Steve Case, entrepreneur, founder of AOL and former chairman of Time-Warner, is bullish on American business, bullish on opportunity coming out of crisis, bullish on the need for business innovation in the heartland of America. He’s putting his money where his mouth is, having funded 140 companies with his Rise of the Rest venture fund. He spoke at an Inc. Leadership series virtual conference recently, his Wi-Fi signal occasionally dropping out, which prompted him to reminisce about the early days of dial-up internet connection for AOL (kids—ask your parents).
Case spoke about the new reality of the COVID-19-ravaged business world, a world that has now been further shaken, mostly for the good in his opinion, by the demonstrations that are putting a focus on investment (or lack thereof) in minority business and the need for investors to include more diverse companies in their portfolio.
The AOL founder kicked off the discussion by calling this a “snow globe moment” when everything is shaken up and things will look quite different when the fallout lands. He spoke about his own experience early on when his small company met disaster with innovation. His company had just landed a deal with Apple to create an Apple-branded web service in 1988. Apple decided to move development of their web presence in-house, which meant that Case’s deal was dead and his company was on the verge of failure. Out of desperation, he and his team took the IP they had developed and repurposed it into their own product called “America Online.” The brand would become so ubiquitous and his company so successful that within a decade, Case was able to engineer the largest merger in U.S. history, when AOL bought Time-Warner (the parent of CNN and other Turner Broadcasting properties as well as HBO). The deal became emblematic of the dotcom bubble of the new millennium.
Case now devotes much of his life to investing in small businesses outside of the big tech hubs. He pointed out that 75% of venture funding happens in just three locations: New York, Silicon Valley, and the Boston/Cambridge, Massachusetts area around Harvard. “Venture funds usually just do more in the future of what they’ve done in the past. And for white guys that means investing with other white guys. We need to change this dynamic.” Case has hit the road for heartland bus tours 8 times in the past few years, visiting 44 cities and investing in 140 companies. 43% of those companies are owned by women or people of color. “There are great entrepreneurs all around the country,” Case says.
Case pointed out that during a crisis, entrepreneurs spend most of their time managing and trying to survive, sometimes in markets that are simply in the process of going away.
Some of his key advice:
- “Don’t spend all of your time managing”
- “Make sure to carve out time for imagining.”
- “How can you pivot and thrive?”
- “What will the world after the crisis look like?
- “What will the opportunities be? How can you take advantage of them?”
He’s seen the change in some of his own investments. Popular healthy food chain Sweetgreen has pivoted to offer no-contact pickup, delivery, and simplified menus.
Case doesn’t see offices going back to the way they were, but he thinks that companies will spend a lot of time, effort and money trying to figure out how to retain a culture of ideas—the innovation kismet that can be such an important result of getting team members together. “How do you maintain your team culture? There’s something about bumping into people and exchanging ideas that are more effective in a physical setting. Despite that, people have been surprised by how productive people can be in a remote environment.”
“Existential crises create innovation. After the Apple disaster, we launched America Online. At the time, only 3% of the population was online—for less than an hour a week. Can you even imagine that world today?”
In a mostly positive presentation, Case did have some harsh words for a few tech companies that haven’t seemed to step up to meet the moment. He called out Facebook by name and said they didn’t have the luxury to ignore the problems their technology is creating in our country and our world. “People are in an information bubble. People aren’t getting the other perspective. Facebook not doing an effective job shouldering its responsibility to the country. It’s complicated, but need they to engage more—because they’re so powerful. With great success comes great responsibility.”
The technology of the webinar was less than perfect, despite Case’s bullish take on tech innovation. He used the glitches to call for better infrastructure spending from Congress, especially high-speed wi-fi in more rural areas. “We need to do better than the dial-up modem days of America Online,” he joked.