In my opinion, it is, because it can show investors that the team is ready to bring huge results and has future plans.
As an example - KickCity, event platform where each user is rewarded for event promotion. You can try it today. More information you can find here https://medium.com/@kickcity_io/kickcity-public-beta-5aa66fafc5c7
Of course, a ready-made product is very important for ICO project,
It's because if there is a proof that a ready-made product already made, it will boost investor's trust to invest in that project
Yes it's good to see a working product.
But if they have a working product why do they need millions of ico funds.