How To Create a Proof of Concept (POC) (2024)

Turning even the most brilliant idea into a business can be daunting and involves considerable risk. But what if you could test the waters before making a big commitment? 

A proof of concept (POC) can help bridge the gap between your rough concept and a finished product, and allow you to evaluate its potential. 

Here are the benefits of developing a proof of concept, and how to develop your own. 

What is a proof of concept?

A proof of concept (POC) is a demonstration of a business model or product idea that business owners use to determine whether an idea is feasible in real-world conditions and has market potential. A POC involves gathering data to evaluate the idea’s viability before investing significant resources and determining whether the product development process makes sense. 

By looking closely at factors like market demand, resource requirements, and development costs, you can identify potential challenges that stand in the way of bringing your idea to life. 

A proof of concept can also help convince investors of the viability of your project idea. A POC makes it easier for others to understand your vision and helps you move your idea through to the next stage of development.

Proof of concept vs. prototype vs. minimum viable product (MVP)

You may hear the terms proof of concept, prototype, and minimum viable product (MVP) used interchangeably, but each refers to a distinct step in the product development process:

Proof of concept

• Purpose. The goal of a POC project is to answer the question, “Can this be done?” Your POC should clearly demonstrate why your idea is viable and what it will take to bring it to life.

• Form. A POC is usually a detailed document or presentation that outlines your concept and can take a few days to a few weeks to develop.

• Audience. POCs typically are created for internal team members including project leaders, development teams, company executives, potential investors, and partners.

Prototype

• Purpose. A prototype is a model or mock-up that demonstrates your product’s functionality. Think of it as a draft version of your final product, showcasing its design and basic features.

• Form. Prototypes may be simplified versions of the product, 3D models, storyboards, or interactive demos. A prototype may take several weeks to build, depending on the product and design.

• Audience. Prototypes are used to gather feedback from internal designers, developers, and project managers, but may also be shared with early testers or select customers. 

Minimum viable product

• Purpose. A minimum viable product (MVP) is a simplified version of a product or service with just enough features for customers to use and engage with it.

• Form. An MVP can be very developed—a working model of a gadget with most features and design elements in place, or as simple as a website that tells visitors about an upcoming product and asks them to sign up for more information. 

• Audience. A minimum viable product goes to customers and end users who can provide valuable insights or user feedback.

Benefits of developing a proof of concept

Here are the benefits of developing a proof of concept:

Reduces risks

Creating a proof of concept can spot issues with your project idea in the earliest stages of the development process. Identifying any pain points upfront lets you make essential adjustments before your product reaches customers.

Saves resources

It can be helpful to evaluate your concept’s validity before investing precious resources in the product development process of an unfeasible idea—especially if you’re working with a limited budget.

Refines your concept

Concept testing, or asking internal team members about their views on a potential product, can produce valuable feedback and insights that will refine and enhance your idea. Data you gather in the early stages of the POC process can reveal areas for improvement that lead to a more polished end product.

Builds trust

A successful proof of concept can build trust and credibility with stakeholders like investors, partners, and project team members. For instance, if an investor is skeptical about the consumer demand for your product, a proof of concept backed by data collection or market research can ease concerns. A POC that provides relevant data that proves your new idea is worth pursuing shows your commitment to thorough planning and execution.

How to create a proof of concept

1. Do research
2. Describe your business idea
3. Identify the scope of your project
4. Outline the path to market
5. Detail resource requirements
6. Set performance metrics

Here’s how to get started creating your first proof of concept:

1. Do research

A POC begins with comprehensive research and data gathering to understand everything you can about the market, industry, and competitors for your product. Create a customer survey, run a pilot project, or organize a focus group to figure out whether your proposed solution appeals to your target audience. 

2. Describe your business idea

The most important step in putting together your proof of concept is to articulate your idea. What is the problem you’re solving? Who is the end user of your product or service? How does your idea differ from other solutions? Translate your research findings into a concise description that covers the key objectives and benefits of your project.

3. Identify the scope of your project

Once your project idea is clear, the next step is to determine the scope of your project. Establish clear boundaries for tasks to prevent scope creep—the tendency for a project’s deliverables to gradually expand beyond its original goals. 

For example, a POC for a software tool might include a list of core features, while also noting advanced features excluded from the project that could be considered in future versions. 

4. Outline the path to market

Create a high-level project timeline that maps out each phase of development. Estimate the duration of concept design and then do the same for prototype development, testing, launch, and refinement. If your proof of concept is successful, build on your timeline when creating your product roadmap.

5. Detail resource requirements

Develop a list of everything you need to bring your project to life, including project funding, physical materials, technology, and people. When it comes to human capital, a POC can help identify what skills are required for specific parts of the product development process. Include other stakeholders in the process of brainstorming the required resources to ensure you don’t forget something important.

6. Set performance metrics

Determine the criteria or key performance indicators (KPIs) you’ll use to measure your product’s development and success. Effective KPIs—like user engagement, technical performance benchmarks, the number and severity of errors, or conversion rates—can provide valuable insights into whether your product is functioning in real-world settings and conditions. 

Proof of concept examples

Here are a few proof of concept examples across different industries:

Software development

A POC in software development might include sections on identifying primary user needs, creating a product timeline, defining team roles, choosing a project management methodology, and deciding how project delivery will be managed.

Let’s say your software company is working on a customer relationship management (CRM) tool for small businesses. Before committing significant resources to the project, you develop a proof of concept with extensive research on user needs, including interviews with small business owners. The feedback reveals that customized reporting is a crucial feature, prompting your team to include it in the project scope before advancing to full product development.

Retail

Investing in product inventory can be a large financial risk for a retail business. A proof of conceptthat thoroughly investigates target customer demographics, supplier agreements, and marketing strategies can help retailers make informed decisions.

Imagine your ecommerce business is planning to launch a new line of eco-friendly cleaning products. While performing a competitive analysis as part of POC development, you uncover a more competitive market than expected. In response, you task your marketing team with developing a compelling value proposition that highlights your product’s unique benefits.

Sales and marketing

POCs can help sales and marketing teams evaluate the effectiveness of new strategies and campaigns before implementation. They can assess elements like campaign messaging, brand positioning, and the competitive landscape.

Imagine your fitness company is gearing up to launch a digital ad campaign for a new online program. During the proof of conceptdevelopment process, your marketing team conducts preliminary research to identify customer preferences and finds that personal coaching resonates the most with your target audience. As a result, the team decides to create targeted ads on this theme prior to launching the campaign.