Transcript: Steve Case


The transcript from this week’s, MiB: Steve Case on AOL, Startups & Venture, is below.

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ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, what can I say, another great conversation with an extra special guest, Steve Case really is legendary in everything from putting America Online, full pun intended, to being the first Internet company to go public, the largest merger in history with AOL-Time Warner, and you would think that’s enough of a resume, but he didn’t stop there. He basically set up a foundation, joined The Giving Pledge, and became very active in both policy and entrepreneurship.

Revolution is the outgrowth of his family office that does everything from seed to venture, to growth investing. He was instrumental in getting a number of very positive policy actions passed over the past decade. And now, he is taking his act on the road and revealing too much of America, how much energy and entrepreneurship there is, away from the big money centers like New York and San Francisco, in the heartland of America. And his new book, “Rise of the Rest,” describes that experience.

I found this conversation to be fascinating. And if you are at all interested in technology, venture, startups, entrepreneurship, I suspect you will also. So with no further ado, my conversation with Steve Case.

I’ve interviewed a number of people from Revolution. I’ve spoken to your wife about the Case Foundation. But let’s talk about your background. Your entrepreneurial career really begins in 1985 when you co-found America Online, which turned out to be the first Internet company to go public. Tell us a little bit about the founding of AOL. Where did this idea come from? And what was that experience like?

STEVE CASE, CHAIRMAN AND CEO OF REVOLUTION: Well, it was an interesting journey. I actually stumbled onto the idea the Internet in 1979, 1980.


CASE: I was a senior in college. I was hearing about these things called videotex and teletext, interactive TV, and the thing, and Minitel in France and Prestel in U.K. All these interactive services, I was really intrigued. And I read a book by Alvin Toffler, the futurist, called The Third Wave, and he basically was talking about this coming kind of electronic frontier or electronic cottage. I was smitten. I was mesmerized. So I knew I wanted to do that. But when I graduated from college in 1980, there were no Internet companies to go to work for because it’s so was more of an idea.

And venture capitalists back then weren’t backing, you know, 21-year-olds coming out of college. So I decided to work for some big companies for Procter and Gamble and then PepsiCo, then moved to the Washington DC area to join a startup that failed. But thankfully, two of the people I met there, Jim Kimsey, and Marc Seriff, and I co-founded America Online in 1985. And back then, only 3% of people were online, and those 3% were only on an hour a week. So it’s still pretty early days in terms of the Internet, but really believed that someday the Internet would be, you know, pervasive, that it would be a mainstream phenomenon. And we set out to try to get America Online.

RITHOLTZ: Yeah. This Internet thing is going to be big one day. I think you were early in that assessment. So I was going to ask you why something so fundamental blocking and tackling its access. But really, the answer is there was no access back then, or other than mainframes at universities and the Department of Defense, very few people in the real world had an Internet.

CASE: Well, actually when we started in 1985, it was — the Internet was restricted to government agencies and educational institutions.


CASE: Actually, it was illegal for businesses or consumers to be on the Internet in 1985. A few years later, Congress passed the Telecom Act to commercialize the Internet. So when we were getting started, we had to create sort of this parallel world, our own kind of email systems around, you know, kind of servers because we couldn’t connect to the Internet. But we knew it was only a matter of time before those worlds would blur together and merge together.

And in our early days, we really just tried to figure out like many startups get noticed to stay alive. It was, frankly, harder because we were in the Northern Virginia area, outside of Washington, DC. There was no venture capital, you know, there. We had to raise money from other places. People were reluctant to leave a big company and go to a small company. So a lot of challenges that we faced. Frankly, it helps inspire some of the work we’re now doing with “Rise of the Rest,” how do we back entrepreneurs in places outside of Silicon Valley. I think my own experience building AOL in one of those forgotten places, left behind places, that people don’t think of a startup, you know, kind of hubs, kind of helped inform some of that work.

And it took us a while. Eventually, in the mid-90s, the Internet became more of a mainstream phenomenon, hit a tipping point. But for the better part of a decade, it was a struggle. A couple of times, we almost, you know, hit the wall, had to go through some layoffs. It was not obvious to most people that the Internet would ever be something more than a niche kind of hobbyist kind of phenomenon. Even when it went public, it was in 1992. You know, we raised a whopping $10 million in our IPO. The value of that company that day was $70 million.

Basically, nobody knew or cared what we were doing. Nobody really was that interested at that time in the Internet. We’ve been at it for coming on a decade, had only a couple 100,000 customers. But thankfully, the next decade, things really accelerated in terms of the growth of the company and growth in the valuation, things like that. But it’s also I think, a lesson for me, I try to carry into the work we now do with Revolution, that sometimes revolutions happen in evolutionary ways. It’s not an overnight success. There’s a slog before finally you build some momentum. And that was my experience with AOL. The first decade was hard and slow. The second decade, really, things really took off.

RITHOLTZ: So was DC just a coincidence of where you happen to be located, or was that lack of legislative permission, part of the reason you had to locate close to Congress and push that forward, so they basically allowed the rest of us to get online?

CASE: Now, the reason I moved to DC was more of an accident. There was an interesting company, or I thought was an interesting company. They joined in 1983. They had a service called Gameline. And at that time, you may recall this, some of your listeners may not, but very few people had home computers, but a lot of people had Atari game machines. And so the idea of this product was you plug the game cartridge, they had a communications capability, a modem built in, and you could download video games, almost like having an in-home arcade, like a Netflix for video.

RITHOLTZ: So it’s a modem and a storage device?

CASE: Yeah, it looked like a game cared too. But, yeah, so you had a phone connection. And so I thought this was a great way to kind of enter that world that I’ve been reading about and wanting to get into. But unfortunately, just as the product came to market, the whole Atari game market blew up, and retailers didn’t want any new products. And suddenly, things were looking pretty, pretty, pretty desperate. So that — but that’s why I moved to the area.

And then because I was already there and these two people I mentioned were also part of that company, you know, the three of us kind of co-founded America Online, brought some of the team from that previous company with us. So it was accidental to be there. But it turned out to be an advantage because, as you say, one of the things that we had to spend a lot of time in the early days of the Internet was public policy, you know, getting the regulations right, commercializing Internet, getting things right for e-commerce, trying to keep the Internet safe for kids, things like that.

And being in the Washington DC area proved to be important. And frankly, it’s proven to be important again now as we’re investing, because policy is becoming much more of a front and center issue for more and more companies. And health tech, sports tech, food and again, these are sectors where there’s some regulations, and entrepreneurs need to understand that, investors need to understand that. So I think we kind of have a little bit of home court advantage being located in Washington, DC, and having a front row seat in terms of understanding how Congress works. And you know, things happen, which I think bodes well, for this next phase of innovation, where policy is much more central.

RITHOLTZ: We’re definitely going to talk about the JOBS Act and some of the public service you’ve done. But I want to stick with AOL as the first Internet company to go public, subsequently runs up 11,616%, not too shabby. Tell us what your experience was like being at the helm of a company as it went public.

CASE: Well, the early days were still a little slow. But then, finally, in ’95, ’96, ‘97, things really took off and our growth dramatically accelerated. It went from a couple hundred customers to, you know, tens of millions of customers. That market cap I mentioned, when we went public of $70 million at peak. Eight years later, it was $160 billion. So it really was quite a ride. And we went from having less than two employees when we went public, till eight years later, having 10,000 employees. And then we merged with Time Warner so there were 90,000 employees. So it was quite, you know, kind of a rocket ship.

