What Is Proof of Concept?

A proof of concept is a tool that helps you work through your product, design, or idea to test if it is feasible and what problems might occur. Companies such as Etsy, Allbirds, and Dropbox use a proof of concept to help minimize risks from untested designs and save time and resources by determining what will and will not work. Explore why proof of concept is valuable and the steps needed to write your own. 

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What is proof of concept?

Proof of concept (POC) is a demonstration that provides evidence to support that a concept (product, design, or idea) can work. It is important because it is the first step for companies to determine if an idea can succeed. In turn, it saves companies time and money, preventing them from putting resources into a concept without proof that it works logistically or technically. Successful POCs can provide proof for stakeholders, investors, or managers to show them why an idea is worth investing in and provide them with actual material to back it up.

Why do I need proof of concept?

Proof of concept is essential in assessing a product, design, or idea for flows and potential mistakes. You may need it to help prove the idea works. If it doesn’t work, proof of concept will save your company money and resources that could be dedicated to another project. By crafting a strong proof of concept, businesses can determine:

• If the idea is realistic

• If the plan will work as predicted

• Whether a strong market is available

• What the company needs to bring the idea to fruition

It is also valuable to receive feedback before the project moves forward. It is an opportunity for other team members to give feedback and ideas you may not have considered.

Another factor to consider is that proof of concept is an asset when showing investors the need for the concept and evidence that the investment will pay off. While a prototype provides a visual of a starting version of the finished product, you need proof of concept before the prototype to demonstrate that the product is buildable. Many industries rely on proof of concept to show that a project will work successfully according to plan. 

Read more: Types of Project Management: Methodologies, Industries, and More

What are the benefits of proof of concept?

One of the significant benefits of a proof of concept is that it helps you determine from the start whether the idea is viable, which saves both time and money. It also serves as a way to understand the project better, considering you will learn all aspects from the beginning because it serves as the base for a prototype. As the first step in development, proof of concept helps identify potential issues early on and whether they are worth fixing before committing resources and time. A few additional benefits include the following.

Save time and resources.

Because it is the first step in developing an idea or product, proof of concept proves or disproves the concept's practicality before moving forward, giving the organization a clearer vision of whether it will succeed. This demonstration allows you to test many areas of product development, ranging from technical issues to market demand, making it easier to recognize any changes or improvements required early in the process. These steps can help you understand how practical the idea is before committing time and resources that could potentially be wasted if the project or design doesn’t work out. 

Understand the project better.

Creating a proof of concept allows you to understand the idea better because you can use it to gain feedback from both users and investors on how to improve or change aspects of your project. It should be as detailed as possible to show investors that the product has the potential to succeed and is also realistically workable. 

To do this, you may want to gather as much knowledge as possible in all relevant areas when creating a new product or service, such as collecting relevant data directly and conducting focus group interviews. An effective proof of concept should address investors' questions or concerns. In addition to familiarizing yourself with the different stages of your project, getting ideas and suggestions from other focus groups and stakeholders will also improve your project plan.

Identify potential problems. 

Identifying potential problems in the early stages can avoid wasted time and future issues. It’s helpful to remain realistic about your goals and expectations of your concept. It is important to show proof to back up your product. Being realistic also helps you foresee any additional costs and obstacles you will face during the process.

Minimize risks.

Proof of concept helps minimize risks by giving you a general idea of the support you can expect to receive for your product through testing and feedback. You will better understand the product because you can make necessary tweaks or changes in the earliest stage. A proof of concept helps you see any unanticipated risks that may arise in the development stages. After the development phase, if the concept moves forward to the prototyping phase, you can again perform tests and get customer feedback still early on in the process, ensuring the concept is feasible. 

How to write a proof of concept

When writing a proof of concept, keep your audience in mind. Your audience includes the people you present your proof of concept to, not your target customer. You will want to prove to them that your idea will benefit them. In addition to your goals, be sure to include the project’s functional components, such as an estimated timeline, expected costs, and required resources. 

Follow these additional tips to help create a successful proof of concept to present to potential investors:

1. Understand your audience’s pain points: When you communicate with potential users, find out what they are looking for and determine how your creation can offer them a solution. Take your ideas that could help solve those pain points to your audience and get their input.

2. Listen to feedback: Use the feedback from potential users to correct any flaws or areas for improvement and make any necessary changes to finalize your proof of concept. 

3. Create a finalized proof of concept proposal: Present your proposal to stakeholders. Ensure it includes your product's features and benefits, the feedback from potential users, and an execution plan.  

Examples of successful proofs of concept

Several companies have successfully used proof of concept to launch exciting products and initiatives. For example:

Etsy, the e-commerce company that sells handmade and vintage items, developed its successful proof of concept by noting what was already working in its market and basing its concept on that. This approach allowed the company to save time, money, and resources in product development by building on the success of similar businesses. 

Dropbox developed a viral video explaining the software’s potential benefits and features. The video attracted much attention, resulting in an overnight increase in the company’s beta sign-up list. The company used this response to validate its idea and connect with interested potential customers before it launched. 

To create its proof of concept, Allbirds, the footwear and apparel company, partnered with Pebble and launched a crowdfunding campaign to help them establish customer interest while raising capital for the product’s development.

Learn more about proof of concept on Coursera.

A proof of concept is an important tool that can help you understand your project better, minimize risks, and save time and money by troubleshooting in advance. Want to learn more about the benefits of creating proof of concept? Check out the University of Maryland, College Park’s five-course series Product Ideation, Design, and Management Specialization on Coursera. The courses offer tools for those seeking to pursue or further their careers in product management, design, and related roles. 

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Ideation, Value Propositions, User Experience Design, Product Lifecycle Management, Team Leadership, Product Design, Proposal Writing, New Product Development, Product Development, Product Management, Prototyping, Financial Statements, Target Market, Market Opportunities, Commercialization, Competitive Analysis, Stakeholder Management, Financial Modeling, Wireframing, Innovation, Product Strategy, User Feedback, Product Improvement, Customer Analysis, Market Analysis, User Experience, Product Testing, Lean Methodologies, Entrepreneurship, Decision Making, Corporate Strategy, Business, Market Dynamics, Capital Budgeting, Return On Investment, Financial Management, Business Valuation, Presentations, Cash Flows, Entrepreneurial Finance, Corporate Finance, Finance, Accounting and Finance Software, Cost Benefit Analysis, Business Metrics, Leadership, Team Management, Cross-Functional Team Leadership, Marketing, Agile Methodology, Product Roadmaps, Project Management, Conceptual Design, Design Thinking