What Is A Proof Of Concept? (With Benefits And Tips)

By Indeed Editorial Team

Updated 30 July 2022

Published 4 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Product or business development requires various stages of planning. One such crucial stage is preparing a proof of concept before you begin to invest in your resources. A proof of concept determines whether your idea is feasible and can transform into a successful product or a business at a later stage. In this article, we discuss the answer to "What is a proof of concept?", see its uses and benefits, understand the difference between a proof of concept and a prototype and provide you with some tips to write a proof of concept.

What Is A Proof Of Concept?

If you have an idea and wish to materialise it, it may be helpful to know the answer to "What is a proof of concept?" before you create one. A proof of concept is a process during which you evaluate whether an idea is feasible. It is a document that explains how the project could succeed and often includes a long-term plan. It is also known as a proof of principle. A proof of concept can provide an understanding of how and why an idea would work without going into the details of the workings of the product itself.

Proof of concept examples

Here are three scenarios in which you could use a proof of concept:

Software development

In software development, a project typically begins with the aim of solving a technical problem. It could be a new product or an upgrade to an existing product. Creating a proof of concept in the software industry may require different user roles from the organisation to participate and provide inputs on how the idea can solve the problem.

Related: What Is Software Development? A Complete Guide

Business development

Many startups use a proof of concept to explain to stakeholders why their idea can be successful. Established organisations also may use it before deciding to launch a new product. In both cases, the business development executives may provide either a revenue model or a projected revenue to determine the outcome of the idea that they wish to propose.

Other industries

The pharmaceutical industry extensively uses proofs of concept. When researchers develop a new drug, they create a proof of concept to show its efficacy through lab experiments. This allows the opportunity for broader clinical research and subsequent testing of the drug. The entertainment industry also uses proofs of concept. For example, filmmakers use short films to create awareness about their later, longer films, or to evaluate a new technique or direction that they plan to use in their forthcoming films.

Benefits Of Having A Proof Of Concept

Here are the benefits of creating a proof of concept:

Mitigating risks

A proof of concept determines whether it can convert into an established project. Every new project may have certain risks, including over-utilisation of resources. When you explain the possible risks in a proof of concept, it becomes easier for the project holders to determine the appropriate resources the project may require. This can reduce upfront costs and last-minute surprises for managing either inventory or people on the project. A long-term plan based on a proof of concept can also reduce the risks of a financial crisis.

Anticipating problems and possible solutions

Converting an idea into action often involves experiencing multiple obstacles. You can identify those obstacles only when you thoroughly brainstorm the idea with the team. This is a part of the process of creating a proof of concept. Once you evaluate the idea, you can determine problems and also find solutions to those problems. When you include these potential problems and solutions in the roadmap for the future product or business development plan, it becomes easier for the other stakeholders to manage them at a later stage.

Attracting stakeholders

This is especially true for startups or even older companies looking to launch a new product or service. A new idea can attract investors when it is strong enough to become a long-term project. A well-prepared proof of concept can give the stakeholders confidence that it may be safe to invest in the new idea. A well-funded project is crucial for a product or business to develop successfully. It also gives the project owner the flexibility to manage resources without having to worry about financial shortcomings.

Difference Between Proof Of Concept And Prototype

Many people confuse a proof of concept with a prototype. Although they may seem similar, they are different in concept and execution. Here are their main parameters on which they differ:

Objective

The main difference between the two is the objective. A proof of concept determines whether the idea is feasible. In the case of product development, a proof of concept document includes the details of whether it is possible to develop the product. It does not evaluate whether the destination market would use the product. A prototype is more like an actual product, but only with the basic functionalities. It evaluates the product from the user's perspective. Its stakeholders are often users who determine whether the product is the right fit for the target market.

Level of detail

A proof of concept has fewer details about the product than a prototype. It determines how the project may proceed. It even lists out possible challenges that the project holders may encounter while developing the project. It may also include a plan of action for the project to be successful. A prototype has many more details of the product. It shows the functioning of the end product so that end users can see for themselves how the product might work when fully developed.

Stage of execution

A proof of concept and a prototype also have different timelines in a product development cycle. A proof of concept comes at a very early stage of the cycle. It is only the second step after generating an idea. Once an idea occurs, the team creates a proof of concept based on that idea and determines its feasibility. Once the proof of concept gains acceptance from all the stakeholders, the next step in the cycle is to develop a prototype.

Related: What Is SDLC? Definition, Stages And Examples

Tips To Write A Proof Of Concept

Here are some tips to design a proof of concept for a new idea:

Create objectives

To know whether an idea could be successful, it may help to first identify the needs of the proof of concept. Determine what the proof of concept is trying to show and the aspects of the idea that you would like to test. Make a detail-oriented list of all the objectives of the idea. This might help the team understand the exact parameters that they would test.

Related: What Are The Objectives Of Project Management? (With Phases)

Develop a plan

Creating the proof of concept may itself feel like a small project. It helps if you develop a plan beforehand. Outline in a written document how you would like to proceed with preparing the proof of concept. It may also help to include the parameters you wish to test in the plan itself. Reference to such a plan could guide the team when they begin to work on the proof of concept.

Related: What Is Project Planning? (How To Create A Project Plan)

Define the scope

Evaluate at the beginning what your proof of concept may cover. If needed, you could also interview some clients to get an understanding of what they think about your idea. You could prove that your idea works by explaining in your document the test results of certain parameters that you think are important. Selecting the correct parameters can make your proof of concept stronger.

Related: What Is A Project Scope? (With Template)

Select resources

When an idea occurs to you, it can be helpful to find the right people who understand the idea. This is because people who understand the idea may develop a strong proof of concept. It can be helpful if you hire the right set of people with the right skill set who can work in a team for designing a successful proof of concept.

Related: Project Manager Vs. Resource Manager: What's The Difference?

Obtain feedback

As with any other project, expect brainstorming within the team throughout the process of creating the proof of concept. Welcome feedback from the team throughout the exercise. The feedback may even help improvise the original idea. Besides, the feedback can enable you to take the final decision on whether the idea is feasible after you have completed the proof of concept document.

Related: How To Give Interview Feedback To Unsuccessful Candidates

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