And I recognized as the company was scaling. I as the leader or as the CEO, needed to constantly rethink what my job should be, what I should focus on, constantly rejigger things with the team, building the team for the business we’d have a couple of years from now, and not from the business we had today, or certainly a business we had in the past. So it was a rapid pace of learning a lot in terms of being a public company growing so rapidly. And also I recognized because AOL was sort of the time of the leader in the United States, that I had a role to play in not just running a company, but being sort of an evangelist for the medium and advocate for the medium, and try to weigh in on policy issues, to try to make sure that, you know, the Internet really had a chance to flourish.

RITHOLTZ: You mentioned the AOL-Time Warner merger, at that time, it was the largest merger in history. And somehow you guys, AOL shareholders, ended up with the majority of the stock, even though Time Warner was arguably a much larger, more established company. What was that process like of negotiations? Did you approach them? Did they come to you? Tell us how that came about.

CASE: Well, it came about because AOL had been growing rapidly and was a leader in what was then called the dial-up era, the narrowband era, where you were connecting your computers to phone lines. But we needed a path to broadband, and the best path was cable system, which had high speed access. And so strategically, there was a real value in merging with Time Warner. We also believed as the Internet evolved, and you had higher speed, you’d have more multimedia content and having some of the brands at Warner Brothers Studios and Warner Music, and CNN, and HBO, and so forth, all part of this company would advantage us.

And similarly, Time Warner is a great company, been built through acquisitions over more than half a century. But they didn’t really have a viable path to digital. They were trying a bunch of things, none of them worked out particularly well. So we both had a strategic need to come together. And also, frankly, from an AOL standpoint, or representing our shareholders, we recognize there was some value in diversification. Our stock had run up quite significantly and owning a share of a business that had a more diversified mix of things would make sense.

So I did approach Gerry Levin who was the CEO of Time Warner at that time, and basically said, “Strategically, I think it makes a lot of sense if we put these companies together. We have an opportunity to really kind of lead in the future, and in a lot of different ways, streaming and so forth. And within the first minute or two of my little pitch, I said, “I’d be willing to step aside as CEO to allow you to be CEO of the combined company because I believe in this idea.” That’s what happened. Eventually, it took us a little while to put a deal together. But we didn’t finally — it took a while to get it approved, but finally did get approved, and I did step down as CEO.

RITHOLTZ: So there’s a theme I keep noticing, and lots of the things you’ve done, whether it was AOL, or the Time Warner merger, and we’ll talk about Revolution in a bit. But everything you seem to do seems to be both innovative and highly disruptive. Is this by design? Was that just a happy accident?

CASE: We kind of say that. I like to — and like a lot of entrepreneurs, do pick battles worth fighting, kind of mountains worth climbing, you know. But it’s easy. It’s not that interesting.


CASE: And in fact, what I get motivated by and again this is true with many entrepreneurs, if somebody says it can’t be done, I’d say, “Okay. Well, you know, game on. We’re going to try that.

RITHOLTZ: Hold an idea.

CASE: Yeah. I — the early days, the Internet, people said it can’t be done. The Internet was never going to be a mainstream phenomenon. A decade ago, when we started working on “Rise of the Rest” and said innovation is going to happen all over the country, not just in Silicon Valley, most people thought it was kind of laughable. They didn’t think that was really likely to happen. Now, thankfully, some of those views are changing. But I think picking those challenges that really I think have a positive impact in the world, and even though they are hard, and in most cases, maybe in all cases, take 10, 20 years to achieve your goal. Those are the — you know, the battles I like fighting,

RITHOLTZ: Really quite, quite intriguing. So let’s talk about Revolution. What is it? How did it begin? When did it start?

CASE: Well, it began a few years after I stepped down as CEO of AOL, and I was trying to figure out what my next act was going to be. And rather than start a company again, I thought I’d start an investment firm that could back the next generation of entrepreneurs. Initially, it was started in 2005 and it was called Revolution, but it was just my capital. A little over a decade ago, we decided to open up to outside capital. So we have institutional investors across the platform now. We have kind of three basic groups. One is Revolution Growth, which was our later stage fund. We also have Revolution Ventures. And more recently, about five years ago, we launched The Rise of the Rest Seed Fund.

So now we’re able to back entrepreneurs at every stage of their journey, whether it’s really just — really early stage, where they just need a seed funding, whether it’s that next phase where they’re starting to grow and need venture funding, or if they’re really starting to scale and need growth funding. That’s really what Revolution is about.

And the other two things that make it I think interesting versus maybe other firms in the country. We talked about a little bit of those earlier, but because we’re based in Washington, DC, and because we’ve been working on policy issues for nearly four decades, we think the next wave of innovation policy is going to be front and center. And in Revolution, we’re trying to position as the leading investment firm in the country that’s focused on policy.

And the second is I think we’ve been unusually focused on place. With “The Rise of the Rest,” we’ve now made 200 investments, 100 different cities. We’ve done these bus tours all across the country. And even the reason I wrote the book on “Rise of the Rest” is there’s remarkable things happening all over the country, remarkable new companies being built, cities being renewed and revitalized. But most people aren’t paying attention to it, and I really wanted to tell those stories. And that’s been a growing focus of Revolution. So as an investment firm, with outside investors at the seed venture and growth stage, but with particular focus on policy and on place.

RITHOLTZ: And we’re going to talk about place in a moment. But just to put this in a little context, Revolution has already had some big successes. Sweetgreen, obviously a big hit, DraftKings, another one. Do those date back to when it was a family office, or was that seed or venture-type investments?

CASE: Those are both growth stage investments. So we were the first institutional investor in Sweetgreen, probably seven or eight years ago; at DraftKings, probably five or six years ago; also Clear, the biometric company you see in a lot of the airports.

RITHOLTZ: I love them. I just flew out JFK. They’re the best.

CASE: Yeah. Recently, more recently, a company in Chicago called Tempus, it got a big data precision medicine to help people who are diagnosed with cancer.

RITHOLTZ: So you’re DC based, which has to give you a slightly different perspective from the folks in Silicon Valley. Before we start talking about the rest of the country, what advantages do you find being at the heart of the policymaking apparatus in United States?

CASE: Well, in our office, Revolution office, a few blocks from the White House, not too far from the Capitol, and having lived there now for a few decades and having a number of people involved in the firm who have been steeped in policy work for government. One of the co-founders of Revolution 15 years ago is Ron Klain, who’s now President Biden’s Chief of Staff, and John Delaney joined us more recently, started two companies, went public, that was in Congress and ran for president. So we’ve got some people that really understand policy. And we’ve got a location that I think is interesting.

And as I said, if you think about — the way I look at the Internet is the first wave was getting everybody online. We talked about those early days of AOL, went from an idea that nobody cared about to suddenly everybody needed to be connected, and you had to build those on-ramps, build all those servers out, build all that infrastructure, and that was the first 20 years or so. The last 20 years has really been the second wave, which has been about building on top of the Internet, building apps and software and services on top Internet, Facebook, Google, you know, things like that.

The third wave is when the Internet meets the real world. And that means you’re starting to deal with some of the most important aspects of our lives, how do we stay healthy? What do we eat? How do we learn? How do we invest? How do we move around in terms of transportation? And what’s interesting about those businesses is they tend to be regulated. You know, because they’re so important, there tends to be public policy focus on those. So innovators need to understand it’s a little bit different as in this third wave, and that understanding the policy framework, both in terms of a go-to-market strategy, and also what policies you could get changed to open up new opportunities.

So when some of the health care legislation passed more than a decade ago that opened up things like Medicare Advantage, that created enormous investment opportunities. More recently, just this summer, there was legislation including around climate that’s going to create enormous opportunities to invest in that sector. We saw one of our companies, DraftKings that we talked about earlier, there was a change, actually Supreme Court ruling that allowed states to make different rules around essentially betting. That open up a big opportunity and actually accelerated the growth of DraftKings.

