Proof of Value (PoV) Edition: Verifying Value – "Is it useful? Is it worth it?"

This article is the second in a three-part series on proof-of-concept (PoV) testing for hardware commercialization. Hardware commercialization progresses through three stages: PoC → PoV → PoB, gradually increasing the level of verification.

• Part 1: PoC - Verifying if the Proof of Concept "Works"
• Part 2: Proof of Value (PoV) - Verifying whether it's useful and worthwhile (This article)
• Part 3: PoB (Proof of Business) Edition: Testing whether a business can be sustained.

The process involves three stages: PoC → PoV → PoB. This article focuses on the second stage, PoV (Proof of Value).

What is PoV? "Moving" and "Being Useful" are two different things.

While passing a Proof of Concept (PoC) demonstrates technical feasibility, whether it delivers the expected results in the field, whether it justifies the investment, or whether the field staff will even use it are entirely separate issues. A Proof of Vision (PoV) is necessary to avoid mass-producing products that work but nobody uses, or that are effective but not cost-effective.

The characteristics of PoV (Proof of Value) are as follows:

• This stage involves implementing a "technically working" prototype, confirmed in the PoC (Proof of Concept), on a small scale in a real-world setting to quantitatively verify whether it "creates value."
• The focus of the verification is not on accuracy or communication, but on effectiveness, ROI, operational burden, and user acceptance.
• Instead of simply moving on to mass production because it's working, we need to determine here whether it's worthwhile.

Four decision-making criteria to verify with Proof of Vision (PoV).

Judgment axis	What to verify	Examples of indicators
effect	Will business KPIs really improve?	Man-hour reduction: ○%, number of stoppages avoided: ○, yield improvement: ○%
Return on Investment (ROI)	Will the investment be recouped?	Payback period: ○ months, ROI in the first year: ○%
operational load	Can the site be run smoothly without any problems?	Installation time, maintenance frequency, battery replacement, and effort required to deal with false alarms.
User Acceptance	Will the people on site actually use it?	Usage rate, retention rate, and qualitative feedback from the field.

If you only focus on the effects and overlook criteria such as whether the system can be implemented smoothly by the team and whether the team will actually use it, you will fall into the typical failure of a system that works well immediately after implementation but never becomes established. Next, we will look at how to proceed with each step, with specific examples.

Four criteria for evaluation using Proof of Value (PoV): effectiveness, ROI, operational burden, and user acceptance.

How to Conduct a Proof of Vision: 5 Steps

The five steps of PoV (Proof of Value): ① Value hypothesis/ROI → ② Small-scale implementation design → ③ Real-world data collection → ④ Effectiveness measurement → ⑤ Go/No-Go

① Setting the value hypothesis and ROI model – First, decide "how much profit will be made."

The first thing to do in a Proof of Vision (PoV) is to model "what improvements are needed and by how much for this product to recoup the investment." This is an essential setting for moving decision-making forward.

For example, at a factory of a certain industrial equipment manufacturer, a demonstration project is underway to acquire data on predictive failures of production equipment using sensors. A production line stoppage results in a loss of several million yen per hour. If the Proof of Value (PoV) investment is 1 million yen, and even one stoppage per year can be avoided through predictive detection, the investment can be recovered in the first year. It is by first establishing this "1 million yen vs. several million yen" model that PoV becomes a basis for investment decisions.

A comparison of a PoV investment of approximately 1 million yen and the effect of avoiding suspension (several million yen per suspension). Recovering the investment in the first year with one suspension avoidance per year.

② Designing for small-scale implementation – making it "comparable"

To discuss the effects, a comparison with the "before implementation" state is necessary. In addition to the target site, number of units, and period, we design the conditions for measuring before/after. One machine manufacturer was manually measuring the size of hundreds of prototypes each year. For example, if they were to introduce automated size measurement using a 3D ToF sensor on a small scale, they could directly compare the reduction in man-hours from "X hours of manual work to Y minutes of automated work."

reference:
ToF sensor for measuring package size | Automatic calculation of shipping fees

Macnica MonoCon® conducted a Proof of Concept (PoC) for a terminal capable of "measuring package size and automatically calculating fees." It is also possible to proceed with PoC/PoV based on this.

③ Collecting data from real-world environments—not just ideal environments.

