A crowdsale which is attempting to set itself apart from the rest is the Janus token sale. With a cap of 7,000 BTC, or roughly $5 million, they are seeking to remodel the idea of what the DAO originally set out to be. As a curator and builder of blockchain-based business ideas, Janus will use the funds raised from the token sale to build out business ventures, blockchain applications and work to sell them at profit over time sharing profits with investors and eventually making an exit and selling the business. Another unique twist is that the asset which is being issued is a token on the Nxt blockchain, not Ethereum’s.
With some of the more popular ICO token sales, especially those conducted on the Ethereum blockchain, it seems they are preparing for initialization of the sale one minute, then they are sold out and capped off within another minute. With the latest Golem ICO token sale, they managed to raise somewhere around $9 million USD in a matter of 20 minutes. Many people who were interested in the project simply were not able to participate due to the high demand. Much like buying tickets to a Rolling Stones concert and seeing them sold out almost instantly, the scalper's after-market positioning also seems to look quite good for the ICO token sales.
However, with Janus, the founders and community are seeking to be more level-headed about expectations and projections as well as avoiding hype. In addition, there is also the added benefit of usability through the Nxt blockchain dashboard, which has a fully functioning desktop GUI. As much as the Mist Browser, wallets and features of Ethereum have progressed in the past year to facilitate a growing audience of potential investors in ICO’s and token sales, it is important to have an example such as Janus on a different blockchain platform to see how these sorts of experiments can work within other environments.
Below, in an interview conducted over email, Janus’ Director of Technology Robert Gasch discusses his inspiration and driving motivation behind Janus as a business, rather than pure technology play in the blockchain based ICO token sale space.
From your Perspective and from an Investor Perspective, Why do a Token Sale with Bitcoin and Nxt?
“When initially considering our options for launching what has become the Janus project, we considered simply bootstrapping the company and growing it organically. The problem with this approach is that it requires you to have a product you can monetize from the get-go. While this is possible, it means that you do not have the time to develop the type of complete product we would like to offer and puts you at the risk of establishing negative (or at least not positive) reputation for the very reason that you have not had a chance to invest into product development to a degree which is necessary."
"Market conditions are such that the easy problems have been solved (to use a proverb, "The low-hanging fruit has been picked",) the result of this is that it is not possible anymore to effectively compete in today's marketplace with a basic product. As such, you need to be able to invest a significant development effort into your products in order to have an offering which is competitive and which can achieve a satisfactory rate of market adoption. Now, if you are able to provide brand new technology (Hadoop, etc.) or a brand new business idea (Uber, etc.) which may change the industry, this may not quite be the case but in our case, we don't aim to be technological innovators but rather pursue 'boring' but solid business plans, targeting existing markets."
"The next step we considered was building a minimal viable product and going the traditional route of securing angel funding. While this is a viable option, it usually comes with strings attached which we would like to avoid. I have some experience in dealing with angel investors and know that the process of securing angel funding can be a long and thorny road and often requires you to devote a significant amount of time to this process. At one of the past companies I worked at, the process of getting from an initial contact toward angel investors to coming to an agreement on funding terms took several months and ended up delaying us to a degree which was way beyond our initial expectations. At another company I worked for, we had reached an initial agreement on the terms of the investment when the investor demanded that we install his CEO at what we considered was a very inflated salary; in addition to this, the proposed CEO had no experience in the software industry. In the end, we declined to accept these terms and parted ways with the investor."
"Given my past experiences with the process of securing funding, the cost (in terms of time and effort spent) of securing funding is a major distraction, especially so if you have a viable business plan which you are eager to implement. Given the fact that we believe that cryptocurrencies are an exciting new development which offers both technological innovation and market decentralization, we eventually decided to attempt to have our ideas financed through a token sale using Bitcoin and Nxt. We chose the Nxt platform because it is a stable and proven technology platform which has all the features we need in order to have token holders receive their profit sharing payments at the click of a button."
What are the Benefits?
"From an investor's perspective, participating in a crowdsale through cryptocurrencies offers exciting possibilities to invest into promising technologies and businesses at an early stage. The downside is that since cryptocurrencies are currently an essentially unregulated market, investors must be cautious to invest into projects which have passed a certain degree of vetting in order to ensure that they invest in projects which are managed by serious and experienced teams. In our case, you are essentially investing in a team which has proven experienced and has guided several businesses from their inception through a growth phase with successful results. It is up to investors to decide whether they believe that our ideas are realistic and whether they believe that we can implement the strategy we have outlined.”
What Lessons, if any, Have you Taken Away from Other Token Sales on Other Platforms Lately?
“To me, it seems that the cryptocurrency community is fascinated by technology. There is of course nothing wrong with this, but over the past few years, we have seen a lot of projects promising amazing technology and using this promise to collect large investments. If we ignore some of the 'pie in the sky' promises which were made but which were obviously unrealistic, the fact remains that by betting on new technology, you are in essence betting on this technology being adopted by the market. If that happens, investors will be happy. But history teaches us that first mover advantage is hard to overcome and that most technologies do not get adopted widely enough to generate a significant return on investment. For example, for the past few years, the altcoin scene has produced a staggering number of altcoins, many of which were tied to interesting business ideas."
"Yet the fact remains that even after throwing just about every possible business idea at the market, Bitcoin is still the undisputed leader of cryptocurrencies. As such, betting on new technologies and business concepts is a rather risky approach, especially so when projects are launched with a primary focus on technology without having an underlying business plan in place. Experts predict the adoption of the technology behind blockchains to be used by mainstream institutions is at least 10 years away so picking a winner now is like throwing darts."