So policy can kind of be a strategic advantage for companies in this third wave. And being in Washington, DC, and having that kind of connectivity, I think that perspective and a lot of relationships with people on both sides of the aisle, I think gives Revolution a unique platform, and we’re able to help the entrepreneurs read back in ways that other venture capitalists typically can’t.

RITHOLTZ: So you grew up in Hawaii, you ended up relocating to DC. What led to the idea, hey, there’s a massive amount of innovation and energy and entrepreneurship in between New York and Silicon Valley? How did you find your way to saying, “Let’s figure out a way to reach these folks, get them funded and give them a boost to launch their businesses?”

CASE: Well, the triggering event, I was asked a little over a decade ago to chair a White House initiative called Startup America Partnership that was launched by President Obama. And that got me traveling around the country because it was really trying to promote regional entrepreneurship. This is at a time when unemployment was high, and there was a recognition that one way to deal with that was to create new jobs. And one way to create new jobs was to create new companies. And so that led to a focus on regional entrepreneurship.

And as I travel more and looked at more of the data, I found it surprising, almost shocking, that even though these new companies are the major job creator, most of the venture capital at the back these new companies are just in a few places. You know, 75% of venture capital over the last decade has gone to just three states, California, New York and Massachusetts. So it doesn’t —

RITHOLTZ: Even worse in three states. It’s really three cities, San Francisco, New York, and Boston.

CASE: Yeah, within those states is overwhelmingly three cities, as you said. So as a result, a lot of people in different parts of the country have felt like they have to be there. If they’re not there, they really don’t have a shot at raising the capital they need to start or scale a company. That’s led to sort of a brain drain. And lots of parts of the country, people kind of leave. And how do you slow that brain drain? How do you create a boomerang of people returning? How do you create more jobs in these communities all around the country? So there is more hope around the future.

And so that really led to launching about eight years ago, “Rise of the Rest,” which initially started as bus tour. We went to places like Detroit and Pittsburgh, and then we went to Minneapolis, Denver, got 44 cities so far, really all over the country to see firsthand what was happening there. For the big red bus, that got a lot of attention. We did pitch competitions. We invited — in each city, we invited people to join us. And that gave us another kind of lens into what was happening.

And then we really doubled down about five years ago when we launched The Rise of the Rest Seed Fund, and we decided to do things a little differently there rather than — in the first few years, it was just my capital. But we decided to kind of ask some of the most prominent entrepreneurs and investors in the country to join us as LPs in this fund. And so we have about 35 people and entrepreneurs like Jeff Bezos and Howard Schultz, and and Tory Burch, and Sara Blakely, and venture capitalists like John Doerr and Jim Brewer, and private equity investors like Henry Kravis and David Rubenstein, hedge fund people like Ray Dalio, really an amazing group of —

RITHOLTZ: That’s a murderers’ row.

CASE: It’s an amazing group of people. We’re honored to have them as our partners in this. And we set out to find these entrepreneurs and we said we’re going to try to build a fund that really can generate, you know, top tier returns, which is the best way to drive more capital from the coast to other parts of the country. And it’s working. And the reason to write the book is o really tell those stories, and really kind of put some — a spotlight on some of these cities that are showing remarkable momentum, and some of these entrepreneurs in those cities that we call it, sort of surprising places, that is not Silicon Valley, not New York, and it’s not Boston. It’s Richmond, Virginia, where a company like TemperPack is really innovative and sustainable packaging, or Chattanooga where a company FreightWaves is doing some interesting things. It’s really interesting where the Bloomberg office is today for this.

So they’re building essentially a Bloomberg data platform for the trucking and logistics industry, because some of the biggest trucking companies are based in in Chattanooga. Or a company in Indianapolis called 120Water that’s focused on helping initially consumers, but then cities kind of test their water and make sure that after the Flint water crisis, there was a lot of concern about that. Or in Baltimore, Maryland, there’s a company Catalyte using AI to identify undiscovered kind of talent that people have for coding. And some of the people who have gone through this program end up making two or three times more than they had before. I remember one that UPS truck driver, nobody, when he was growing up, told him he could be a coder. Catalyte determined they had a talent for coding, and so he’s making substantially more than he was making before.

So these are the kinds of stories we’re seeing all across the country and cities that would surprise you. And I think the reason to write the book because I wanted to tell those stories. I think most people reading the book will be surprised by the story, surprised by the company, surprised by the cities, and have a slightly more optimistic view of the future of America because of what’s bubbling all across the country.

RITHOLTZ: So tell us a little bit about what these bus tours are like when this big red coach rolls into a small town and says, “Okay, we’re going to hold a bake-off for the best startup technology, whatever it happens to be.” What is that like? And what is the reaction of the locals like to this?

CASE: You know, it’s very positive. I think for them, it’s a signal that somebody is paying attention and a signal that things are turning up in terms of new possibilities. And we use the bus, it’s partly kind of a visual.

RITHOLTZ: For sure. A giant red coach.

CASE: Yeah. It gets people’s attention. And you know, remember a few years ago, 60 Minutes did a story on it. I think the optics of that sort of the Americana road trip bus dynamics is part of it. But there’s a more strategic reason for it. So we actually use the bus as a rolling, convening platform. We bring people together from different parts of the community. The mayor often joined us, or a senator, or the university president, or CEOs of big companies as well as obviously the entrepreneurs starting these new companies. And we’re trying to connect people and create more of a collaborative startup community there.

And we also invite people from other places to join us, either investors from the Coast, or people from larger companies to join us on the bus. So they can see firsthand what’s happening as well as obviously inviting media, but local media and national media. And it’s our way to learn what’s happening, identify promising companies to invest in, but also to try to showcase the best of what each of these cities. And in the process, if you take a step back showcase of the best of America, not just what’s happening on the Coast, but what’s happening all across the country.

RITHOLTZ: I would think that with all the focus on New York, Boston, and especially Silicon Valley, there are some enormous inefficiencies, and lots of great ideas, and either underfunded or undervalued startups in the in the heartlands are being or at least were being neglected until you shine a light on them.

CASE: Yeah. I know we still have a lot of work to do, but it’s starting to change. And in the last few years, people have seen some real significant successes. Even a company I write about in the book called Mailchimp based in Atlanta, and acquired for $12 billion. It was actually bootstrapped. There was no venture capital, in part because they weren’t able to raise venture capital when they started more than a decade ago in Net Atlantic because most people weren’t really investing in cities like Atlanta.

As investors see more and more of those success stories in places all across the country, it’s opened their eyes to the potential, and they’re starting to pay more attention. They’re still overwhelmingly investing in their own backyard. So they’re sitting in San Francisco. Most of their investments are in Silicon Valley. But at least, they’re a little more open-minded about it. And frankly, the pandemic has been helpful in that.


CASE: You don’t want to make light of all the tragedies of the pandemic, but it just stopped whining.

RITHOLTZ: No, it forced people to think outside of — listen, if you’re stuck at home and you’re talking to an entrepreneur, it doesn’t matter if they’re down the street or 3000 miles away.

CASE: Exactly. If you’re doing a pitch meeting on Zoom, what difference does it make where they are? That was — that was helpful. The other thing that’s been helpful is for a lot of people, the pandemic was sort of an opportunity to take a step back and reassess their lives. And some people have decided to shift how they live and how they work, and where they live and where they work. And the whole idea of more remote work, hybrid work has become a real phenomenon. And that is helping these Rise of the Rest cities that we’ve seen some people who grew up in different parts of the country or went to college in different parts of the country, and had gone to the Coast, typically, Silicon Valley, decided during the pandemic to move back.

And once they’re there, even though they usually start working — continuing to work for the company they had been working for just doing it remotely, they realized there’s remarkable things happening in the startup communities in those cities. And some of them are now starting to leave those big companies to join some of those small companies. Some of them even started to think about starting their own companies in these communities. So I think the tipping point for the Rise of the Rest really was the pandemic, and we’ll see an acceleration over the next decade.

