Importance of a Proof of Concept
It’s typically not the things we don’t know that sink our companies, but the things we do know but don’t implement. One of the primary examples is the Proof of Concept.
It’s a basic concept: make sure your audience values your product before scaling it up.
We, as entrepreneurs, can often get more excited about our product or service than our potential customers. We build and build, and ultimately end up with something that no one wants or that doesn’t have market viability.
As business owners we must ensure there is a tangible response to our products or service BEFORE we bring it to the mass market. A tangible response means people are willing to put real money on the table for our offering.
It doesn’t mean we have friends and family telling us, “that’s a great idea” (sorry mom, I still love you) or have our social media followers tell us, “I would buy that” (thanks for the encouragement, HappyChaz273).
Those endorsements, as much as they might be indicative, are not guarantees. In fact, they can often lead us into over-investing in a bad idea.
I used to own a publishing company. Inevitably, every potential author I worked with emphatically told us how much their friends or family enjoyed their book. “That’s great,” I’d think to myself, “but those people know you and are willing to enjoy something because they enjoy you.”
To successfully launch a book it needs a 3:1 share ratio. In other words, a reader (on average) will share a book with a minimum of three friends. If the number falls below that ratio, it is likely that the book will fizzle out. The reason being, it doesn’t have the internal viability to continue its growth.
Adding marketing and advertising dollars will create a short term bump, but the share-ability factor will eventually play out. Free Random Tip: One little known secret about the publishing industry is that only 1 in 5 published books makes money. Out of the five, 2 will lose money, 2 will break even, and 1 will make a considerable amount of money (and cover the rest and more).
Ensuring the Proof of Concept for your product is like doing field-research to find the 1 in 5 product that will work.
A POC is typically a minimal viable product of your potential offering. For example, it may be an “app” without all the bells and whistles, but simply something to determine if people are even interested in the basic concept. If people start purchasing the product regularly (even at a reduced price), it demonstrates that there is market viability for your product.
In addition, by offering the product without it being fully actualized, you can garner INVALUABLE information from your customers. They can inform you as to what features, widgets, or options are the ones most desired; and which ones will most increase the value of your offering.
Over the years, I’ve been given some great advice about the POC. These are all similar sayings (a few of the gems), but they’ve all resonated with me in different ways over the years. Maybe one of them will stick in your mind:
It’s better have a Ford on the street than a Ferrari in the garage. In other words, get your product to market!
Birth Ugly. Everything is initially going to be “meh.” But it can grow quickly when it gets real-world feedback from the market.
Launch at 80%. If you wait until everything is perfect, you’ll never launch.
It’s easier to turn a moving car. Doing something (anything!) allows you to pivot. Whereas if you are doing nothing you’ll have nowhere to go.
All of those nuggets of wisdom may seem obvious, or even contrite, but I am always shocked by how often entrepreneurs get in their own way.
Instead of launching, they build something that no one wants, OR, they are continually building something that they don’t ever finish. Both of these options are slow-roll self-sabotage. They’re a way to satiate our entrepreneurial impulses, but are ultimately going to be unsuccessful.
Instead, test your product in the real market. Give it a trial run. Do surveys. Offer it for purchase on a website. Run ads. Pre-sell it. Do whatever you can to test a very minimal option for your product…before you invest unGodly time and money into a dud.
When you have a steady and enthusiastic response for your offering, you’ll know you have a successful proof of concept. After you have confidence in your product, you’ll be able to ramp up sales into a successful business.