Proof of Concept: When You Need a PoC for Your Business

Explore how to effectively use a Proof of Concept to validate business ideas, minimize risks, and attract investors. Essential reading for startups.

Before investing thousands of dollars into your software project and bringing it to market, have you ensured it will succeed? When you've already started investing in your software, it could mean wasting much of your capital – especially if you own a startup. That's where proof of concept (PoC) comes in. 

With a proof of concept, you can validate your idea and collect the evidence you need to find funding. Plus, it brings you benefits that will aid you in developing your idea.

This blog will define PoC in software development, business development, and product development. Then, we'll reveal when you need this document and how you can create it.

Proof of Concept Explained

A proof of concept (PoC) is a document that outlines the results of a feasibility study of a business idea. More specifically, you can use this document to establish if a startup, product, or project is plausible and financially sound. As such, it's the initial step in developing your idea.

Though you might draft your idea and ask for feedback, this process doesn't create a deliverable. Instead, it uses a rough draft to gauge how well the fully-fledged version will perform on the market.

In creating this document, you must gather evidence that your idea meets a customer’s particular need. Then, you can use this proof to gain funding for your idea.

Let’s dive deeper into the different types of proof of concept.

PoC in Business Development

This document acts as a proof of the necessity of your startup. The testing and research you'll do to create this document will prove the feasibility of your business plan. In this type of proof concept, you should demonstrate:

  • Market Fit: You'll need to detail how your startup will fit in the industry's market.

  • Technology: To prove your idea is viable, you'll need to note which technology you'll use. This will impact the resources you need and prove that your operations will be efficient.

  • Demand: When you create it, you'll discover the demographics wanting to patronize your startup.

  • Risks: It should outline the risks your startup may encounter and how you can mitigate them.

  • Feedback: It needs to show the testers' thoughts about your startup idea. 

What Is PoC in Software Development?

In software development, this is a crucial step in creating successful programs. When you create this document for a software idea, you'll need the knowledge of expert developers to know the specifications your software requires and resolve technical issues. In fact, you could outsource this project to ensure you have expert opinions guiding your software to success.

For example, Walmart partnered with IBM on proof of concept software to help them track their food from the farmers to their various stores worldwide. By going through this process, they could test their idea on a small scale with only two products, reducing the risk of lost investment in the case of failure. According to reports, the result was a blockchain that could track down issues in their products in 2.2 seconds, while it would take over 6 days.

PoC in Product Development

When creating a product, you need to take it through the process of creating this document to ensure its feasibility. Moreover, it helps you verify that the product will have an audience.

Furthermore, it helps you establish the final product’s features:




By researching the resources and processes required to create your product, you can establish the minimal cost of producing it.


You can establish how the product will work using this document.


By considering the research conducted in the preliminary phase of this process, you'll be able to estimate the quality of the product.


This document will detail the features and makeup of the product, which will help you gauge its durability.


The feedback portion of the document will help you discover and rectify this product's problems.

When Does Your Business Need a Proof of Concept?

You should consider going through the process of creating this document when you're planning to work with the following:

New Idea

You should use this concept if you're considering creating a completely new idea. New, untested ideas can easily lead to failure. According to studies, 9 out of 10 startups don't succeed. Yet, with this document, you can quickly discard ideas that won't meet your financial requirements.

For instance, if you want to create a startup that offers ingenious and modern advertising services, you should use this document. Then, you could verify which services are viable and ensure you don't waste capital trying to promote services that won't bring the desired result.

New Technology

When you're using new technology, you may need this document. New technology brings both opportunities and technical issues. These issues could render your idea unfeasible or dissuade users from using it. Therefore, if you're using something like a new program, you should first create a software proof of concept.

New Feature

If you already have a product but wish to add a new feature, you should still test this idea. Integrating a new feature requires resources. To avoid wasting these resources, you should test the idea to ensure that it offers your customers' desired functions and meets the expected quality.