And it goes back to I said earlier, but for me, these journeys, these battles I’m fighting, whether it be the early days of the Internet, or more recently leveling the playing field with Rise of the Rest have a certain dynamic to them, which is the first 10 years, it’s a slog. And the second 10 years, things really kind of take off. We saw that with the Internet. We’re beginning to see glimmers of that with Rise of the Rest. And hopefully, this book will help accelerate the whole movement.

RITHOLTZ: So let’s talk about some of the cities that you’ve gone to. After New York, Boston and Silicon Valley, what is the next largest tier? What do you think is the fastest growing cities? And what cities surprised you the most for whatever reason it happened to occur?

CASE: That’s a tough question, for two reasons. One is it’s not just a few cities, it’s a few dozens of cities.

RITHOLTZ: It’s a lot. Yeah.

CASE: So it’s hard — it’s hard to just pick a few. And the second is it’s a little bit like asking a parent who their favorite child is, you know.

RITHOLTZ: Well, we all know — listen, parents will —

CASE: I love all my children and I love all of these. I love all these cities.

RITHOLTZ: That’s what you say. That’s what you say, but we know you have a favorite. But — so let me ask the easier question. What surprised you the most when you were out and about in a hundred different cities?

CASE: Well, each of the cities, there’s some things that are similar, and some things are different. What’s similar is what’s happened is in the last particularly decade, more attention got focused on startups and even the government leaders, mayors and governors for decades, economic development was basically getting a big company to move their headquarters, or big company to open a factory. Then the recognition more recently was, no, the real way to do that in a sustainable efficient way is actually to launch new companies. Some of which would fail because that’s the nature —

RITHOLTZ: By design.

CASE: But some of which would succeed and be maybe the Fortune 500 companies of tomorrow. And then kind of creating more of that collaboration in the community, more that sense of possibility in the community has been really a key ingredient that we’ve been watching building over this — over the past decade. But the other aspect I think that’s interesting is there are some cities that really it’s not just a lower cost of living or lower cost of operations which is a motivator for some, or family reasons, or lifestyle reasons to be in a particular city which is the motivator were or some.

There are more and more cities where there really is an advantage to be in those cities versus being in, say, San Francisco or New York. Take healthcare, the healthcare really is going to require systems level change to really revolutionize how we think about our health. That’s going to require partnerships. Some of the key partners you need in the healthcare space are big hospitals like Mayo Clinic in Minnesota, or Cleveland Clinic in Ohio, or Johns Hopkins in Maryland, or MD Anderson in Texas. Being close to them probably increases your odds of establishing partnerships with them. So that dynamic is critical.

Another example is a company we backed in Northwest Arkansas, Fayetteville called AcreTrader. Basically, it’s a platform to invest in farmland. And the founder Carter Malloy actually was in San Francisco and said, “If I’m going to start a company that’s going to basically be this platform for farmland, I should be where the farmers are, right?” That’s a good way to build kind of trust and scale up the platform. And he’s done very well, now raised a large round. They’re scaling quite rapidly.

RITHOLTZ: I am familiar with AcreTrader and had no idea that you guys had anything to do with that.

CASE: And it’s a wonderful Rise of the Rest story because again even though Carter Malloy had left that area to go to San Francisco, he returned, and some of that I’m sure it was for family reasons, but most of it was for strategic reasons. AcreTrader is more successful in Arkansas than if it had been in, you know, state in California or New York. We’re seeing that happen and more and more of these cities.

But in terms of one city I would point out because it’s an amazing story, it’s even — I lead off the book with it. It’s a story of Detroit. You know, people don’t really focus on this. But if you think about Detroit a hundred years ago, essentially was Silicon Valley. It was the most innovative city in the country when the automobile was the hot technology of the day.


CASE: Hundred years ago, Silicon Valley was fruit orchards. They weren’t growing startups. They were growing fruit.

RITHOLTZ: Apple is called Apple for a reason.

CASE: And so, yeah, Detroit was rocking and rolling the car revolution for a couple decades. People wanted to be part of that, moved to Detroit. Houses were being built. Schools were being built. You know, Detroit was really rocking and rolling. And then about 50 years ago, things turned and they lost 60% of their population.


CASE: 60%. And the year before we rolled in with our Rise of the Rest bus, the city of Detroit went bankrupt. What had been Silicon Valley went bankrupt. That’s the bad news. The good news is a vibrant startup culture, particularly in the downtown Detroit area. We backed companies like Shinola and StockX and others that are in Detroit, with the backing of a great entrepreneur, and Gilbert, strong mayor, foundations like Kresge all work together to say, “We need to rebuild Detroit and we’re going to do it on the back of backing new company startups in Detroit.” So now Detroit, you know, is kind of back on, on the rise and doing some phenomenal things.

The other city we visited on that first Rise of the Rest bus tour was Pittsburgh. When you think about Pittsburgh, it’s really powered the Industrial Revolution. It was the steel capital. And hundred years ago, it was rocking and rolling, and then lost some of that, you know, kind of lead, but reinvented itself in the last couple of decades, have a great university there, Carnegie Mellon —


CASE: — and a big focus on robotics, for example. And as a result of backing new companies and startup like Duolingo, the language app, started spun out of Carnegie Mellon, started in Pittsburgh, it’s seeing the rise again. But this is — this is really the story of dozens of cities. I think if you fast forward 10 or 20 years, it’s more — as I said earlier, more optimistic view of America that will have a more inclusive innovation economy, won’t just be a few people in a few places. It will be a much more broader based innovation economy, which I think will result and then creates some more jobs in more parts of the country, which might even create more of an opportunity to knit together a very divided country that’s obviously divided in many respects.

But one way is sort of an opportunity gap. There are some people doing really well. A lot of people struggling and feeling left behind. How do we create some of the jobs of the future, even some of the industries of the future in these cities all across America?

RITHOLTZ: You raise an interesting policy question. Whenever I see, you know, a groundbreaking where some giant company comes in with all these tax abatements, we start with Foxconn in Wisconsin, turned out to be a bust. We see it every time, some billionaires’ stadium gets paid for by taxpayers. The math never seems to work out. But it sounds like what you’re saying here is if we stop trying to do these giant — let’s bring a big company in to save the factory town, and if that company leaves, the town is toast. Let’s create an entire different model of startups, small companies, build that whole ecosystem that has a much better chance of success for that region. Is that way fair way to start?

CASE: Success for that region and success for the country. The interesting thing about this economic development battle where different states are fighting with each other over the same existing companies has sort of zero sum for America.

RITHOLTZ: Right. Right.

CASE: They’re just throwing money at it to get — you know, leave here to go there. It doesn’t really help the country. And so — and then you say, often those investments do not pay off for those particular cities or those particular, you know, states. So it’s way better to focus on the new companies. And we saw an interesting dynamic a few years ago when Amazon launched its second headquarters, you know. And they basically said, “We’re going to create a second headquarters and create tens of thousands of jobs in that second headquarters. And you know, let us know if you’re interested in us coming.”

And 230 different cities all pitched to get Amazon, you know, to come, ultimately decided actually in Northern Virginia, not too far from where we started AOL is where they decided to kind of plant their flag. But then the nice thing about it was those 230 cities had to come together, had to make a joint pitch, had to figure out what their strengths were to really highlight, what some of the weaknesses were that they could they could focus on. And what we’re seeing is sort of a continuing effect of that. Many of these cities are now focused on these new companies, focused on backing the startup saying, “We don’t really want to do that, fighting again, to get Amazon. How do we create the next Amazon in our own communities?” That’s resulting in a pivot to focus on new companies, on startups and cities all across America.

