Proof of Concept (PoC). Three magic words (excluding the abbreviation in brackets of course) that are an essential part of launching your startup. And yes, to get any funding for a business venture, you’re going to need one.

But what does it mean? Isn’t it the same as a prototype? Not at all.

Proof of Concept (PoC): What it is and what it isn’t

Let’s begin with a simple definition from our friends at the Oxford English Dictionary:

noun – evidence, typically deriving from an experiment or pilot project, which demonstrates that a design concept, business proposal, etc. is feasible.”

Pretty straightforward then. In startup terms, a Proof of Concept (PoC) is an early model of the final product/service which you will eventually develop. It should look sort of like a final product, even if it isn’t. 

Think of it as a small exercise to test a design idea or assumption/hypothesis. And the main reason for creating a PoC is to demonstrate the functionality, as well as to verify that a certain concept or theory can be achieved in development.

Proof of Concept in business vs software

Apart from the general definition above relating to startups and businesses, there’s also some slight differences when we talk about PoC in software development — something which as practically a big part in most startups these days, given the fact that a lot of new products consist of SaaS (Software as a Service) services.

In software development, PoC often characterizes several distinct processes with different objectives and participant roles. For example, vendor business roles may utilize a proof of concept to establish whether a system satisfies some aspect of the purpose it was designed for, or solve a particular problem. Then, once a vendor is satisfied, a prototype, or MVP (Minimum Viable Product) is created. This MVP is then used to seek funding or to demonstrate to prospective customers. 

Why Proof of Concept is important

Don’t underestimate the importance of your Proof of Concept. After your business model, it’s the second most important thing to cover on your startup “to do” list. Apart from the practical side of showing that something you have in your mind can actually work and solve the problem you want it to (which means, of course, there’s more chance of monetizing it), there’s also the value of you PoC in your storytelling.

It’s your key to a perfect pitch

As we are always at pains to point out on this blog storytelling for startups is a vital part of strategy, both for pitching to investors, and your brand and marketing efforts; from launch-to-market and beyond.  Think about it. As humans, we simply love stories. And so, when you prepare your perfect pitch to investors, what does all the advice out there tell you to do? To tell a story, of course. YOUR story; and a compelling one at that. You need to get that ‘lean-in’ reaction from your audience when you’re talking about your bright idea. Sorry, I mean your Proof of Concept. 

When you go to pitch your product to investors, you will basically tell them a story. But not just any story. One that is uniquely YOURS. About yourself, as a successful contemporary entrepreneur, with the big idea and the gumption to bring it to life; about your crack team of software developers, growth hackers and business wizards; and about your product and the problem it is going to solve.

And, of course, this is where your Proof of Concept comes in. Investors are not too enthusiastic about investing money on things that do not yet exist. So, your PoC is there to give them more than look and feel. They can get an actual taste and feeling of what your product or service is like.
The best way to think of a PoC is as a stepping stone to the other side of a pond. Upgrade your pitch deck to a PoC, and do a bit of the old “show and tell” game. 

You can use it for problem-solution fit testing

Another vital role the your Proof of Concept can play is by trying out different versions of it, you can weed-out any design or functional flaws and work towards understanding how to develop the final product better. Product development efficiency at its best!

And this is not just for internal use. If, for example, your mentors, investors, or third-party experts reject your product, you will get that all-important feedback. This will determine your next steps and help you to pivot and develop a better PoC.

Much in the same way, later down the line, when you’ll need to get vital feedback using customer interviews, your Proof of Concept will prove important in the early development stage. If you don’t create one, for example, you might end up actually building the wrong product — which is (surprise surprise), the #1 reason most startups fail.

To sum up…

So, just to make it clear. Proof of Concept is not a minimum viable product (MVP). Your MVP, or prototype as it is otherwise known, comes in the next stage. The key difference is in the “can” and the “how”. As Entrepreneur points out:

While a POC shows that a product or feature can be developed, a prototype shows How it will be developed.

Your need to have some clear objectives for your PoC. Is it to get funding? Is it to prove to yourself and third parties that the product or service works and will fit its intended purpose? I like this nice bullet-listed summary of what your PoC should deliver for you from product and UX designer tova safra. It should:

  • Encapsulate those parts of your product or service that provide the core of the value to customers. (Keep it simple and focused.)
  • Show stakeholders, investors, or founders that there is market demand for what you offer.
  • Help refine what exactly it is that customers want to see from you, and whether it is feasible for you to deliver on. 
  • Minimize risk by letting you get your feet wet when beginning a new venture. 
  • Save you money, since you may discover leaner ways to execute on your business idea.

Now, are you ready to create your Proof of Concept? Go for it. If you have any extra tips and advice on PoC’s, we’d love to hear from you.


Graham Wood Graham Wood

The Starttech Ventures Storyteller. Studied Journalism with Business at the University of Central Lancashire. Has worked in various product marketing management positions for the likes of Nokia, Samsung and Vodafone, as well as in several journalism and media roles since 2000.