Right now, as you are reading this, there is someone working tirelessly to introduce a new product or service to the world.

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Entrepreneurs of this millennium are disinclined to doing business as usual. This sharp twist is a resultant effect of the astronomic growth in the deployment of technology for work. This has thus far redesigned the businesses landscape. Every day, disruptive innovations are going on around the world and entrepreneurs are constantly looking for pre-start-up funds or investments to scale existing businesses. This article will briefly highlight one important factor every entrepreneur should consider while seeking investment- Proof of Concept.

Simply put, proof of concept is an entrepreneur’s evidence to show the operability and market response to her/his idea.

A proof of concept aims to validate the feasibility of a business, idea, or the customer response to the sales strategy. Often times, entrepreneurs come seeking venture capital investment for their businesses on the grounds that they have a mind-blowing idea to solve a complex social problem. They so often forget that the difference between an idea and its implementation is in praxis. For this reason, investors are interested in seeing how your idea works in the real world and what the customer feedback is. This feedback tells the prospect of the business and answers vital questions encompassing patronage, subscription, pricing, return sales, profitability, adaptability and how scalable the business can be.

A major part of the proof of concept, is a proof of profitability. This, is the most important feature of every business an investor looks for. To the investor, no matter how sound the business idea is, how many persons it can employ, social impact and how eco-friendly it is, if it cannot show the path to profitability, it becomes uninteresting to an investor.

Another important part of the proof of concept is the adaptability and scalability of the business or idea. Most investors are not looking for ideas that will reinvent the wheel. They want an idea or product that can easily be attached or applied to existing technologies. This is what some venture capital investors refer to as adaptability of an idea. In terms of the scalability, investors want to know that the demography the idea or product is designed for is wide enough to make profit in the advent of other competitors. Again, it is worthy of note to point that investors want to see that this simple idea can be duplicated and applied to a broad range of industries; hence, it can grow from annual earnings of 100,000 to a 10-billion-dollar company. This way investors are assured of their ROI (return on investment).

Building a minimal viable product… (Photo credit —

It is important to state that although investors do not necessarily seek for ideas that reinvent the wheel, they also are willing to invest in disruptive innovations. These are innovative ideas that create a new market, new value networks and radically dislodge existing markets. But for investors to invest in this, they require a proof of concept that show patronage and repeat sales/purchase. This part of the proof of concept focuses on what the customers’ preferences are. What sales have been since operations began, number of unique visitors to the website, number of referrals, best sales time, the demography of customers, target market, market size, industry worth and all relevant consumer data.

All entrepreneurs should see the hurdle of a Proof of Concept/Minimal Viable Product as an important stage to build leverage and to test if their ideas work. To get to this point, entrepreneurs may have to bootstrap a bit. By bootstrapping I mean, starting a business with little funding, either personal, borrowed from family members or using some money from an existing business to fund a new idea. In growing a global brand from a start-up, it is instructive to note, having a great idea or raising money/investment is not as important as creating value. Ultimately, clientele for any business rises the moment the business is able to create value.

An entrepreneur with an acceptable minimum of a proof of concept/minimal viable product as outlined above is ready to pitch his idea before investors. Here are two TV shows every entrepreneur should watch on how to raise capital/investments and what investors look out for — Shark Tank and Dragon’s Den.

Twitter: @seguntsamuel