Ideas - Wednesday, March 19, 2008 5:41 - 0 Comments

The Disruptive microISV’s Dilemma

Robert Scoble tends not to get into the microISV world very often, but when he does, it’s worth noting. Robert posted yesterday “The Disruptive Entrepreneur’s Dilemma” about two startup trying to make it: The Hatchery and Admob.

On one hand, Andrew Mobbs of the Hatchery has a big idea - make it safe, affordable and easy to use your cell phone instead of a credit card to pay for things. Great idea - major uphill battle. Andrew’s hoping to interest some large player - Amazon, Starbucks, someone - to adopt the technology and get it moving.

Tough odds - big players don’t get big by jumping on every bandwagon that goes by, they get big by obsessing about the execution of one really good idea that needs one - and only one - really good vendor. Very tough odds - He’s taking on not just PayPal but the credit card industry, those great folks who have the U.S. Congress wrapped around their little finger.

Robert compares Andrew to Omar Hamoui of Admob, a mobile advertising network. He walked into a major VC and had a term sheet in one day. How?

• He had customers and rapid growth before they went shopping for money.
• He didn’t try to boil the ocean - just focused on one bucket’s worth and got that moving.
• He did not go head to head with entrenched competitors.

Leaving aside whether you want to build the kind of business that absolutely needs significant capital to scale fast, I think these two stories illustrate why microISVs best succeed when they focus like a laser beam on one very small, discrete but emerging market to establish themselves.

What do you think?