If you are a startup that is in the initial stage of developing a new product, one of the first things you need to do is validate your idea. Just leaping head-first without thinking can be a lot expensive in terms of money, time, and stress.
Choosing an idea validation method, like a PoC or an MVP or both will save you a lot of heartache and give your business a much better chance of success.
So, let’s find out what is the difference between a PoC and an MVP, and which one do you need? Which one will help you secure funding? How much will they cost? We have all the answers – read below.
What is a PoC?
If you are launching a radically new product or need to add unique value to an existing market, a PoC is an excellent way to determine whether or not your idea can be achieved from a technical standpoint. It can be done relatively low in cost, completed in short order, and lets you know if your idea will work while giving you a clear understanding of the constraints around your project and the tools and resources, you’ll need to make it work.
Since a PoC is built with internal validation, it dismisses specific features such as UI and UX design, security, and development best practices. It is dependent on mock APIs and pretty simplistic UI controls. The code created for a PoC often is not used later on in development. Consequently, your PoC should never have been demonstrated to any end-users. Only to researchers, developers, and stakeholders.
This would mean that for your PoC to be successful, you must have defined goals and decide what problems you need to address and solve. Your project scope must be kept tight to a single feature. If more than one feature needs checking for feasibility, you would run multiple PoCs.
Example
A financial tech company wants to implement blockchain for secure transactions. They created a PoC to demonstrate that blockchain can enhance security and transaction speed for their specific needs without committing to full product development.
What is an MVP?
A research study found out that one-third of startups failed because there was no market need for their offering. Creating an MVP helps you to reach the market as fast and cheaply as possible and see how your target market reacts. This is not the full version of your product but will offer the core features so that you can validate the idea with real user feedback.
This is invaluable in knowing what works, what doesn’t, and what pain points your audience has. You either go back to the drawing board, modify and evolve your product by developing it iteratively in time to be in its best form possible.
For an MVP to work well, you’ll need tight focus on a target audience that you can then zero in to concentrate on the pain points that those audiences face. This means that, although your MVP must be usable and largely pain-free, avoid wasting time on things outside your core value proposition. Then you can add those elements as soon as you see what they like and what they dislike.
Example
Dropbox initially launched an MVP by creating a simple video to show the concept of cloud storage. This validated market interest without having a fully developed product and helped attract funding for the next stages of development.
PoC vs. MVP for Startups
- PoC proves that something is technically feasible, while an MVP will prove that there exists a market need.
- While an MVP will take months to create a PoC will only be developed in days or a week.
- MVP ends up being seen and tested by early adopters and some investors. While PoC would only be seen inside; it would only be presented to researchers and developers.
- PoC reduces the technical problem risk; an MVP cuts down on the risk created by making a product whose market does not exist at all.
- A PoC costs little, whereas an MVP will cost much more.
- The consumer cannot sell or use a PoC, but with an MVP, revenue generation can occur immediately.
- A prototype or MVP can be informed by a PoC, but will never be used in a final product, whereas an MVP can form the basis of the full product.
As mentioned above, the PoCs and MVPs both have the same purpose of validating your idea from different angles. Therefore, choosing the right approach right from the beginning adds to your chances of winning.
In general, developing an MVP is mandatory for all startups, while building a PoC is discretionary based on your business model, your idea, and the stage of development up to which you are progressing.
Which One to Start With?
Both have the goal of saving time, money, and efforts for you by validating the idea before launching a full-fledged product to the market. Which one do you start with depends upon the context of your particular project.
As a rule, you should start with PoC if:
You have an innovative, revolutionary product in mind, but you do not know if your concept has technical feasibility.
You have an existing market with potential new value and need to demonstrate that your product is providing unique functionality compared to competitors.
You have to identify the technical requirements of your idea. For instance, which technology is involved, and what resource or third-party solution will be necessary for its effective implementation.
You should begin with an MVP if:
- You know that your idea is technically feasible but do not know if there really is a market need
- You truly want to start generating as much profit as possible in the shortest amount of time.
- You want real feedback from customers.
Which One Helps Attract Investors?
A POC may be useful in raising money in that you demonstrate you are on the right track, but a POC is usually only an internal project. An MVP is more likely to help you attract investors because you can point to real world use and feedback.
How Much Will They Cost?
Proof of Concept is less costly compared to the Minimum Viable Product, as the concept is proven only of the viability of the idea or that specific technology. Most commonly, the features used remain few and are intended only for internal use while avoiding fully operational users. Thus, leaving it at the bottom level of a low-cost and low-risk venture.
An MVP would cost more money, as this involves features like user interface design and some initial testing for market feedback. For instance, a fitness app developed by a startup can make a PoC to prove motion-tracking capabilities. Validated, they can move on to an MVP that includes functionalities such as exercise tracking and a user dashboard to obtain feedback.
While more costly than a PoC, an MVP is still much cheaper than a full product so that startups can test market demand and iterate with real user input before investing in significant development.
Which One is Right for You?
This will depend on the stage you are at, the resources available, and what you want to achieve. Generally, if you want to reduce market risks, MVP will be your best shot. If you want to test technical feasibility, a POC will be best for you.
For more details on the types of validation, which one you would need, and what each includes, contact us today.
