Four weeks into launching an ICO, DigiPulse has raised over $1mil in Etherium. Here's how they did it.
DigiPulse is a startup that has until now been under the radar. Now, they've become arguably the first Latvian startup to successfully implement an ICO.
With the rise of the information age, and especially with the rise of cryptocurrencies, people have been creating and storing digital assets that contain value. The logical question that was bound to pop up over time was - how can we make sure that these valuable assets are passed on to our family, just like any other tangible assets we have?
DigiPules's answer to that - creating a blockchain-based storage location for sensitive information, like your password and address to your cryptocurrency wallet.
We sat down with Norm Kvilis to find out what it takes to raise a successful ICO.
How did you decide to go for an ICO?
History, it all started 2 years ago when I met my then friend and now cofounder while working at a startup. He got sick, which provoked a lot of questions. Like, what would happen if I would pass away, with all of my digital assets?
A lot of things in the digital ecosystem can be valuable - it's important to be able to inherit them.
We tried going the typical route, by looking for investments from investors. Meanwhile I had my eye on cryptocurrencies and thought hey, this is a thing that has potential.
It's important to note that this isn't our first ICO. The first try was in August, and we didn't reach the essential goal, because our product and infrastructure was too complex. We received a lot of feedback - that it's a good idea, but is the mechanims really necessary?
So we scrapped the whole currency thing, and now our sold tokens are only used as usage tokens. They're essentially the way you pay for our services - like going into a casino and cashing in tokens to play.
We're not afraid to say that we failed, because we're proud that it has let us continue to a second try. We were able to listen to the people's feedback, and move forward with a boost of motivation.
How is the campaign going so far? Is there interest?
We launched October 1st, and we already reached our minimum cap. The current amount of funding gives us a year to continue to develop the product.
When we first set out, there wasn't really any information available to guide us through launching an ICO - now there are plenty of guides, blog posts, videos, and even services to manage it for you. But we expereineced it by going through it ourselves. We did the math and created a financial plan to understand how much funding we'd need to continue developing our vision for another year, and that became our minimum cap. Anything on top of that would be an additional runway. $10 million would be enough for a 5 year runway, and we've currently raised $1 million worth of Etherium.
Regulation hasn't yet caught up with the fevelopment of cryptocurrencies, and isn't regulated yet in Latvia. How have you dealt with this?
We have our own ways.
Unregulation tends to be the case in the rest of the world. Some countries are banning cryptocurrencies, but others see it as an opportunity.
I'm a patriot, but when it comes to legal issues and support for startups, our country has always been lagging one step behind Estonia, which has a further developed tax and legal system that support cryptocurrencies.
Are you registered in Latvia?
Yes and no.
There are 2 separate entities - the ICO foundation is registered elsewhere.
What are your plans for development within the next year?
The roadmap is that currently we're still finishing the initial product - currently it looks as if we're going to finish the Lite version by January - in a week we are going to launch the alpha version and hand it over to the community to test it.
After January we have other ideas up our sleeves, moving from the digital world to “real world” involvement - lawyer and attorney services for other digital memorabilia.
This involves reaching out to wallet providers - we see a possibility to integrate with them. This [the ICO] opens a lot of doors - we'd like to see how we can help our own government - in trying to understand how to use blockchain technology to the advantage of the country.
In which cases would you suggest starting an ICO, and when not?
I wouldn't suggest it at all.
It's become fashionable. Some see it as a quick way to raise funds. But it's a double edged sword.
There are many scams that just raise a lot of money then disappear with everyone's funds.
The general rule of thumb is that if your solution doesn't have anything to do with blockchain (other than raising funds), then don't do it. For example, some people running hairdressing salons are asking for advice to raise money through an ICO. That's the wrong approach.
If in doubt, Bitcointogs.org is an excellent filter to understand how the blockchain community will respond to your idea. Every ICO that goes live essentially starts by publishing their intent on Bitcointogs - that's where we got the valuable feedback that our initial idea was flawed. We worked on the idea, came back, posted the idea, and then got the green light to continue.
The short answer is:
If it's just raising money, don't do it.
If you're creating something for the blockchain community, go for it.
Estonia is thinking about their own cryptocurrency - how far do you think they are they from implementing this idea?
I imagine that the first test runs could be done in 2 years - but it depends on how much funds and developers are allocated. But first you have to understand the fundamentals and opportunities of blockchain, and that takes some time.
As far as i see it, we had the industrial revolution, then the information age, and blockchain is the next step.