Everybody with an idea wants to launch a startup nowadays in India. I might be sounding a bit rude and direct here but in my personal experience, this is the case with most of the entrepreneurs out there. Since I have been an integral part of the startup ecosystem for quite some time now, I know by my experience that out of 100 startups looking for proper funding barely 2 percent will ever get it.
Apologies if this came as a rude shock to you but this is the naked truth. The startup ecosystem is designed to see you fail. It is its filtering mechanism to filter out the failures from the champions and the unicorns. There are some exceptionally smart people out there helping investors select the best startups, so bluffing here seldom works.
Does that mean you should quit right here and let your dreams go down the drain? No! All I want to convey here is that you as a new entrepreneur must do your homework right. I am here to see you succeed and not fail. You might be wondering why such a tall tale before coming to the point, well for understanding the proof of concept saga a little premise is necessary.
What Is Proof of Concept and Why Do You Need to Pay Attention Here?
Just step into the shoes of the investor for a moment and ask yourself, I am going to put a lot of money into the idea, why should I do it? Ask this question with respect to your proposal for seeking funds. You will start to see the picture clearly gradually.
Speaking technically “Proof of concept is a presentation that demonstrates the feasibility of your idea”.
Now you might be creating a new service or a product, either way, it has to add value to the buyer and to those who are willing to invest their funds into you. Proof of concept is also known as proof of principle.
In your own eyes and logic, you might have a billion-dollar idea, but for the investor, your promise of a billion-dollar company holds no water. You have to convince them about the “How” and “Why” of your business. Investors like you are here to make profits, since you just have a prototype or an idea, they would need more to pay some attention to you and your next BIG IDEA.
That data, numbers, facts, figures, and the actual product (in case you are going to manufacture something great) along with a good understanding of the demand dynamics should make your POC. That is the only thing that would help you convince investors that by investing in your idea they are going to make good money.
Just remember 90% of the startups fail because they did not put enough work into their POC. A POC will tell you and the investors whether your idea is going to work well in the market or will it just burn cash and eventually crash.
Creating a POC Is Far Cheaper Than the Final Product!
Making changes to your final product is costly and remember you don't have money that's why you are seeking funds. Even the investors would not be so adamant about funding a final product that has not tested the troubled waters yet. On the other hand, creating a POC will help you and the investors know the real worth of the idea and course correction at this stage is also not expensive.
Honestly, POC is a very deep topic and no one formula fits all here. In case you think you have an idea that would change the world for good, then feel free to connect with me. I will guide you to creating the perfect POC for it. Remember asking questions and seeking proper guidance is what the business community loves, do it for your own sake.