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An Open Letter From Evan and Ryan Regarding Dash Marketing

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Ryan Taylor

Well-known member
Foundation Member
Background:

This year, we witnessed a dramatic change in the resources available to the Dash project, the scale of which is unprecedented in our short history. Leveraged wisely, this is obviously a good thing.

Our first priority for these incremental funds is obviously to fund ongoing development. There is an upper limit to the impact additional resources can accelerate Evolution, and we are at the point that resource constraints are not hindering those efforts. The team currently in place is well positioned to deliver Evolution efficiently.

There is still work to be done to ensure we can retain the top talent we have working on the project, including the ability to offer regular employment and benefits commensurate with the market to fill ongoing roles. We are still working on these additional components to make working for Dash attractive long-term, but we have a path to completing that work within the next few months.

In the meantime, our higher market capitalization and the rate at which it has risen opened up much larger budgets at the same time that the Core Team’s balance sheet expanded from the price increase, causing us to discontinue budget requests for most funding needs. This has left an expanding unallocated budget as the price increased for six consecutive months (and about to experience our seventh).

In this environment, there is a clear desire on the part of masternodes to put the excess budgets to work on marketing initiatives. While we share this view, and marketing makes for a great “flexible budget”, we have several concerns with the approach and tone that some of the marketing initiatives are putting forward. This letter outlines our philosophy and a suggested approach to marketing that we hope shapes the opinions of the community, and provides some foundation for unifying our approach to marketing. We also outline our own plans for ramping up marketing in a more cohesive manner.

Our objective in this letter is to provide an alternate perspective on the marketing topic that we believe will enhance the community’s ability to engage in critical thinking on the marketing topic.

Our observations and concerns:

Over the past couple of months, we’ve observed that the entire digital token / currency industry has become feaverish. Evidence of bubble-like exuberance was readily visible at Consensus and Token Summit this year. There are several parallels with previous asset bubbles - claims that the market is in a “land grab” for market share is reminiscent of the “land grab” for eyeballs during the .com bubble. Insufficiently educated investors are indiscriminately investing tens of millions blindly in ICOs that have little to show except a whitepaper and a vague description of a business plan.

In this environment, it is easy to succumb to the fever, and many Dash investors - both old and new - believe that Dash can effectively market itself as an investment vehicle on the basis of its past performance. While we’ve not seen much advertising of this nature yet, we’ve begun seeing it openly discussed and proposals submitted to the Core Team by community members for this exact style of advertising.

We believe there are significant risks to the project, our users, and our strategy by following such approaches. While not all marketing carries this risk, it is inappropriate to market Dash to potential investors that likely lack the expertise to properly evaluate cryptocurrencies and their risks, nor whose risk profile matches the high-risks of this market.

We differentiate this type of marketing with marketing of Dash’s current utility as a payment network and value propositions to appropriate audiences. Examples include Dash being the only way to obtain 15% off gift cards at Bitcart or the fastest and cheapest way to transfer funds between exchanges or fund your WhaleClub account. One could even argue that Dash is a superior store of value in select geographies like Venezuela where inflation is currently over 30% per month. This is value and utility Dash brings to the market today.

What is concerning about marketing Dash as an investment?

In an environment in which ICOs are actively marketed, it may seem “normal” to market Dash as an investment. However, we believe that over the course of time these practices will be considered unethical and in many cases illegal, and primarily serve to tarnish Dash’s brand. Many if not most ICOs are clearly securities under the law when applying the Howey Test. In other words, coins are marketing unregistered securities to unqualified investors. This situation is unlikely to last, and we should not seek to mimic this approach.

While we do not believe Dash technically qualifies as a security because no portion of the coins are issued by a centralized entity, we encourage the community to operate in an abundance of caution. Dash’s most valuable asset is its reputation, and in the near future the practice of marketing digital assets as an investment may be frowned upon, especially if the bubble pops and investors are seriously impacted.

We believe that advertising Dash as an investment rather than on the basis of its utility as a payment network would be similar to Microsoft advertising the increases in its stock price rather than the utility of its software in the midst of the .com bubble. In time, we believe that this type of marketing will be viewed in an extremely negative light. Public opinion will shift and in the long-term, it would behove the community to avoid engaging in this behavior.

In addition, any gains from this type of advertising would be temporary. As soon as the marketing is removed, the artificial influx of investments would deteriorate followed by the price. Wild price appreciation and crashes would actually detract from Dash’s utility as a currency and medium of value transfer, thus directly working against our stated mission and vision. We encourage the community to take a longer-term view to their investments and refrain from hyping the coin… there is plenty of hype inherent in the industry already.

