So you want to find the next big coin before it goes up 5x? If you do your own research you can be ahead of the market which is how you earn the best returns. Venture capitalists evaluate early stage companies every day. These are some of the metrics they look at.
Team
Team is vital, to have a chance of success they need the skills to execute on what they have planned. An easy way to evaluate a team is to look them up on LinkedIn. What to look for:
*Does the CTO have technical training and experience launching a product? (Previous crypto experience is ideal here)
*Does someone on the team have experience in the industry they are targeting? (They will avoid the typical pitfalls)
*Would you hire each team member for their role? (Look at Degrees, Professional Experience, etc)
Market
Market is crucial because it determines the size of your possible returns. A larger market has a larger upside, all things being equal. Calculating the future revenue of a company by market size is not an exact science but you can do some napkin math to get a good idea. The basic idea is that you take the number of people likely to use the product or service, and multiply it by the amount they will spend.
Here is how it would look if you used Facebook as an example: Facebook has about 2 billion users and each user is worth on average around $15 a year in advertising. If you multiply that together you get $30 billion which is within 10% of Facebook's actual revenue for 2016.
The idea here is not to get an exact number but just to give yourself an idea of the size of the opportunity. For cryptocurrencies, a higher estimated revenue or volume of transactions should lead to greater demand for the currency, and a higher value.
Technology/Plan
The tech or idea is a lot trickier to assess. An easy way to do this is to find someone in the target market. Explain the concept to them and see what they think. You could be a prospective user for the product which might make this easy. Keep in mind if you are already considering investing it might make you biased. One way to counteract bias is to mentally assess why it might not work even if you believe it is a great idea.
Another thing to consider is technology application mismatch. Not every business can or should be tokenized. I think a good example of this mismatch are investment tokens, an example being tokens backed by real estate. To me there is not much upside to something backed by something with a known value. Take a house backed by a cryptocurrency for example, the house is only worth whatever it is worth in the real world so the currency should only increase in value as much as the house does which generally speaking is not much. Some might argue that you could get rent from said house, but I would say the tenant is likely paying rent in fiat so transferring the money into crypto and dividing it up would actually reduce the overall returns due to administrative and transaction costs.
Token Economics
The final thing to consider is how the economics work within each coin or token. Some tokens have locked up supply that is not trading. Locked up supply can have a downward impact on price when it is released if there is not sufficient volume to absorb it. Generally speaking, a coin or token with a fixed supply will perform better than one with a growing supply.
You also have to consider the economics of the mini token economy. For example are the holders of the token likely to buy or sell? Miners for example are more likely to sell the token to pay for electricity to keep their operation running. Alternatively token holders are more likely to hold the token where proof of stake is used. Also consider the use case, generally speaking where the users are encouraged to hold the token it will have an upward impact on price. Obviously buyers and sellers of the token will exist in every economy. The idea here is just to take the vantage point of each user and sketch out what is in their best interest to do. Then you can estimate the total proportion of all users to figure out if the total impact on price will be positive or negative over time.