I recently spoke to Steve Case, who is best known as the Co-Founder of America Online (AOL), which he started in 1985. Case helped AOL become the world’s largest and most valuable Internet company back then and it’s still thriving today.
Today, Case has become a major driver and supporter of entrepreneurship in America. He believe that the most economic growth will come from small businesses. He is the Chairman and CEO of Revolution, an investment first that partners with visionary entrepreneurs like Zipcar and LivingSocial. In addition, he was the founding chair of the Startup America Partnership, which was launched at the White House to support American entrepreneurs. He has also used his talents to support the social sector with the Case Foundation, which he co-founded with his wife in 1997.
At Revolution, how do you decide what companies to invest in and which ones to avoid? Do you bet on the entrepreneur or the idea?
Our motto at Revolution is to “Invest in people and ideas that can change the world”. So we bet on entrepreneurs as well as the idea. Sometimes it is a person we just have high confidence in, with a less developed idea, and sometimes we are so captivated by the idea we are eager to invest even if the team is not yet quite right. Our strength at Revolution is on identifying and helping to execute on big, swing for the fences ideas, and so we look to invest in entrepreneurs that have the vision and the passion to execute on the idea. And while we celebrate the remarkable ecosystem in the Bay Area, our bias at Revolution is to invest in companies outside of Silicon Valley.
It stems from a belief in the “Rise of the Rest” – the notion that because of technological innovation, regulatory changes, the dissemination of entrepreneurial culture, and other factors, areas that have traditionally not been hotbeds of entrepreneurial activity are going to emerge and disrupt the entrepreneurial map.
Small business is the foundation of America, so we need to celebrate and support all the small businesses out there. But the place to focus in particular is on high growth businesses. Some entrepreneurs want to open a restaurant and have it generate enough profit to support their family; others want to build a national chain of restaurants. It is these aspirational high growth companies that are the big job creators in our country, and also the key driver of innovation and economic growth. So while all businesses are important, it is the young, high-growth companies that merit extra attention.
Some progress has been made on making it easier for entrepreneurs to get the capital they need to start or scale their companies. The Jumpstarting Our Business Startups Act that passed in 2012 is an example of this. Also, progress has been made in reforming our patent system, to make it easier for innovators, and in rightsizing regulations, to reduce some of the costs businesses incur. Now, the aspect I worry the most about is immigration. Reforming our broken immigration system is fundamental to the long-term health of our entrepreneurial economy. Forty percent of Fortune 500 companies in the United States were started by immigrants or the children of immigrants, including iconic brands like Google, AT&T, Honeywell and Ebay.
Yet our country makes it harder than ever for American-educated immigrants well schooled in science, technology, engineering, and math to stay in our country to work or start a new business. These are lost opportunities for our nation and for the companies who need access to these workers. High-skilled immigration is a key issue we must take on as a country in order to increase innovation and drive economic growth. Americans of all stripes need to band together and support comprehensive immigration reform because ultimately it speaks to our long-term economic competiveness and our ability to harness the best talent so that we can out-build and out-innovate our competitors.
Tell me about the AOL story. How did you get the idea, what were the obstacles and looking back, what are you most proud of?
When I was in college, I read a book called The Third Wave, published in 1980 by Alvin Toffler. I was fascinated by the concept that the book put forth about the “electronic frontier,” and I knew then that there was an opportunity to create a place where consumers could interact, research and connect to others online. But when I graduated from college, there were no opportunities to join companies that were exploring this new interactive world. After a few years in more “traditional” corporate marketing jobs, I took the plunge and joined a startup, in 1983. It failed, but two of the people I met there became co-founders of AOL in 1985.
People thought we were crazy, as back then only 3% of people were online, and only sparingly (average use was an hour per week). And for a while, they were right, as we struggled. It took us nearly a decade to get 1 million subscribers on AOL. Then, over the course of the next decade we went from 1 million to more than 25 million. That’s when I learned the importance of passion and perseverance. Eventually we were able to “get America online” and help make the Internet an important part of our lives, but it took a long while.
What economic trends are you paying attention to for 2014 that will impact startups and workers?
As you might expect, I am looking closely at the entrepreneurial sector because that’s where the most potential is for economic growth and innovation.
In particular, I’m eyeing the momentum in regional entrepreneurial ecosystems – places like Chicago, Des Moines, Detroit, Denver, Austin, and Washington D.C. While Silicon Valley will continue to dominate the startup tech scene for years to come, the pace of change happening in other cities is accelerating and I’m confident we’re going to see a new wave of companies emerge from these cities that will begin to alter the map of our entrepreneurial economy./>/>
I’m also keeping a close eye on the implementation of crowdfunding and other regulatory changes initiated by the JOBS Act. 2014 will be the first year that the main provisions of the JOBS Act will take effect, making it easier to form companies and raise capital. It’s important we get those things right so that we can continue to make the case to Washington for policies that encourage entrepreneurship and ultimately lead to a stronger economy.
1. Follow the Wayne Gretzky principal: don’t focus on where the puck is, go where the puck is going. Focus on the future.
2. Vision is important but as Thomas Edison said, “vision without execution is hallucination.” Think big, and be confident in your idea, but make sure you have the tools to implement it. Set clear priorities, so you know what you have to do today, this month and this year to move your vision forward.
3. Build a great team. You can only do so much yourself. I’m reminded of the African proverb that says “if you want to go quickly, go alone, but if you want to go far, you must go together.” That’s true for entrepreneurs, as well. It’s a team sport. As the founding entrepreneur you may be the quarterback, but you’re only going to win if you have assemble a great team, and aspire them to do great things.