A proof of concept, or POC, is meant to validate an idea’s feasibility, practicality, and market potential before moving forward with full implementation. The term POC also applies to business development and physical products (remember Jobs and Wozniak, who made samples of the first Apple computers in the garage to get investors), but we’ll discuss POC in software development.
This article will define what a POC is, explain how to create it step by step, and give some practical advice that’ll help you gain customers' trust.
What is POC
A proof of concept is a way to ensure that a service or product idea can work. According to the Gartner glossary, “A POC should demonstrate that the product or concept will fulfill customer requirements while providing a compelling business case for adoption.”
This demonstration can take different forms depending on the product, the development stage, and the stakeholders’ requirements. It can include conducting market research, writing test code, and creating basic design mockups.
To know more about functional and nonfunctional requirements, their specification and types, read our dedicated article.
POC accomplishes several tasks:
- verifies that a product you’re building actually solves the problem and is very likely to achieve a product/market fit;
- checks the feasibility of the idea: not only if it is technically doable but also whether the company or investors have enough resources and expertise to complete the task;
- helps to learn about upcoming challenges;
- allows you to get stakeholders' feedback, which will guide your development process; and
- helps to set a realistic budget.
In essence, a POC not only validates the potential of your idea but also equips you with critical insights to refine your approach. It's a powerful tool to ensure the project starts on a solid foundation, reducing risks and aligning expectations early on.
Proof of concept vs prototype vs MVP
The term proof of concept is often used interchangeably with prototype and minimum viable product (MVP), though they are not entirely synonymous.
Proof of concept, prototype, and MVP in a new product predevelopment phase.
A prototype is an interactive model of a product or feature built to explore design, usability, and sometimes functionality (a functional prototype) before writing production-ready code. Usually, prototypes are created using tools for UI/UX design, such as Figma, Sketch, or Axure. A prototype might simulate user interactions, like a login flow.
A prototype template. Source: Figma
An MVP is a working product version with just enough functionality to address a specific problem and deliver value to early adopters while minimizing development time and cost. It focuses on the primary problem-solving feature set.
Prototypes in Product Discovery
These three deliverables occur at different stages of product development process: The POC happens early at the ideation phase to validate the feasibility of an idea, a prototype is then designed, and finally, the minimum viable product (MVP) is launched to attract first customers and gather feedback.
One of the fastest-expanding companies in the transportation tech domain, Uber, started like that. Uber's MVP—an iPhone app called UberCab, launched in 2009—provided bare ride-hailing. Users would send a text message with their pick-up address, and UberCab would match them with the closest available taxi, dispatching the driver to their location.
That said, it’s important to remember that code created early in the validation phase of the idea almost never transitions into the production version.
"In 90 percent of cases, the code written for a proof of concept is discarded and rewritten from scratch. Nothing remains of it except for the accumulated knowledge and expertise gained in the process. We validated hypotheses, explored how they work, assessed and accounted for risks, mitigated them, etc. This body of knowledge represents a significant and valuable part of the process," says Eugene Ovdiyuk, Project Manager at AltexSoft.
When do you need POC?
A proof of concept is critical when developing a new solution.
"If the idea isn’t new and there are plenty of similar products on the market, a POC isn’t necessary. However, it’s a different story when nothing like it exists. In these cases, potential customers or investors might see the risks and costs as too high to justify committing millions upfront. But, say, with a $50,000 investment, you can test the hypothesis, assess risks, and create some sort of a trial version. Seeing a working product builds immediate confidence," explains Eugene Ovdiyuk.
A proof of concept is also useful for expanding and enhancing existing products when planning to build a new feature, integrate third-party services, or migrate data.
In these cases, the POC focuses on verifying the viability and effectiveness of the specific functionality, technologies, and processes or whether they will meet users' needs. The latter can be done via A/B testing: Users are randomly shown either the initial version of the product (version A) or a new version B, and their behavior is tracked against specific metrics, such as clicks, conversions, or time spent.
How to create a POC step-by-step: best practices
The creation of a POC may be suggested by the client, investor, marketing director, CTO, software architect, or other stakeholders who are uncertain about the future product’s success.
But whoever initiates the POC, it is a product or project manager who is usually responsible for its completion. These tips will help deliver the most comprehensive POC and gain customers' trust.
The steps to create a proof of concept
Define your business idea
Start by clearly outlining the problem your idea addresses and its value to users. Identify your target audience and articulate the unique benefits of your concept compared to existing solutions. Avoid broad generalizations—focus on specific pain points or opportunities. Remember, the more precise your definition, the easier it will be to test its feasibility and market potential.
Set your goals and criteria
Establish objectives for your POC: They should be specific, measurable, achievable, relevant, and time-bound (SMART). For instance, you aim to achieve a 20-percent conversion rate from a test group or demonstrate that a POC integrates seamlessly with existing systems.
It makes sense to write proof of concept requirements in the same way that feature requirements are written so that it is clear what you are trying to accomplish
Set the budget and timeline
Ideally, defining a clear scope for creating a POC is helpful. However, when the concept is new, it’s often impossible to know precisely how it will take shape. As a result, the POC process is typically constrained by just two factors: time and budget. While the client usually dictates the budget, it’s best to aim for a short timeline—around two to four weeks.
Although adjustments to the budget or timeline might occasionally be necessary, it’s crucial to stick as closely to the original plan as possible.
