Agile Software, Product Development and in the Lean Startup you hear discussion of the Minimum Viable Product or MVP which is a strategy used for fast and quantitative market testing of a product or product feature. More information can be found in a blog post, Developing a Minimum Viable Product.
A MVP is not a minimal product; it is a strategy and process directed toward making and selling a product to customers. It is an iterative process of idea generation, prototyping, presentation, data collection, analysis and learning. One seeks to minimize the total time spent on iteration. The process is iterated until a desirable product-market fit is obtained, or until the product is deemed to be non-viable (Wikpedia).
A prototype is just part of the MVP process but it may be the most critical. It can be defined as a sample or model built to test a concept or process or to act as a thing to be replicated or learned from . Prototyping does not necessarily have to happen at a certain stage but it does need to happen early and often. People get engage when things get tangible. One of the keys to successful prototyping is that you need to configure the prototype to learn not to test. Most people think of prototypes as a finished product or a working piece of software. I encourage you to step away from your product and use props, storyboards, videos, building blocks and sketches.
One of my favorite stories comes from the person that took the PDA to market. As luck goes, he was ill prepared to discuss with investors much of the details of the product. He was yearning for something to help them grasp the idea as he saw the glassy eyes developing around him. Half in jest and half in desperation, he tosses his wallet to the middle of the table. The story goes on but summarizing, he saw everyone start looking at it and then a few of them picked the wallet up while others waited for it to be passed to them. He had them!
Few of us will be that lucky to create a prototype on the fly but it serves as an example of how important it is to create that learnable moment. A story should be an integral part of the prototype and lead the group down the trial path. Create that moment of suspense such as a magician does before pulling the rabbit out of the hat. As a result, you will only make the prototype seem more real to everyone.
Allow everyone to move things around a bit and touch the product. I have seen interior designers use doll house furniture, engineers use cutouts from drawings and others use building blocks. Engagement in the process allows earlier buy-in and effective feedback. Creating that relaxing atmosphere goes a long way in gathering the information you need. But be careful to leave the customer validate the product or service, not you.