We recently did just this with a client. They weren't sure if the idea they had would float. They had a potential investor and the investment weighed in on if

We recently did just this with a client. They weren't sure if the idea they had would float. They had a potential investor and the investment weighed in on if their idea would actually work in practice. We recognised that we could build their MVP pretty quickly, so we agreed to do it for a thousand box, so long as they agreed that if their investor liked it and they got funded, we would get an extra (substantially bigger) amount to finish and polish the job. We developed the MVP for them for 1k and they ended up getting funded by their investor. So that part turned out well. We have now proceeded to polish the product for them at the higher fixed rate. For the most part it has been a success in that it has helped another startup realise their idea, and we have and will be getting paid accordingly. We placed quite a bit of faith in our client in following through with the subsequent job that justified our initial time investment, and that is something we were only able to do once we met with the client and formed a trust with them. Knowing your client and forming a trust is something more valuable than any web form/screenshot submission or even a contract. What we have learnt from this exercise: * The initial agreement period took a far longer than expected, almost a couple of months for a really simple $1k prototype. * The customer pivoted several times in terms of functionality, feature creeping all over us. We tried to account for this to begin with, but the amount their idea changed was quite unexpected. * Our client was very organised in terms of getting real users for beta tests. Every week we produced a new build, and tested it with a significant amount of real users. This helped the product turn into something valuable very quickly. We are going to try and make this mandatory for every client we work with from now. * We would not have taken on the $1k prototype job if we weren't confident that they hire us to finish the job for the extra substantial fee. So in summary, I think the $1k prototype is a great idea as long as you find a client you can trust who understands the outcome of the MVP, and also that you believe in their idea.