ICOs Overview: Should Investors Choose an ICO Developed with the Lean Startup Methodology?

Abstract

Abstract. An Initial Coin Offering (ICO) is an innovative way to raise funds and launch a startup. It is also an opportunity to take part in a project, or in a DAO (Decentralized Autonomous Organization). The use of ICO is a global phenomenon that involves many nations and several business categories: ICOs collected over 5.2 billion dollars only in 2017. The success of an ICO is based on the credibility and innovativeness of project proposals. This fund-raising tool contains however some critical issues, such as the use of tokens that have no intrinsic value and do not generate direct liquidity, and the role of investors in the management of the startup. We analyzed if the Lean Startup methodology is helpful to face this critical aspects and we examined some ICOs in which the proposing team states explicitly that a lean startup approach is used.

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“…They made it known that more in-vestment could be added when the new technology started to generate some income. This result aligns with the claims of several authors about the benefits of the lean startup methodology (Gaffney et al, 2014;Gbadegeshin & Heinonen, 2016;Ibba et al, 2018;Järvinen et al, 2014;Kruuti, 2016;Moogk, 2012;Shimasaki, 2018).…”

“…Their affirmation corresponds to the focus of recent frameworks of the lean startup methodology (Apilo et al, 2015;Furr et al, 2014;Gbadegeshin & Heinonen, 2016;Hemilä & Jaring, 2018). The experts also made it known that startup phenomenon, digitalization influences, and "money making" pressures are compelling entrepreneurs to apply lean startup logic as some authors have also noted (e.g., Apilo et al, 2015;Ibba et al, 2018;Kruuti, 2016;Shimasaki, 2018). Thus, the experts emphasized that, in the last five years, lean startup logic has been spreading among technology entrepreneurs, though they also acknowledged that it can be difficult to use.…”

“…One of well-known lean/agile approaches is the lean startup methodology. It was propounded by Ries (2011) and it has been applied by scholars in various contexts, such as healthcare (e.g., Gaffney et al, 2014;Silva et al, 2013), biotechnology (e.g., Shimasaki, 2018;Kruuti, 2016;Grohn et al, 2015), education (e.g., Tran, 2015;Youtie & Shapira, 2017), research (e.g., Still, 2017), technology-based ventures (e.g., Harms et al, 2015), and information and communication technology (e.g., Gbadegeshin & Heinonen, 2016;Ibba et al, 2018;Miski, 2014).…”

Initial Coin Offerings and Agile Practices

“…The maximum team size includes 67 people. These results are higher than the results reported in [21], where the average team size was 10.87, and the maximum team size was 57.…”

“…The possibility of using an ICO as a fundraising tool to finance business and technology initiatives directly and without intermediaries was analyzed in [21]. In this work, the Lean Startup methodology as a tool to face the main critical aspects of a startup and examined some ICOs based on lean startup approach, is analyzed.…”