Steve Case: Riding the wave of the 'second Internet revolution'

Steve Case: Riding the wave of the 'second Internet revolution'

Revolution is a theme in Steve Case's career. During the closing session of the VERGE DC conference this afternoon in Washington, Case spoke with Marc Gunther about revolutions past, present and future.

As the co-founder and former CEO of AOL, Case's firm was instrumental in bringing the Internet to scale. And that has been just the beginning.

"The way I think of this is that we're now ushering the second Internet revolution," Case said. "The first one, over the last 25 years, was getting people used to it, getting them to connect regularly. Generally, I'd say we succeeded in getting people to get online. And 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 other core foundational industries in our country -- energy being a key one, health care being a key one, education being a key one."

He added: "I have no doubt over the next 25 years those industries will be fundamentally transformed by this second Internet revolution, and that provides a real opportunity for entrepreneurs."

Case has long had a role to play in those transformations: Through his Revolution venture capital fund, he has invested in disruptive companies like Zipcar and LivingSocial, and he is also a leader of a White House-backed initiative called Startup America, which aims to spread the seeds of entrepreneurship across the U.S., creating jobs and spurring innovation across each of those key industries, and many others.

"I really do believe in the power of entrepreneurship," Case said. "I believe this nation was made great by entrepreneurs."

Startup America is geared at providing companies the resources to get started with new businesses -- a number of companies, including Microsoft, GE, Ernst & Young and many others have contributed free or discounted expertise, services and capital to help boost new firms -- but is also looking to spread entrepreneurship and innovation beyond the current primary hub of Silicon Valley.

"Ultimately, the action is in other regions -- we should not be reliant on a few regions like Silicon Valley as the hubs of innovation, it should be broader," Case said. "We should be building up D.C., Raleigh, Denver, Cleveland, and having other ecosystems that are vibrant to have a network density effect."

While there are notable successes among innovative companies making real change in entrenched industries, there are also plenty of challenges, especially when targeting the three big sectors Case mentioned at the beginning of the discussion: energy, health care and education.

All of these industries are highly entrenched, highly regulated and highly capital-intensive, as Marc Gunther noted during the talk. Each of those presents a big challenge, and together it's nothing short of daunting.

Case gave the example of Opower, which is partnering with large utilities to give end-users more insight into their energy use and energy costs. And companies like SunRun are taking much of the difficult decision-making out of solar power purchases, but it's still an uphill march to make change happen.

stage photo

Part of that, Case said, is that those three industries also share a common obstacle, that they are not largely consumer-driven. Unlike with media, or car rentals, the end users don't have as large a reach into the investment or procurement requirements of their school districts, utility companies or health care providers. And that makes it even harder for small, disruptive firms to make the kinds of ripples that Zipcar is making.

Fortunately, Case said that his firm is ready to engage in the long-term push for change. "We have a Bias at revolution toward bigger problems, ones that are harder to fix," he said. "Zipcar started a decade ago, and it's only now hitting its stride in terms of the market picking up. I like the long-term, harder-to-build companies that when you break through and have a bigger impact on society."

Photos from VERGE DC taken by Goodwin Ogbuehi for GreenBiz Group.