What about giveaways?

While we often reference PayPal’s famous $20 sign-up bonus and referral program in presentations as one example of incentives that grew a new payment solution, PayPal’s situation was different from ours in meaningful ways. The main difference is that they had addressed the other two adoption factors… the product was faster and easier to use than credit cards or bank transfers and was more secure. The incentives were therefore effective at growing their business because a high number of users tried the product and became recurring users.

Dash is unlikely to witness the same effects in the absence of Evolution. Our hypothesis is that incentives will have greater effect at a later time once the product value proposition is stronger.

Even though we would discourage repeated giveaways, the recently completed giveaway is not wasteful. We can analyze blockchain activity for those funds getting used and for the deposit addresses seeing additional activity. We understand these funds were given to different groups including a large concentration within remote villages. We might gain some valuable insights from this data, and we encourage analysis of the results.

Isn’t any marketing better than unused budget?

As stated at several points in the past, dating all the way back to 2015 when the governance system first launched, the possibility exists to “resurrect” unused funds and allow them to carry over from previous periods. Although the protocol does not currently support this functionality, we as a network can choose to implement that without affecting the committed emission limits. This would provide the network greater flexibility to “save” its treasury budget for when the funds are needed, and eliminates the perceived need to spend funds simply because they would otherwise be wasted. Funds saved in this way are likely to be worth a great deal more when spent in the distant future, for a much greater purpose than simply filling up the budget limitations each month.

We could easily resolve the question of whether unused budgets should be rolled over to future periods through a simple network vote.

A potential path forward:

As stated earlier, we are not opposed to marketing. Marketing can increase awareness of the Dash brand and our unique value proposition, and drive value for our business partners. We encourage the community to orient any marketing in these directions.

In fact, by driving actual use we protect our investment and downside risks. When real commerce is flowing through Dash’s ecosystem, it means Dash can never drop to zero, and the more actual commerce we drive the higher our price floor becomes. This is equally, if not more, beneficial to providing our investors with a stable and growing network than any one-time gains from attracting trend-following speculators that will exit when the trend shifts downward.

Marketing is both an art and a science. We believe that the best path forward is engagement of experts / professionals that can skillfully craft, test, measure, and refine a cohesive multi-channel marketing strategy featuring consistent messaging and branding.

Here are the areas we feel marketing aligns most closely with our goals:

General awareness: Industry events and trade shows, general branding, and communicating our vision and mission to general audiences

Features: Many digital currency users are unaware of Dash’s features and benefits. Increasing awareness of our instant payments and low transaction fees are examples of messages that can increase awareness for what makes our product unique.

Business partners: Advertising the services of our business partners (assuming they approve of the campaign) both encourages the use of the Dash network and provides incentives for merchants to integrate with Dash and continue utilizing it. For example, advertise that using Dash can you get 15% off Amazon gift cards at Bitcart. We could also advertise to businesses the benefits of integrating with Dash.

Use-cases: Build awareness of specific use-cases, like cross-border money remittance or speed-sensitive transactions.

Each of the above drives the actual use of our ecosystem forward, while avoiding the hype of investor-targeting advertising. Decisions made regarding marketing will have lasting or even permanent implications to our brand, product and reputation and we feel that moving forward, we should be careful and exercise caution. In these situations we recommend moving slowly, sure of the ramifications of each step we take.

What is the Dash Core Team planning?

For the past two months, the Dash Core Team has been pursuing a service contract with a leading professional multi-channel marketing firm to start formulating an effective, efficient, and cohesive marketing plan that aligns with the product roadmap and strategy. Selecting a firm has become more challenging than we expected, as we’ve encountered potential client conflicts that have delayed our progress.

Once a firm is finalized, we plan to test at small scales various marketing strategies, messages, and channels to determine what is most effective. We feel the outcomes from these exercises will both inform the specific expertise we might require in hiring a marketing executive, and will help us formulate strategies for the launch of Evolution.

In the meantime, we encourage the community to refrain from potentially brand-impacting marketing tactics, especially those that focus on marketing Dash as an investment vehicle. Dash has always been focused on delivering value, and is characterized by long-term investors that believe in our mission and vision, and we hope to continue that long-term mindset well into the future.

Evan and Ryan
 
What was the rational to go with a marketing firm rather than building these capabilities in-house?
Primarily three reasons:

1) As stated above, we feel that the initial guidance provided by a professional marketing firm would contribute valuable input into the specific expertise we would need to target for the market executive position. For example, if the marketing approach will likely depend on online and social media marketing, we would target those skills. If we find that a more well rounded media mix including traditional channels like radio and television is more appropriate, then we might target a broader skill set.

