For any startup or business with a new to world idea, the biggest challenge is to create a rock solid proof of concept trial. If executed successfully, it is valuable collateral for any business, giving the idea credibility and gravitas in the eyes of potential customers, investors, suppliers, and partners. But proof of concept trials can be costly in both financial terms and in the time and resources required to implement, monitor, and collate the outcomes. Crowd funding is now proving to be the game changer in the way proof of concept around new ideas is worked up.
Proof of concept, as the name suggests, is real world verification that the idea works and does what it is intended to do, or that the market anticipated for the proposal actually exists and is desirous of the product or service. Proof of concept can be achieved in trials that show that the widget not only could perform in the manner expected, but does in reality do what is expected (or more!). It can also show that the customers, when offered the widget and a chance to buy it at the proposed price or through the proposed distribution channels are willing to purchase. Proof of concept trials traditionally cost money to fund testing of the widget against real world conditions or real market expectations.
Social proof is, by many, being considered as the newest iteration of proof of concept. Proving the widget does what it purported to do is one thing, but commercial viability is, for many, the real evidence required for the project to go ahead. When the makers of the Tick Tock watch crowd funded their campaign to go into full scale production, it wasn’t so much the $941,000 that they raised that saw the project take off, but the 13,000 people that put their hands into their pockets and pre-purchased the watch that saw the greater public sit up and take note, and it was then that the investors, potential partners, and wholesale suppliers and customers came flooding in. Whilst the money raised was nothing short of phenomenal, the real benefit came in the form of the social proof that demonstrated the tremendous commercial viability around the product.
For many, the pre-sales and test marketing that crowd funding offers can be a greater outcome than the money raised. Much like social proof, the test marketing provides confirmation or validation that there is a need or a want “out there” for the product for which the crowd funding campaign is being conducted. Crowd funding can be the first foray into sales for new ideas and products. A successful campaign in which the reward or inducement is an attractive offer to pre-purchase the product may very well be the best way to prove the supposition behind the concept.
Whether the campaign is successful or whether it falls short of its target, crowd funding can provide the necessary real world feedback to go back and “tweek” the product or the offering. Candid honest feedback is always hard to come by when the concept is kept “in house”. Family and friends are always full of praise, but the harshest critics, the ones who will give you the most honest feedback, are your potential market. They will tell you if your concept or product is too big, too small, the wrong shape or colour, or perhaps even too dear. This priceless information allows you to go back to the drawing board with the necessary guidance to make the changes required to satisfy the buying public.
If nothing else, your crowd funding campaign will assist in getting your story out there. The more people to whom you can expose your idea, concept or product, the greater the awareness you generate. Crowd funding is an effective platform on which you can build an awareness campaign, and if you can get others to “share the love” and distribute the campaign to their networks, the more awareness you generate, the more feedback you receive, the greater the volume of test marketing you can do, and the bigger the proof of concept you will achieve.
Whilst crowd funding is indeed the ultimate proof of concept trial, project creators must be aware of protecting their IP, and ensuring they do not push their idea too deeply into the public domain and losing their patentable position. The best advice here is to consult with a suitably qualified patent attorney who will guide you in how to put your product “out there” and crowd fund its birth while achieving your proof of concept trial without giving the game away.
Crowd funding – offering you not only funding, but social proof and collateral to seek buy-in from future funders, investors, suppliers, and strategic partners. It can offer you exposure to the crowd and to your future customers who will give you honest feedback, allowing you to go back and refine your product or offering. Traditionally, proof of concept trials cost the project initiator considerable time, money and resources, but through the wonders of crowd funding, project creators can prove up their offering while raising the funds to get them into monetizing their passion.