Another day, another ICO. But for the Crypto.Tickets team, it’s months of relentless planning (hopefully) coming to fruition. whatever happens next, for cofounder Katerina Kirillova, it’s been one helluva ride!
Blame The Travel Industry
Tickets Cloud, the company behind the Crypto.Tickets ICO, was built in 2014 around the idea that a global distribution system in the ticketing industry could allow event organizers to put their tickets on a global platform instead of having to split their inventory between multiple distributors. Think of it as an Expedia for event organizers (both are selling tickets, after all).
“All of those exchanges were typically done manually. Dynamic pricing is nearly impossible to do if demand exceeded supply. We wanted to create an automated platform where billing, payment, price surges, analytics, CRM and accounting could be done within the same environment.” recounts Katerina, a partner in Tickets Cloud, cofounder of Crypto.Tickets and the CEO of EuroShow Moscow and the Moscow Ticketing Forum.
Since its launch, the Tickets Cloud distribution platform has generated over one million sales and claims monthly revenues of around two million US dollars. In search of a better way to connect key players with their audience and deliver better performance and user experience, the Ticket Clouds team came up with the idea of launching the Ethereum-based Crypto.Tickets (token name: TKT).
Why Blockchain?
"Crypto.Tickets isn’t the first to attempt fundraising through an Initial Coin Offering", which makes sense because there is a real use case here”, commented one of the Blockchain Association of Canada’s director, Phil Chevry.
And it would appear this new market doesn’t have a clear winner yet; out of the necessary 4 million dollars needed to bring the current prototype to MVP stage, Crypto.Tickets managed to raise 1.5 million US dollars from investors alone, “pre-ICO”.
When asked whether it’s just another opportunistic move to benefit from the current “ICOmania”, Katerina admits: “The word Blockchain has been misused to create hype, for sure! But for the struggles our industry knows, it came as salvation. There’s a fear of monopoly in the ticketing world which can be solved by a decentralized ecosystem.”
“We’re trying to setup an infrastructure and rules by creating a backend solution for both first and second market transactions, so that everything can be transparent and recorded. The terms and conditions should always be visible. Traceability, security, billings and payments are all issues which can be addressed by using Blockchain technology.”
“We’re Not Quite There Yet”
If you’re interested in the technical stuff, a new version of the white paper was just released, giving more details about the architecture of the proposed solution which, in a bold move to get an MVP out by mid-2018, mixes an Ethereum-based token with the EON technology.
“Ethereum remains very expensive and cannot support the amount of transactions needed at the moment” explains Katerina. Even though this is the team’s first ICO, hearing Katerina explain how Madonna’s concert tickets, if marketed properly, sell out in less than 10 minutes made me think they are more prepared than they know…
This attempt to differentiate by addressing the elephant in the room, which is that Ethereum is currently limited to 10 to 20 transactions per second compared to 50,000 for Visa, could work in TKT’s favour… or not.
“We know that the community might argue EON doesn’t have Ethereum’s track record and community, but the main difference between us and a lot of other ticketing projects is that we already have a working prototype, and it’s running very smoothly so far. In fact, our Russian supporters purchased their first Crypto.Tickets using the Tickets Wallet prototype to be able to attend our launch party that took place in Moscow on Oct 5.”
“Big events sell out faster than the most popular ICOs! We must account for that.”
Since EON works with a proof-of-stake consensus, I was tempted to ask if they would consider migrating to Ethereum after Casper: “The tokens will be issued using Ethereum, so if Ethereum was to switch to proof-of-stake, we would have more options. We plan on releasing on schedule with EON to be first on the market, during the second quarter of next year. Then, we’ll see what’s the next step for Ethereum and decide.”
It is absolutely impossible to launch a product on Ethereum as it is though, from an economical point of view. Big events sell out faster than the most popular ICOs! We must account for that. We might migrate post-Casper, but for now, we want to give our investors ever chance to see a quick return on investment.”
The Bumpy Road To ICO
With a team of about 25 people working relentlessly on the project, 500 new users on the platform and two to three hundred newcomers on their Telegram Channel every day, the team expects to gather six to eight thousand potential participants for the ICO. That sounds like a lot, but the hard cap is an ambitious 23 million US Dollars, in a maximum of 30 days.
“We have PR people, designers, marketing people, community managers… but what we’ve seen so far is that ad campaigns aren’t as effective as the channels people can trust. CoinTelegraph for instance has generated a lot of traffic to our Medium page” commented the cofounder, determined yet cautious.
Considering the industry believes you are “experienced” if you’ve survived one successful ICO (and didn’t run away with the money), knowing what teams would do differently if given the opportunity always brings valuable insights. This time was no exception: “A LOT, happily admitted Katerina. Our first idea was quite vague, and we didn’t know which door to knock at to get help. There are big trade-offs when doing an ICO, with regulators wondering if they should prohibit the whole movement… We wanted to launch before this window closes, but that had to be done at the expense of better performance and planning, compared to what we’re used to.”
“Another big issue we faced was linked to the narrative. We had to change our speech in the middle of our awareness campaign because we realized how we interacted with the audience wasn’t compelling enough. The way we explained the concept and who we were had to be re-imagined in the middle of the road show! There’s also a huge language challenge for us, because we’re Russian speakers, so all of our material needs to be translated to reach a broader audience, which is time consuming and adds a lot of work.”
“Finally, I would have started communicating with funds earlier. We didn’t have enough time to do it right, as a lot of them requested as much as three weeks to evaluate our material. And some of the people we reached out to didn’t actually have anything to invest!”
There’s No Such Thing As Free Money
Getting a hold of Katerina was difficult in the first place. We had chatted over Telegram several times, but once I saw her travel schedule, it all made sense: “I have been on the road for nearly a month now. I am currently in Barcelona where we have a booth and pitch sessions planned. Honestly, admitted the young mother, I miss my son, my family and my colleagues. There are times when I don’t even realize which time zone I am in anymore!”
With around 180 ongoing ICOs at any given time, getting noticed is becoming harder every week. “Back in July, investing 50,000 dollars in marketing could bring you 10 million. Three months later, the same amount of money might bring you only one, and it will likely come from friends and family” admitted another team last week.
“It definitely does feel like there are 10 times more ICOs happening compared to two or three months ago!” agreed Katerina. “We have good benchmarks though. Our main competitor in the blockchain space raised 15 million within a few days, which was their hard cap. These guys just graduated from university and do not have a working prototype; they have a good team and advisors, but no market experience.”
Meanwhile Crypto.Tickets, incorporated in Luxembourg, got from their legal advisor a piece of paper that could give the project a huge advantage: a confirmation that their TKT tokens meet the requirements of the SEC and are not subject to security laws because they are tokens for internal use within the system (utility tokens). There are also talks of incorporating an external KYC solution for US citizens. If it works, the software should be used to open the crowd sale to US investors.
As to what the future holds, no one knows, but these guys are determined to keep the community posted, providing information and running marketing campaigns post-ICO to achieve the desired network effect and on board the first corporate clients. As to the tokens themselves, if the soft cap of four million is reached, they should be listed on trading platforms one month after the end of the sale, beginning of November.
*: Toronto-based consulting firm ConsenSys published a list of blockchain-based ticketing systems here.
**: Phil Chevry is an advisor for Crypto.Tickets
About the author (this is where I talk about myself in third person):
Audrey Raby is a strategist, a storyteller, a speaker and a mom. Oh, and the CEO of Montreal-based innovation consulting firm Nash.
Join us: