May 2022
May 2022
Great innovation begins with good planning. Acting on a plan without collecting evidence and reducing risks along the way can, however, result in missed opportunities and lost capital. One of the most critical aspects of planning required to convert a big idea into reality is a proof of concept (POC). A POC is vitally important for product development and business success because it demonstrates that the product will fulfil customer requirements while also providing a compelling business case for adoption.
A POC involves creating documentation that explains how a product or service would work, why it is needed, and what it needs to become market-ready. It also involves deciding what to demonstrate, what critical aspects to focus on, how to run trials, and how to access real market feedback and learn faster. Collaboration can simplify this essential process.
At InnovEcos, we help startups to grow and simplify this process. We support them in developing a POC for their product, resulting in a broader market share, once successful.
When refining your business plan, a POC is a test conducted to validate a product or idea, before committing more resources to bring it to market. It helps demonstrate the idea by examining its feasibility, validate market demand, and better understand the funding required.
For startups looking for funding, a POC shows that they have examined the idea’s viability and have gathered evidence that their detailed plan will be a success. This gives investors confidence in the product and increases the chances of getting financial backing. In short, this important stage of the project planning process ensures the project's success.
When venturing into uncharted waters, a POC can identify the difference between success and failure. If you find it hard to believe that others have not had similar ideas before, there may be a good reason why such a product doesn’t already exist. Implementing a POC allows you to demonstrate clearly how a product will fulfil a customer requirement. This helps you and your investors better understand whether it will be profitable.
As consumer needs and desires change over time, your products must adapt – but in this case, a POC is not always required. To outperform your competitors, your solution requires an additional unrivaled feature, the uniqueness of which may necessitate a proof of concept. A proof of concept allows you to gather direct feedback and insights on customer needs – and help you enhance your product accordingly.
Outsourcing decisions, or make-or-buy decisions, are those where a corporation must decide whether to produce a necessary product or obtain it through an external supplier. To be able to accurately compare the costs, a company needs a POC to determine how expensive product creation would be in comparison to simply sourcing it from an external supplier.
Through open innovation in collaboration with corporate colleagues and clients, the development of a POC can be streamlined for maximum efficiency. Internal knowledge may be limited in scope, and the market may evolve faster than closed innovation can keep up with. This makes collaboration with corporations essential for success and sustained growth. Collaboration allows companies to:
Collaborating with a corporation will allow a company to focus on applying an idea to an actual customer segment or industry, as well as getting access to expertise and customer contact help in defining a clearer purpose, and faster learning.
Using open innovation, it is easier to foresee risks and establish safeguards to prevent failure. A joint POC simplifies risk analysis through broader knowledge integration, allowing the company to access more reliable feedback from a wider range of experts, and change direction much faster if required.
To achieve success, the company must be able to visualize success. Using open innovation can allow the incorporation of features that have worked for others in the past to give a clearer definition of what success means for the project.
1. Be present in the main ecosystem and communitiesBe sure you’re actively involved in the most relevant innovation communities (e.g. local communities, industry communities, accelerators, open innovation hubs). Be certain your startup is listed and present on the most relevant innovation platforms such as Crunchbase, DealRoom, Tracxn etc. since corporations or other potential startups and partners could find your business through them. Through multidisciplinary work with professionals from all over the world, you can gain access to technological trends and discover new business models. This can help you accelerate your startup’s growth.
A common mistake with startups is often to only have an investor deck which is at too high a level to understand the product offering, which can lead to ineffective presentations.
An investor deck serves as more of an introduction or a teaser that focuses on a key value proposition and the market opportunity for a startup.
The purpose of a company deck, on the other hand, is to share your vision for your product line and your company as a whole. It demonstrates product features and value proposition, and contains a detailed overview of the company’s capabilities, references and awards.
By first calculating the internal effort required, you can determine the need to provide the right support for the project. Having an adequate workforce is crucial for a successful launch. Through the POC, you can determine what resources you need for the next steps.
The financial aspect of a POC is crucial because projects can stall if funding is lost at any stage of the process. At the same time, an over-ambitious budget can become an obstacle.
A POC is a step of mutual commitment and effort. So before approaching a corporation, think about the benefits in a holistic way. It is not just about the money you can get from the POC but also the assets the corporation can bring to you and how it can support your scaling. (e.g., data, IT expertise, market reach, etc.)
Don’t be scared, be open to negotiating according to the scenario and companies you are meeting.
Every POC has a start and an end. Once your company and your product has been validated, get ready to run a frictionless project .
In the starting phase of the collaboration, create your standard template for NDAs and Trial agreements. These contracts serve to protect both parties' legal and intellectual property rights. Having these documents ready to share could ease operations and speed up the POC.
Once the legal side has been agreed, you can have an introductory meeting to discover your customers' business needs and deep dive into the requirements to design your solution. Usually, discovery sessions can help focus on the main aspects of the POC that will lead to its success.
Last but not least, set up project milestones and frequent communication to encourage mutual exchange to monitor expectations and calibrate the output of your effort efficiently.
Companies often rush to launch straight to market without guaranteeing their chances of success. A well-thought-out POC can be an invaluable tool to ensure product success and company growth. It can be adapted for use across many industries and sectors. For new startups, a POC can provide a roadmap using external feedback to determine whether their idea has the potential to be a market success. If carried out properly, a POC could be the beginning of industry-shaking product innovation.
Are you interested in a joint POC?
If you believe you have a solution that taps into the future of Fintech, even at the MVP stage, and you are interested in a collaboration, get in contact with us. At InnovEcos we run a venture client program to accelerate open innovation, and we would be happy to discuss potential areas of collaboration!
ABOUT INNOVECOS
InnovEcos is the CRIF Open Innovation Hub. Our mission is to guide the discovery of business models and technological trends of the future to innovate services, products and processes through research, experimentation and collaboration with startups.
