How to Build a Proof of Concept for Your Business Idea

How to Build a Proof of Concept for Your Business Idea

Article authors
Lyana Kolpakova
Elena Rudenets

At the very start, any innovative project runs with some uncertainty in the background. Before investing in any new technology, idea, or method we are all eager to get proof that they really will work and avoid spending all available resources. This is true for any field. For example, no medical product will be launched before the results of the early, less stringent checks are received through one time or short period use of the medicine. Despite the fact that the results in no case take place of a large-scale investigation, they are the better basis for making decisions than pure assumptions only.

IT projects are no exception. Any innovative idea is risk-bearing and therefore requires to be verified not during the development process, but at the stage of pre-development and investment raising.

In our previous articles, we have already described how the Discovery Phase helps highlight the bottlenecks of a future product that are to be checked. Such a bottleneck may be the most complex or innovative feature of your IT product. If the planning stage raises such questions as to whether the solution that we propose is feasible, or what costs the development will require, or what restrictions exist and whether they can be bypassed, the worst thing that can be done is to rely on intuition and postpone testing for later. Indeed, at the stage when a lot of effort, time, and money has already been invested in the project, making changes to the concept is much more complicated than during the pre-development period.

Let’s see how to reduce risks at the start of an innovative IT project using Proof of Concept and what Proof of Concept means.

  1. What is Proof of Concept? 
  2. PoC vs MVP vs Prototype
  3. When Does the Project Need Proof of Concept?
  4. Proof of Concept Steps 
  5. Proof of Concept Cost and Timeline

1. What is Proof of Concept?

The Proof of Concept (PoC) is a demonstration of the practical feasibility of a method, idea, technology in order to prove the fact that the method, idea, or technology does work.

There are various approaches to the Proof of Concept definition. The software proof of concept templates are used to outline the key factors of the project and keep them in one place. Often PoC covers both the prototypes and the MVP (a working product with minimal functionality). However, we at Umbrella IT distinguish between these stages of the concept development, since they have different goals and produce different results. It would also be a mistake to take PoC for somewhat of a draft project, which needs only a little refinement in the future. The Proof of Concept format itself is much closer to the research than to the development of a working product. Only a small part of the system is tested and namely, critical features, while it may turn out that the result obtained will not be used in the further development. Since the purpose of PoC is quickly to make sure that the concept works, the secondary aspects that are important for the production version of the product may be omitted. In such cases, having received the green light at the Proof of Concept phase, the team can start coding the project from scratch.

2. PoC vs MVP vs Prototype

To clearly demonstrate for what purpose this or that method of testing new ideas is suitable, we have compiled a comparative table:

Proof of ConceptMVP
Issue CheckedWhether a feature implementation is technically feasibleWhether a product is in demand among users
Functionality CoveredOne key feature of a new product/one of the use scenarios
Product key features sufficient to solve a major problem of the user

Target GroupStakeholders, InvestorsStakeholders, Investors, Users
DeliverablesDevelopments and expert opinionWorking product

For more information on business tasks that can be solved using MVP, read our blog-article 4 Reasons Why Your Project Needs MVP.

The Proof of Сoncept covers one key function that is not necessarily to be brought to perfection. If we compare the prototype vs proof of concept, the prototype only visually reproduces a future application that contains the above function. For instance, at the stage of PoC, we need to check the technical feasibility of calculating the first-order-derivatives, but when creating a prototype we shall demonstrate an input field where the user can enter a function, as well as the CALCULATE button.

Umbrella IT offers a separate service for UX prototype development for a new site or application using the CustDev methodology. The next article will run on how this approach helps to make a highly-demanded IT product.

3. When Does the Project Need Proof of Concept?

Due to the variety of options for verifying ideas, it can be difficult to figure out which one should be allocated resources now to save months of development in the long run. Let’s clear out when we need the Proof of Concept in software development. 

The product proof of concept is an optional phase of the project, and in most cases is not required. If you want to create an application following the Uber principle, the project uncertainty will be minimal: the idea has been already tried and tested, every stage of development is described in detail, lots of ready-made solutions are available. While, for example, usage of VR / AR technologies, Machine Learning algorithms or Big Data Analysis several times increases the uncertainty level. Thus, according to Microsoft, about one third of IoT projects fail to go through the Proof of Concept.

New opportunities are fraught with certain risks, including a security threat, high complexity of projects, and a shortage of qualified personnel. So before launching the project, you need to make sure not only that the solution is working, but also that the business result is proportionate to the costs and risks.

Even when the technology stack is traditional, the Proof of Concept helps compare the performance of several solutions and choose the best one.

We used the Proof of Concept approach to choose a service for building routes for commercial cargo transportation on the SmartSeeds project. It was critical that the route takes consideration of any restrictive signs specific for freight transport: driveway, weight, height, width, and time. In this case, the project should have a reasonable cost. 

