The Importance of Community Management for Blockchain Crowdfunding
Blockchain-based crowdfunding, primarily executed through initial coin offerings, or ICOS, relies on consumer outreach. Effective crowdfunding campaigns within the blockchain ecosystem is weighted heavily toward consumer participation -- the typical blockchain crowdfunding campaign includes content composition, social media marketing, press outreach, and the curation of a highly engaged large-scale community focused on the project itself.
Executing a successful crowdfunding campaign in the cryptocurrency ecosystem is vastly different to traditional funding models. Venture capital firms, for example, perform lengthy, intensive due diligence over extended periods of time.
The most active demographic within the blockchain crowdfunding ecosystem is, unsurprisingly, the millennial generation. Defined as individuals aged between 22 and 36, millennial investors strongly prefer digital currencies over traditional financial markets. Data available via Forbes reveals that 30 percent of millennials prefer to invest in blockchain technology.
Technological literacy is the primary driver of millennial interest in blockchain-based crowdfunding -- further data published by Bloomberg reveals that 42 percent of all millennials are highly aware of and invested in both cryptocurrency and blockchain technology.
Before investing in cryptocurrency-related projects, millennial investors will typically consult with the communities associated with a project. These communities span multiple platforms, including social media platforms such as Reddit and Medium, or large-scale chat communities on Telegram.
Community Management is Critical in the Blockchain Ecosystem
Blockchain ventures that aim to generate startup capital via crowdfunding must address a number of factors in order to develop an effective community. The key demographics that invest in blockchain-based crowdfunding campaigns value transparency, reliability, honesty, and rapidity -- the real-time nature of communities active on chat platforms such as Telegram demands real-time communication and rapport generation.
Effective community management provides potential investors with the ability to directly engage with a project -- the fundamentally decentralized nature of blockchain technology allows investors to become collaborators, creating a network of highly engaged and highly invested community participants.
The blockchain investor community performs autonomous due diligence across multiple platforms. The rise of decentralized cryptocurrency platforms that facilitate the sharing of ideas and analysis such as Medium or DAOstack allow cryptocurrency investors to rapidly disassemble any potential investment in a collaborative manner.
Andrew Hamilton, CEO of Rubix.io, emphasizes the importance of crowd intelligence, noting that cryptocurrency community members rely on decentralized communication vectors that leverage peer-to-peer trust:
“With Rubix, we’ve created a decentralized trading platform that allows users to trade concepts and knowledge as well as cryptocurrency -- the social elements of the Rubix platform allows users to connect with trusted community members and compare intelligence, facilitating the transparent discussion of blockchain news and ideas”
A professional community management team provides blockchain ventures focused on crowdfunding with the ability to direct the attention of potential investors, delivering a cohesive method of distributing information and announcements across the platforms that investors are active on.
Effective Community Management Strategy
Executing an effective cryptocurrency crowdfunding strategy relies on several critical steps. The go-to-market strategy for any blockchain-based crowdfunding campaign should primarily be focused on developing a passionate and diverse community.
There are four key steps to an effective cryptocurrency community management campaign:
1. Define what makes your project unique
Cryptocurrency projects are assessed by potential investors based on the key differentiators that make it stand out. The first step in creating a dedicated cryptocurrency community is defining and announcing the core values and goals of the project -- investors will participate in a community that aligns with their personal values and vision. Rubix defines its core goal as providing consumers with the ability to share information without the fear that their personal information will be sold or used against them.
IBM data published by Fortune indicates that 81 percent of consumers are highly concerned about the way big companies use their data -- Rubix, by providing consumers with data security, delivers a relatable goal that aligns with consumer sentiment.
2. Launch a bounty and referral program
Incentivizing community interaction is essential. A blockchain startup can quickly leverage the network effect benefits of even a smaller community by incentivizing community-driven growth. Data published by Wired highlights the importance of referrals -- blockchain startup SpringRole was able to increase its community size from 1,500 members to over 60,000 members in one month by delivering referral incentives in the form of pre-ICO tokens.
3. Distribute tokens to community members
Providing community members with tokens prior to and during launch via airdrops is a powerful method of driving community interest. Early-stage token holders operate as loud evangelists within the cryptocurrency community as they stand to gain the most subsequent to a successful crowdsale.
4. Maximize ongoing discussion
Delivering consistent and reliable updates on project development, roadmap progress, and major tech breakthroughs such as mainnet launch will propel a blockchain venture beyond initial token sales and ensure the project captures attention throughout the development process.
Reputation Management Via Community Management
The large and often unsupervised nature of blockchain crowdfunding communities attracts bad actors that focus on platforms such as Telegram -- large cryptocurrency-oriented Telegram groups commonly observe more than 20 scam attempts every 24 hours.
The strategies used by bad actors within the blockchain crowdfunding industry can include fraudulent accounts that attempt to imitate official announcements or the creation of accounts that attempt to misrepresent themselves as official team members.
In most cases, these fraudulent accounts will attempt to direct community attention toward phishing sites in order to defraud community members. Establishing a dedicated community management team allows blockchain crowdfunding ventures to identify and remove these bad actors before they are able to damage the reputation of a crowdfunding campaign.