"So while what we are doing is not per se 'sexy' in the sense that we won't innovate blockchain technology, the fact that we intend to target extremely large and global markets gives us the potential to reach real market adoption which in turn should generate substantial profits. In this sense, it is instructive to take a step back and look at the size of the cryptocurrency market and the number of people participating in it because compared to mainstream markets, crypto is tiny. This means that by limiting yourself to the cryptocurrency market, you are in effect excluding the bulk of the planet's population from your target audience. It is my estimation, it is much easier to reach a sizable user base and implement monetization strategies when you target mainstream markets, which is exactly what we are planning to do. We plan to use cryptocurrencies in a supporting role for our projects where this makes sense, but it may be the case of our users not even noticing this."
"Having said the above, I believe that interesting things are happening with what is generally called Blockchain 2.0 technology. However, the market reaction to these technologies remains to be seen. In a way, cryptocurrencies are where personal computers were in the early 1980s. Lots of interesting developments with lots of companies/projects offering their ideas to a new market, but if history is a guide, the best technology does not always win and in most cases, 'boring' companies can generate very good returns on investment while most of the trending companies fall to the wayside. The few trending companies which make it will do very well, but from an investment perspective it is extremely difficult (if not outright impossible) to predict which of these companies will make it and which won't."
"The other thing which should be noted is that while there are lots of projects who are trying to put certain things on the blockchain (proof of asset ownership, etc.) and while the underlying ideas are an interesting evolution of current intellectual and property ownership models, in my estimation this is quite meaningless until an internationally valid legal framework is adopted which supports these ideas. The fact that you have an immutable blockchain record which certifies that you own a particular piece of property is at this point in time quite irrelevant because it has no legal standing."
"This is a classic case of technology leaping ahead of the legal framework which our society is based upon and it remains the be seen how this will evolve because, in addition to the inertia which has to be overcome, you can be sure that the existing stakeholders and process owners will not relinquish control easily. We can already see this process in action with banks experimenting with blockchain technology in order to reap the benefits blockchain technology offers without having to rely on a previously established platform."
"The digital transformation of society, especially so in the area of cryptocurrencies and the potentially disruptive effects of blockchain technology, is challenging long-entrenched interests of some very powerful and well-funded groups and I expect that we will so some strong defensive moves by these parties over the next few years, raising questions with regards to whether new projects will be able to wrest control from the existing order.”
Are there any Token Sales that you Look Up to Especially?
“I think the Ethereum sale was a very interesting one as it offered the vision of genuine improvements upon existing blockchain technology which was, to some degree, delivered. The market's reaction to Ethereum has been enthusiastic and time will tell if the project manages to reach adoption at a level that accords with the investment it received.”
What was your Approach to Governance? It Seems Exclusively that the People who Invest the Most in Janus will have the Voice on the Board. Is this Dynamic? If Someone Buys More Tokens on an Exchange, Can They Then be able to Have Board Privilege?
“First of all, I'd like to state that I'm happy to listen to any good idea which comes my way, regardless of whether it is brought to me by a token holder or not. With regards to the advisory board we have planned, membership will be dynamic; if someone decides to sell their stake they lose their seat on the advisory board. Conversely, if someone decides to buy up tokens to a level which qualifies them to be a member of the advisory board, we'll be more than happy to welcome them to listen to their opinions and advice in great detail."
"The advisory board is intended to give large investors a formal role in influencing company policy and decisions. However, I would like to point out that we intend to have an open dialogue with all our token holders and we will welcome any constructive input they have to offer. The simple fact of the matter is that more minds will have better ideas and insights than just the three of us which are running the project; it would be short-sighted of us to reject valuable input which is offered to us.”
I Noticed there was no Real Heavy Marketing of this Project before it Launched. Nothing that I Noticed at least. Was this on Purpose?
“That is correct. We wanted to hit the market with a fully-formulated plan rather the dish out bits and pieces. In retrospect, it might have been better to offer some hints of what we were about to launch in order to generate some anticipation or even hype, but we decided that a concrete and finished message would serve our purposes better and help convince potential investors that the Janus project is not a spur of the moment thing but rather the result of extensive planning and brainstorming. Those who we felt comfortable sharing our project with, in this case, the Nxt Foundation were asked to keep Janus unknown publicly until all details were settled, whereby first contact with their staff was made during August 2016.”
What has been the General Feedback you have Received Thus Far?
“The feedback we've received so far has been very positive; (potential) investors seem to appreciate the fact that we're a business play rather than a pure tech play. We've been asked good and pertinent questions and I believe we have answered them to everybody's satisfaction so far. We're happy with the way things have progressed. While we had hoped for a larger initial response, the fact remains that we've only been live for four days and we're just getting our message out there. We see involvement on our slack channels growing and it seems that the number of people, who have heard about us and are at least interested enough to stop by and inform themselves of our project, are also growing, so we seem to be on the right track."
"The bottom line is that we believe that an open dialogue is important and we're happy to answer all questions which are being put to us.”
Assuming the Token Sale is a Success, What Projects are you most Excited to Start Working on?
“I think all of us are excited about our 'social fintech' idea. We believe that this is something genuinely new which has the potential to break new ground and be very successful. While I won't divulge the details at this point, I think this is a project which ties together some very interesting and exciting ideas and offers the potential to establish itself as a widely used service and potential brand."
"From a 'boring' business perspective, we're also quite excited about our ideas to enter the realty market. We believe that there are lots of opportunities in the real-estate market and that with proper funding we can build a quality product which has an excellent chance to receive good market adoption. The beauty of the real estate market is that it is inherently geographically segregated; if you are looking for an apartment in New York, you don't care what's available in Los Angeles. It is this separation which we believe offers an opportunity to enter the market on many levels.”