It is actually the process of taking your idea and turning it into an application with some basic functionality. A prototype makes it quite easier to sell your idea to potential buyers who can now actually view the tangible benefits instead of just visualizing or reading product description. It is quite helpful in attracting investors and working with manufacturers and finding licensees.
Make sure that your very first version of your product is used by your early adopters and get as much as feedback from them. List the most significant for your next version.
Even while working on a prototype, do ensure you take measures to secure your app against unauthorized usage and access to data.