The Disruptive Dilemma Of The Entrepreneur

Wednesday, March 19, 2008 by Mistlee

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The Disruptive Dilemma Of The Entrepreneur

By Robert Scoble

Andrew Mobbs, managing director of the Hatchery, has a big dream. He wants to move the world off of credit cards and onto using their cell phones to pay for things.

He's not the first to have that dream, but I think he's thought through some of the problems better than other people I've talked to about this so far. He is in Silicon Valley today, visiting from London, UK, which is where he's located.

But that's not what was interesting about my breakfast with him this morning. What I found really interesting was his dilemma as an entrepreneur. What is it?

1. His product is too difficult to use, so it needs some more work. That takes capital, but he's not able to land Silicon Valley capital (at least not yet).
2. Because he's chosen a "boil the ocean" strategy (getting, say, Starbucks or Amazon to adopt his technology) he's finding it hard to get adoption.
3. Because he doesn't have adoption, investors aren't interested.
4. Plus he's going against big companies (PayPal, Visa, MC, American Express) which makes investors nervous, unless you have a clear differentiator that'll be defendable for some time.

Compare his story to Omar Hamoui's story, CEO of Admob, a mobile advertising network. He walked into Sequoia Capital and had a term sheet in his hands in about 24 hours. I interviewed him yesterday, and we'll have his story of how he did that up on in a few weeks (we start our daily video show tomorrow, and have about three weeks of shows stored on our Seagate hard drives right now).

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How did Admob land the capital it needed?

1. They had customers and rapid growth BEFORE they walked onto Sand Hill Road.
2. They didn't try to boil the ocean, nor did they try to go up against entrenched competitors.
3. One thing common is both picked the rapidly-growing world of mobile.

Anyway, it'll be interesting to see if Andrew gets any feedback based on the 18-minute conversation we had this morning on Qik. My feedback to him?

Instead of trying to get in front of the CEO of Visa, Starbucks, Facebook, or getting a VC like Sequoia, or even an investor like Jeff Clavier to pay attention to him, I'd do some new work. I'd hang out at Stanford with Dave McClure, who teaches a Facebook class there. If Andrew gets a couple of Facebook app developers to build his payment techology into their apps, then he'd have something to show investors. Plus, he'd probably have millions of people trying his technology and he'd be able to learn from their usage model.

Translation: don't try to boil the ocean, just pick off a small bucket of water, boil that first, then work on the ocean later.

What do you think?

Either way, it's pretty rare that entrepreneurs let you look into an early-stage company and some of the challenges that it faces trying to get a new idea and a new company started.


About the Author:
Robert Scoble is the founder of the Scobleizer blog. He works as's Vice President of Media Development. Go to Scobleizer...

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