What Is Proof of Concept and Do You Need One in 2023?

In the age of startups, thousands of ideas are born every day. Some of them even manage to grow and become a business.

Still, most of them fail.

Why?

Because they haven’t asked themselves the right questions right from the start.

Do people need this product? 

Is it helpful, feasible, profitable?

Today you’ll discover how to answer those questions.

Furthermore, you’ll understand the differences between a proof of concept and a prototype.

In addition, you’ll find various examples to back up each scenario.

So, without further ado, let’s jump right in.

What Is a Proof of Concept? (POC)

A proof-of-concept is a presentation of a product, which proves its feasibility.

Companies and startups use POC to demonstrate that their idea could, in reality, be built and achieve certain goals. This presentation goes to their managers, stakeholders, or potential investors.

Proof of concept is also known as a proof of principle.

So imagine this – you have an idea for a startup. Like most inventors, you fall in love with that idea. And you know what people say about love – it’s blind. Typically the creator is utterly certain that it will work, there will be a demand for it, and so on.

Unfortunately, you don’t have enough money to create a company on your own. So naturally – you need an investor who will also believe in your idea and invest in it.

The problem with investors is they don’t care about your promises that much. They need some proof that your product is feasible and most of all – that it can be profitable.

In that case, you need a proof of concept. It could be either a document, a demo, or a very basic prototype of your idea.

Using a POC, you can convince the potential investor or stakeholder that your idea is worth it. The POC proves your product will deliver your promises and that you can actually create it.

That’s the meaning of POC. 

Now that you know what POC is let’s move on and see when you need one.

When To Use a Proof of Concept?

Knowing just the definition of POC already puts you one step ahead of other startup enthusiasts. 

Why? 

Because by creating a proof of concept, you will know if your idea is actually worth something. This, in turn, will tell you if you should keep investing time and money in it.

When you start working on your POC project, you’ll get some answers early on.

Can you actually turn your idea into a real-life product?

Will it be profitable?

If the answers are “No.” - stop spending resources and focus on something else. If you want to pursue your dream, then go back to the drawing board. Do that until you can answer both questions with “Yes.” 

Creating a POC is far cheaper and less time-consuming than the final product.

In fact, about 90% of new startups fail, mostly because they don’t look far ahead. If they did, they’d know if their product can work and sell well. A POC can tell you that right from the start. 

Let’s see a proof of concept example to make everything clear.

Imagine you want to become a singer. 

Before you can take a shot at a Grammy, there are a couple of problems to solve: 

How (and where) can you find a good producer? 

Do you have songs people will like?

There’s no reason to go to a producer and explain your song. He’ll rightfully ignore you because music has to be heard, not explained. 

That’s why you can record a demo in your home. It doesn’t take much time and money, compared to a studio recording.

When you’re done, you play it to your friends and even random people to get feedback. If you are happy with the results, you can take the demo and see a producer.

See, the demo is your proof of concept. So far, you’ve completed three steps:

1. You have a complete and detailed picture of the final product.
2. There’s proof of your product’s feasibility (you can actually create the song).
3. You know there will be demand for your music because of the feedback.

Sure, it’s a bit more complicated than that in real-life situations.

Still, fundamentally, that’s how proof-of-concept works and why you could need one. (And maybe even more than one.)

The proof of concept can have a different form, depending on the industry. In essence, it still serves the same function.

For example, the proof of concept in technology is often mistaken with a prototype. Yet, there’s a difference, and the two terms aren’t interchangeable.

What Is the Difference Between a Prototype and a POC?

There are several phases an idea has to go through before it becomes an actual product. 

To understand the difference between a proof of concept and a prototype, let’s focus on the POC definition for a while longer.

Here’s the deal.

The proof of concept exists to validate the project’s feasibility. It often gets built for inside use to verify the idea’s viability.

In other words, the POC proves that you can build your product. Plus, you get to know if it will work and have potential clients. 

The prototype, on the other hand, is an earlier version of the final product. It’s already halfway to the market.

Your POC is the proof you need to start building that prototype.

Now.

Imagine you want to start your own business. 

Your idea is to create a mobile breathalyzer that can connect to a smartphone. 

In that case, your proof of stake would be a document. It will prove the need for such a device, and the technologies required to build one. 

Since you intend to create a startup business your POC should also include the potential profits.

There are several reasons for such proof of stake. 

