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.

How to create a simple proof of concept
There isn’t a single way to create a proof of concept. It all starts by understanding what minimum viable option will prove the project successful and, therefore, it will help us scale the overall project.
Proof of Concept Vs. MVP
However, where a minimum viable product has the scope of defining whether there is a market for an idea, thus scoping that market and delivering 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.
Instead, an MVP flips the logic upside down, and it asks, “how can we kick off a valuable, iterative, feedback loop, with customers, to make a product valuable, over time?”

In short, with an MVP, even if you launch a product, and it fails, it’s fine, as long as it fails fast.
Yet, to ensure you can kick off valuable feedback loops, you have to target a very narrow niche, or what’s known in buzzy terms a minimum viable audience.

A minimum viable audience will help you find the way toward a successful product, even though that might not be successful as of now.
Therefore, it starts by narrowing down what’s the fastest and simplest way to prove whether the idea is feasible in the first place.
Proof of Concept Vs. Prototype

A prototype addresses the feasibility of the idea.
Whereas a proof of concept tries to address whether the idea is a good one in the first place.
Both, though, are too risky.
Indeed, the prototype is risky because it addresses the market question (will people want it?) too far down the road, potentially making the project’s costs too high and failure too expensive.
The proof of concept, on the other side, tries to address whether the idea is a good one, but without testing the market in the first place.
In short, it relies on theoretical assumptions, which are also too risky, as we might embark on a road that is too risky to undertake.
So what’s a middle ground?
Proof of Concept vs. Pretotype

A great way to test is through pretotyping.
Coined by Alberto Savoia, which I interviewed on the blog, pretotyping is about “finding the right it” by addressing the market risk (will people want it?) with an approach that reduces the assumptions of the market.
In other words, before embarking on an expensive and risky project, we want to understand if people will want to use that if we were to create that product.
How do we do it? According to pretotype we fake to build a viable prototype and test it as if it was the real product.
As Alberto Savoia explained to me:
Many many years ago IBM thought “we want everyone to have personal computers,” but there was no way (think about this is like 1980) that most people are going to learn how to use a keyboard.
In those days who used a keyboard? Secretaries, programmers, and writers. So they thought, we need people to be able to operate the computer without using the keyboard, just by using speech to text into a microphone.
Of course, they could not build the technology, they could not build the prototype for years because the technology was not there, computers were not fast enough.
But they thought, okay, maybe we want to make this investment, how do we actually make sure that people will want to use a microphone exclusively to interact with a computer?
So they did a very clever thing, they brought people in the room, they gave them a microphone, and there was a screen in front of that microphone and told them,
“Look, this a new way of running a computer, there’s no keyboard, you just speak to it, and give it a shot and tell us what you think.”
And the interesting thing, this is when I came up with the name pretotyping, originally I called it a pretendotype, because I thought, they haven’t built something that actually works, they’re pretending to have a prototype, so let’s go with pretendotype. Then I shortened the name to pretotype.
With this simple trick, the IBM team found out that even if they were going to build it, they assumed that most people would not use a keyboard, and this proved utterly wrong.
Yet they didn’t embark on a multi-billion dollar project to figure this out, as they realized that the speech-to-text was not fit for a work environment, as there were too many issues that they had not thought about in the prototyping stage!
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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