You’ve spotted an ICO that has a brilliant idea for a blockchain application, and you’re thinking of investing in some hard-mined coin. But will the team actually deliver the product? Here are some pointers to look for.
The Tezos ICO raised over $200 million dollars, which is an impressive number by itself. But will this number guarantee that the product will actually be made? By their own account they will spend $3.6 million dollars in the next 4 years to get the product built, but 4 years is a long time and unexpected things can happen.
Roadmaps are just a guide
Whitepapers and Roadmaps are a staple on any ICO website, but you should read them with skeptical eye. Unless the team is highly experienced, forecasting software projects is extremely difficult. A good place to start is to ask the team: what is the biggest technical problem and how will you solve it? Anyone in the tech field knows about projects that run over budget and over the deadline. Roadmaps, per definition, should be read as the “best case scenario” of project development and not a promise.
If they have a project manager on the team it’s a very good sign, however remember the saying: A project manager is a person who thinks nine women can deliver a baby in 1 month. And a developer is a person who thinks it will take 18 months to deliver the baby. Likewise, if there are more marketing and PR people on the payroll than developers, it’s probably being marketed more than actually built.
Check out the development team
On the subject of the project team, investigate the developers who will actually do the work. Check out their Linkedin pages and Github accounts, if they are provided. If not, a Google search can help you further. Don’t just rely on the descriptions of the team in the white paper or on the website, it can be polished to look as if the developers are more experienced than they are.
Blockchain applications need a specialized set of skills in order to be developed. So what should you be looking for? Sergey, Chief Technological Officer at OpenLedger explains:
But some new businesses start their product on the Bitshares blockchain, where you don’t use smart contracts, but have to have a deeper understanding of the Bitshares blockchain.
And the most heavy technical solution is a product on it’s own; a custom-written blockchain. Usually it’s a fork of one of the existing blockchains, and it requires a large team, very strong in c++(go, perhaps) and programming architecture.
Lastly, look at the business side. Are there already products that solve the problem? If so, the new product will be competing against established products. Those products can chose to add the very same features that give the newcomer an advantage, in the time it takes to develop a completely new product. If the product already has a working demo with users, or customers vouching to use their services, great! This is a good indication that there will be at least some initial income flowing in from the beginning. As always, it comes down to due diligence and your own research!
Disclaimer:the author does not promote any of the services mentioned in the article as better than others. Do your own research and pick wisely!