Convincing investors and even consumers to support an idea or a project requires much more than just optimism and blind trust. You need clear evidence that the idea you’re proposing is feasible, viable, and has a great chance of success. That’s where you need a proof of concept (PoC).
What is a Proof of Concept
A PoC is a pre-MVP model of the final product or service that you aspire to develop. In software development, a PoC may look and act like a real product but it’s essentially vaporware, lacking much of the core functionality of the final product. And since it’s missing essential features, it’s not ready to be monetized.
The proof of concept should not be confused with a product pitch or business proposal. It’s more than that. The PoC is a tangible way to show prospective stakeholders why your product needs to exist and what it will look like, and it comes with its own design costs. However, those costs are “table stakes” for receiving internal buy-in or outside investment.
How Important is a PoC?
With sufficient resources and support, some companies opt to bypass the PoC stage and move directly to MVP because proving out the concept seems like a redundant and costly step. While that may be true on some level, bypassers beware, a PoC is essential to risk management. The last thing you want to do is invest in a full-blown product if you aren’t sure it will succeed and be adopted by the market. The PoC will help you avoid those pitfalls and simultaneously make progress toward the first release. So, let’s recap:
Building a PoC will help you…
- Foresee a product’s limitations. You need to consider how your product will scale in production and how it can accommodate your organization’s growth. For instance, developing an online platform for your business requires foresight on how much data that platform can handle.
- Prepare for possible challenges to come. In any business venture, there will always be obstacles that you might encounter. Are you ready to face those challenges and solve potential problems that may affect your product?
- Get internal buy-in for a new product within your organization or find investors who will help make your product a reality. Executives and investors alike prefer not to bet on risky ideas and a PoC helps to establish viability.
Proof of Concept Simplified
To better understand how a proof of concept works, let’s take an example:
Suppose you’re an entrepreneur in an alternative universe where the only means of transportation is the local subway/metro system. You want to disrupt the transportation industry by building a personal vehicle (automobile) because you believe that consumers will be interested in the opportunity to travel whenever and wherever they please.
You’re convinced that a personal vehicle is a winning idea, but there are two problems:
- You are not 100% sure if there is a market for it. For example, maybe people will find the initial cost to be unreasonable, or maybe they will find that operating and maintaining a vehicle is too much of a hassle.
- You estimate the cost of building this car to be one million dollars, but you have only a tenth of that. As such, you’ll need to convince someone to invest in your idea in exchange for a share of future profits, but convincing someone to invest in an idea that exists only in your imagination is challenging at best.
Both of these problems are reconciled by building a PoC and subsequently showing consumer interest in the concept. If people are willing to pay for your idea, investors will be willing to pay you to build it. After that, it’s on to the MVP and eventually the final product.
Your idea has the potential to change any industry as long as it is deemed feasible and profitable. That can only be achieved after proving that the concept works. It is essentially the first step to the realization of an idea into a viable solution.
AscentCore will help you develop a proof of concept and then turn it into world-class digital product for your business. We partner with you to provide end-to-end product development services that empower your business to reach its goals. Learn more about the solutions we offer by contacting us today.