With the ICO/STO market stalled, how are blockchain startups finding their way to market? The Chief Business Officer and Co-Founder of bootstrap Romania based startup Coreto talks to Blockleaders about the challenges he faces building his project from the ground up, the perils of following crypto influencers and how he plans to bring trust back to the crypto space.
It’s difficult not to admire the genius behind the Useless Ethereum Token. Described on its website as the “world’s first 100% honest Ethereum ICO,” here was a token that promised no utility, wore its worthlessness as a badge of honour, and even ran the caveat “seriously, don’t buy these tokens”, in a prime position on its homepage. Flying in the face of all logic, this enterprising soul raised a startling $300,000 in an ICO, which he enlivened with Tweets about how many flat screen televisions he could now afford. Even more extraordinary is the fact that these tokens, which were priced at $0.02 each in the UET ICO, were adopted by several exchanges, trading hands for $50 at one point. If you wish, you can still pick up some Useless Ethereum Tokens for a knock-down price on HitBtc.
The investors who picked up these tokens were, I hope, in on the joke. Of course, hundreds of other projects offered tokens of dubious utility and value, and many of us are saddled with thousands of tokens for ICO’s that promised much, but never quite got around to delivering a working product, let alone a platform where a token had a raison d’etre. Many of these ICOs raised large amounts of capital in Ether and lost their fortunes as that currency underwent a major correction. And amidst the deafening noise of the bull market of late 2017, scammers and opportunists had a field day.
Vlad Faraon, co-founder and CBO of Coreto knows first hand what it feels like to fall for a scam. Becoming interested in the blockchain technology and cryptocurrencies in mid-2017, he invested $1000 in an ICO that had nothing going for it, an unfortunate event that he has used as a positive.
“The madness and hype of the second half of 2017 was like a jungle. Of course, where there is money, scammers always appear. I was scammed myself. Later, I analysed my actions. What were the triggers that made me throw $1000 into a project that didn’t even have a team? I had done my own research, investing lots of time trying to find quality content and trying to follow the right influencers. But quality content was very hard to find and it was impossible to know which influencers to trust. In the first quarter of 2018, there were still plenty of ICOs, and it was at that time that we were able to analyse the market from the point of view of a retail investor. If you have just discovered cryptocurrency and you want to dip in and test the waters, it is incredibly difficult to find objective, trustworthy information.”
Like other novice investors, Vlad turned to Twitter feeds and review aggregator sites for advice on where he should put his money. The ICO boom had brought to the fore a new breed of financial influencer- the ICO adviser. The same faces appeared as advisers on numerous platforms, the metric of how expert an adviser was only calculable in relation to the number of ICOs they had advised. Similarly, ICO rating sites offered expert opinions of variable merit. It was Vlad’s experience of negotiating the maze of online crypto-related content that gave birth to the idea of Coreto, which he runs from his home city of Bucharest.
Coreto plans to solve the problems he encountered by providing a reputation-based social platform that bridges the trust gap between blockchain investors, influencers, and project teams.
“In 2017 everyone was an expert. There were “ICO Veterans”. But this was a new technology. How can you already be an expert, or a “veteran”? We saw that there was no way of tracking the performance of these individuals beyond their own proclamations. As for ICO rating sites, there were scams there too. Different experts would give bad reviews and then contact the team behind the ICO and offer to upgrade their review for payment. This is a matter of trust. Our plan is to build to the first trustworthy reviewing platform for blockchain projects and influencers. This will be a social crypto platform. From training material, trading analyses to reviews – anything a person needs to understand this technology and its investment opportunities.”
The landscape has altered completely since 2017. Vlad reports his difficulties in finding advisers to assist his startup, which he is building from the ground up with his Co-founder, CEO and wife, Iustina, and their small team. At every step of getting his ambitious project off the ground, he has encountered the very difficulties that, he maintains, makes Coreto so potentially important in the blockchain space.
