Michael Epps Utley {kind=image/jpg}
Are you thinking of doing something new in 2024? Find out how investing in a proof of concept can help prevent mistakes and make it more likely a new product, service, or idea will succeed.
What Is Proof of Concept?
A proof of concept (POC) is a study that examines the viability of a project, idea, or strategy before spending time or money on it. It tests how well something will work out in the real world and whether it’s worth pursuing. A POC helps get investors and team members to back a new concept. It also allows cash-strapped business owners to decide which projects to pursue.
Proof of Concept: The Basics
A proof of concept process is most valuable when you want to do something — such as introduce a new product, service, or way of doing business — that hasn’t been done by another company. Consider it a tool to test feasibility when no use cases are available.
For instance, the launch of Airbnb was based on the results of a POC. Before the company's founders got investors to back it, they had to prove that people were willing to sleep in a stranger’s home.
Their POC involved Airbnb’s founders renting out space on air mattresses in their San Francisco apartments during a major conference. They developed a website and got three people to pay a lower rate to stay with them rather than booking costly hotel rooms.
This test proved a real-world need for alternative lodging and that the novel concept was feasible. After a few more POCs, Airbnb got funding, and the rest is history.
Proof of Concept: The Benefits
A POC is valuable because it gives you a way to prove the viability of a new idea based on actual data. Here are some additional benefits of POCs:
Reduces risk. A POC is a relatively fast and inexpensive way to prove an idea is valid before you spend time and money on it.
Refines and improves concepts. Gathering feedback during the POC process gives you the information you need to improve a new product, service, or other idea before release.
Demonstrates value to stakeholders. A POC provides evidence to make the case for a novel concept. Sharing the results of a feasibility test helps you build trust with people who may doubt the viability of a new idea.
How to Develop a Proof of Concept
Here are the five steps to creating a proof of concept.
1. Identify a Need
Before determining the feasibility of a new product, feature, service, or business, you must demonstrate a consumer need and desire for it. To do this, you must identify pain points or gaps in the marketplace your offering could fill. Do this by:
Defining the target market by identifying the people experiencing the problem and how many there are.
Explaining what the problem costs people dealing with it, including things like time, money, security, and peace of mind.
Identifying the current solutions to the problem and how your idea compares.
Using market research and your own data, whether gathered through studies, surveys, or anecdotal evidence, to support the validity of your concept.
2. Explain Your Solution
Now that you’ve defined a problem or market need, you must demonstrate how your solution solves the issue. A description of the solution will depend on the concept you’re testing. It could include:
New product or feature: Include the product’s design, features, specifications, and functionality.
Service: Explain how the service works and resolves the identified issue.
Business idea: Define the business model, including target audience, revenue streams, and cost drivers.
Include a high-level development roadmap or business timeline that provides you and your stakeholders an idea of what it will take to realize the effort.
3. Define Success
Identify the key metrics you want to track, such as user adoption and retention rates. Set targets you must achieve to prove feasibility.
4. Test Your Concept and Track Metrics
Create a working model of your concept and test it with a sample group of people in your target audience. The model doesn’t have to be perfect or include all the features a final version will. Collect and monitor data and evaluate it to determine success. Leverage a survey or focus group discussion to gather feedback.
5. Present the Results of Your Proof of Concept
Were you able to prove your concept could work? If you did, you can present a report to your stakeholders for buy-in, funding, or both, for your initiative. The report should include information about the problem, solution, and results of your test. Also, share insights you learned from the process, including additional opportunities or possible obstacles you could face and ideas on how you plan to address them.
The Proof Is in the Putting (Putting in the Work, That Is)
In the end, a proof of concept may add time to a project, but it could help you avoid investing money and effort into something that may not work out.
Looking for ways to jumpstart sales of a new product or service offering? Check out our tips.
