Presearch: The Anatomy of a Token Sale
It’s been an exciting and action-packed 6 months for Presearch!
We’re well on our way to realizing the vision for an open, transparent and community-driven search engine, and we couldn’t have done it without the incredible support we’ve received from our Members!
Please join us as we recap our progress so far and prepare for the next phase of the project.
(Note, if you don’t want to read the story and just want the numbers, scroll down to the end for the TL;DR version)
Project Genesis
In the beginning, there was Google; the academic research project apparently founded to help the world make sense of the vast troves of data scattered over the world wide web.
In the year 2000, 21-year old Colin Pape, Presearch Project Lead, had entered the web publishing world with the creation of ShopMidland.com, a local business directory. This site would introduce many in his home community to Google by featuring a search field that directed people to the innovative new search engine.
Like many of you, Colin was in love with Google’s quirky, friendly nature and superior, advertising-free search results.
Now that they dominate the internet landscape, it’s hard to remember a time before Google, but back in those days, the site was relatively obscure and was spreading through word-of-mouth, particularly local techies who were setting their customers up to use this friendly search engine as their start page.
Google grew rapidly and didn’t miss a beat on their way to capturing more than 90% of search traffic and becoming the gatekeeper to the internet.
In the early days, there was nothing but love for Google; they offered their service up for free and appeared to be totally impartial in their results. They opened up access to information in unprecedented ways, and exposed alternative viewpoints and data sources that would never have seen the light of day otherwise.
Google appeared to be one of the best things that’s ever happened to humanity. And in many ways, that’s true. However, with time, more and more people have seen the dark underbelly of Google; whether it’s the potential for surveillance and ties to the CIA, their domination of media, or anti-trust concerns.
Presearch was born from the realization that Google was simply becoming too powerful, and threatening both users and potential competitors with its overwhelming dominance.
After competing with Google in the local space for a number of years as the CEO of ShopCity.com, Colin had one particular encounter that lead him to the realization that the world desperately needed an open, transparent and community-driven alternative to the search monopoly.
On the morning of July 14th, 2011, Colin and his team woke up to find that their ShopCity.com network of local marketplaces was under Google penalty; searching for their sites, even by name — ex. ShopMidland.com — would return results on the 4th to 8th pages, where no one looked, instead of on the first page where they were before.
With this much power in the hands of one company, you’d think there would be a solid dispute resolution process in place to protect participants in the Google ecosystem, but it turned out that trying to get a resolution to an urgent problem was almost impossible.
In a tense 60-day ordeal, with search traffic cut off, the ShopCity.com team scrambled to get a resolution from Google and in the process discovered that thousands of businesses had also experienced Google penalties, with many having to lay off staff or go out of business completely due to the loss of traffic to their website.
ShopCity.com was fortunate to have the power of local communities behind it and to connect with a prominent lawyer who was contributing to an FTC investigation into Google’s anti-competitive practices. Colin and his team ultimately escaped Google’s penalty box, but others weren’t so lucky.
Around the same time a groundswell of companies were starting to complain about how Google’s tendency to enter and dominate more and more markets were limiting their ability to compete and invest in innovation.
Frustrated with the prospects of a future that increasingly resembled the animated movie WALL-E, where a single company fulfills all of society’s needs, Colin was inspired to build a platform that would be a ‘Switzerland of search’.
In late 2013, Presearch was born as a proof of concept to level the playing field for all different search providers by enabling the user to have a single search field to easily search their favourite resources directly.
The response to the proof of concept was positive and for years it served as the start page for friends and family. Colin explored expanding the product’s reach over the years, but a growing business, new child and lack of viable go-to-market strategy kept it on the sidelines.
In 2017, with the rise of token-based crowd funding, and a continued lack of search competition, Colin assembled a small team to explore the feasibility of launching Presearch as a blockchain-powered search project.
— — —
Immediately, we were struck by how well the opportunity was suited to tokenization, with the ability to reward users with tokens for using the platform to conduct their searches, and then enabling these users to sell their tokens back to sponsors looking to advertise on the platform.
We retained one of Canada’s top blockchain lawyers, Addison Cameron-Huff. Mr. Cameron-Huff is an Adjunct Professor at the University of Toronto and now the President of Decentral Inc., one of Canada’s main blockchain companies, and was previously an early advisor to Ethereum through co-founder Anthony Di Iorio. While he was our lawyer, Addison advised us on the integration of the token into the model, and assisted with the language and strategy for the token sale.