For example, if you manage a hospital, you could include a new feature in your system to avoid disruptive ransomware. With proof of concept, you could establish that it is a pain point and that this problem needs to be addressed. Then, you could verify with the document whether your solution would be successful.

Complete Overhaul

Before you completely change your business, you should consider testing this pivot. Studies show that 6% of startups fail because their pivot didn't work. So, if you want to move to a different industry, such as oil and gas, you should first test your idea to ensure that you remain out of this statistic.

Limited Resources

Though using this document is a best practice in general, it's necessary when you have limited resources. In this situation, you must only use your resources on projects and products that will likely succeed. For example, if you want to create a new mobile video game, you can use a software program to verify that its design is compelling to gamers.

The Benefits of Using Proof of Concept for Your Business

Creating this document can help your business in the following ways:

  • Proves Feasibility: You can discover if your idea is viable considering the required resources.

  • Ensure Success in the Market: It will ensure that your idea is viable by verifying that it has a place where it will fit in the market. Plus, this document can help you estimate demand.

  • Enhances Your Idea: With the research and feedback you'll receive, you can improve your idea. Plus, the feedback may give you insights you may not have considered originally.

  • Attracts Investors: You can use this document to convince potential investors that your idea will be successful, so they should fund it.

  • Mitigates Risks: You could avoid unfeasible projects with PoC software development. According to studies, companies cancel 31% of their software projects. Therefore, you can avoid wasting your resources on ideas that have other problems.

  • Reduces Cost: This document can help you focus your resources on viable ideas. Moreover, this process helps you discard poor ideas before you invest in them.

The Key Steps in Creating a Proof of Concept

Now that you understand why and when you should use a proof concept, let's explore the process of creating this document.

1. Define Your Idea

To create a proof of concept, you should first define your idea. In particular, you should consider the problem you're trying to solve and who could help. 

Then, you should decide what the best solution to this problem is. If there's already a solution on the market, you should consider how your idea will bring more value to the user. Next, you'll decide what the best workflow is to develop your idea and find ways to avoid likely disruptions.

2. Select Success Criteria

After defining your idea, you should decide how you'll judge your idea is success. You may consider metrics such as return on investment.

3. Estimate Your Timeline

Now that you've selected a success criteria, you should create a timeline for this document.

4. Calculate Required Resources

After you've outlined a timeline, you should calculate the resources you’ll need to create your idea. These calculations should consider the resources you can access and the ones you still need to acquire.

5. Develop & Test Your Idea

Once you've calculated the required resources, you should create a draft of your idea. It could be a document, sketch, or presentation. Next, you'll show your idea to staff and individuals in your target audience.

6. Review and Refine

After receiving feedback from those who examined your idea, you should alter it to improve it. You can then test your idea and refine it until you're satisfied.

7. Report Your Findings

Finally, you'll gather your findings into a report confirming your idea's viability. If you find that your idea isn't viable during any of the steps, you can disregard it.

How Divelement Can Help You Create a Successful PoC for Your Business

While you can do some of the software proof of concept creation steps in-house without developers, you'll need expert knowledge to figure out the specifics. Hiring developers for PoC software development can be prohibitively costly for a startup.

In this scene, Divelement has a wide range of experience in technologies that they'll use to maximize the success of your project. They will help you from the inception of your idea to the creation and maintenance of your software.

Moreover, they can conduct targeted research to ensure your project meets the needs of your end users. In addition, their project managers can help you stay on schedule and meet every key performance indicator.

Now you know PoC in software development, business development, and product development is a feasibility study. You can validate your idea with the evidence you've gathered in this document. Then, you'll surely have invested in an idea that will lead you to success.

You should use proof of concept to test new ideas, features, and technology. It will allow you to mitigate risks, reduce costs, and attract investors. So, to begin a successful software development process, you can follow our guide and consult with expert software developers like Divelement.