Our team developed a test bench to test several mapping services. This made it possible to visually compare the routes that Google Maps, HERE.maps, and Yandex.Maps built taking into account the relevant restrictions for freight transport. The results were ranked by the number of traffic violations within the constructed route. Having prepared a conclusion on the cost of each solution, we recommended the service that best solves the task.

PoC allows checking any idea for bottlenecks. For example, in recent years, marketers have set hopes on ad personalization technologies. However, the excitement and hasty introduction of innovations have led to difficulties with the collection, integration, and data protection. At the end of 2019, Gartner came to the conclusion: consumer confidence decreased, personalized offers became less effective, which led to a decrease in ROI. In addition, careless handling of personal data has attracted the attention of the regulatory authorities. All of this could have been avoided if problems had been identified at the stage of testing the hypothesis. At the moment, the forecasts are disappointing: by 2025, 80% of marketers will give up personalization. Those who are still planning to invest in these technologies, the Gartner analysts recommend making a decision only after the demonstration of Proof of Concept.

Umbrella IT experience proves that using the Proof of Concept approach provides businesses with a number of benefits. Unviable and unreasonable ideas are screened out at an early stage, and the saved time and resources are used to implement the tested ideas. The percentage of successful and effective projects is increasing, in addition, the breakthrough products appear that allow to leave behind competitors. When testing the concept of innovative ideas becomes a common practice in the company, the speed of business development increases by 2-3 times.

4. Proof of Concept Steps

To understand how the Proof of Concept works and what result is achieved during the implementation process, we suggest going through the stages of PoC in software projects. 

The PoC process in Umbrella IT covers 5 steps.

4.1. Start of activities

You come to us with an idea willing to choose the most effective solution. First of all, an analyst is engaged to determine the purpose of PoC and choose from all the functions of a new product the most complex and innovative ones. At this stage, possible restrictions are also fixed.

4.2. Usage scenarios

Based on the information received, we form a list of use cases to be checked in the frames of PoC. The use cases are the scenarios of using the future application by the users. If the Discovery phase is preceded by a verification of the concept, then most likely such scenarios have already been developed - then those are selected for which the innovative functionality is critical.

At Umbrella IT we offer the PoC in 1 Month service. The term and the composition of the team (described below) are determined on the basis of our experience - we implemented 50+ PoC and MVP projects. At the planning stage, together with the client, we approve the number of scenarios that can be verified in 1 month. For the complex products, several PoC studies may be recommended - for each innovative feature.

4.3. Roadmap

The complete scope of tasks is divided into 3-4 weeks, each week presents a milestone and is equal to 1 iteration. Since the result of the Proof of Concept is not a finished product, but a prototype of a solution with the conclusion “fit / not fit”, speed and small investments are important for this phase. Therefore, where appropriate, we use the solutions we have tested - this allows us to speed up the workflow.

Since the Proof of Concept is mostly a story about a new approach to solving problems, we are not talking about using any standard templates. However, some parts of the functionality can be written not from scratch, but based on the ready-made modules that have been developed over 10 years of working on various commercial projects.

4.4. PoC development and testing

For your project, we assign a team consisting of a developer (Senior or Middle), a QA-engineer and a Project Manager (PM), who controls the workflow and acts as a link between the team and the client. The development phase takes about 3 weeks. The results of the work are submitted to a demo stand for proof of concept testing to check the accuracy of implementation.

The key success factor lies in constant communication between the team and the client. In many cases already during the verification process itself, it becomes clear whether the idea meets the business expectations. If it turns out that some of the assumptions were wrong, timely adjustments allow you to transform the idea in the development process and arrive at the desired result. 

4.5. Demo

Upon completion of the works, we demonstrate you the technical proof of the idea. The experts give an opinion specifying the detected restrictions and recommendations for further development.

If it turns out that the idea is not feasible from the technical point of view, or the existing solutions do not meet the requirements, we offer alternative ways to develop the project. If however the results meet the proof of concept evaluation criteria, this gives a green light for launching the project, and also serves as a powerful argument for raising investments.

Based on the Proof of Concept data, but not assumptions, you make an informed decision whether to develop a project or move on to testing another concept.

5. Proof of Concept Cost and Timeline

The minimum time required to test a new idea or technology is 1 month. The scope of work is distributed among the team members as follows:

  • Project Manager – 40 hours;
  • Senior/Middle Developer – 120 hours;
  • QA Engineer – 80 hours.

Umbrella IT offers the PoC in 1 month service for $ 7 000. We guarantee the result, so we accept 80% of the payment upon the completion of the work.

It is important to realize that the team size and the development time may vary depending on the complexity of the project, the availability of the specialists working with specific technologies, and other factors. Accordingly, the value of the Proof of Concept may change. Share with us the info about your project and we will calculate the exact cost of the PoC based on the product specific.

Going to launch a new product and reduce risks? Write to us. We will find the solution that exactly fits you.