We made the decision to domicile Presearch in Canada, and as such, needed a token sale platform that would enable us to charge the appropriate harmonized sales tax (HST) to Canadian token purchasers, something that off-the-shelf applications would not handle, and which necessitated the development of a custom token sale portal.
We finalized the first draft of the white paper in mid-June. We decided that the project would be divided into two phases; the first being the introduction of the search tool concept that had already been created and tested, and the second being the development of the actual search engine, which is much more demanding.
We began brainstorming potential advisors for the project and came across two individuals with deep experience in search engines and open source search; Rich Skrenta, who’d built a search engine called Blekko that was sold to IBM Watson and resulted in him heading up the program, and Trey Grainger, author of the #1 book on open source search, “Solr in Action.”
Next came early market testing — would potential clients of the service pre-purchase advertising credits for use in the search platform in a Kickstarter-like crowdfunding model? We floated the idea to a number of ShopCity.com’s City Managers, and they were very receptive to promoting themselves on Presearch and optimistic about their ability to resell their pre-purchased tokens to local businesses who would then run ads on the platform.
With a completed white paper and some early market feedback, it was time to broaden the project’s reach and connect with other potential token buyers.
The obvious channel to experiment with was CoinMarketCap (CMC), the most popular site in the crypto space. We knew that most crypto enthusiasts visited the site daily and should be aligned with the project’s messaging about the need to decentralize search. Upon inquiring for advertising rates, we were pleasantly surprised to find out they were quite reasonable — about $5 per thousand impressions at the time. This channel performed extremely well and would form the basis of our advertising and go-to-market strategy in the months ahead.
With the basic strategy figured out, it was time to announce the project and see what kind of reaction we received.
Spreading the word
Presearch announced its launch on July 5th on BitcoinTalk (BCT). We had done a pre-announcement weeks prior, but quickly learned that you can’t just join BCT and start posting whatever you want — you need to build up your reputation before you’re allowed to post photos and other content, and your posts are rate-limited, so you need to wait a few minutes between replies.
We had an idea that BCT was an important way to reach people who wanted to see an alternative search engine come into existence, but truthfully, we were dropped the ball on that channel. The site was just too cumbersome — no mobile version, post throttling, a swarm of people offering services that we didn’t need, and the CoinMarketCap banners were working so well that we didn’t prioritize it as highly as we probably should have.
In retrospect, that was probably a mistake as BCT is known as a great place to reach token buyers, and we should have expended more energy in reaching their audience. We are now actively re-engaging with that community.
While we’re discussing announcements, one other unexpected wrinkle in the plan was the announcement of the launch of another project called ‘Bitclave’ later that same day. Their team immediately started positioning their offering the same way we were— as a ‘decentralized search engine.’ We were a little perplexed by this as it appeared that the project did not intend to actually search the web, but instead was going to connect buyers and sellers directly. Nevertheless, they ran with the same messaging, adopted the same token sale date we announced and generally appeared to model our trajectory. They spent heavily on advertising and definitely created some confusion in the marketplace. That said, we believe there is a ton of room for disruption in the search space, and having some competition provided us with a sense of urgency and validated the market opportunity. We wish them all the best with their project.
Around the time of the announcement, Colin and Thomas Leclair were invited to attend the filming of a documentary for Anthony Di Iorio, one of the founders of Ethereum. That night, Anthony discussed the need to bridge the gap between the world of traditional finance and cryptocurrency and stressed the importance of connecting with forward-thinkers who understood both worlds. The next day, Colin connected with Tim Enneking, managing director at Crypto Asset Management, whom Colin had had read about earlier in a CNBC article. Colin sent Tim an email and offered an introduction to Anthony, figuring the two should know each other. After the call, Tim reached out to say thank you and started asking questions about Presearch. He really liked that the project was based on an existing product, understood the token model, and saw the value in purchasing tokens to promote his fund through the platform.
A couple of weeks later, Tim reached out with an offer we couldn’t refuse; “How would you like to be on CNBC tonight? I’m going onto the Capital Connection show and would like to talk about Presearch. We’ve researched you extensively and really like your model. There’s only one problem…” Tim said. “I’m going to talk about Presearch to thousands of people and you’re going to sell out of tokens before we have a chance to buy any. Can you reserve some for us at the market price and we’ll complete the purchase by the end of the week?”