RITHOLTZ: So let’s dig a little deeper into Revolution. First, is there a favorite sector or industry or size that Revolution likes, or it doesn’t matter? If it’s an interesting idea with a chance for success, it interests you.

CASE: But as I said, there’s two key planks of our strategy. One is policy and the other is play. So on the policy side, we tend to focus on the industries where there is a policy kind of component. So I mentioned health tech company called Tempus. I mentioned TemperPack, which in the sustainable kind of packaging business; Clear, the biometric company. There are policy issues, and usually partner issues associated with that. But —

RITHOLTZ: Agriculture also, something else you’re building up?

CASE: Agriculture would fit into that. Sports tech would fit into that. So there are many sectors that fit into that. But they generally — most of the theme that generally drives most of our efforts are around policy. And then of course, with our Rise of the Rest Seed Fund that is very placed-based and it’s sector agnostic. And one of the interesting things we learned late last year, we did a joint report with PitchBook. There are two data points that I thought were striking and even surprising to me. I’ve been working on this for a decade.

The first was in the last decade, 1,400 new regional venture firms were started up, 1,400. And they’re typically focusing on that early seed and kind of venture stage. And the other data point was there’s a 600% increase in venture capital going to these Rise of the Rest cities. So the things we’ve been talking about a decade, we’re starting to see progress, new venture firms starting more capital flowing, but we think things will really accelerate in the next decade. We’re just trying to make sure if Revolution was positioned to really be the leader around place and use even the book to make the case for why other investors should be investing in these other cities, not just in the usual places like San Francisco, New York and Boston.

RITHOLTZ: So Revolution brings a lot more to the table than just capital. There’s a lot of value-add coming?

CASE: Absolutely. No, at the beginning, we make an investment. That’s the start of the process of working with a company, whether it be introducing them to new partnerships or helping them recruit people, their management team or their boards, or helping them navigate sometimes complicated policy issues. There’s lots of things we try to do to really help these companies scale, help them achieve their full potential.

RITHOLTZ: Quite intriguing. Coming up, we continue our conversation with Steve Case, chair and CEO of Revolution, discussing his new book, “The Rise of the Rest: How Entrepreneurs in Surprising Places Are Building the New American Dream.” I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.


RITHOLTZ: . I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Steve Case. He is the chairman and CEO of Revolution, as well as one of the three co-founders of America Online. He is also chair of the Case Foundation and the Smithsonian. He is the author of a new book, “The Rise of the Rest: How Entrepreneurs in Surprising Places Are Building the New American Dream,” that is out this week. So let’s talk about the book. First of all, what motivates you? As someone who’s written a book, I know how much work goes into it. What motivated you to sit down and say, “Yeah, I’m going to put all this down on paper?”

CASE: I thought I had to write the book. I spent most of the decade traveling the country, meeting entrepreneurs, visiting dozens of cities, seeing remarkable things happening that most people are unaware of. And so I just felt like I don’t have a choice. I had to write this book. I had to tell the stories there. I had to profile some of these entrepreneurs, talk about what they’re doing with their companies, got to showcase some of these rising cities in terms of what they’re doing to really create kind of a — and renew their communities, create more opportunity, more jobs, things like that. So it was not really a choice. I just felt compelled to write this book.

RITHOLTZ: What was the response from the various entrepreneurs when you say to somebody, “Hey, I’m going to feature you as a chapter in this new book,” are people excited about it or —

CASE: Of course. I think they — particularly the entrepreneurs in these Rise of the Rest cities tend to feel lonely, a little left out. They don’t have the — at least, yeah, we’re working on this, obviously, but don’t have quite the attention that you have if you’re an entrepreneur in a place like Silicon Valley. So even when we’ve rolled into town with our Rise of the Rest bus and just — and have pitch competitions, where entrepreneurs can be on stage. That allows them to talk up what they’re doing, and get people in their communities to better understand what they’re doing and believe in what they’re doing.

And similarly, with the book, everybody we talked to was honored, obviously they being included in the book, and appreciative of the fact that we’re really championing their stories, trying to do what we can to help them scale into being kind of significant companies that can change the world, creates significant value for the investors, create, you know, hopefully thousands of jobs. And the process is going to lift up their particular communities and strengthen America in terms of having, you know, kind of a more inclusive economy.

RITHOLTZ: Tell us about these pitch competitions. How long does each entrepreneur get? What are they allowed to bring? What are some of those pitches like? How do they vary from one to one?

CASE: Well, when we decided to do a road trip, we planned this for more than six months in advance. So we have an advanced team that’s going to the cities. We try to understand what — who should we visit in the cities, what startup to do, like a bus startup crawl with it. We might have a lunch and pitch event, a lot of different things to really kind of get people together.

But for the pitch competition, specifically, we basically say we’re coming to town to do this pitch competition. We generally get about a hundred people applying to pitch, and then our team sorts through that and picks the best 8 or 10 to be on stage. Then we actually hire a pitch coach to help them work on their pitch.


CASE: Because we really want to help them — whether they win or not, we’re trying to help them be positioned for success. So they each get three minutes or so to pitch, and then a couple minutes of questions following that. And then we — the judges spend some time reviewing which ones should win, and then we make a decision about which one we’re going to invest in. Sometimes we actually invest in more than one because we’re just struck by the — you know, the power of some of those — some of those ideas.

RITHOLTZ: So just a quick digression, so we have a VC fund that just focuses on financial technology. Because of my day job, and we just had this giant conference out in — of all places, Huntington Beach, in SoCal. And one of the things we did was an exact — that exact thing, a pitch competition. It was five minutes per entrepreneur. And I think we ended up going with 10 people out of well over 100 applications. But the idea of a pitch coach, because some of the pitches were fantastic. Some were a little rough around the edges. The idea of a pitch coach is really intriguing. How did people respond to that? Someone coming in and saying, “Hey, you only have three or four minutes, here’s what you need to focus on.?”

CASE: It was super helpful. And obviously, these companies have done pitches before, but they’ve never done in most cases, a pitch at this day, you know, kind of level, with this kind of audience. And so getting — it actually came to us, we had a partnership with Google. We have an initiative called Google for Startups, and we were doing some joint things with them. And they were doing a pitch competition where they invited some of the entrepreneurs that we helped select from all around the country to come pitch at Google headquarters in Silicon Valley. And as part of that, they used a pitch coach.

So we then embraced that idea, and ever since we’ve had a pitch coach as well. But, no, it can really result in the entrepreneur telling a much more compelling story, and it benefits them long after we leave town. They have a crisper, more compelling pitch for the next time they’re meeting with a prospective investor or customer or partner.

RITHOLTZ: Data is wonderful, but sometimes it’s all about the narrative, isn’t it?

CASE: Exactly. No, storytelling is a lot of what this is about. You have to captivate people. Everybody has to be selling. If you’re trying to hire somebody, you’re selling. If you’re trying to get investors, you’re selling. If you’re trying to get media attention, you’re selling. If obviously you’re trying to get customers, you’re selling. And everybody can, you know, be coached to be better at what they’re — what they’re trying to — you know, to sell.

RITHOLTZ: Really interesting. You know, you said something earlier that I let sneak by, but I got to bring it back up. The JOBS Act passed under the Obama administration, and the Investing in Opportunities Act, not only were you involved in helping to create that policy, you were instrumental in getting that passed. So first, tell us a little bit about that experience. And second, what has that meant for startups and funding of new companies and entrepreneurs?

