Jared Polites is a Venture Partner at 7BC, an early-stage VC firm, and a partner at LaunchTeam, a strategic consultancy and agency that connects experts with companies to facilitate growth.
Since starting, the industry has changed drastically and is still undergoing extreme volatility in the markets. While critical, Jared remains optimistic and continues to explain more about the changes he has seen in the market and offered some advice for blockchain projects.
How has the industry changed since earlier this year?
It has completely morphed. We started with oversubscribed token sales that were being fueled by pools and syndicates. Then came the crypto funds to take the dominant lead. As this shift occurred, the retail market slowly dried up. Then the Asia wave hit. All projects started running to Asia like a reverse gold rush to scout “easier money” from wealthy Asian investors. Right now, we see a market where most fundraising is traditional, with the exception of a few IEOs coming from leading platforms like Binance.
Ok, enough of the gloom and doom. I promise I have some positivity in me. I would say now money has become smarter in the sense that products, teams, roadmaps, and communities are examined to the core. Equity offerings are now more common as well. people want to have skin in the game without being overexposed to volatile crypto markets. This is what we are seeing.
Do you expect this to change?
The good news is that I don't think the industry is going anywhere thankfully. Sure, regulation and conflicting powers that be could change the landscape but this mechanism of alternative fundraising and decentralization is here to stay. For it to work, you need to gain back the public's trust and make products that are easy to use.
I do think natural selection has weeded out a lot of companies that were building gimmicky products for the sake of raising a ton of quick capital. We now see more technology and developer focused projects that are solving real problems in the industry.
What does this mean for marketers?
I can't emphasize this enough: it's go time. It is time to build a real brand and a real business. Think of your brand identity, customers, product market fit, and use cases. Switch the mentality from “who will invest” to “who will use the product”. This means the community is still at the core, but things like airdrops and bounties are no longer as effective. They are drawing in people who could care less about a project and are in it for free tokens. They are not engaged.
This is why you see hollow groups on Telegram with 60,000 people without any engagement.
Marketers need to go back to the tech world where the concept of the first 1,000 users is so key. Find 1,000 engaged users or community members and you have yourself a great foundation. In practical terms, for blockchain founders, this means stop trying to game everything with vanity metrics. Marketing needs to be cohesive and long-term in nature.
Should blockchain companies still hire marketing agencies?
Absolutely, in my opinion, unless a company already has a well-built-out internal team with relevant holistic experience. There are still several nuances and a constant barrage of pitfalls to avoid when marketing in this space. Having that experience is critical, especially as things change so quickly. Having a solid basis of noticing trends and how to react to rapid changes is very important. I would recommend leveraging an agency that has a long-term perspective and understands the value of brand building. Find someone with experience in traditional industries coupled with recent blockchain experience. This would be the most effective combination.
To this point, it is important to realize the days of bootstrapping low-budget ICOs are gone. That model is now dead. You will need a real budget that can be allocated to professionals or in-house staff, versus outsourcing marketing to thousands of bounty hunters for a few dollars in tokens.
Have there been any changes with PR specifically in the industry?
Not much, really. The fundamentals are still there. If anything, the industry is way more crowded, so I always advise founders not to get too stressed over minute details in an article. What you should be after initially is social proof from getting solid press coverage. Readers and traffic should be down on the list of PR expectations, unless you are Crypto Kitties and have a viral campaign at your fingertips.
I always use this example, but think of it like this: if you come across an article in the NY Times on your phone that mentions a few companies, what would you do? Most of the time, skim the article, maybe click a company hyperlink if it really catches your eye. Then, you land on a company's page and their main call to action is download a whitepaper, contribute money, or register your email. No way most people would do the first two on mobile, so that leaves one successful option in the funnel.
Lastly, be smart about who you work with in PR. There are way more bad agencies out there than good. I have agencies that outsource to me, without their clients knowing work is being outsourced. Some of the biggest PR agencies in the industry do this. What is really funny is when a potential client passes on me and then goes with an agency that outsources right back to me. This has happened a few times, and the irony makes me laugh every time.
Any final thoughts or advice?
Be humble, learn, adapt, and admit there are no such things as experts in this space – only people with experience that is specialized and valuable. Blockchain marketing expert is an oxymoron in my eyes, but I do admit the experience I have had does give me a unique advantage, and that is the value I try to provide clients.