Proof of concept for validating the Idea of Cloud-Based Virtual Fuel Cards for a Logistics Startup

This SaaS solution was supposed to be an analog of Google Pay, Apple Pay, or Samsung Pay for the transportation industry.

Creating a virtual fuel card means making a clone of a physical card that will be stored virtually (on the phone, tablet, etc.) and will allow paying in a contactless way.

Virtual fuel cards are meant to lift multiple restrictions and inconveniences for truck drivers, their managers, and carriers, such as wasting 2 weeks on sending a physical fuel card to a driver to another city or region by post.

The system could allow drivers to use mobile apps on NFC-enabled devices to pay for fuel and services (car washing, maintenance, etc.) at partner fuel stations within the EU countries. Their managers could get the option to control limits (per day/week/month) and manage allowed services. While the carriers could avoid fraud or card loss risks.

However, the startup had 2 pressing challenges that impeded them to implement the idea:

Lack of Technical Understanding of How the Product will Work

When the business founders contacted Belitsoft, they had only a common idea without business analysis as well as defining technical specifications. 

As a result, they still had neither a well-thought strategy nor step-by-step tactics for how to turn the idea into a viable product.

Need for a Development Team with the Right Skill Set 

As the business had no in-house resources to fulfill a new idea, which is typical for startups, they needed a reliable partner to outsource the entire development process, which apart from the development itself includes business analysis, design, and testing.

Outsource Software Development to a Vendor with the Required Expertise

Typically, startups outsource software development due to such reasons as:

It saves money on developers’ salaries. The startup founders analyzed salary data and discovered that outsourcing the entire process to a nearshore software development company would be approximately 2 times cheaper compared to hiring an in-house team in their country.

It saves time on recruiting specialists. In addition, partnering with a vendor like Belitsoft would be a one-stop-shop solution for them, as we offer a full scale of services, from business analysis and Proof of Concept to implementation and software testing.

It minimizes upfront costs and risks. A startup has no sufficient capacity to hire an entire in-house team at the start, and nor has it much sense to spend a budget on creating the infrastructure and team for a product that still exists only in the form of an idea.

Realize the Discovery Phase and Proof of Concept (POC) to Validate the Business Idea

As the startup came to Belitsoft having no clear vision of the technical aspects and no step-by-step strategy for implementing such a product, we suggested:

1. Starting with a discovery phase to test the idea against reality.
2. Making a Proof of Concept to test how the product would function in a real-world environment.
3. Creating an MVP first to deliver the product to the end clients faster and at a lower cost.

After running these processes for 3-4 weeks, the team of Belitsoft made sure and demonstrated to the Client that their business idea had a serious technical problem. Fuel cards of the local stations had NFC microchip technology that didn’t permit cloning. This issue made the entire business idea not feasible in the real-world environment. Let’s see how we discovered it.

The startup founders came up with an idea that was initially considered a game-changer for the EU market - a cloud-based Virtual Fuel Cards (VFC) system for European truck carriers. However, startup founders didn’t think about the technical realization of the project. 

The initial project evaluation was $150-200k. 

At the stage of defining technical requirements as a part of a Vision & Scope document, our team detected the bottleneck: cloning cards (creating their virtual copies) might be problematic for fuel cards compared to cloning regular payment cards (Visa and Mastercard).

We suggested developing the Proof of Concept to prove or scatter the theory in practice. Proof of Concept showed that the business idea was not viable due to the specific microchip format used by Fuel Card Providers, which didn’t allow card cloning.

Although the result didn’t allow the Client to develop the product, it took only $2400 (which is almost 1/100 part of the initial budget) and 3 weeks so that the business founders could avoid the risk and save up to $200k.