“We have contacted influencers to try to get them interested in our project. Advisers would call us and promise us the world. They could introduce us to all these important people, they could gain us access to all these funds. But based on what? On Coreto, blockchain projects will be able to assess the performance of their advisers, which will help future teams. Content creators and advisers will be able to demonstrate their performance, using a rating method that we have devised.
The benefit to investors is obvious. The platform will help them improve their financial literacy and learn more about the crypto market landscape, which is a very intimidating space for novice investors. We hope ultimately to facilitate one on one relationships between mentors and investors. Blockchain projects will have the chance to rate their advisers. But the platform works for advisers and influencers too. Not only will they have a trusted base for their valuable opinions, but they will also have the chance to monetize their work through subscriptions and mentoring options. This is clearly something that Crypto Twitter can’t offer.”
These days, Crypto Twitter has moved from shouting about the guaranteed ROIs of the ICO of the moment to a deeply evolved subculture where Bitcoin maximalists bate altcoins, amateur market analysts interpret candlestick patterns and the Lightning Network Torch is passed from handle to handle – even drawing Twitter CEO Jack Dorsey into in the debate. For the uninitiated, it’s like learning a foreign language.
“The people who were experts in ICOs are now very competitive in trading analysis and charting. They badmouth each other when things go wrong. They push their correct predictions and delete the bad ones. It’s harder than ever to find influencers you can trust. That’s why we want to bring influencers and their followers to Coreto, which will help investors and people who are interested in blockchain to find other experts who can help them in their search for good investments. And once investors have found an influencer they can trust, they have the opportunity to cement that relationship with one on one training and mentoring”.
If finding people to trust in business can be difficult sometimes, Vlad at least can rely on the commitment and honesty of Coreto’s co-founder. But is it wise to go into business with one’s spouse?
“Iustina and I are very compatible, both in our personal lives and in how we approach business. We both have entrepreneurial mentalities and have great synergy. Iustina is very determined and very people oriented. She is a dreamer and always has brilliant ideas. She has the power to motivate others into working for and believing in her ideas. I’m more analytical. If you show me an idea, I will find three or four reasons why it won’t work. So having a visionary and a more grounded person is a perfect balance. We have a system where we keep our professional and business lives apart, and it has worked very well so far.”
Vlad and Iustina are based in Romania but a move to Switzerland may be on the horizon. “The blockchain space in Romania is very niche. There are people who are interested in the tech, and there are interested retail investors. I know very few project teams based here. The development team of Token Pay are based in Bucharest, but not many others. The community is not very well established. There are no hangouts really like there are in many countries.
However, there are lots of great developers and lots of large multinational tech companies have hubs here for that reason. On a government level, crypto regulation is underdeveloped. There is a distinct shortage of VC funds and angel investors in Romania, so finding investment can be difficult locally. We have applied for an incubator in Switzerland and relocation there is a definite possibility. We are open to it, but of course, we have our personal lives in Romania to consider.”
Vlad is philosophical about the challenges his business faces in a bear market when the investment opportunities that were so plentiful not so long ago are thin on the ground. But he does not think Coreto has missed the boat. “We hit the pause button last year because we are not MVP ready yet. People are no longer willing to invest their money in businesses at such an early stage now. We wanted to launch the business in the middle of a bear market because it will show our commitment to what we are doing.
We don’t want to be identified alongside the ICOs that have damaged the reputation of the space. Our focus is on finding seed investment, and this is challenging in the current market, but we hope to be in a position to launch the first stage of our platform – a Telegram bot that collates and interprets the predictions of influencers – within the next few months. We are at point zero. Building a community, and getting our brand known through social media channels is a real focus right now. The road ahead is full of challenges, but we believe that the solutions our platform promise will attract investors who are as passionate about blockchain as we are and want to bring trust back to the crypto space.”
You can read more about Coreto on its website and connect with Vlad on LinkedIn.