clearly see why a cryptotoken is necessary. I have no interest in projects that are issuing tokens as a simple fundraising mechanism when the action (transaction or otherwise) could be completed via BTC or ETH.
- The project needs a capable team, preferably one that has built something together. The longer they’ve known each other, the better. I would argue the founder relationship is more important with the added implications of a blockchain-based business.
- The team needs to bring up good governance in our first conversation, and they have to agree to be good actors. No securities per the Howey Test, regardless of whether the project is located in the United States. I consider the Howey to be a good guideline in all jurisdictions.
- There has to be a clear reason why I’m the person who they reached out to, and I have to deliver real value to the project. I’m not interested in simply being a name on a team page — I want to be involved and I want to know that I’m contributing.
I’m currently advising both a consumer-facing project and a business-oriented project, an interesting mix of different challenges.
The consumer-facing project is called Munchee. Munchee is a popular iOS app and restaurant review platform that focuses on what matters: the food. The app founders were frustrated that all Yelp seemed to care about was negative experiences with waiters or bad parking — they just wanted to find the best enchiladas, and what better way to do that than an Instagram-like (photo-based) review?
And look, I get it. The Munchee app sounds like another interesting but not necessary mobile app. We’ve got plenty of different ways to evaluate restaurants and stripping features doesn’t exactly scream innovation.
That’s how I felt until I downloaded and gave the app a spin, and while I usually care about the ambiance and decor of a restaurant I’m thinking of going to, it was incredibly refreshing to read a review platform that skews to the positive rather than the negative. The stats back it up: you’re several times more likely to leave a negative review on Yelp than you are a positive one. With a photo-based review platform, you’re far more likely to leave a positive review than a negative. It’s refreshing.
The product? It exists, it’s different, and while I don’t think it’s the next billion-dollar business, it’s cool. There’s a clear use for the token as an incentive system where they reward quality submissions with something that can be exchanged for a (to be announced) set of goods, services, and food. They’ve got something cool in store there. Check.
The team, which includes founders with PhDs and work history at places like Google, was certainly capable and had worked together in various capacities. Check. They reached out to me in direct response to the SEC article in Hackernoon because, as one of the founders told me, “we don’t want to go to jail.” I dig it. The token is being sold in a know-your-customer format and it’s structured as a pre-sale of advertising inventory. All good. Check.
When I ask perspective projects how I can deliver value, they often respond with “how do you think you can best help us?” This is a no-go for me — I’m not here applying for a job or selling my services, and you should have a reason for having reached out to me over someone else. Explain it.
The Munchee team had a clear and concise list of things they were hoping to reinforce with my involvement, including governance and introduction to partners. I could do that. Check.
Licensing Coin is a different story. Rather than a single product, Licensing Coin seeks to build a central marketplace for media licensing. The problem is publishers and rights-holders generally negotiate licensing agreements as part of closed systems. This requires publisher relationships with hundreds of different groups for their various media needs, a time-intensive process which results in missed opportunities and lost revenue.
By bringing rights-holders of all shapes and sizes together, you create a central dashboard that offers a full range of media (photo, video, audio, text, more) and a one-stop shop. That’s a good product, but what really brought it together was the need to do this on blockchain: a universal legal framework backed by top lawyers and smart contracts. That’s a huge step forward. Product? Check.
While I can’t share much about the team (as the Licensing Coin operates as a consortium with a board that is elected/being announced in phases), I can share that they come from top-tier groups and I’m stoked to be working with true industry leaders. Team? Check.
The value that the group sought had everything to do with good governance and shortening the technical development timeline, which made things easy and appealing for me. I also brought one of my side-projects, snip.ninja, to the table as they sought content partners. Checks all around.
I’m fortunate to have found two partners who not only satisfy my personal commandments for advising, but are also cool products with interesting challenges. What else can an ICO advisor ask for?