Tim was featured on CNBC and the next day the Presearch project was catapulted into the spotlight and provided with a great media asset that could be leveraged in our marketing.
During the run up to Lot 1, we were spending about $2,500 a day on CoinMarketCap banners and getting about 500k impressions. In our conversations with CMC, we discovered that we could buy the banner across the very top of the site, and that it would persist for every user visit. The price was double at $5,000 per day, but impressions ballooned from 500k to more than 3 million. It was a no-brainer, but all of the spots were booked.
At the conclusion of Lot 1, reflecting on just how well the basic banners worked, Thomas said, “Why don’t we contact them. Maybe they’ve had a cancellation. Who knows? It’s worth a try.”
Sure enough, about 30 minutes later, we had an email back from CMC — there had been a cancellation and the top banner was available for 20 days from July 30th until August 19th. If we wanted it, we could have it for $100,000 and could expect more than 60 million impressions. It was the largest one-time purchase we’d make during the campaign, but also the quickest. Within 5 minutes we’d replied that we’d take it. That banner would drive our success for Lot 2 and the lead up to Lot 3.
Lot sales
The concept of holding multiple lot sales was somewhat foreign in the token sale space at the time, but made sense to us: higher product discounts for those who bought earliest would reward them for their early support and help offset anticipated increases in cryptocurrency exchange rates, and would provide the team with the ability to make progress toward the development of the completed platform as tokens were sold gradually, rather than sell first and fulfill later.
Five lots were prepared, with the first opening up for sale on July 25th, 2017.
The initial three Lot sales were very successful. The market timing was great — we were still early enough in the token sale boom that there weren’t many projects out yet, and token sale fatigue had not yet set in.
The July Lot sale was right before the Bitcoin / Bitcoin Cash fork, and a lot of people were uncertain about the outcome and were more than willing to part with their crypto to support other projects, and Presearch benefited from this timing.
The next sale less than 2 weeks later, on August 8th, was also strong, driven by our extensive advertising campaign at CoinMarketCap during Lot 1.
Lot 3 was scheduled to take place in August, but due to the summer doldrums, some uncertain crypto market conditions and an opportunity to secure the top banner on CoinMarketCap the first week of September, we decided to push Lot 3 to September 7th.
We had committed to getting our token out by the end of September and began to realize we were running short on time.
We made a decision to automatically roll into Lot 4 when Lot 3 was completed so that we wouldn’t need to spend another month preparing and could speed up the process. It was a success in some ways — our single largest token buyer came in during Lot 3 and ended up buying more in Lot 4, but the feeling internally was more about just ‘wrapping the process up,’ which meant the results were a little underwhelming.
By the time the Lot 4 sale was over, we had generated enough revenue to bring the project to life. However, we felt that we needed to stick to our initial plan and roll out the Lot 5 sale, plus momentum had been picking up:
- We’d recently signed a deal to get the Presearch PRE token included in one of the top crypto wallets, Jaxx
- Jaxx CEO / Ethereum co-founder Anthony Di Iorio had joined our advisory team
- Lot 5 was timed to coincide with our beta release (more on that later), and we’d hit that deadline and were getting strong reviews
- We decided to do a ‘go big or go home’ contest to award 10 BTC to the person who referred the most token sales
Things looked pretty good in the weeks leading up to Lot 5, but as we got closer and closer to the unlocking of Presearch Tokens for transfer, the reality of the situation became more and more clear; any missteps with security could negate all of the hard work we’d done and put the project in jeopardy.
In particular, a handful of missing token situations made us start questioning everything we thought we knew up to that point. It turned out to be due to phishing attacks and some stolen passwords being used that caused the issues, but it was a great incentive to do even more on the security front.
We ended up implementing additional checks around token withdrawals — the requirement for users to confirm withdrawals via email and the requirement for an admin to manually approve them after that. As well as increased general security — captchas to complement rate-limited password attempts and automatic account lock-outs, 2-factor authentication on Presearch.org, additional code reviews and penetration testing, and the creation of a formalized bug bounty program.
