Proof of Concept And Why It Matters In Business

A proof of concept is a document that provides a visual representation of what your idea is and how it would work. It’s a tangible way to show off your idea to a potential collaborator, investor, or customer. Therefore, it shows how a pilot project might help a larger project scale if there is “proof” that the first concept worked out.

What is a proof of concept and why is it so important in business?

In simple terms, a proof of concept is a document that allows to get an idea funded, either by an investor, partner or perhaps to a potential customer.

The idea of the proof of concept is to simplify your project, at the point of creating a smaller, viable one, that can prove the viability of a larger project, with less risk, budget, and a more focused timeline.

In fact, in most cases, in business ideas fail because there is not enough interest from the market, or because the timing is wrong, or perhaps the team, funding and business model aren’t good enpough.

Thus, a proof of concept helps business people simplify a larger, and more ambitious project, into something that can be tested in a shorter time span and with less effort, in terms of budget and time.

According to Bill Gross, founder of Idealab, the five key factors influencing startups’ success are the idea, team, business model, funding, and timing. Among them, timing is extremely important but can’t be controlled. That is why startups often need enough funds to keep going until the business becomes viable.

How to create a simple proof of concept

There isn’t a sinlge way to create a proof of concept. It all starts by understanding what’s a minimum viable option that will proof the project successful and therefore it will help us scale the overall project.

However, where a minimum viable product has the scope of defining whether there is a market for an idea, thus scoping that market, and deliver a fully functional (yet minimal) product. A proof of concept is more focused on understanding whether that is a good idea in the first place.

As pointed out by Eric Ries, a minimum viable product is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Therefore, it starts by narrowing down what’s the fastest and simplest way to prove whether the idea is feasable in the first place.


The SFA matrix is a framework that helps businesses evaluate strategic options. Gerry Johnson and Kevan Scholes created the SFA matrix to help businesses evaluate their strategic options before committing. Evaluation of strategic opportunities is performed by considering three criteria that make up the SFA acronym: suitability, feasibility, and acceptability.

Key takeaways

  • In business, a proof of concept is critical to validate an idea. Therefore it helps achieve a better understanding of whether to undertake a larger project.
  • A minimum viable product instead is the complete version of your product that is good enough to attract its potential audience and improve on that.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"