- What sort of demo do you have on the website? Or is it just a basic description of the product and a list of features?
- Does this mean you get payment processing setup before development every time?
- How do you manage returning money if you decide not to do it?
I never take any money I just log the actions people took on the site. If it's a buy button, then you can just say, "Thanks for your interest. We are launching soon."
It probably depends on the audience, but people are more understanding than you'd think about the need to look before you leap, especially when they know you're just a solo entrepreneur.
Now the dev can go build a working version putting in 200-500 hours into the MVP and find the next set of 20 people who are ready to use that software, with validation at hand.
However, I agree that better messaging can be used instead of straight up misleading people. Since if it does become widely practiced, people will generally become mistrustful (again, the odds of that happening is low).
~ 2 cents
I'm not denying that poor behaviour can net more customers -- on the contrary, it's by far the easiest way of doing so. My response was in the domain of ethical, not commercial, calculus.
Your "I think it's much more likely" is a bit odd considering what you know about me (ie. almost nothing). "Outrage" is also pretty exaggerated. There are millions of commercial outfits out there in the world, the vast majority of which I'll never have anything to do with. There's a low bar for me to exclude just one more from consideration.
I would have validated the viability at the cost of losing one customer. I think most would be willing to take that loss.
The demo can be extremely simple, a sentence describing the concept and a (fake) screenshot.
Be aware that presenting the same product in different ways to different people lead to very different results, so you can run multiple tests like this to find the approach that has the better chances of working.