First of all, you can use it internally. That way you and your team will know firsthand if it’s worth developing further. 

Secondly, if everything looks fine, you can use that proof of stake to convince a potential investor to fund your project.

There are also two more types of such demonstrations – a prototype and an MVP.

MVP doesn’t only stand for the most valuable player for all the sports’ fans out there. In this case, it stands for a Minimum Viable Product.

What Is a Prototype?

Think of the prototype as a draft of the real product. It’s a working model, which offers some of the product’s functionalities. 

Prototypes aren’t ready to be released to the market. They are built, so potential clients (or investors) can test them firsthand. They usually lack the polish of the end-product and have limited possibilities. 

The main purpose of a prototype is testing. You build one so your team and users can discover any flaws with the product. Once users have tried it, they can leave feedback. You can then use that information to improve your device (or software, or whatever it is.)

So, let’s get back to the breathalyzer project. Its prototype would be a device that can adequately calculate the alcohol fumes in someone’s breath. In addition, it could also be able to transfer the data to a smartphone. Neither the device itself nor the mobile app will have a fancy design at that point. Still, they’ll offer the core functionality of the product for real-life testing.

Once you see your prototype in action, you can fix the potential problems. Usually, several prototypes get built to remove the majority of bugs and to test additional functions. Once that’s done, the next step is to build an MVP.

What Is a Minimum Viable Product?

The MVP version of a product is (almost) ready to hit the market. Unlike the prototype, the minimum viable product is a bugless version of your idea. Its purpose is to be good enough to have a competitive edge on the market. 

It has a clean design and feels like a finished product. 

Once you see how your product is doing on the market, you can add additional features. 

Sometimes, your MVP’s profits may not be what you expected. In that case, you can still use it as an advanced prototype before you launch the final product. One of the benefits of creating an MVP is you get feedback from a much larger audience.

Now.

The breathalyzer’s MVP would have a modern design and it would be made from quality materials (unlike your prototype.) Also, it would come with a well-designed smartphone app.  

Later on, you can update the app with additional functions. For example, the app could call an Uber or a cab, if the user has been drinking. You can also create an improved design for the device itself.

Now that you got through the whole process, let’s summarize it.

Let’s name your breathalyzer B.A. In that case, its proof-of-concept would be B.A. version 1.0. The prototype would be version 2.0. Finally, the MVP would be B.A. v3.0. 

So, there you go - the difference between proof of concept and a prototype in a nutshell. 

You may not always need one, but more often than not – you will. 

Proof-Of-Concept in Different Industries

Businesses in nearly every industry need proof of concept. It acts as insurance that a future product will work as planned. That’s done to save companies millions of dollars in useless investments. After all, every innovative product could turn out useless, thus unprofitable. 

So here are some examples you probably didn’t know about.

Proof of Concept in the Movie Industry

Many directors make proof-of-concept movies to sell their ideas to the movie studios. 

Here are some blockbusting examples.

Zack Snyder, the director of 300, made this proof of concept short movie. He then showed it to Warner Bros. 

https://www.youtube.com/watch?v=dHQCPMRqyRU&feature=emb_title

Robert Rodriguez also created a short proof of concept film. There, he displayed the technique he was going to use in Sin City. His POC short film even became the opening for the movie.

Remember District 9? Peter Jackson decided to produce it, thanks to a proof of concept movie called Alive in Joberg.

All of these proof-of-concept movies turned into blockbusters. The directors used them to show what their teams can achieve.

Proof of Concept in Healthcare

When pharmaceutical researchers develop a new drug, they do a proof of concept study to validate its effects. Usually, a proof of concept study includes a small number of tests on a limited number of patients. Afterward, the results from these tests set the stage for future funding and development of the drug.

POC in Cybersecurity

Unlike other industries, the proof-of-concept in cybersecurity doesn’t prove that a system works. In fact, it’s exactly the opposite – that it doesn’t.

This POC is also known as a proof of concept exploit. It’s an attack against the system, just to prove that it isn’t secure.

White hat hackers and cybersecurity researchers usually execute these attacks to point out any software or hardware vulnerabilities.

Now we’ll take a look at the software industry. Its proof-of-concept is a bit complicated, so it deserves some special attention.

Proof of Concept in Software Development

We’ve already looked at some of the industries and how they use the proof of concept. POC in software development is different, because it’s more of a process, instead of a demonstration.

