How effective is it to promote an ? How much money is needed and which marketing channel is most important for a startup? Responding to these questions is Mariya Lapuk, co-founder of the Vinci Agency, which has previously worked on PR for the Internet Initiatives Development Fund (IIDF) and one of the top social media in Russia Odnoklassniki. ICO blockchain — How did you get involved in promoting blockchain projects? It all started in 2017 when the Vinci Agency was founded. Initially, we were focused on tech and venture startups, but with time we also added a blockchain stack. The first ICO that we held as a PR contractor was Cindicator. This was a hybrid intelligence that makes predictions based on the “wisdom of the crowd”, which is the collective opinion of profile specialists and artificial intelligence. In August of 2017, $15 million was collected at the project’s token sale over the course of three weeks. Then there was the token sale of INS Ecosystem, which ended up being the agency’s biggest ICO. We raised $42 million, which was a very good result. After all, this was in December 2017 with a volatile market and a lot of competition. There were other projects as well, including AdHive, The Abyss, etc. — Why is there no mention of ICOs on the Vincy Agency website? Are you hiding it? This is the story of the cobbler with no shoes. As soon as we make an attractive presentation about an ICO, the rules of the game change and the information becomes outdated. For example, in the spring of 2018, we reached a point where we had learned to work quite well in Japan and found good executors and contractors. We even took on a new client for Japan. But regulations were changed literally the next day. We were forced to rework everything. Mariya Lapuk and Kirill Bezverhi during the conversation — Speaking of media publications, where is the best conversion rate right now in terms of site visits or views? I think it’s improper to consider conversion from media and, in principle, to tie traffic to KPI in PR — this is not marketing, after all. Nevertheless, the stronger the media coverage, the more views you can expect to receive. If TechCrunch writes about you, then the rest of the media will reprint it. — If you take blockchain media and paid press release publications, then you should know where the best effect will be. Different materials show different conversion rates in the same media. Aside from that, not all media outlets disclose information on articles views. In the case of an ICO, PR is not needed for traffic, but to build trust in a new company and product. The team of a blockchain project raises money on an idea even if there is a ready product. People’s trust is monetized under some kind of expectation. This is psychology. Therefore, there’s no point for PR to measure the conversion rate in terms of views and click-throughs. It is the same situation with PR on the venture market. There are two primary reasons why startups need PR. The first instance happens when a deal is needed and the parties begin to “bargain” on the price. The second is when a company has become big and reputation is critical. Because technology is very difficult to feel, this is a reputation-dependent business. In crypto, every project requires promotion because, more often than not, they don’t have anything. They want to take a lot of money from people and they need to inform them that they are going to do something for this money. — Has there ever been a situation where you purchased a publication in crypto media and there was no traffic or they didn’t fulfill their obligations? What media do you recommend avoiding? The situation must be judged in the moment. At the end of this past year, for example, there were situations where quite small media greatly increased traffic for two weeks. We thought that it was inflated. But now if you look at these media, you’ll see that they’ve become regular, big media because they, for example, had unique news and good editorial content. The market is very dynamic and you can’t say that one media is good and another is bad. — What should a PR budget look like when holding an ICO? Mariya Lapuk during the talk about money It depends on how much you want to raise. If you have a hard cap of $10 million, then you would have come to me at the start of this year and I would have said that you should spend $1 million on marketing, that is, a ratio of 1 to 10. Now, for projects with an existing product and real cash flow, this would be more like 1 to 5. For the rest, this is a big question, in principle. You would have to consider in which regions you want to raise funds. If you’re looking at the PR budget, then it should be $100,000 to $150,000 for an ICO. If the budget for marketing is one million, then this is about 10–15%. — You’re talking about expenses at the beginning of the year. What about now? The market is in a bit of a decline, and Google, Facebook, and Chinese portals are banning a lot of things. This is a problem that is greatly increasing the cost of marketing. A conversion rate of 1 to 5 is now considered good in terms of the ratio of marketing investment and earnings at an ICO. If you want to make $10 million, invest $2 million. And again, you need 10–15% for PR. — Okay, so you have a PR budget of $100,000. How do you recommend spending it? I wouldn’t rush spending it. You will always have time to buy. I’m more for making news and pitching it in the media. We have repeatedly sought free publications in CoinDesk, Cointelegraph, and in the American Forbes. To put it simply, the news was good, and we turned to the journalists we needed. Of course, we have many clients and we often talk about different projects with the same journalists. But, in general, we find the media, we find who has written news about the relevant topic, we contact the author through LinkedIn, Twitter, sometimes Facebook (depending on the country), and we pitch the news. This is very similar to typical “media relations”. It is generally understood that media is specific in the cryptomarket. They understand why you’re coming to them, and for this they want money. This is quite similar to the Russian regional media market at the beginning of the 2000s when there was a lot of money; there were elections and everything connected to them. With time, the market became “cleaner”, and the ones who remain are either those who make good news or those who sit on a budget. I believe that the blockchain media market will also “clean up” after a while. Mariya Lapuk and Kirill Bezverhi during the conversation — So, 10–15% of a marketing