Proof of concept is generally associated with product development and is used to demonstrate the feasibility or viability of an idea by collecting evidence of its practical or business potential. It might also be a useful discipline for investors as companies pursue new, and largely untested products and services. For example, the potential for generative artificial intelligence (AI) appears to be enormous, but how and where to invest is less obvious.
This is not going to be easy. Today it seems that many authors and commentators start with their predetermined conclusions, instead of ending with a conclusion based on a careful analysis of the opportunity, i.e., proof of concept.
Investors should be very careful in seeking outside advice and take the time to evaluate the potential for author bias. Almost everything has a degree of bias, so it is incumbent on investors to seek to separate fact from furtherance of an agenda.
All comments and suggestions are welcome.
Walter J. Kirchberger CFA
