What is "reverse ICO"

Jeremy Epstein rightly drew attention (at the end of last summer, but I did not notice) the appearance of the “reverse ICO”. Epstein, of course, did not bathe (he is a marketer) and just did Trent Mac Konahi’s article copywriting about the tokenization of enterprises, where everything is also debatable, but what kind of animal is this “reverse ICO”?

Let's figure it out.

There is such a Coase Theorem (the author of the term “transaction costs” and in general he got the Nobel Prize for it), from which the main rule of tokenization results:

tokenize where transaction costs are higher

And where are they higher? Of course, outside the company (according to Coase, the companies make the costs inside themselves much less than in the surrounding society and this difference is paid by the society):

For example, the costs are higher between the firm and its:

1) clients (b2c)
2) partners (b2b)
3) by the state (b2g)
4) ... other circuits of interaction.

It would seem, where is the blockchain? The only sensible thought in the article by McConaughey, which was copied by Epstein (and even this thought was not Trent himself, he was suggested) is that the blockchain reduces the cost of interaction between firms. It's true.

Now we recall the Coase theorem and its main rule: if you want to grow, look for “expensive / slow” transactions and add lubricants there.

Kik as a messenger is doing well in the business, but in principle in a solvent "first" world he has nowhere to grow (there is a giant well instead of the sky ... and Facebook Messenger + WhatsApp) - that is, b2c tokenization is futile.

Then what is tokenized in Kik, conducting the “reverse ICO”?

Well, probably, shared income with users, you say?

Wrong: Steemit does this (and dreams of a citizen McConaughey getting started on Facebook and Amazon). No, Kik charges tokens to users for ordinary actions (content creation and social activity) and offers them to spend on products / services of partners .

That is, Kik, by releasing tokens, creates an additional channel to monetize its user base.

Here the blockchain should work quite effectively and that is why. A smart contract is a primitive, in general, version of a regular contract:

a) “does not fly” in the case of pure b2b (contracts here are much more complicated, including they have logical branches “if not,” that the blockchain does not fall in principle, etc., etc.), but
b) great for optimizing costs in partner channels (b2b2c).

What are the costs optimized? Costs of control over partner channels.

See it. A smart contract can easily be fulfilled if the consumer (“c” in the formula) puts the goods from the partner (the first “b” in the formula) in front of the product (todies issued by the platform - “b” in the middle).

The task of accounting for all these transactions without a blockchain is very complicated, expensive, and this is the cost of the average “b” (Kik).

After all, how it happens: you opened an advertising channel through the API, partners came there and began to hang ads. You charge for referrals. Once - after all, the partners try to lead the user from the platform to themselves and there they earn on it almost infinitely (see LTV ). All commission income from the second and other sales partner Kik loses, because the costs of establishing such control for him are enormous (you need to build the marketplace, keep track of it and all that).

This part of its “lost profit” at Kik has been optimized. So far, not very successfully , of course, because go find what product from your partner will cause a desire to spend tokens, but from an economic point of view, the “reverse” ICO is about such business tactics.

And, of course, the term is tiny, because Essentially does not reflect. Well, let it be, suddenly take root.