It’s common for the team to suggest additional features, saying, “Let’s add this functionality and see how it works.” The product manager must resist these impulses to avoid scope creep. Trying to make the proof of concept perfect means too much effort before you can run the pilot. Remember, the POC’s purpose is solely to test the core hypothesis
List the resources needed
Compile a comprehensive list of all the resources required to bring the POC project to life. This should cover both tangible assets—such as equipment, tools, and technology—and intangible ones, like expertise, skills, and team collaboration.
AltexSoft experts recommend that only experienced high-level engineers—software architects or at least senior developers—be engaged to work on POCs.
Create and test the demo
Proceed with the planned activities. As mentioned above, it can be doing market, designing an interactive prototype, performing A/B testing, or writing some working code.
Monitor the previously defined metrics and evaluate them against your objectives to see whether your POC succeeds. Use dashboards, analytics platforms, or manual tracking to collect data. Encourage candid feedback from stakeholders, as it’s a chance to refine the solution before full-scale development.
Document insights systematically and evaluate them against your objectives.
Read our comprehensive article on technical documentation in software development. It’ll guide you through the various types of documentation, share best practices, and introduce tools that can streamline the process.
Present your results
Summarize your POC's findings clearly and compellingly to present your results. This should prove that the product is worth the effort, or, on the contrary, that it's wise to abandon the idea because it is doomed to failure or technically unfeasible.
Include key successes, challenges, and recommendations. Use visuals like charts, prototypes, or demo videos to illustrate your points. Show how the POC met (or didn’t meet) your goals as convincingly as possible and provide actionable next steps. A strong presentation ensures buy-in from stakeholders and lays the groundwork for future collaboration even if, this time, the idea didn’t take off.
Proof of concept examples
In business applications, POCs have been pivotal in turning ambitious visions into reality. This section explores practical examples of POCs transforming concepts into tangible solutions or, sometimes, preventing the owners from wasting money.
Build a basic website to test the waters
The Airbnb story began in 2007 when Brian Chesky and Joe Gebbia came up with the idea of renting out air mattresses in their living room to attendees of a local design conference who couldn’t find hotel accommodations. The POC was simple: They created a basic website named AirBed & Breakfast. To their surprise, three people signed up to stay with them.
The next step was a functional MVP of the platform, allowing hosts to list their spaces and guests to book them. After refining the site with quality photos and user reviews, the product resonated with users and got the first investment.
Present the idea with a captivating video
The story of Dropbox, an online backup and storage service, provides a great example of the importance of presentation. Faced with a costly and complex development process, Dropbox needed a way to prove its concept without a finished product. The co-founder, Drew Houston, created a simple explainer video showcasing the software’s core functionality and user-friendly design.
The video resonated with viewers, generating excitement, early sign-ups, and invaluable feedback. Dropbox’s beta sign-up list grew from 5,000 to a staggering 75,000 users overnight. The video validated the idea and attracted the investment needed to build a fully functional product.
Get the feedback by interviewing potential users
Rob Walling, founder of the email marketing platform Drip, validated his idea of using a simple yet effective approach. He emailed 17 startup founders and influencers he knew to ask them whether they would pay $99 monthly for the solution, retargeting website visitors via email. His goal was to secure commitments from at least 10 people. The experiment resulted in 11 positive responses, confirming the market need and helping define Drip’s initial target audience. This POC laid the foundation for a successful product launch.
Confirm demand via market research
A leading provider of B2B payment technologies in hospitality partnered with AltexSoft to explore new market opportunities. Processing $2.1 billion in hotel commissions annually, the company sought to enter new markets with minimal changes to its product. Our team conducted extensive research to define market size, growth rates, and distribution patterns, identifying potential customers with low digitalization.
We created detailed reports for each segment, highlighting potential revenue, growth opportunities, and the client’s strategic fit. Additionally, we pinpointed barriers like reluctance to adopt new software, which impacted the viability of the client’s tool in certain sectors. Identifying high-potential segments and delivering actionable insights enabled the company to make informed decisions: prioritize markets with the most substantial demand for their product.
Validate the idea with technical research
One of AltexSoft's customers decided to upgrade their technologies to a new version of the framework. Since it’s a large platform with a lot of dependencies, we offered a POC with the following objectives:
- migrate one piece using a strangler fig pattern to validate the approach;
- identify and document technical and organizational challenges, as well as possible workarounds before a full-scale migration;
- develop an approach for dividing the project into smaller parts for iterative execution; and
- estimate the timeline and expected budget.
As a result, our experts created a roadmap for a full-scale migration.
Another AltexSoft client, a tech entrepreneur in the travel industry, came to us with an idea for a unique travel app: instead of browsing tours, users would describe their preferences, choose the country, pay upfront, and let the app match them with tours based on their budget and desires. The idea of design (an interactive globe where you can choose a country) and user flow (first, you pay, then you find out about the details of the tour) were both new.
To explore how well this idea aligned with market needs and whether it was technically feasible, we suggested starting with a POC. UI/UX validation confirmed that the globe idea is not difficult to implement. But there were problems with the flow. The user's steps should correspond to the requests the application sends to the travel inventory provider (e.g., tour operator or OTA). However, the existing technical solutions do not allow requests, for example, the price of a hotel, if the hotel itself has not yet been selected and the dates of check-in are not known. The same is true for flights.
Based on the POC results, our engineers and business analysts concluded that new solutions should be developed and implemented for such a product. This would require significantly more time and money than the client was ready to invest. Remember that the successful POC just does its job: It explores viability and helps to make the right decision.