HomeLaw BlogWhat Is A Proof of Concept (Explained: All You Need To Know)

What Is A Proof of Concept (Explained: All You Need To Know)

What is a proof of concept?

Why are they done?

What are the benefits of doing a proof of concept?

Keep reading as we have gathered exactly the information that you need!

Let me explain to you what proof of concept is and why it’s important!

Are you ready?

Let’s get started!

What Is A Proof of Concept

A proof of concept is an exercise where your objective is to demonstrate the feasibility of an idea or that a product will function as expected.

In other words, the proof of concept is to assess whether a product or a service works as intended and meets the needs of the business or client.

For example, a software developer will provide a potential client with a proof of concept to show that the software solution they built works as expected.

Alternatively, a startup company will build a proof of concept to show that their business idea is feasible and financially viable.

In essence, the proof of concept is to show that the business idea (the “concept”) works (the “proof”) and can be turned into reality.

Why Is A Proof of Concept Important

In business, proof of concept is quite important.

Performing proof of concept is an exercise performed by a product owner to verify the feasibility of turning a business idea into something concrete and viable.

The company that performs proof of concept is able to test the product or service before offering it on a larger scale or investing further capital toward the project.

In the context of a proof of concept, the business will solicit feedback from internal stakeholders, users, and those involved in the project.

The feedback can provide valuable insights as to what works and what may need to be changed.

When a proof of concept is successful, it means that the client, stakeholder, or end-user is convinced that the product meets their needs and can bring them value.

In the software industry and industries where there’s a lot of invocation, research, and development, the proof of concept is a highly valuable tool to ensure that the product being built is worth pursuing in that state.

Proof of Concept Benefits

There are several key benefits to performing a proof of concept.

The main benefit is that a proof of concept can help you evaluate the feasibility of your product or plan before heavy work begins or a significant investment is made.

Another important benefit is that the company or product owner will get valuable feedback from users and stakeholders involved in the proof of concept process.

The feedback obtained will allow the company to fine-tune and further enhance its product or plan.

Ultimately, the proof of concept allows a business to determine whether or not they have a minimum viable product on their hands to be released on a larger scale.

From the end-user or customer’s perspective, the proof of concept helps the decision-makers determine if the product works and meets their needs.

A successful proof of concept will demonstrate to the end-user or customer that the product works and should be purchased.

Recommended article:

How to Write A Proof of Concept

Depending on your industry, you may write the proof of concept in a slightly different way.

However, in general, no matter your industry, the proof of concept should have the same fundamental objective and purpose.

Your main objective with a proof of concept is to demonstrate the feasibility of your product or plan.

To achieve this goal, you should write your proof of concept by keeping in mind the following aspects:

  • What is the purpose of the proof of concept
  • What are your criteria for success
  • How will the proof of concept be carried out
  • For how long the proof of concept will be executed
  • What happens if the proof of concept is successful

Companies engaged in a proof of concept should carefully assess their objectives.

If you are looking to spend time, money, and resources on a proof of concept, what is the outcome that you are hoping to achieve?

In some cases, the parties agree upfront that if the proof of concept is successful, the client commits to purchasing the goods or product.

Recommended article:

Proof of Concept vs Prototype

What is the difference between a proof of concept and a prototype?

Although the terms proof of concept and prototype are used interchangeably in business, they are not the same thing and they have very different purposes.

Fundamentally, a proof of concept is an exercise where you are looking to see if you can turn an idea into a reality.

On the other hand, a prototype is a reduced version of the end product that you have built that can be evaluated, tested, and assessed for usability, functionality, and design.

You can look at a proof of concept as a theoretical demonstration of a product or concept to see if it has the potential to be turned into a product or offering in the future.

A prototype is actually an early version of a product that has been built, perhaps following a proof of concept.

The prototype will not have all the features and functionalities of the end product but will give stakeholders a rough idea of what the end product will actually look like.

Recommended article:

Proof of Concept Examples

Let’s look at a few examples of proof of concept to better illustrate the concept.

A proof of concept is used in many industries and in all types of companies, from startups to mature businesses.

Companies in hardware, software, manufacturing, science, engineering, security, filmmaking, drug development, and many other industries can use a proof of concept to test out an idea for viability.

Let’s look at some examples.

Example 1

In engineering and technology, proof of concept is used to test a new electrical device, a new robot, or a breakthrough product.

Example 2

In software development, proof of concept is used to demonstrate that the software satisfies the purpose for which it was developed.

The proof of concept helps the software developer choose the best software stack, simplify things, make the product more user-friendly, onboard a client, or find ways to improve profitability.

Example 3

In drug development, a proof of concept refers to an early stage of clinical drug development where the drugmaker is looking to go through the different phases of clinical research.


So there you have it folks!

What is proof of concept?

In a nutshell, a proof of concept is the process of obtaining evidence that a business idea, product idea, business plan, or project plan has the potential to be developed further and is financially viable.

For example, a software development company will use the proof of concept to assess whether or not a software product satisfies the purpose for which it was developed.

Whether you’re in software development, business development, project management, manufacturing, IT, cybersecurity, or many other industries, you may have to engage in a proof of concept to ensure that you are on the right track.

Negotiating your proof of concept and putting the right contractual framework is key to ensuring that your proof of concept is successful.

Although you will not necessarily need a business lawyer or contract lawyer to help you with simple and standard proof of concept, you may want to consider hiring one for more complex projects or those that expose you to greater risk.

Good luck!

Statement of work
Executive summary
Vision statement
Action plan
Project plan
Gantt chart
Project manager
Minimum viable product 
What is a beta

Latest Posts

Editor's Picks