I agree with a lot of stuffs but i am personally not comfortable with a lot of your stands too. A lot of the good icos have no working products and can grow very huge while on the other hand a lot of the icos have working products but fail terribly. One of the best case is that ethereum. It begins as an idea when it started and it takes years and years to iron the product out, even till now it is still in the upgrade phrase. On the other hand, some icos already have products but after the fund rising, products did not get adopted or there were unforeseen problems keep appearing and the team is not able to solve. So to me, what is more important is the dev team.
You are correct that some ICOs with prototypes/products will fail and some ICOs without prototypes/products will succeed. What you have to assess for yourself is the probability. Venture Capitalists have decades of experience and they rarely invest in startups without a prototype/product. They are trying to reduce their risk.
There are a few differences between when
Ethereum had its ICO and today:
- There are far more ICOs today than back then, so you can be much choosier
- Vitalik Buterin was co-founder of Bitcoin Magazine in 2011. This means that he was already a leader in the field, when he started Ethereum in 2014. Most of the ICOs today are not started by leaders in this field. Some of them have only been exposed to cryptocurrencies for a few months. Change Bank's "Blockchain Expert" worked in Inside Sales until 1.5 months prior.
- Vitalik grew up in Canada and Ethereum started in Switzerland. Today, you have many ICOs coming from corrupt countries around the world. In 2014, you didn't.
There is no guarantee that any business will not fail. But, when the ICO team has a prototype/product, they have proven that they can develop. That significantly reduces your risk. With many ICOs, you have no idea if they can. You cannot trust the information on the profile of many ICOs. Just because they can hire somebody to make a video, it does not mean they can write thousands of lines of complicated code. It's like you giving money to someone to fix your car, simply because he says he can fix cars but have never fixed one before.
Y Combinator is one of the biggest startup incubators in the world. They provide a small amount of funding (approx. $25k to 50k) to startups, which usually consists of 2 founders each. Then they build prototypes or products. Then the startups give pitches to angel investors or Venture Capitalists. If prototypes or products are unnecessary, then why do they waste so much time and money before pitching to angels and VCs?
Almost all incubators have startups that consist of usually only 2 founders, that are building prototypes and products. ICOs are stacking their team with a dozen people and they still cannot build anything. With 12 people, they should've built 6 prototypes/products by now. This shows that they are simply stacking their teams with useless people, in order to impress you or sucker you in.