We also wanted to focus our efforts on improving the beta product, and so dedicated more time there than to promoting the token sale. We are so excited about the product and know that with the right execution and marketing there, we will drive more revenue than through the token sale model anyway.
All of the Lot sales were successful in their own way, each with unique experiences and learnings, and in total sold 155m tokens, generating ~$16M in revenue.
In retrospect, we believe that five lot sales may have been too many, as some fatigue set in among both potential customers and the team. Running a successful token sale is extremely intense:
- There’s tons of marketing and PR involved — interviews, creative, ad buying, etc. to create the awareness and excitement that encourages purchasers to take action during the sale.
- During the actual sale, due the way we ran our sales with a high-touch, semi-automated process (other Ethereum-only smart contract sales are completely different), the customer support load is incredible; the Lot 1 token sale for $1.5M had us up for more than 24 hours straight, typing in live chat windows and responding to emails until our fingers were numb. The inquiries were just non-stop and it was kind of an ultra-marathon of online business. The team really excelled here, and we had amazing feedback and built some great relationships in the process, but it wasn’t easy. We did streamline things as we went, so it got a little easier with time, but each sale was still a major production.
- There was ‘burnout’ of our mailing list due to the seemingly endless focus on selling tokens. We ended up with more than 17,000 people who subscribed to our mailing list, and it was the core driver of our results, but toward the end, we were probably pushing our luck with early purchasers tired of hearing about more token sales.
- Contests can likely be effective, but you really need to nail your game theory. We went too big with our 10 BTC contest and didn’t have enough credible co-sponsors participating to make it seem legit. A major participant had to drop out, and when that fell through, we should have just aborted the contest, as it didn’t have the desired effect. Only those who already knew and trusted us participated, and most of them had already bought tokens in previous Lots and had already referred their networks. While it did not meet our initial expectations, we are confident that the community will benefit from the exercise in the long term. The results of the contest will be announced on Friday, December 15th.
Overall, we feel pretty good about the results we were able to achieve and the relationships we’ve built along the way. We consistently had great feedback on our customer support, and are glad that we took more of a manual approach to handling the token sale rather than an automated ‘ICO’ where people send ether to a smart contract. It gave us an opportunity to get to know our customers, help them with their challenges and needs, and build more of a community.
At the end of the day, the revenue we generated was amazing and will ensure that this project reaches its potential, but what I’m most proud of is the thousands of relationships we’ve created and the community that’s sprung up around them.
Thank you to everyone who’s participated. We appreciate your support, and this community and project wouldn’t be the same without you!
Beta release
On November 9th, 2017, Presearch delivered the first version of its beta search tool — right on schedule. The tool enables members to easily search the web’s top sites and earn rewards at the same time.
The product is fairly simple at this point, with limited customization, but by bringing the world’s best resources together, it’s already delivering huge value to users.
We’ve had a stream of positive feedback since we launched.
The product has been very sticky, with almost half of all beta testers becoming daily active users and generating more than 20 page views per day, per person on average.
And this is with a limited minimum viable product (MVP) that is still missing tons of features and improvements that will make it much easier to use.
We couldn’t be more excited about the response so far, and the future of the product is really bright!
In this version, you can earn up to 8 PRE per day (0.25 PRE per search), a number which will be reduced as the platform is released on a wider scale. Tokens currently cannot be withdrawn, but you will be able to remove them in the future.
If you’d like to register to be a beta tester, you can do so at www.presearch.org/register. There may be a wait of a week or more, but token holders will be approved faster. If you are a token holder and haven’t been approved within 8 hours, please send an email to info@presearch.io.
Community transition
Immediately after the conclusion of the Lot 5 sale, and as per the white paper, Presearch.org Global Limited handed over control of the Presearch Telegram channel (https://t.me/presearch) to the Presearch community and opened up a news broadcasting channel (https://t.me/presearchnews). It also transferred over ownership and control of the Twitter account (https://twitter.com/TeamPresearch) and will operate via a broadcast account (https://twitter.com/presearchnews).
The Presearch Community is in the process of forming a Decentralized Autonomous Organization (DAO) dedicated to promoting the Presearch project and holding the developers and managers accountable.
Presearch.org has provided this organization with an initial endowment of 550 ETH (https://etherscan.io/address/0xd663445f453fe1e95a23e4a205f8fe009a705547).