2) Our initial marketing efforts will be smaller and aimed more at testing the effectiveness of various approaches. A smaller scale campaign may not initially require a full-time in-house resource to oversee it. We can manage this temporarily with existing resources until we start actively ramping up the marketing efforts and require resources.

3) We already have fairly high fixed expenses once benefits are added and all outstanding positions are hired. By outsourcing marketing, we ensure marketing costs can ramp up or down quickly as budget allows. Building this capability in house would permanently raise our fixed expenses at a time when those constitute still a high share of our budget. The only reason we haven't been drawing much from the budgets recently is that the price increases have allowed us to rely on our increasing balance sheet, but unless the price continuously increases, this will not always be the case.
 
We could easily resolve the question of whether unused budgets should be rolled over to future periods through a simple network vote.
Great, let's do it then !

For the past two months, the Dash Core Team has been pursuing a service contract with a leading professional multi-channel marketing firm to start formulating an effective, efficient, and cohesive marketing plan that aligns with the product roadmap and strategy
Was that announced somewhere ? Maybe I missed it...

In any case, I noticed that the more time passes by, the more communications from Core Team about ongoing projects or initiatives or even reports (still no video of the Q1 call...) are scarce or late. Many topics are raised on the forum and often the only feedback the community gets is : "we are busy, you'll hear from us soon".

Marketing has been a crazy topic for the past month and many people have been solliciting the Core Team to provide a response which we receive only now (if I'm not mistaken - in that case, my apologies, could you even please share us a link ?).

So, again, two answers community is used to receive from Core Team :
  • We are busy, be patient
  • We can't give info as carrying out our plan and our partner ask for discretion
I definitely understand, they are valid arguments. But still, we should talk about it.

As many have suggested, it is paramount that a person in charge of communication should be appointed.

I don't see any reason at all why the video takes so long, it is really not acceptable. Many people involved, many timezone, yes. Plus, everybody is busy. But if there is a will, there is a way. If there is not, that might say a lot about how sometimes communicating to the community from the Core Team is seen : maybe not that important...

My aim is not to offend anyone but to try to have the Core Team put itself in my position (and I am sure of quite a few on this forum), a position where we don't receive much information.

If you guys take such a long time to get everything you need to post a video that was a public event, how long are we supposed to imagine we will be waiting when it is about sensitive informations ? That's a worrisome actitude.

About those sensitive informations, I liked the way you guys comminucated about Kraken, which has been announced much in advanced as a "major exchange". But what about that marketing firm you've been in contact with. How come we didn't know when the forum is getting crazy on the forum ? (Again sorry if it somewhere on the forum and I just didn't see it, but it is unlikely)

So I believe, yes, a pesron in charge of communication should be appointed, and the Core Team should also set a clear path explaining how they see their duty of communicating toward the network and what safeguards are in place. It's important that we agree on that as community.

Just at the top of my head, that could be a vow from the Core Team to file a report on their position/opinion every 2 months top on Marketing, Dev, etc. Like that, the community will know that they will get a clear position from Core Team every two month on which ever topic is hot in the forum.

It's really important a solution is found here because we really are in a particular and new situation : Masternode are the board of directors but they cannot have access to all the information they should because those are shared publicly which can be a problem to do business... But that situation converts Masternodes not in a board of directors but only shareholders that wait for the official public press release, like everybody.

A solution needs to be found...
 
Agreed.
However, Ryan, do you think we (Dash) need to start looking for a CMO right now or not? Keeping in mind that hiring such a person would take a lot of time, as well as creating marketing strategy and starting one, while the Evoluiton is about to start just in 1 year, according to roadmap. That investigation, you mentioned, does it fit in time with roadmap? When will be the first visible results? I don't mean huge rising in market cap, I mean public marketing strategy, "most effective marketing strategies, messages, and channels" (exactly as you said), detailed "marketing roadmap" based on value-approach, which one I undoubtedly support. Marketing roadmap linked to main tech-roadmap, which Evan is already started to publish - do you think we need it or not?
 
Great, let's do it then !


Was that announced somewhere ? Maybe I missed it...

In any case, I noticed that the more time passes by, the more communications from Core Team about ongoing projects or initiatives or even reports (still no video of the Q1 call...) are scarce or late. Many topics are raised on the forum and often the only feedback the community gets is : "we are busy, you'll hear from us soon".

Marketing has been a crazy topic for the past month and many people have been solliciting the Core Team to provide a response which we receive only now (if I'm not mistaken - in that case, my apologies, could you even please share us a link ?).