If you are in software development, there are a few reasons why you’ll need a proof-of-concept.

1. You can make sure your software project is feasible.
2. The proof of concept document can show you if your workflow plan needs alterations. 
3. Your POC can show you how likely it is for customers to adopt your software.
4. You can estimate the expected revenue and growth in the long run. The lack of such a vision is why 82% of startups failed in 2018.
5. Most importantly, the POC can reveal any potential roadblocks.

The POC of your project is of tremendous value when developing software. It allows you to see potential problems early in the development. Furthermore, the feedback from your potential clients can give you invaluable insight. 

Here’s the deal.

There are several proofs of concept in software development. 

• Proof of Technology

Its purpose is to test the technical issues that may hinder the development process. The PoT tests different features of the software and their compatibility. Everything that could go wrong from a technical standpoint should be addressed in the proof of technology.

• Steel thread

This is a more sophisticated proof-of-concept, which includes a wider array of the software’s properties. Design, software architecture, and profitability are just some of the aspects it takes into account. 

• Pilot project

This is similar to the minimum viable product we mentioned above. It’s an earlier version of the software, and several users put it to the test. You can think of it as a beta version. Developers use the feedback from the testers to fix any problems with the software. 

This is why using POC throughout the development process can open your eyes for any potential issues. It’s also crucial if you need future funding.

Now that you have a decent knowledge of what a proof of concept is we can move on. Coming up next is a real-life example of how a proof of concept can create a new industry.

The Proof of Concept Example That Changed the Modern World

Throughout the history of humanity, there have been thousands of POCs, which have lead to inventions that changed the world.

Take Leonardo da Vinci’s machine gun design, for example. In fact, it’s a simple proof of concept. He addressed a problem (the slow reload of a cannon), came up with a solution, and explained how it would work in detail. Nevertheless, in his case, it took a couple of decades before a prototype was built. 

The Wright brothers’ Flyer is another example. 

But here’s the kicker:

In 2008, Satoshi Nakamoto published the Bitcoin whitepaper. That was also a proof of concept. He addressed an issue, proposed a solution, and explained in detail what the blockchain will do and how Bitcoin can benefit society. Thanks to the worldwide adoption of this public proof of concept, we have that means of payment and trading today. Safe to say Satoshi Nakamoto’s POC created a whole new industry.

To get back to startups - the proof of concept offers many benefits for every new aspiring company.

Advantages of Creating a Proof of Concept for Startup Businesses

By now, you should already understand the two main benefits of creating a POC - it saves both time and money. 

Ask yourself a question.

What could stop your idea from becoming a real product?

The answer is simple.

It’s either time, funding, the state of technology, or the market not being ready for your idea.

While you can’t do much about that last one, a proof-of-concept can easily address all the rest. It gives you a clear idea if you should continue your product’s development or focus on something else. 

It’s essential to create a POC, especially if you are building a large-scale product. Typically such ventures require a lot of time and money, so it’s crucial to know if it’s going to be worth it in advance. 

Anyway, how can you save time and money, even if you’re sure your project has a 100% chance of success? (Which is rarely the case.)

First of all, creating a POC usually takes between a couple of days and up to two months tops. That’s nothing compared to the time you’ll need to create the final product. 

The proof-of-concept will show you if some of the features of your product are unnecessary. That way you won’t waste your time and money developing them. Like a hot tub in a space station – sure, it’s nice to have one, but it's useless.

Furthermore, the POC can open your eyes to something you’ve missed. Sometimes the market could have additional requirements you haven’t predicted.

So, if you don’t want to waste time, cash, and human hours – create a proof-of-concept. Moreover, it acts as evidence for your idea’s feasibility and ROI. 

In case you don’t know how to do a POC, here’s a proof of concept template to guide you through the process. 

Wrap Up

The proof-of-concept is a great tool to help you find out if your future product is really worth the time and money you are prepared to invest.

It addresses a few simple, but essential problems you may face in the long run. The POC answers the main questions most startups struggle with.

Do people really want this product?

Will it be profitable? 

Can it attract investors?

Will your product stumble upon a problem that will block its development?

Finally, you can use your proof-of-concept as a foundation to create a working prototype and later on – a minimum viable product.

It’s not a silver bullet for every startup business, but in most cases - it’s better to create one. Otherwise, you venture blindly into a world that may reject your idea. 

That’s all folks. See you next time.