Investments in Crypto PR Could Indicate Traction For Small Projects

In the world of digital assets and crypto tokens, success is driven by a single factor - network effects.

Essentially, the value of each token is amplified by every additional user who adopts it. More people on a network enhance the value of the network which attracts more users to adopt the platform. It’s a virtuous cycle of value creation that has led to the adoption of nearly every major social technology in recent history - from smartphones to social media.

Blockchain technology is yet another social innovation that relies on these network effects. However, startups and young teams struggle to gain enough of traction to kickstart these network effects for their project. Developers may refuse to create solutions for a company that is only a few months old and has only a handful of users. Meanwhile, users may be reluctant to sign up for a platform that lacks mainstream adoption, a recognizable brand, or a broad selection of features and decentralized apps.

Startups with enough of resources can beat this chicken-and-egg problem by investing in the services of a professional crypto PR team. These external agencies understand the market, have access to qualified investors, and know how to deploy digital marketing strategies that can drive wider adoption.

Crypto PR agencies have managed to modify traditional public relations and corporate marketing techniques for the digital age. Their search engine optimization, online advertising, paid promotions, content creation, crypto news creations and event marketing strategies can act as a launchpad for a young blockchain startup.

The right agency can support and drive growth for the long term.

With this in mind, investments in PR and marketing could be used as an indicator of future value. Investors can examine the marketing team and PR agency’s credentials to see if the startup founder has managed to assemble A-list talent to drive the company forward.

Recruitment of industry veterans and experienced marketing experts is a leading indicator of wider adoption in the near future.

However, there are downside risks to investments in PR and marketing. The old adage “Nothing Kills a Bad Product Faster than Good Advertising,” applies to public relations and crypto marketing too. An excellent may expose a product to the wider public before it is fully ready or all the flaws have been uncovered. This can cause early and irreparable damage to a startup’s reputation.  

Investments in PR could also chew into the limited resources a firm has at its disposal. Hiring a well-known corporate marketing giant could cost six or seven figure sums annually. This hefty amount can quickly chew into the limited funding startups usually start with.

Investors need to bear these downsides risks in mind. The due diligence process before any blockchain startup investment should reveal if the investments in PR and marketing are yielding positive returns or diminishing cash flow.  

The most successful crypto startups and blockchain companies have managed to strike the right balance between investing in sophisticated marketing strategies or top-notch PR firms and creating value for users, investors, and developers across their network.