So, again, two answers community is used to receive from Core Team :
  • We are busy, be patient
  • We can't give info as carrying out our plan and our partner ask for discretion
I definitely understand, they are valid arguments. But still, we should talk about it.

As many have suggested, it is paramount that a person in charge of communication should be appointed.

I don't see any reason at all why the video takes so long, it is really not acceptable. Many people involved, many timezone, yes. Plus, everybody is busy. But if there is a will, there is a way. If there is not, that might say a lot about how sometimes communicating to the community from the Core Team is seen : maybe not that important...

My aim is not to offend anyone but to try to have the Core Team put itself in my position (and I am sure of quite a few on this forum), a position where we don't receive much information.

If you guys take such a long time to get everything you need to post a video that was a public event, how long are we supposed to imagine we will be waiting when it is about sensitive informations ? That's a worrisome actitude.

About those sensitive informations, I liked the way you guys comminucated about Kraken, which has been announced much in advanced as a "major exchange". But what about that marketing firm you've been in contact with. How come we didn't know when the forum is getting crazy on the forum ? (Again sorry if it somewhere on the forum and I just didn't see it, but it is unlikely)

So I believe, yes, a pesron in charge of communication should be appointed, and the Core Team should also set a clear path explaining how they see their duty of communicating toward the network and what safeguards are in place. It's important that we agree on that as community.

Just at the top of my head, that could be a vow from the Core Team to file a report on their position/opinion every 2 months top on Marketing, Dev, etc. Like that, the community will know that they will get a clear position from Core Team every two month on which ever topic is hot in the forum.

It's really important a solution is found here because we really are in a particular and new situation : Masternode are the board of directors but they cannot have access to all the information they should because those are shared publicly which can be a problem to do business... But that situation converts Masternodes not in a board of directors but only shareholders that wait for the official public press release, like everybody.

A solution needs to be found...
Fair criticisms... we could use more support on the communication side and there is no excuse why the core team call is not posted. If it was lost due to the WebEx crash we encountered during the call, we should at least communicate that. I do not know the status, but I will find out.

I used to fulfill much of this role for the core team and provided far more frequent replies and updates and as my time is stretched thinner and responsibilities have expanded it is becoming harder for me to continue fulfilling that piece. We will discuss the possibility of adding staff specifically to focus on communication.
 
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Agreed.
However, Ryan, do you think we (Dash) need to start looking for a CMO right now or not? Keeping in mind that hiring such a person would take a lot of time, as well as creating marketing strategy and starting one, while the Evoluiton is about to start just in 1 year, according to roadmap. That investigation, you mentioned, does it fit in time with roadmap? When will be the first visible results? I don't mean huge rising in market cap, I mean public marketing strategy, "most effective marketing strategies, messages, and channels" (exactly as you said), detailed "marketing roadmap" based on value-approach, which one I undoubtedly support. Marketing roadmap linked to main tech-roadmap, which Evan is already started to publish - do you think we need it or not?
I do not feel that we should be conducting a search for a CMO right now, no. Hiring one will take some time, but more like 6-8 weeks, not the year you're fearing. That said, we cannot wait until May of 2018 to hire someone. Building and implementing a marketing strategy takes many months. If we had someone in place by the end of this year, it would be sufficiently early for the launch of Evolution. I would not recommend waiting that long though. I think once we have a marketing firm selected, we will quickly obtain a better understanding of our needs and can hire for the position. I just wouldn't hire someone first before assessing what is the most likely approach.
 
Yea I totally agree with Leonidas. I get that you are all incredibly busy so If funding is not an issue as you always say then hiring some people dedicated to communication really shouldn't a hard choice.
 
I do not feel that we should be conducting a search for a CMO right now, no. Hiring one will take some time, but more like 6-8 weeks, not the year you're fearing. That said, we cannot wait until May of 2018 to hire someone. Building and implementing a marketing strategy takes many months. If we had someone in place by the end of this year, it would be sufficiently early for the launch of Evolution. I would not recommend waiting that long though. I think once we have a marketing firm selected, we will quickly obtain a better understanding of our needs and can hire for the position. I just wouldn't hire someone first before assessing what is the most likely approach.

Thanks for the answer!
One more thing, if you don't mind: do you think marketing team should be an independent division reporting to DAO or should it operate within Dashcore?
 
Yea I totally agree with Leonidas. I get that you are all incredibly busy so If funding is not an issue as you always say then hiring some people dedicated to communication really shouldn't a hard choice.
Funding isn't the only consideration... searches, interviewing and onboarding takes time as well. And we have several searches underway already or on a waiting list. We need to build out the PM, business development, and QA/testing area as well, so we're adding people as quickly as we can. I think once we get through that backlog we could address the communication role.
 
