From AOL to Revolution: Steve Case's second act
From AOL to Revolution: Steve Case's second act
Steve Case is having a pretty good second act.
Case, as you surely remember, led America Online to glory and riches during the Internet boom. The first Internet firm to go public, AOL was the best performing stock of the 1990s, with a 11,616% (!!) return. That put the upstart in a position to acquire media giant Time Warner, in the largest merger in business history -- and one of the most ill-fated.
Case, who is 53, is back, and he’s busy, as the chairman and CEO of Revolution, a company that “invests in people and ideas that can change the world"; as chairman of the Case Foundation, which is mostly run by his wife Jean; as chairman of the Startup America Partnership, a nonprofit that supports startups in a variety of ways; and as a member of the President’s Council on Jobs and Competitiveness, which has him advocating bipartisan legislation to make financing for startups easier.
What ties all those interests together is Case’s belief that entrepreneurs are the “secret sauce” that keeps the American economy humming, he told me last week at VERGE DC, a conference organized by GreenBiz about the convergence of energy, information, buildings and transportation..
“I really do believe that entrepreneurs change the world,” he says. “They’re willing to take risks, start companies around new products, ideas or services and in many cases new industries emerge. That’s why we’re the leading economy in the world. It didn’t happen by accident. Fortune 500 companies don’t instantly vault into being Fortune 500 companies. Walmart started as one little store in Bentonville, Ark.
“I saw it first-hand with America Online. We started in 1985. Three percent of people were online. They were online for an average of one hour per week. We said, someday this is going to be a ubiquitous medium that’s going to change the world, that everybody would be connected all the time, with multiple devices. It took a quarter century to get there, but now we’re there.”
“We’re now ushering the second Internet revolution,” he went on. “Now that everyone’s connected through multiple devices, connecting more habitually and more mobile-ly, you’re now able to have a transformative impact not just on media and communications and financial services, but on other core foundational industries in our country -- energy being a key one, health care being a key one, education being a key one.”
“They actually have not changed that much,” he said. “But I have no doubt over the next 25 years those industries will be fundamentally reshaped, transformed, disrupted by this second Internet revolution, and that provides a real opportunity for entrepreneurs who are challenging the status quo, playing an attacker role.”
I’ve known Steve since 1996, and I’ve always enjoyed talking with him. I wrote a cover story about him for Fortune in 1998 (The Internet Is Mr. Case’s Neighborhood) which I’ll never forget because the magazine invited my daughter Sarah, then 14 and known as email@example.com, to write a sidebar (Why AOL is Cool) to explain AOL to clueless older readers. On the day AOL announced its purchase of Time Warner in 2001, I was on my way to interview Steve; that meeting was scratched when a PR woman called me at 6 a.m. to say, “We’re buying your company.” Crazy times.
But I’d always felt Steve was about more than the bubble. At least in the early years, Steve and many of his AOL colleagues were mission-driven. They were excited by the idea that cyberspace (yes, that was what we called the Internet way back when) could connect people who’d never been connected before.
Now he’s mission-driven again, hoping to disrupt established businesses that have grown sluggish. “I’m a better attacker than I am an defender,” he said. Since VERGE is fundamentally about sustainability and efficiency, about using the power of information to better use and manage physical assets, I asked him about Zipcar, one of Revolution’s early investments.
When they invested, he said, “most people were unaware of it, but we believed that the idea (of car sharing) driven by environmental concerns and economic concerns -- and driven particularly by the Millenial generation that was rising, and believed in sharing rather than owning -- we believed there’d be a lot of opportunity…If you live in a city, that’s just a better way and a more responsible way to access transportation. But it’s only possible because of the first Internet revolution.” Zipcar renters can locate a car on their cellphones or online and unlock it with their phone. “The ubiquity and the mobile nature of the Internet makes that industry possible,” he said.
“Give consumers more control, give consumers more choice, give consumers more convenience, have a positive social impact and you can build a significant, sustainable company around that,” he said.
Another example: An office sharing company called LooseCubes, which connects companies that have great work spaces with people who need it.”There’s excess capacity in lots of offices,” he said. “If you can get rent for that, for a day or a week or a month or six months, that’s interesting. But what’s more interesting is if you can [get] these innovative, entrepreneurial types into your office, that can create a much more interesting, creative atmosphere.”
He sees lots of potential in the sharing economy: “There’s a shift to use and sharing and experiences as opposed to ownership.”
It’ll be tough, he acknowledges, to upend powerful entrenched interests in energy, health care and education. Those are all tough sectors to disrupt because “they are structurally different…Decisions are generally made not by consumers but by some other institutions. Healthcare is basically run by the payers. It takes a lot longer to break through.” Education, of course, is mostly a government monopoly, and all three sectors are heavily regulated and not as consumer-centric as many other businesses.
“We have a bias at Revolution toward harder problems that take decades to fix,” he said. That’s where the big opportunities lie.