It will be independently-administered by a great entrepreneur named Sherry Cooper while the governance structure is finalized. You may remember Sherry from the early days at Presearch. She had to leave the organization due to the Bahamian hurricane back in September, and has since relocated from the Bahamas to Panama to take on this important duty.
We are super-excited to begin this process and to leverage the best practices employed by other DAOs as the Presearch Community group forms. A round table group to steer the effort is planned, with members sourced from within the growing Presearch community on Telegram in particular. These people will likely be nominated and confirmed through an unofficial vote, as the ground rules are not yet in place. It would be for a short time period of say 6-months while the governance model is put into place. Fortunately, a number of passionate, talented and visionary individuals have emerged, and the future of the DAO in their hands looks very bright.
Ultimately, a number of local groups will be formed, with strong interest already expressed from members in Greece and Poland in particular.
Moving forward, Presearch.org will focus on product development, sponsor acquisition, and marketing, and will begin reporting to the community as it ultimately transitions the ownership and control of the project over to the DAO group.
Next steps
In the near to mid-term, Presearch is focused on building a search resource that is the best way to access the web, while forming the community-focused organization that will ultimately control and own the project.
Short-term road map:
- Building out of internal systems to support the evolving customer base
- Browser extensions for setting Presearch as your start page and new tabs in Firefox and Chrome
- Customization — changing default search providers
- Customization — creating custom resource collections
- Query classifier / traffic director to determine which type of search is being done and the best way to handle it
- Autocomplete / autosuggest index
- Basic keyword advertising platform
- Sharing of custom configurations so that others can copy your settings via a dedicated URL
- Enhanced fraud detection and prevention
- Formalization of DAO organization and governance model
Additionally, in the next 90 days, Presearch will continue to open up access to the platform and will allow for new members to sign up via invitation.
Presearch is just beginning on this great journey, and there are so many important milestones ahead as we build the decentralized search movement. We are fortunate to have such a passionate community forming around the idea that the world deserves an open, transparent and decentralized search engine, powered by the community. We are so happy that you have joined this amazing team that is making the vision a reality.
TL;DR version
Sale info:
- 155,000,000 tokens sold
- $16m in token revenue
- 5,117 invoices
- 4,514 unique buyers
Token info, transfers & usage:
- Contract address: 0x88a3e4f35d64aad41a6d4030ac9afe4356cb84fa
- Token holders: https://etherscan.io/token/0x88a3e4f35d64aad41a6d4030ac9afe4356cb84fa#balances
- Tokens were unlocked on November 30th at 12:01am
- You can withdraw your tokens using https://portal.presearch.io/account/redeem and should be complete within 24 hours (though delays with the Ethereum network could change that)
- Instructions to withdraw to MyEtherWallet can be found here: https://www.presearch.io/uploads/TokenWithdrawal.pdf
- Jaxx wallet instructions coming soon!
- If you leave your tokens in https://portal.presearch.io, you are eligible to be listed on the Sponsors page (https://presearch.org/sponsors) — there are no other bonuses or incentives being offered
- To maintain the intended token economics, the number of tokens in circulation has been reduced from 250,000,000 to 170,000,000
Beta access:
- You can sign up for the beta version of Presearch at https://presearch.org/register
- Once you are signed up for the beta version, you should set it as your home page and start searching through the platform — you can earn up to 8 tokens per day at a rate of 0.25 tokens per search. Please note that tokens are ‘real’, but currently cannot be withdrawn from the system. Expect this in early 2018.
Advertising:
- Once you are signed up, you can transfer your purchased tokens into your advertising account here: https://presearch.org/account/tokens/transfer (note that your beta and portal accounts must be linked, and this is currently a one-way transfer)
- Create and manage your ads. The first ad unit is a site sponsorship at a cost of 50 PRE per thousand impressions (as of 12/11/2017 — pricing subject to change). Run an ad here: https://presearch.org/account/sponsor-ads
Miscellaneous:
- Do not forget to activate 2-factor authentication (2FA) on your account. 2FA will make your account more secure, and help prevent someone from breaking in and taking your tokens.
- Due to regulatory concerns, we are unable to discuss exchanges, and instead direct you to the Presearch Community Telegram channel with your questions (https://t.me/presearch) — if you choose to resell your tokens via an exchange, you do so at your own risk, as this is not the intended use for your tokens.