CASE: Well, the JOBS Act passed just about a decade ago. It had broad bipartisan support. It’s called Jumpstarting Our Business Startups Act. And it was basically updating the rules of securities laws that are in place since 1933. So this wasn’t just pre-Internet, this is pre-television. It needed a little bit of an update. And it allowed things like crowdfunding had created an on-ramp for young companies to go public who were called “emerging growth companies,” that has fueled more IPOs. It was really about giving more entrepreneurs more access to capital at the early stage or the later stage, with the goal of having more companies start and scale and create more jobs. And so that’s really why it was called the, you know, the JOBS Act. And it was great.

I worked on the President Obama’s Jobs and Competitiveness Council and there was a little subcommittee focused particularly on entrepreneurship. I work with Sheryl Sandberg at Facebook, and John Doerr, the venture capitalist at Kleiner Perkins, to help figure out what some of the policies would be that would create a more fertile startup environment all across the country. And the JOBS Act was part of that.

RITHOLTZ: So what do you think the direct result of that legislation and that policy update has been in the decade you’ve been traveling around the country and looking at startups?

CASE: I think crowdfunding has been helpful to a number of companies that otherwise wouldn’t have had access to capital, would never have gotten started up. And there are more companies have gone public in the last decade because of the JOBS Act, making it a little easier for these emerging companies to go public.

RITHOLTZ: I keep finding these — when I’m searching for something, I keep finding these funny little products like, oh, that looks really interesting. I’ve never seen anything like that. You click through and as often as not, it’s a crowdfunding, “Hey, give us enough money to help get this product launched, then you get a product,” but not necessarily any equity ownership. Is that the future for very specialized, niche products as opposed to broad company startups?

CASE: The crowdfunding really started with some platforms like Kickstarter, exactly what you’re saying that if you — if people to offer a particular product, usually before it’d even be manufactured and get some preorders that will allow them to have the capital to then go build out the product. And that worked for a number of companies. Some of the products then ended up getting launched more broadly, or they ended up raising capital more broadly. But there also have been more and more companies that are using crowdfunding to raise equity capital to help fund companies as well.

RITHOLTZ: You can do both, not just a product, but —

CASE: Exactly.

RITHOLTZ: — you’re actually a small investor in a startup.

CASE: Exactly.

RITHOLTZ: Really, really quite, quite fascinating. So let’s circle back to 2000, the Time Warner-AOL deal goes through. You set up a family office. And from that, you really start to expand into a lot of different public service and philanthropy. You mentioned the National Advisory Council on Innovation and Entrepreneurship, as well as President Obama’s Council on JOBS and Competitiveness. Tell us a little bit about when you go from a nimble startup to a big merger, to the government, what’s the trade off? How difficult is it to move the ball down the field?

CASE: Well, I think it’s difficult, for sure, which is why I do it only on the side. It’s sort of my moonlighting, my side hustle. My main event is focused on investing in companies —

RITHOLTZ: (CK) side hustle.

CASE: — through Revolution. But I do think it’s important to make sure that, you know, I do at least everything I can to make sure America remains the most innovative entrepreneur nation. I do think it’s important to try to, as we discussed around Rise of the Rest, create a more inclusive innovation economy that brings along more people in more places. And while most of that and most of my time is spent on working with those entrepreneurs as an investor and mentor, I do think it’s important to make sure we have the right policy framework in place that creates as much opportunity as possible for as many entrepreneurs as possible, as many places in America as possible.

So that led to the work around the National Advisory Council on Innovation and Entrepreneurship. More than a decade ago, actually, current Secretary of Commerce Gina Raimondo restarted it, recently asked me to co-chair it again. So I agreed to do that. And we’re focused particularly on identifying some of the industries of the future, where America really needs to lead, and supporting this effort around regional hubs, including some of the legislation that passed recently to fund more regional innovation around the country. So it is less, you know, Silicon Valley based.

RITHOLTZ: What’s the big change in the decade that has ensued from the last time you were involved with this policy or this panel today?

CASE: Well, some of the initial focus was on this access to capital side, which led to things like the — you know, the JOBS Act. Now, it’s I think a little more focused on access to opportunity, which ties in with the work we’re doing around Rise of the Rest, how do you create a level of the playing field, so everybody everywhere has a shot at the American dream. That’s really what it’s all about, and trying to create more of that investment.

It’s also — it’s striking to me because I’ve been doing this now for a while. As you think about that early days of the Internet, we talked about AOL being in Northern Virginia, outside Washington, DC, actually a number of the companies that were pivotal in that first wave were all across the country. It was not so much about Silicon Valley. For example, IBM’s PC operations were in Boca Raton, Florida. CompuServe, a major online service at that time was in Columbus, Ohio. Hayes, the communications modem company was in Atlanta, Georgia. Sprint, another communications company was in Kansas City. Dell was in Austin. Microsoft actually started in Albuquerque before moving to Seattle.

So that first wave of innovation of the Internet was regionally distributed. It was only the second wave when it became about software, that Silicon Valley rose to prominence. I think in the third wave we can redistribute it again and have innovation in different parts of the country. And that’s part of the focus on the policy side, just do what I can to bring that entrepreneurial lens, that investor lens to policymakers, do it in a very kind of bipartisan kind of way, working with Republicans and Democrats, trying to figure out what is the right kind of policy going forward.

But it’s easier to do — you know, based on your question, you know, it’s challenging to deal with these things. Sometimes it does feel like you’re trying to move a mountain. But doing it, you know, occasionally on the side, it’d be — it works for me. I have great respect for the people who are willing to jump in and do it full time. I think that’s not my thing.

RITHOLTZ: It’s tough. You mentioned the Subcommittee on Entrepreneurship. Tell us a little bit about their work, and what have they accomplished\.

CASE: Well, that was I think pivotal in terms of creating the framework and also the momentum around things like the JOBS Act. And the way we did that is we actually asked an outside consulting firm, it was McKinsey, to do — look at all of the ideas that have been put on table, legislation that have been introduced in Congress, think tanks and others, that would create a more entrepreneurial ecosystem all across the country. And then number of things were identified, and we just kind of whacked away, working on identifying what the — which policy would have, you know, the biggest impact.

And I think we did make progress in lots of different areas. One area we did, you know, recommend that we spend more time on, that we didn’t make progress on, but hopefully it still will. With the immigration reform, how do we make sure we remain a magnet for people all around the world who want to come here, and start companies here, and create jobs here? And how do we make it easier for people to come on — people who’d come for universities, education? It will be easier for them to stay. So we can continue to lead the charge and continue to be that — you know, win what’s now a global battle for talent. So that’s one area that was a strong recommendation of that the JOBS Council a decade ago that has not yet happened, but hopefully it will in the future.

RITHOLTZ: In the U.S., there’s a labor shortage at just about every level of the employment spectrum, entry level work, farm work, all the way up to very senior technology people. What can we do to bring in the best and the brightest from the rest of the world?

CASE: We’ve got to pass legislation. It came closest this summer. There’s some legislation called the Startup Visa that essentially would it make it easier for entrepreneurs who are going to —

RITHOLTZ: Did that go anywhere?

CASE: It did not get done. It was part of some broader legislation, but ultimately did not get that done. And I recognize that immigration is complicated and really emotional and become very political because of various facets of immigration, securing the border, things like that. But on the specific issue of how do we get people from all around the world who have ideas and want to start companies, how to make sure those companies are started here, and the jobs, and therefore are created here as opposed they’re created elsewhere.

And we have seen in the last couple of decades, a globalization of innovation and then globalization of venture capital. You know, 25, 30 years ago, over 90% of global venture capital is invested the United States. Now, it’s under 50%.


CASE: So other countries have figured out that sort of the secret sauce, that sort of powered the American story is entrepreneurship, and venture capitalist is part of that. Now, even in this new book on “Rise of the Rest” talk about the need to focus on immigration reform, focus on backing founders from all over the world and starting those companies in United States. But obviously, the key message is they don’t have to be in Silicon Valley, or New York, or Boston. They could be in many other cities around the country, and that’s what we’re trying to promote.

