The most outstanding product or innovation is only as great as how it’s received by those meant to use it. If not, just ask the makers of the Phaeton. If you’ve never heard of this failed product, there’s a good reason for that, as poor marketing is to blame for its failure.
And this is as true for the success of a cryptocurrency startup as much as it is for that of a new product. Indeed, lack of good marketing is one of the main reasons a startup can fail. But it’s not only about communication — the marketing strategy for a crypto startup needs to be different from that of other kinds of startups, making it even easier to make mistakes that can hinder a crypto startup’s success.
3 Reasons Crypto Startups Fail
Here are the top three mistakes a crypto startup needs to avoid.
Lack of Connection With the Audience
Unlike investors in most other kinds of companies, crypto traders are especially keen on not wanting to be burned like they may have been in the past. Indeed, for those totally new to the cryptoverse, crypto itself still may seem like Monopoly money. Likewise, only 10% of financial advisors recommend their clients to buy into cryptocurrency.
Even in terms of blockchain technology itself, 45% of respondents across diverse industries have cited in a recent survey lack of trust as a barrier to the adoption of blockchain in their industry.
Finally, a potential adopter has no financial statements to check out a cryptocurrency startup like you would with a stock. With all these burdens, what successful startups do to succeed and stay relevant is to foster a community.
An essential aspect of connecting with a crypto startup’s audience is understanding the special relationship between its community members and the startups they support. The community members are not only passive token holders but also stakeholders. Ownership is an important factor. If you don’t think community matters to a cryptocurrency’s success, consider that Bitcoin has already had around 100 forks. And though Dogecoin’s success can be affected by Elon Musk’s interest or disinterest, community is a more long-term predictor of its success.
Because of these factors, connecting with potential adopters and building crypto community support are especially important for startups.
Low Trading Volume of the Startup’s Native Currency
Not only is connecting with a community crucial but how that connection is made, too. According to a recent academic study, the level of discourse, average social media sentiment, and increasing emotionality correspond with the level of volume of the startup’s crypto. Consequently, low volume is associated with risk for a cryptocurrency, and the factor of risk is an especially sensitive one for crypto enthusiasts, as previously mentioned.
Therefore, high volume is a vital factor for cryptocurrency startup success, especially for those whose value goals for their token include high valuation as a financial investment and not so much as a utility token. The impact of the trading volume in a crypto startup’s success has been confirmed by Coindesk in a survey of cryptocurrency traders — where volume was the most cited factor they couldn’t live without.
Ultimately, the interrelated factors of low volume and lack of a strong connection to a strong crypto community could create an endless cycle that can jeopardize a startup’s success completely.
Weak Marketing Strategies
Do you remember what happened with New Coke? The creators probably wish you didn’t.
It’s just one example of a product disaster commonly ascribed to the lack of a strong marketing strategy. As with New Coke and the example of Volvo’s failed Phaeton model mentioned at the beginning of this article, lack of connection with the intended audience and poor marketing strategies derailed products that were not faulty in and of themselves. Therefore, one of the most significant ways a cryptocurrency startup can resonate with its growing community of adopters is to develop a strong marketing strategy from the very beginning, avoiding risks that can kick you out of the game.
And for this, startup founders need to understand that successful marketing has to be more than a one-time thing. In fact, an effective marketing strategy is too complex an aspect of a company’s success to be underestimated and for success to be expected with just any strategy. Therefore, to develop a strong crypto marketing strategy, enlisting a solid marketing team is essential.
For a Successful Startup, Just Add AmaZix and Stir
With its 75 years of combined professional experience, AmaZix’s marketing, finance, business, and legal team provide a one-stop solution for all the needs of your crypto startup — offering intensive treatment in every area and an extensive variety of needs they can fulfill.
So, contact AmaZix about one of its multiple service tiers today and make sure your startup doesn’t go the way of the Phaeton.