budget should go to PR. Share with us a few other metrics for successfully promoting an ICO. We have the 30 to 70 formula. This means that in promoting a blockchain or other startup, 30% of the news is made about the technology, and 70% of the messages should create the expectation that this is a cool project. This could include the sweet parts of some news, but it should not be about technology, since the majority of speculators have neither the time nor the required understanding of it. 70% of news should be some kind of signal to buy. For example, if I say that some startup has signed an agreement with Microsoft, this is a very strong signal to buy its tokens or stocks. There are also numbers that have been attained by experience. I don’t claim absolute truth in the last instance, but we are accustomed to believing that if you want to raise $30 million, then you should make no less than 500 publications in the media. If the number is $10 million, for example, then that means 150–200 publications. In this regard, 10–15% of them should be in the tier 1 (top media) class of media. Also, it doesn’t matter if it’s about crypto or about business. If you want to grab the world, then this means Forbes, TechCrunch, Coindesk, and Cointelegraph. In Russia, this would be Kommersant, Vedomosti, Forbes, and ForkLog. — Is it necessary to publish in Russian media and, in general, focus on Russia? It depends on the project. Every market has its own peculiarities. For example, we don’t operate in India, but several FinTech projects are going well there. In Korea, cybersport projects are being met with cheers. One should certainly work in Russia if day traders are needed. That’s not to say that many people are involved in crypto in Russia, but they are certainly on the level of Turkey and Eastern Europe, which is not insignificant. The world is full of Russian-language crypto funds, which receive investments in private rounds. Furthermore, at least earlier, there was a history of transferring fiat money to crypto for those who wanted to withdraw funds. Kirill Bezverhi asking about investors from Russia So, I wouldn’t say that Russia isn’t worth looking into. All projects that we’ve undertaken have had part of their funds raised in Russia. Russia has always been in the top 7, and for some was one of the top 3 countries for fundraising. I witnessed how one ICO in Russia had 7%, which is a good result for this country. At the same time, Russia must not be the sole focus. Regardless of the project, one could even get away with not creating a Russian-language website, chat, or Telegram channel, since everyone who invests in Russia more or less knows English. — You say that there are many day traders in Russia and that this is one of the factors for targeting an ICO to Russians. What’s the connection here? Day traders are good for any project from the perspective of the post-ICO period when liquidity is needed. After the token sale, listing occurs and you should have real sales and purchases. Otherwise, crypto assets will be non-liquid and the exchange rate very volatile, which is bad for business. Everyone thinks that the main point of an ICO is to raise money. No. Actually, it’s not so complicated to raise money. What very complicated, however, starts after you’ve been listed and you need to really develop the project, hold a normal token price, engage in partnerships, and everything else. is This is like the stock market but with a huge amount of insider trading and where there still aren’t any regulations or rules. This is where you have investors who may be happy or unhappy, and you have to answer to them. At any time, your token can drop, as there are large funds that will want to exit, for example. This is a real headache for founders and is more abrupt than collecting money. — If you consider all the past ICOs, which of them was the most strongly organized in terms of PR? A super case is EOS. It’s awesome what they did in terms of PR. There was no product and they built their whole PR strategy on expectations. This is how it should be in crypto. Ilya Perekopskiy’s Blackmoon had very good PR and raised about $30 million, which became one of the largest Russian ICOs. Chinese VeChain also created good hype. — What marketing channel is most important for the success of an ICO: community, IR, roadshows, or something else? Mariya Lapuk pointing out the role of community management in ICO Community. This is because it is the community that gives a project its biggest contribution both at the time of the ICO and in the post-ICO period. People from the community are the most motivated and, more often than not, don’t unload tokens on an exchange immediately after listing. Additionally, it is now more profitable to invest in the community when considering the prohibitions on various tools. — But we see that in ICO collections, the share of the community in a crowdsale, in contrast to the situation a year ago, composes 20–30%, with the rest being raised by funds and pools. So is the role of the community really important? People invest well when they understand that they can make a lot of “X”s. Now is not the time for “X”s. As soon as people see that they are able to guarantee an increase in their investment by a factor of 2–3, people will then begin investing again. In that case, the market-fund ratio will be about 50/50 for fundraising. — What is the forecast like for the development of the ICO market? What trends do you see? If we’re talking about ICO fundraising, then average projects with a hard cap at $15–50 million have disappeared from the market. What’s left now are small projects that raise up to $10–15 million (which they hope to collect for free) and large and truly complex infrastructure projects that seek to raise at least $50 million. As far as general tendencies are concerned, in the fall of this year, I said that this would all end in the spring. I thought that there would be execution for the first obligations of the projects, that nothing would happen, and that the market would be disappointed in ICOs. But I’m not seeing that now. People still expect to earn, partly because of the fact that the market isn’t actually globalized. In Russia, there was hype very early on, but, judging from talks with my partners, there still hasn’t been any in America. Being involved in crypto in New York is still seen as improper. Therefore, we will still see very cool projects and ICOs. Crypto will greatly change the world and decentralization truly is the new Internet. By Kirill Bezverhi

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