6 Steps to Kickstart Your Proof of Concept in Fintech

“You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.” ― Paul Graham

One of the most common mistakes that startup founders make is putting their time and money into building something that nobody is going to buy. Even small apps that offer just a few basic features can cost in the region of $10,000 to $50,000, which is a lot to throw away if your big idea doesn’t catch on.

If you don’t want the wrong idea to sink your startup, tell your inhouse programmers or outsourced team to hold fire on the coding, for now, take a step back and make sure that your app passes some basic tests first.

What you’re looking to establish is “proof of concept.” This is a realization of your method or idea that demonstrates its feasibility, and well-constructed proofs of concept are designed to achieve these three things:

• they verify that the solution solves the problem you’re attempting to address
• they confirm that the solution is valued by your future customers
• they determine whether or not people will pay for your solution

A proof of concept is like a focused piece of research that if it’s successful can give you the green light to develop your product. Getting to that stage can also be expensive, so here are 6 effective ways to prove that your product has a firm foundation without spending more than you need to:

Define The Problem

Write down the problem that your product is trying to solve in the clearest terms you can manage, no vagueness allowed. You’re looking to clearly show the problem so that you can clearly define your solution.

Create The Customer Persona

‍This is a profile of your ideal customer, and you write it as if they were a real person because once you feel like you know your customer, you can use your understanding of their wants and needs to shape the product design.

And later, when you’ve built it, you can use that persona to craft targeted marketing messages to your audience because you’ll know the right tone of voice to use and you’ll be able to address their wants. If this sounds like it’s beyond your skillset, you should hire a marketer to do it for you.

This (and some of the other examples in this list) may cost you in the hundreds of dollars, and this is cheap when you understand that it could be saving you tens of thousands of dollars, not to mention some grey hairs.

Identify The Market

Without a sufficiently big market for your product, all you’ve got is an expensive hobby. Establish market size so you know the product has a chance of achieving profitability.

Analyze Existing Solutions

‍Has anyone else solved this problem already? Your competitors can also tell you things. Look at what’s wrong with their offering and learn from its shortcomings. If you can fix what’s lacking with their app then you stand a better chance of attracting their users to yours when it’s ready.

Talk to Customers

‍There’s nothing quite like a face-to-face discussion to give you a real sense of whether or not they will pay for the solution that you want to offer. Doing this yourself is one of the cheaper approaches to product validation, but if you have some cash to invest, consider spending it on enlisting others to approach your audience and pick up their valuable feedback.

Build an Audience

‍There are lots of cheap or even free ways of getting the word out about your upcoming product while also nurturing an audience of future customers.

You could start by simply creating a Google Doc to share, making a blog post announcement, or writing a self-published book or e-book. If you check out the comments section of the blog post or look at Amazon reviews for your e-book, then you may receive some useful opinions about your project’s chances from your potential customer base.

The same principle for publishing a document applies to publishing an explainer video, too. It may even be a more effective approach as people seem to be gravitating more towards video and less to reading text these days. You could go for a talking head style, a full animation or a whiteboard animation, depending on your budget. The video can function as an advertisement, a talking point and it can also help you to gauge interest and attract feedback for your concept.

You could also try a fake landing page for your product before it exists as a way of promoting discussion about it, and so generating insights that will inform the project development phase.

Tech influencer Product Hunt started with just a small list of email subscribers, a select few individuals who compared notes on new products. Email was the ideal forum in which to prove the concept of having one place for discussing the next big thing in tech and it grew from there, so it might be just as useful for your project, too.

Facebook or Slack groups are perfect platforms for building a community, then building a product. If you can get enough pairs of eyes looking in one place, then you’ve created a ready-made audience of buyers. The group itself is the test lab that proves your concept has potential and when it comes time to sell to your customers, you’ll know exactly where to find them.

You could also create a clickable or partly functional hand-built prototype. This mockup of your concept gives you something that people can take for a test drive and comment upon. It will be close enough to the real thing that shortcomings become obvious and improvements will suggest themselves.

Finally, Survey Monkey or Fastuna let you easily build surveys and questionnaires that are a convenient way to capture honest feedback.

All these tools will cost you several hundred dollars, but they could save you from wasting thousands. They can bring you closer to your potential customers and give you an understanding of whether your idea is going to take off or be dead in the water.

Takeaways

There are many cost-effective ways to prove that your bright idea has the potential to grow into a successful product, and when you’ve done the groundwork for that you’ll be ready to talk to us. Pixels and Sense is your next great cost-effective decision because we’re UX/UI experts with a wealth of knowledge and experience. We can augment your customer and product intelligence with our own and use it to help you to perfect a product that your customers will love.