Proof Of Concept

Stage 2 – Proof of Concept

Proof of Concept involves the application of research to demonstrate the concept works and is technically and financially feasible.  The aim of the proof of concept is to obtain evidence that demonstrates that a business model or idea is feasible.

Areas of consideration include:

  • Concept feasibility.
  • Developing a working model (technically this is not a prototype).
  • Product/Service planning and specifications.
  • As idea evolves revisit market research.
  • Financial assumptions.
  • Financing – innovation assistance, self, family and friends.

Questions to consider include:

  • Have all ain ethical issues been addressed?
  • Will extensive training be required for correct and safe use?
  • Do you clearly understand how and why the customer is likely to use the opportunity?
  • Will the opportunity reach the market in a short time period?
  • Have you identified other technologies that complement and enhance the opportunity?
  • Do you have access to the necessary production facilities?
  • Is each team member willing to be part of the commercialisation process?
  • Have different commercialisation options been assessed?
  • Have you indentified all the expenses that will be incurred?
  • Have financial statements been prepared?

The following is a practicle guide to achieve this:

Set yourself some goals, actions and deliverables:

Goals – These should communicate the desired outcomes you are trying to achieve at this stage

  • Understand product application and project scope including technical/service requirements.
  • Develop technical/service specifications based on end user requirements.
  • Identify key elements required to demonstrate the product/service works and is reproducible.
  • Identify potential manufacturing/service delivery process.
  • Understand the market.
  • Understand product /service attributes (features, benefits, advantages).

Actions – What needs to be done to realise your goals

Product/Service and Intellectual Property

  • Research and evaluate specifications; design and variations, performance, cost, use.
  • Perform risk analysis.
  • Perform SWOT analysis.
  • Research relevant IP and alternate solutions/complimentary technology (or service).
  • Review IP protection strategy.

Sales and Marketing

  • Research market opportunity, growth trends, size, competitors, risks.
  • Prepare draft Marketing Plan.
  • Develop potential customer list.
  • Identify potential trial participants and contact.

Manufacturing

  • Investigate and document capital equipment list, potential manufacturing process, potential contract manufacturers, potential suppliers.
  • Develop working model and test technical features/service delivery.
  • Prepare Manufacturing Plan including estimated cost of goods sold (COGS).

Quality

  • Gain an understanding of the industry standards and regulatory environment for the market/s of interest.
  • Investigate and document safety standards and compliance (regulatory) material.
  • Investigate packaging materials.

Business and Finance

  • Prepare budget.
  • Formulate financial assumptions.
  • Prepare draft Business Plan.

Evaluation

  • Detailed Evaluation

Deliverables – Outcomes of your actions

Product/Service and Intellectual Property

  • Documented results, design specifications (including CAD drawings if required).
  • Working model or process that demonstrates the concept and its benefit.
  • Risk analysis report.
  • Documented IP protection strategy review.

Sales and Marketing

  • SWOT and competitor analysis report.
  • Draft Marketing Plan including product/service name, shipping or service delivery details and sales forecast.
  • Customer list (and customer survey where possible).
  • Trial participant list and agreements.

Manufacturing

  • Supplier list.
  • Manufacturing Plan including COGS, schedule for pilot run and contractual agreements (for contract manufacture) where necessary.

Quality

  • Safety standards, regulatory/compliance material.
  • List of possible product packaging materials.

Business and Finance

  • Budget.
  • Financial assumptions.
  • Draft Business Plan.

Evaluation

  • Evaluation Report.

Decision: Progress idea, further research or stop.

Tips

Below are some tips to help keep you on track:

  • Understand your users.
  • Keep your spending to a minimum – bootstrapping throughout the entire process is essential. Even if you receive funding limit your expenditure.
  • Remain focused.
  • Product iteration is important, develop the concept and make note of opportunities for improvement.
  • Engage users.
  • Find out who is receiving grants and what grants are actually available marketplace; also what research is currently being undertaken.