RITHOLTZ: Let’s talk a little bit about some of your philanthropic work. You join the Giving Pledge in 2010. Tell us what that experience was like. I’ve heard some pretty amusing stories about working with Bill Gates and that process.

CASE: Well, I’ve obviously known Bill Gates for decades. We were vigorous competitors in the late ‘90s when I was running AOL, but it was great to become partners around things around philanthropy, including the Giving Pledge. And Melinda Gates and also Warren Buffett, I’ve known for quite some time. And so when they approached my wife, Jean and I, when they were getting started, it was over a decade ago, we were initially a little reluctant to be that public about what we were doing philanthropically. We’ve always done things in a somewhat quieter way.

But we decided to join because we thought maybe it’d lead others to making a commitment or giving the majority of their wealth away. But also, we thought we could learn from others and learn how to be smarter about the philanthropic investments we made. I think that’s been the case. There have been a number of meetings of the giving pledgers on specific topics, and also kind of annual meetings. And I think everybody that’s part of the Giving Pledge is a little bit wiser because of the network that’s been created among the people who made that commitment.

RITHOLTZ: So let’s talk a little bit about the metrics of giving, go back 20, 30 years, and the question was sort of like advertising. You know, some of its effect, if you just don’t know which half is, how do you think about tracking, analyzing and determining if you’re moving the needle when you’re making a specific donation?

CASE: Well, first of all, I should say my wife, Jean, has led the Case Foundation since we started it 25 years ago. I’ve been focusing more on the investment side. She had been focusing more on the philanthropic side, so she gets all the credit. But I think we and others have gotten much more precise in terms of trying to understand the impact of the philanthropic investments we’re making. What is the — what are the key metrics that should be tracked there? And we — you know, specifically Jean leading the foundation has brought a little bit of that venture capital mentality to it, and rather than just pick one thing you invest in, we picked several things and cycle them through at various times.

Right now, a primary focus of Jean is around National Geographic Society, which she is the chair of. I’ve spent time as the chair of the Smithsonian Institution, including how to move it into more of a digital future. So those are a couple of areas of focus. But we found that you can bring some of your business experience to the philanthropic sector. You’d have to recognize it’s different. But one thing that is similar across both of them is the value of partnerships.

There’s an African proverb we both love that if you want to go quickly, you can go alone; but if you want to go far, you must go together. So a lot of what we do with the philanthropic efforts around building partnerships, a lot of what we do with Revolution, and also Rise of the Rest is around building partnerships. So that idea of collaboration and going forward together is one of the constants across all our work.

RITHOLTZ: So you mentioned the Smithsonian, I’m a fan. The Smithsonian Institution is the world’s largest museum and research complex. What led you to that? Is there any particular interest in science, history, technology? How did you get involved with them?

CASE: I was asked over a decade ago to join what they called the Board of Regents, and then more recently, I became the chair of it. And like many people have seen the wonders of the Smithsonian, I remember even when I was a — I guess I was 18. I came to Washington and saw the Smithsonian for the first time and experienced some of the wonders of — I was inspired to do a number of different things because of it. So I wanted to make a contribution to kind of take the Smithsonian into the future build on its legacy over 175 years, around increasing and diffusing knowledge.

And add to it a digital component that we’ve been working on what we call the Virtual Smithsonian, where rather than just assume that you’re going to fly to Washington, DC, visit the National Mall and visit our (19) museums, we want to come to you. And so we want the Smithsonian to be in every home and every classroom, and embracing a lot of partnerships, embracing a lot of technologies to do that.

RITHOLTZ: Spirit of St. Louis is hanging —

CASE: Yeah.

RITHOLTZ: That’s my vivid recollection as a kid going through it and it’s just stayed with me forever.

CASE: And you probably know, we have two Air and Space Museums, one on the National Mall, one out by Dulles Airport. The one, National Mall has been closed for most of the past year.


CASE: It’s under reconstruction. And it was opened in 1976 and we’re going to reopen it actually next month. And part of it is being reimagined to be the Bezos Learning Center. The largest philanthropic gift in the Smithsonian’s history is from Jeff Bezos, a $200 million gift to the Smithsonian to build out that Air and Space Museum.

RITHOLTZ: Really, really quite fascinating. You mentioned partnerships. What did you bring from your AOL experience to philanthropy? How much of that foundational, you know, building a business, ramping it up, taking it public, merging it? How does that apply to a very different part of the world?

CASE: Well, again, my wife Jean gets — has been taking the lead here. But from my prism, it’s how do you identify problems that need to be solved. And then bring both an entrepreneurial perspective in terms of what new things might get started, as well as kind of almost like growth investing perspective, what existing organizations might get scaled. And we’ve done work on both sides, made investments to scale up existing organizations like Habitat for Humanity, or Special Olympics, which we were at that time, I think the largest kind of givers to. This goes back a couple decades, as well as launching some initiatives ourselves, including a digital divide initiative over 20 years ago, to try to get computer technology centers installed in different neighborhoods that didn’t otherwise have access to it, with partnerships with a lot of people that made that possible.

So it’s a mix of identifying some of these problems that need to be solved, and figuring out some of them are kind of like bringing — using the investing mentality or think we make seed investments and to get them started. Some of them also are backing existing organizations and giving them the growth level investments to really scale up faster.

RITHOLTZ: You mentioned digital divide, I don’t recall which legislation. It might have been the infrastructure bill, now builds out broadband to pretty much every corner of the country. How big of a digital divide is it? Is it rich versus poor? Or is it urban versus rural? Tell us a little bit about what the digital divide looks like.

CASE: It’s both. And the digital divide, we are focused on — 20-plus years ago, was just getting people connected to the Internet, getting computers into their classrooms and community centers, and some level of connectivity. As we’ve seen with the pandemic, that connectivity, particularly broadband connectivity is much more important. And it’s much harder to not just learn, but just function in life without that broadband connectivity.

And to your question, it’s both. There are different parts of the country that definitely have slow, in some cases, non-existent Internet connectivity, and so those areas are disadvantaged. And this legislation will help there. And obviously, even in big cities, there are parts of the communities that don’t have access to high speed as well. So it become more of a utility that everybody needs to make sure they can, you know, kind of compete in this world and participate. And increasingly, healthcare is using telemedicine. Increasingly, education is using telelearning. It’s not just about the ability to get news or byproducts. It’s also the ability to do some of the most fundamental aspects of our lives. So ubiquitous connectivity is important.

RITHOLTZ: You talk a lot about leveling the playing field. That’s an expression. You mentioned in terms of access to capital, you mentioned in access to networks, access to Internet and broadband. Why is that so important to you?

CASE: It’s actually something that’s sort of been part of everything, or almost everything I’ve been involved in. You know, to me, the excitement, the passion in those early days of the Internet, and I’m talking about the ‘80s when we were just getting started, in the ‘90s when the Internet was scaling, because I really believe the Internet would make the world a better place. The Internet would give people access to information, education, commerce, community that they otherwise wouldn’t have.

And also would level the playing field. Right now — those early days are, on the news side, there are only a few news networks like CBS, and ABC and so forth.


CASE: Or you maybe — if you were wealthy, you might have owned the local newspaper. There weren’t really opportunities for most people’s voices to be heard. And so, I really felt that the Internet could help create more of those voices and level the playing field. And as you say, that effort in the last decade around Rise of the Rest, even the reason I wrote this book on Rise of the Rest is I’m going to try to level the playing field, create more opportunity for more people in more places. And it’s just something that drives me. How do you, you know, make sure that everybody has, you know, kind of a fair shot? The outcomes are going to be different, but the opportunities for everybody should be, you know, much better than they have been.

