POC Vs POV: What’s the Difference?

Setting up a new business requires understanding its viability, from assessing the demand for products or services to the potential return on investment.

By implementing a proof of concept (POC) or proof of value (POV), business leaders can determine the best strategy for maximizing their chances of success.

This guide will explain the key advantages of a POC and POV and how they deliver valuable insights when establishing potential business value.

What Is Proof Of Concept (POC)?

A proof of concept is a preliminary outline that explores the feasibility of a concept or idea, mainly when related to a technical product or service.

It is commonly used by solopreneurs and entrepreneurs in the early stages of development and can be used when seeking investment from third parties.

Composing a proof of concept is similar to prototyping designs for digital or physical products by constructing a working model.

This model is then used to assess the feasibility of the underlying theory behind the innovation and determine whether it can be effectively implemented.

As such, proof of concept is a vital process in product development, helping to determine whether the product idea delivers tangible benefits that warrant further development.

What Is Proof Of Value (POV)?

A proof of value goes beyond the considerations covered in a proof of concept by determining the project’s measurable business value and marketability.

While proof of concept focuses on the technical feasibility of a product idea, proof of value focuses on demonstrating how consumers will benefit from it.

This process will consider potential benefits in a real-world environment, whether it’s focused on social entrepreneurship ideas or consumer products.

Some of the core benefits a proof of value considers include efficiency gains compared to existing systems and how the concept solves customer pain points.

This can significantly improve the sales process and enhance revenue growth by allowing businesses to focus on products that offer exceptional customer satisfaction.

Proof of value is integral to developing internal business tools and product evaluation aimed at consumers.

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POC Vs POV: Key Differences

Although proof of concept and proof of value are often used interchangeably, several key differences set them apart.

While both concepts set out to determine a concept’s value proposition, POC focuses on the product or service itself, while POC relates to the value for businesses or consumers.

This interrelation between the two processes can be refined into the following areas of consideration:

• Core objective. The proof of concept’s key objective is whether or not the idea can be realistically transformed into a viable and functional product. Proof of value determines whether this product brings the value needed to warrant investment.
• Project metrics. The metrics used during the proof of concept process are notably different from those used during proof of value, with the latter emphasizing financial benefits such as cost savings and efficiency gains through production methods.
• Implementation timeline. Proof of concept always precedes proof of value since it is oriented toward determining whether or not the project has viability before the execution phase. Proof of value takes the small-scale demonstration provided by the proof of concept and increases the scale.
• Scope of the process. The scale of the enterprise engaged in the proof of concept phase is also much smaller than that of the proof of value, as the concept is applied on a small scale and in a controlled environment. Once a project’s technical viability has been established, substantial resources will be added during the proof of value stage.

Whether exploring a boring business idea that runs itself or working on a cutting-edge tech startup, these processes can be applied to your business idea.

When To Use POC Or POV

Deciding when to use POC or POV will largely depend on your overall business objectives and the stage of development of a product or service.

Your company’s success criteria can characterize these objectives, from testing concepts and theories in the abstract to how they fit into the sales cycle.

By understanding the stages of innovation involved in the process, you can apply proof of concept and proof of value to your workflow.

If you’re in the early stages, proof of concept is vital for identifying and addressing any challenges, such as technical risks.

Once you’ve addressed these technical aspects of development, you can move on from proof of concept to addressing the monetary value of your business idea.

Findings from proof of value can then drive interest in potential investment and stakeholder buy-in and create a model of your ideal prospective customer.

Deciding when to use POC vs POV is particularly important for sales professionals, impacting the success of their pitch through its ability to address customer needs.

For example, POC is a vital element of the pre-sales process and closing funds from investors, while POV shows the product or service’s value.

Let’s explore the individual benefits of POC and POV in more detail and how the core functionalities of each process can improve your performance metrics.

Benefits Of POC

Modern business leaders are well aware of the value of strategy analytics when assessing the viability of a new product or service.

The proof-of-concept stage of a concept’s development requires careful research and testing to validate its feasibility before the more extensive production management process.

By operating as a pilot project on a smaller scale, POC delivers valuable feedback that can inform broader investment and production decisions.

Let’s take a closer look at some of the key benefits of POC you need to consider:

Analyzing Technical Feasibility

Whether you’re focusing on developing innovative digital products or selling cybersecurity solutions, successful execution requires overcoming technical challenges.

POCs are vital for establishing this technical feasibility and analyzing the potential risks and challenges to determine whether or not the concept is viable.

If the product or service is designed to integrate with other computer systems or tools, this means setting up a transparent testing process to verify compatibility.

Software developers achieve this by implementing quality assurance pipelines and stress testing applications to assess performance and user applications.

Any risks can then be flagged and addressed before the product’s large-scale rollout, mitigating the need for post-launch fixes.

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Gathering Insights Through Feedback

Developing a new concept requires a continual feedback loop, both within the development team and third parties and from potential customers.

This can be accomplished in various ways, such as working with consumers in the beta testing process or sending out consumer surveys.

Gathering feedback can help business owners refine the concept and include features that potential customers expect that may have been overlooked.

It can also help clarify ambiguities in the product or service’s intent and prioritize features that are its most vital selling points.

This clarification and refinement can then improve the concept’s model in a more persuasive way when reaching out to attract stakeholder buy-in.

