What Is POC In Business? Complete Guide For Entrepreneurs


Entrepreneurs often have a lot of business ideas in their minds, but making them come true in the real world is a different conversation. You can’t just invest a whole lot of your time, money, and resources if don’t know if your idea will work. So, how does someone verify it, the answer is a proof of concept.

Proof of concept in business is a practical test to see if an idea can work for real and not just theoretically. This article dives deep into the significance of POC in entrepreneurship, with real examples and a step-by-step guide on how to create one.

What is POC in business?

POC in business stands for Proof of Concept. It’s a practical test to see if a new business idea can work in real life. This includes gathering data from primary and secondary sources, it could be from your own surveys or case studies from the past. The important part is to verify that it can work before companies invest heavily in them.

There are a lot of ideas out there to start a business with, but not all are worth it for you to invest all your time and resources in. This is why it is important to develop a proof of concept, not only for you but for your future investors, partners, and customers.

Having a solid proof of concept means that at the earliest stage, you can get some confidence that there will be a big chance that your product or service will not crash. Although running a business is full of ups and downs, you can’t 100% predict that your company be successful, but a proof of concept will be the closest predictor to it.

Related: What Is A Business Concept? Ultimate Guide & Writing Tips

What is an example of a POC in business?

Examples of POC in business include:

A POC, or proof of concept, in business is like a test run. Here are some simple examples:

  1. Website Chat Test: Imagine a company adds a chat feature to their website. Before they make it available to everyone, they try it out themselves to see if it works.
  2. Battery Trial in a Toy: A toy company thinks about using a new kind of battery that might last longer. They put it in a few toys first to see if it really does last longer before using it in all their toys.
  3. Cash Register System Experiment: A store wants to use a new cash register system. They set it up in just one aisle first to check if it can handle sales well before putting it in the whole store.
  4. App Sign-up Method Test: A company has a new way for people to sign up on their mobile app. They ask their employees to try it first to make sure it works right.
  5. Eco-friendly Material Sampling: If a company wants to use a new, environmentally friendly material in their product, they make a few samples with it first to see if it’s good.

That’s how POC works in business. It’s the initial step to verify if a fundamental idea is viable. It comes before more comprehensive tests like prototypes (a working model) or MVPs (a basic version to see if there’s market interest).

Related: What Are Five Things To Consider When Evaluating A Business Opportunity?

How do you write a POC in business?

Creating a Proof of Concept (POC) is a key step in validating if a business idea or solution is feasible. Here’s a direct, step-by-step breakdown:

1. Define Clear Objectives

Start by pinpointing what you want to prove with your POC. Be specific about the problem you’re addressing and the outcomes you hope to achieve. Having a clear objective will make your data gathering simpler because you will be able to focus on the information you truly need.

2. Research & Data Gathering

Collect all relevant data and information that can help you understand the problem better. This includes market trends, customer feedback, and technological insights. Knowing the landscape ensures you’re on the right track.

There are many resources you can use to gather your data, be sure to only use the relevant and trusted sources. If it is an article from a website, make sure that it is an authoritative site on that particular industry.

3. Develop the Concept

With the information you’ve gathered, design and create a simple version of your idea or solution. This doesn’t have to be perfect, it’s a basic representation to test its viability. The concept must be testable and not just a fact or general information. It should also include your main component of the business whether it is a product or service.

4. Test & Validate

Once you have your concept, it’s time to put it to the test. Check its functionality, gather feedback, and identify any issues or improvements. The goal is to see if the concept holds merit and if it’s technically feasible.

This does not mean that you have to create the product or service itself, that part is called developing a minimum viable product or MVP. The goal here is to prove that your concept works and that this business idea is worth investing more of your time and resources.

5. Document & Present Findings

After testing, compile all the results, feedback, and lessons learned. Document everything, both the successes and the challenges. Present these findings to stakeholders or decision-makers to determine the next steps.

By following these steps, you ensure that your POC is thorough, providing a clear picture of whether or not your idea is worth pursuing further.

Proof of Concept vs Feasibility Study

A “Proof of Concept” (POC) confirms that a specific business idea or process can work technically and functionally. In contrast, a “Feasibility Study” assesses whether that idea is viable to implement, considering various aspects such as cost, time, resources, and market demand.

Feasibility Study

A POC demonstrates the technical viability of a specific function or component of an idea, ensuring it can work in practice. On the other hand, a Feasibility Study evaluates if the broader project or idea is practical to implement, considering factors like cost, time, resources, and potential market demand.

When a tech company wants to introduce a new software feature, they might first create a POC to ensure that the feature doesn’t cause system errors or crashes. It’s about checking the idea’s foundational viability.

However, before going all-in and investing in the complete development and marketing of this software, the company would conduct a Feasibility Study. This dives deeper, assessing not just whether the feature can work, but whether it’s cost-effective to produce, if there’s sufficient market demand, potential legal issues, and more.

In essence, while POC answers the “Can we do it?” question, a feasibility study addresses “Should we do it and how?

Related: What Is A Serial Entrepreneur? Traits & How To Become One

Proof of Concept vs Minimum Viable Product (MVP)

A “Proof of Concept” (POC) validates that a specific idea or function can work, while a “Minimum Viable Product” (MVP) is a basic version of a product introduced to the market to gauge interest and gather feedback.

A POC centers around validating the technical feasibility of a specific aspect or function of an idea, ensuring it operates as envisioned. In contrast, an MVP is a basic, market-ready version of the product that is launched to a select audience or the public to gather feedback and gauge interest.

For a company building a new app feature, they might start with a POC to confirm the feature’s functionality and ensure it integrates smoothly without technical issues. It’s about establishing the feature’s core technical viability.

Once this technical foundation is confirmed, the company could proceed to develop an MVP. This would be a stripped-down version of the app, including the new feature, released to a subset of users. The goal here is to understand user reactions, garner feedback, and see if the feature holds genuine appeal to its intended audience.

Proof of Concept vs Prototype

A POC checks if an idea can work in the simplest way, while a Prototype shows a clearer, more detailed preview of what the end result might look like.


A POC is like a test run to see if a basic idea can work at all. It’s the first check to see if your idea makes sense and is possible. On the other hand, a Prototype is a simple version of the product that shows how it might look or work in more detail.

Imagine you have an idea for a new toy. A POC would be a rough sketch or a basic model just to see if the idea is possible. Maybe you’re seeing if it can balance on its own or if a certain part can move.

If that test goes well, you might make a Prototype. This would be a more detailed model of the toy, showing its colors, how it moves, and how kids might play with it. It won’t be the final toy, but it gives a clearer picture of how the finished product might be.

Final Thoughts

Standing out in the marketplace requires not just great ideas but also ensuring those ideas are viable and impactful. Tools like Proof of Concept (POC), prototypes, and feasibility studies serve as crucial checkpoints in this journey, helping businesses turn their mere ideas into successful implementations.

A POC isn’t just a formality, it’s a strategic step to validate the strength of an idea before investing deep into its execution. It saves time and resources, and, most importantly, offers clarity. By putting effort into creating a well-thought-out POC and leveraging other assessment tools, businesses can confidently move forward, knowing they’re building on a solid foundation.

As we move towards an even more competitive future, these initial evaluation steps will play an even more significant role, ensuring businesses stay innovative, efficient, and successful in their ventures.

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