RITHOLTZ: You mentioned access to information. There’s a line from either the book or something you wrote about the book a hundred years ago, the amount of information people would encounter in their lifetime was the same as a Daily Edition of The New York Times. That’s just astonishing.

CASE: Yeah. There’s been an acceleration of that. And I recognize there’s also now some unintended consequences, almost like a lot of information and a lot of issues around, you know, what is news and what is fact, and so forth. And even in the social media space, there have been some — you know, some challenges. So, all these things have some pluses and some minuses. The question I think for society is how do you maximize the benefits and minimize some of the risks?

RITHOLTZ: Really quite interesting. My last question before we get to our favorites is a little bit of a curveball. You’re born and raised in Hawaii, but then relocate to of Washington, DC. That seems like the worst weather trade I’ve ever seen. DC is humid and Hawaii is just delightful. What was it like leaving that behind?

CASE: Well, I love Hawaii. I was born and raised there. Both my parents were born and raised there. So our family goes back over a hundred years and have investments there, and have family there. And they try to get back as often as they can. But for me, I really wanted to pursue a different path and staying there, which led to going to college in Massachusetts, and working in Ohio then working in Kansas, and then for the last few decades in the Virginia, kind of a DC area.

And I think that journey, including growing up in Hawaii says that before starting a company and starting AOL in Virginia, I think also informs my views around the Rise of the Rest. I think it’s part of the reason I’m so passionate about trying to, you know, create more opportunity for more people and more places. You know, when I grew up in Ohio, I remember the early days, this would have been I guess the ‘70s. We’d get television shows a week late. It was — the satellite technology had not advanced to the point where they could beam them. So we would get the tape sent over.

RITHOLTZ: Literally.

CASE: Literally sent over. So, yeah, basically, if you had a friend on the mainland, you could find out what’s going to happen on the television show this week, because it already happened in the television show there last week. Just, you know — it’s a little bit, you know, kind of off the — you know, kind of the beaten path, I guess. And starting AOL in Tysons Corner, Virginia area, it was also off the beaten path. As I mentioned before, it’s harder to get going there. I think that’s why I’m so passionate now about, you know, creating opportunity for entrepreneurs all across the country, backing them in cities all across the country. That’s why I decided to write the book to tell those stories, and give people more of a sense of what’s happening out there and more of a sense of what’s happening and what could be happening all across America in the future.

RITHOLTZ: Who would have guessed Hawaii was that formative to the worlds of entrepreneurship and adventure? All right, so let’s jump to our favorite questions that we ask all of our guests, starting with, tell us what kept you entertained during the pandemic? What were you watching or listening to?

CASE: We watched not a lot thing. I mean, we’re not big television watchers, but we definitely watched more during the pandemic.

RITHOLTZ: I think all of us did.

CASE: I think one that I remember we watched and recall particularly given what’s happened recently, in the last few weeks with the death of the Queen was The Crown. That was fabulous. More recently, I mentioned my wife is the chair of the National Geographic Society. They have a partnership with Disney, what’s called National Geographic Partners. And as a result, we have a big presence on Disney Plus, and there’s a new series just came out last couple of months called “America the Beautiful.” That’s really spectacular.


CASE: If you haven’t watched that, you should.

RITHOLTZ: I watched, what was it? Earth at Night on National Geographic on Disney and some of it is just astonishing photography. I’ll take a look at “America, the Beautiful.” Tell us about your mentors who helped to shape your career.

CASE: I think there are different people at different stages. In the early days, I think I really did learn a lot from my parents around kind of taking a long view, working hard, trying to be humble about how you approach things. I got a lot of experience in mentoring at some of the big companies I worked for, like Procter and Gamble in Cincinnati. They have a great training program. In the early days of AOL, I learned a lot from co-founders Jim Kimsey and Marc Serrif who were both quite a bit older than I was.

And from our venture capitalists, I learned a lot from being able to work with those venture capitals and getting their perspective on scaling businesses which I think helped me as a CEO of AOL, and also certainly helped now as an investor at Revolution. So I like a lot of people kind of curious, and like to bump into people and ideas and kind of a sponge for different perspectives.

RITHOLTZ: Let’s talk about books. What are some of your favorites and what are you reading right now?

CASE: Reading right now actually a book called — actually of interest to folks who listen to you, called “How to Invest” by David Rubenstein.


CASE: The book just came out and it’s going to be fun. In a couple of weeks, we’re going to do a joint thing in the Economic Club in Washington, DC, where he’s going to interview me about my book “Rise of the Rest.” I’m going to interview him about his book, “How to Invest.” So that should be fun. During the pandemic, my favorite book was “A Gentleman in Moscow,” this great novel by Amor Towles. It was really quite fascinating.

RITHOLTZ: What sort of advice would you give to a recent college graduate who is interested in a career in either technology, entrepreneurship or investing?

CASE: Well, a couple things, I’d say, first of all, again, part of the reason I wrote the book “Rise of the Rest,” don’t assume that you have to be in Silicon Valley or you’re going to be on the — you know, The Beat team, the junior varsity. What’s now happening all across the country is really extraordinary, and that will accelerate over the next decades. So decide what city you want to live in. And you can think of it for personal reasons, or for a strategic reason based on the industry you most care about. And maybe at Silicon Valley, but I doesn’t — it increasingly won’t be there. It’d be many parts of the country that you should consider living in.

Second would be to always remain curious. You know, I’ve learned a lot from, you know, sometimes by serendipity, just being in the right place at the right time, bumping into somebody, listening to something, reading something, and that helps inform your perspective on things.

And the final one and certainly, it’s my experience with building AOL and the Internet. And more recently, what we’ve been doing with the Rise of the Rest is this kind of idea of revolutions happening in evolutionary ways. You have to take a long-term view. You have to be persistent. Sometimes in the entrepreneurial world, people focus too much on the overnight success of Mark Zuckerberg in his dorm room, coming up with Facebook. And you know, a year later, it’s a global phenomenon. A year later, he’s a billionaire kind of thing. That’s super rare. And most of these things take a while and really are going to be two steps forward, one step back, a lot of near-death experiences. And if you really care about it, you keep fighting.

RITHOLTZ: And our final question, what do you know about the world of startups venture, entrepreneurship, technology today, that you wish you knew back in 1985 when you were first launching America Online?

CASE: I would say we’ve covered some of this, the importance of partnerships that almost everything I’ve done that’s had a real impact in the world is about partnerships. And so how do you identify opportunities for collaboration that can really allow things to scale? And that’s one of the key things.

The second would be, it seems so basic, almost so obvious, but it’s true. At the end of the day, it all comes down to people. The people you work with, and the people you partner with are going to result in success or failure. And it’s not about you. Entrepreneurship is a team sport. How do you assemble the dream team of people who would bring different perspective, but work together well in a team?

And everything I’ve had success in my life, including AOL, and more recently, what we’ve done with Rise of the Rest, we’ve had the right team, the things that have been struggles, including the merger with AOL and Time Warner, which obviously was a disappointment. We didn’t have the people side right. We didn’t have the right people focused on the right priorities, working together in the right way. So just a reminder to me that you have to constantly take a step back and make sure you really have had the people side front and center.

RITHOLTZ: We have been speaking with Steve Case, chairman and CEO of Revolution. If you enjoy this conversation, be sure and check out any of our previous 400 or so that we’ve done over the past eight years. You can find those at iTunes, Spotify, wherever you feed your podcast fix.

We love your comments, feedback and suggestions. Write to us at Follow me on Twitter @ritholtz. Sign up for my daily reading list I would be remiss if I did not thank the crack staff who helps put these conversations together each week. Justin Milner is my audio engineer. Paris Wald is my producer. Sean Russo is my head of Research. Atika Valbrun is our project manager.

I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.




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