Learn more: Explore the best B2B industries you can start today.

Financial Risk Reduction

One key consideration when developing a new project is the level of financial risk involved in advancing the concept into full-scale development.

The POC stage helps to address these concerns and define how the business can tap into the customer’s core values for consistent profits.

We’ve also touched on how this ability to demonstrate potential value through risk reduction can be used to attract investment and assist with the POV stage.

This can help to avoid potentially huge losses for business owners and investors in the event the concept fails to launch successfully.

Business Strategy Development

While the core functionalities of POC are focused primarily on the early stages of a concept’s development pipeline, they have significant long-term implications.

Each element of POC, from assessing technical risks in a more controlled environment to analyzing the target audience, can serve as a learning process.

These lessons can then be applied to future business concepts and refined based on an analysis of their effectiveness to improve future business strategies.

As such, POC is an excellent tool for gaining a clearer insight into what concepts are technically feasible and how to deliver a proposed solution with maximum business impact.

Benefits Of POV

Building on the foundations established through POC, POV moves the emphasis away from conceptual testing toward broader issues over profitability and customer demand.

As such, it incorporates a wide spectrum of metrics related to measurable business value, from maintenance costs to potential marketing budgets.

Here’s an overview of the main POV benefits and how they can lead to an informed decision:

Understanding Customer Pain Points

Understanding the pain points relating to the core customer base can make the difference between the success or failure of a product or service.

For example, focusing on international business ideas requires understanding how the concept translates into different territories and the various regional demands.

Through the POV process, these customer pain points can be correctly ascertained to ensure the product or service instills confidence in the consumer.

This will help align business goals with consumer demand, address their unique requirements, and contribute to success.

Encouraging Collaboration & Engagement

POV is also a core element of the collaborative aspect of a project’s development cycle and is especially useful when collaborating with outside parties.

Many businesses develop concepts in-house and through third-party contractors, and the POV process can help streamline this collaboration.

By fostering healthy conversational intelligence during the development process, POV can help developers and sales teams stay on the same page.

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Refining Marketing Initiatives

If the proof of concept stage is oriented around more pragmatic considerations such as technical viability, proof of value is more concerned with storytelling.

Whether you’re setting up a casual business that runs itself or managing hundreds of employees, marketing, and promotion are necessary for success.

As such, it’s often deeply rooted in conveying an emotional message that structures a compelling narrative around the concept’s intrinsic appeal.

This narrative can then be woven into the brand’s marketing strategy through a solid grasp of market needs and consumer expectations.

Addressing customers’ most concerning pain points can also inform key performance metrics and how they relate to customer goals.

Outlining Cost Savings & ROI

Potential value and return on investment are top priorities for any business, regardless of its size or the products or services it has to offer.

Unsurprisingly, artificial intelligence plays a significant role in reshaping how ROI is assessed, and these tools can feed into a company’s POV processes.

This can include establishing a dedicated ROI calculator to share with investors in conjunction with case studies and other supplementary materials.

A POV can also include cost savings and revenue projections to deliver additional insights into potential ROI for short—and long-term growth.

Combining POC & POV Methods

Whether you’re an investor exploring small business ideas or an executive at a multinational corporation, POC and POV methods will be a part of your vocabulary.

While each has unique advantages and core processes, both can be run in tandem to optimize productivity throughout a project’s lifecycle.

POV is typically used to leverage the results gained from POC, with the latter providing lots of data and associated insights to streamline the former.

Large companies with existing systems or products on the market can incorporate lessons learned from previous development cycles into new concepts.

The key considerations when deciding whether or not to combine the POC and POV methods are focused on the amount of pre-existing knowledge of the new concept.

If the concept extends current products or services, POC processes will be relatively limited since viability has already been established.

Projects that seek innovation will emphasize POC in the early stages but won’t necessarily exclude POV from the workflow entirely.

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Alternatives To POC Vs POV

While POC and POV are perhaps the most popular methods companies use when assessing a project’s viability for investment and development, there are alternatives.

Here are some other approaches you can take to evaluate the business impact of a new idea:

• Industry analysis firms. Several reputable industry analysis organizations provide a wealth of resources to help business leaders make informed decisions backed by in-depth data and professional insights. Platforms like Gartner, Josh Bersin, and Deloitte are all highly valuable resources that frequently present clear, up-to-date insights into industry-specific trends and best practices.
• Technical review websites. Whether you’re a computer programmer or engineer, there is no shortage of dedicated websites providing professional insights into technical challenges. These can be significant money- and time-saving resources, particularly for smaller companies lacking the funds for extensive research and development.
• Higher education institutions. Reputable educational institutions are also rich sources of information covering technical topics and industry-specific research, from Harvard and Stanford to MIT and beyond. They allow users to access thousands of studies online that can be used to streamline the POC and POV processes or track down data that supports your research.
• Business case studies. If your concept has a proven track record of success, you can find case studies online that support your thesis and use this when approaching potential investors.

These resources can also be used independently to help with early research and bolster a POC or POV with additional reputable evidence.

Learn more: Discover the best service business ideas.

Summary

Both proof of concept and proof of value are essential when assessing the expected value of overall business objectives.

By following the advice in this article, you can better understand how your business idea delivers technical feasibility and other clear success criteria to achieve success.

Following up with market research and user feedback will provide valuable insights to refine your business for ongoing revenue growth.