Thanks for the answer!
One more thing, if you don't mind: do you think marketing team should be an independent division reporting to DAO or should it operate within Dashcore?
I think that there are some functions that make more sense to be standalone and some that make more sense as part of the Dash Core Team. For example, journalism-type organizations should clearly be separate from the Core Team and to be effective must have complete independence to criticize our activities. In my opinion, the marketing function should be closely tied to the product strategy, business development strategy, brand strategy, and other public facing communications (like the website and PR efforts) - those all need to be working closely together. Given the benefits of tight integration / collaboration are critical to an effective marketing function, I believe that marketing should be part of the core team and not operated independently. But that decision isn't up to me... the MN owners have the ability to start a separate entity to conduct marketing campaigns and we will make every attempt to work collaboratively with those entities (should they be created) to make Dash marketing aligned with those other areas. I just don't see any benefit in having them operated separately from other functions.
 
When I see someone like Amanda B Johnson posting in the subreddit about how stressed she is I see that as a problem. For me, Amanda is a major part of the core team and if people believe she isn't being supported then it's not a healthy sign as she has been instrumental in both the uptake in the adoption of Dash and keeping the community informed - Amanda is a great vehicle for this and this should continue.

As already pointed out, informative timely communications about what is being planned and what has been happening behind the scenes is just as important as marketing to people outside the community. That way, interest in Dash grows more organically. When the community knows what is going on because it has been informed properly, it is less likely to form false assumptions, the subreddit Reddit doesn't fill up with mindless posts with people in disagreement about whats happening and everyone feels a lot more confident. We grow together!

Thank you for this update. With this and the recent roadmap it's a very good start - please continue.
 
I am happy to read this. I totally endorse your view. As "shareholders" of a currency we want it to success, and the only feasible roadmap for a currency to success is the one that aims to get the currency used by everyone as a currency. Promoting investing does not take Dash to a point closer to its goals. Neither Dash, nor any other currency. A currency has its value locked to the number of transactions per unit of time it does for trading goods and services. Promoting investment without an underlying value is dangerous. If it doesn't succeed in leveraging real everyday transactions for goods and services, it takes the currency to a inevitable pump and dump.
 
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I mostly agree. Good job. This is very logical analysis.

I have few thoughts to share (you don't have to trust me on this and I encourage you to do your own studies/research):

1. In my opinion doing even only this:
advertising Dash (...) on the basis of its utility as a payment network
will inevitably also lead to:
attracting trend-following speculators that will exit when the trend shifts downward.
I don't know many assets immune to price manipulation and speculation.

Even now people are investing in Dash mostly as speculation, betting on it's future adoption. Its probably more long term (maybe because of Evolution promise) than i.e. ethereum but still.

2. IMO we need more long term than short term investors but how can we reach the first group without drawing attention of the second?

Many short term investors study their assets after buying. Some of them only then are able to realize dash superior utilities over other cryptos.

3. There is also something like "first love" psychological effect. First asset you invest in is favored by you because of confirmation bias.

There are so many scams, ICOs, shitcoins. Why not give inexperienced investors chance to hear about Dash and let them invest in good quality (even when they don't fully realize that) project ?

4. I 100% agree that it shouldn't be advertised as "investment vehicle".

5. Market (investors) too often isn't logical.

I fear that even with our superior technology (sole fundament of long term utility) but without sufficient marketcap (people holding and being aware of something like Dash project) we can be left over as one of many niche altcoins.
 
Also, saving non-spent budget is the best strategy at this time. It adds to the present value, because the creation of a bunch of currency units is postponed, and there is more certainty that when they'll be released, it'll be for a cause that will probably add yet more value. Of course, if the final value added was less than the interest of the investor, then the strategy would have been a failure, because the investor would have preferred to cash that out the extra value added by the non-created coins now and make a different investment. Nonetheless, because of the Dash potential for succeeding, the strategy failure is very unlikely. That is without saying that if Dash succeeds as a currency (and we all hope that t happens) at some point it will lose its potential as an investment and will just retain its investment value for having a limited supply. Should that happen, the strategy of saving the unspent budget should be revised.
 
I like it, however I would encourage Ryan and Evan not to encourage the community to do or not do a thing.
Why? Isn't more information, including informed opinion, better? MN's can sift how they will.

The criticism has been over lack of communication, and already they should limit it?

I hope they encourage us more, provided they give their reasons so we can evaluate them.
 
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