The proof of concept was meant to last four weeks. It is now month seven. The customer’s team uses it every day, a second department has been added, and nobody has mentioned a purchase order. You did not sell software. You are running a free service.
This is the most common way early-stage vendors lose money at Indian enterprises, and it almost never starts as a decision.
What is the short answer on stopping a free PoC from becoming a permanent free product?
Put an end date, a success test and a commercial consequence into writing before the PoC starts, and enforce all three. A PoC needs a signed charter, a fixed scope, an access cut-off on a known date, and a pre-agreed conversion offer that expires. If the customer needs more time, that is a paid extension, not a favour.
Why do free PoCs turn into free production use?
The customer’s teams get value, so they have no reason to stop, and the buyer’s budget owner has no deadline. Meanwhile the vendor fears that pushing for a contract will lose the relationship. Without a date and a price, the PoC drifts into production use, and the vendor’s leverage drains away with every week that passes.
The pattern is widely documented for pilots in general. This CIO Dive report on why enterprise AI pilots fail to scale describes similar stalls: unclear ownership, no success criteria and no path to production.
What should a PoC charter contain?
Scope, success criteria and dates
- One use case, one business unit and the systems in scope.
- Two to four measurable success criteria, each with a baseline and a target.
- A fixed start date, an end date and an evaluation meeting date.
Commercial terms
- A fee for the PoC, even a modest one, ideally credited against the first-year contract.
- A conversion offer, with indicative price and term, valid for a stated period after the evaluation meeting.
- A statement that production use requires a signed order.
Technical guardrails
- Sandbox or limited environment, with caps on users, data volume or features.
- No live production data without a signed agreement.
- Access automatically ends on the end date unless extended in writing.
What are the warning signs that a PoC is drifting?
| Warning sign | What it usually means | What to do |
|---|---|---|
| New teams or departments are using it | The PoC has become shadow production | Pause onboarding; propose a paid pilot with a wider scope |
| Success criteria keep changing | The goal posts are moving | Reset the charter in writing; agree the change in scope and fee |
| No named budget owner | No route to a purchase order | Make a budget conversation a condition of continuing |
| Evaluation meeting keeps being postponed | The buyer has what they need or has lost priority | Set a final date and a lapse date for the conversion offer |
| Requests for custom features | The customer is shaping a bespoke product | Move requests into a paid change process |
| Contract talk is always “next month” | Procurement has not started | Begin security and legal review in parallel now |
How do you end a PoC without damaging the relationship?
Do it by calendar, not by confrontation. Two weeks before the end date, send a results summary against the agreed criteria and the conversion offer. On the end date, switch access to read-only or off, as the charter says. If there is genuine interest, offer a short paid extension that is credited to the contract.
Most buyers respect a vendor who follows their own rules. A vendor who never does is treated as free.
What if the PoC has already drifted?
- Quantify what the customer has used, in users, data and hours of your team’s time.
- Schedule a review with the business sponsor and the budget owner.
- Present the value delivered and a paid proposal covering current usage.
- Set a firm transition date. Offer a short bridge period at a reduced rate if needed.
- Be willing to pause access if no agreement is reached. Your engineering time is not a free resource.
References and Further Reading
- Why enterprise AI pilots fail to scale (CIO Dive)
- Is India Inc really that hard to sell to? (Outlook Business)
- How do I sell into a big Indian corporate or bank? (eChai Ventures)
- Pilot purgatory: why pilots stall before production (Glean)
Frequently Asked Questions
How long should an unpaid proof of concept last?
Keep it short and fixed, commonly a few weeks, with a written end date. The longer an unpaid PoC runs, the more it behaves like free production use. If the customer needs longer, convert it to a paid extension credited against the contract.
Should I ask Indian enterprises to pay for a PoC?
Yes wherever possible. A fee, even a modest one, tests whether there is budget and a sponsor, and it protects your team from open-ended work. If a free PoC is unavoidable, keep scope narrow and tie it to a written conversion offer that expires.
What do I do if the customer refuses to sign the PoC charter?
Treat it as a signal. A buyer who will not agree scope and an end date is unlikely to move quickly on a full contract. You can offer a one-page version, but do not start work without agreed success criteria and an end date.
Conclusion
A PoC is a decision process, not a trial subscription. Fix its scope, price, dates and conversion terms before anyone logs in, and follow your own rules when the end date arrives. That is how you protect both your team and your pricing.
If you are building a B2B company for Indian enterprise buyers, join The Builders Club community to compare notes with other founders and CXOs who are working through the same problems.