Proof of Value (PoV) data must be collected under actual field conditions. If measurement conditions are limited to an ideal environment that is an extension of the development lab, operational burdens and exceptional cases will be overlooked. In fact, in one IoT sensor project, a prototype that had been running in the lab malfunctioned in the field due to a failure in the LTE module's response and a power line break during transport and packaging. The golden rule for value validation is to conduct it "in the field, for a certain period of time, and in conditions close to normal operation."

④ Effectiveness measurement and ROI verification – using both quantitative and qualitative methods

In addition to numerical data (KPI improvement, ROI), we also gather feedback from the field (ease of use, effort, and dissatisfaction). Acceptance cannot be seen through numbers alone.

⑤ Go/No-Go Decision – Three Options

Macnica 's PoV support: What only a semiconductor trading company can do.

Macnica 's PoC/PoV development team is comprised of veteran engineers and handles several development projects annually. While typical device manufacturers promote their own products, Macnica, as a semiconductor trading company, is well-versed in products from multiple manufacturers. With its neutral component selection capabilities, unbound by any particular manufacturer, it designs "the sensors and configurations truly necessary to deliver value" from a neutral perspective. The features of MonoCon® support are as follows:

• We provide support from value hypothesis and ROI design: We work together to create a model of "how much profit you will make."
• A small-scale implementation plan: Start by lending out some sensors, verify their value, and then expand.
• Conducting PoC → PoV → PoB with the same team: Knowledge is not interrupted even as the stages change.

If you’re thinking, “We’ve drawn up our own schedule, but I’m worried whether we can actually stick to it,” please bring your commercialization schedule to us, and we’ll use Macnica Mono-Con® to rework it into a realistic timeline.The value of Macnica—which has supported numerous hardware commercialization projects—lies in our ability to identify issues such as “this is how it should be done” (too early/too late) with an eye toward mass production during this phase.

Comparison of Before (Our company: Serial process with PoV and sales channel verification at the end = approximately 30 months) and After (Expert: Parallel process, brought forward = approximately 22 months)

Frequently Asked Questions (FAQ)

Q1. What is the difference between PoC and PoV?

A Proof of Concept (PoC) verifies whether the technology works, while a Proof of Value (PoV) verifies whether it is useful in the field and whether the investment is worthwhile. PoCs are primarily lab-based, while PoVs focus on small-scale deployments in actual field settings.

Q2. Can I request only a Proof of View (PoV)?

Yes. If you already have a working prototype, we can assist you with the PoV (Proof of Value) phase. We will help you from the design of your value hypothesis and ROI model.

Q3. How is ROI calculated?

We calculate the payback period by comparing "the metrics to be improved (man-hours, downtime, yield, etc.) x their monetary equivalent" with the "investment amount." For example, if we can avoid a loss of several million yen (e.g., one hour of downtime) once a year, a PoV investment of around 1 million yen can be recovered in the first year.

Q4. What if no value is generated in the Proof of Value (PoV)?

A no-go (withdrawal) decision is also the right one. Discovering that something won't be used at the proof-of-visual (PoV) stage is far more valuable than finding out after mass production, and the insights gained can be used in a report for future projects.

Q5. What will you do after PoV?

Once the value is confirmed, we proceed to PoB (Proof of Business). We verify whether it can be a viable business in terms of mass production costs, sales channels, revenue structure, and support system. For more details, please see the PoB section.

Summary

Proof of Value (PoV) addresses concerns such as, "We know it works technically, but will it really be useful in the field?" by providing numerical data.

• Proof of Value (PoV) is the stage after "getting it working" where you verify whether it is "useful and worthwhile."
• The factors to be evaluated are effectiveness, ROI, operational burden, and user acceptance.
• How to proceed  ① Value hypothesis/ROI model → ② Small-scale implementation design → ③ Real-world data collection → ④ Effectiveness measurement → ⑤ Go/No-Go  5 steps

Macnica MonoCon® provides comprehensive support from mass production design and certification to sales channels and continuous supply. No specifications are required. Please feel free to contact us for a consultation.

Related article

• How to Conduct a Hardware Proof of Concept (PoC): 5 Steps, Costs, Duration, and Failure Examples
• How to proceed with hardware PoB: Verifying whether it can be a viable business through mass production, sales, and profitability.
• How to Choose the Right Outsourcing Service for Product Development: Differences Between OEM, EMS, and ODM, and Your Options Beyond That.
• [Essential Guide] Wearable Development | Requirements by Application and Three Implementation Difficulties
• Package size measurement using ToF sensor | Automatic calculation of parcel charges