5 Ways to Prove the Unproven Idea
For those entrepreneurs doing something different or unique out there in the world, here are 5 steps to getting a proof of concept for your innovation. From idea to finances:
Many times as entrepreneurs and innovators, we have to prove a disruptive technology, innovation, or concept that lacks competitors. Or even a proven business model. That’s pretty hard to do.
Why We Get a Proof of Concept
The majority of entrepreneurs’ ideas are formed based on intuition. Intuition is something untaught. It cannot be taught. It’s a gift. And it’s actually a personality characteristic that most of the world lacks (proven fact, 75% of the population are sensors). As depicted in the common scenario of the world vs entrepreneur (oh, so that’s why everyone calls us optimists!!):
So approaching our ideas and innovations with the knowledge the majority of the world doesn’t have intuition is why we need to prove our concept. That…and, well, money, employees, and customers are usually sensors.
Ways to Get a Proof of Concept
Now we can talk about how to get a proof of concept, disruptive technology, or whatever new idea has been stewing around in your head. And here are 5 great ways to do that:
The key thing to remember, is the interest is always struck by the market the new idea can capture.
1. Blogs & Articles
I have actually done this a number of times here at Plan to Start to help get proof of concept (sometimes on purpose, sometimes not so much..). But it’s good to create controversial topics in blogs & articles, because you get to observe how people react. Great method of testing.
2. Cause & Effect Graphs
If you can find comments for proof of concept, then you can copy and paste those. You can put them together (in a visual cause & effect graph) that can show someone else “customer said this, which leads me to believe customer feels A, because of painful problem B, and product C is the best solution”. Then an outsider is able to look at that, and see how you came to your conclusion.
Pictures have been, and probably always will be, the entrepreneurs favorite method to get proof of concept. John shared with us before his picture that he put up at the tradeshow, and his picture won first place. A picture won over commercial ready products.
4. Product Proof
A good way to start off, is offer the MVP (minimum viable product) for free. Analyze what features customers are using. Or are they not using (need to pivot product)? Test, refine, repeat. Before long, with the help of steps 1-3, you’ll be able to narrow down into a direct path of what your customers are looking for. Focus in on that, then execute in phases.
5. Attempting to Project Finances
Pricing in the business model for a new idea can get difficult. But I think after you follow 1-4, market & opportunity windows open for a more accurate pricing fall into place. Your product may wind up close to competitors, so in those cases you could get an accurate glimpse into what the market may bear. Remember, the market always determines the price.
Sometimes you’ll wind up with no competitors, or in a completely different market then where you started. Price accordingly for demand, which without competitors, is usually an intuitive guess based on customer feedback/customer demand of the free version. If you have growth rates, you can try a backwards approach to attempt financial projections:
Free conversion (impressions divided by # of free users). Free conversions usually average 10-15% of total impressions (impressions= # of times idea/product is exposed to target customer).
And you can go with an industry average paid conversion of 1-3%.
X your monthly growth rates (demand)
Of course you have other factors in there depending on if it’s a recurring revenue vs transaction based business model, but that formula can give you a fairly good start.
I guess at the end, the key thing to remember (especially for those working with innovators), is it’s an experimenting process that takes a long time. It’s going to change constantly as that entrepreneur receives new insight.