Steve Case Hits the Road for His Rise of the Rest Tour

Torrents of rainwater rush down neighborhood streets into intersections and storm drains. A dozen or so people hurry under shared umbrellas behind a salt-and-pepper-haired man in a fleece vest. They funnel into a house along the way. The decibel level rises as they crowd into the narrow living room furnished with a couple of workstations, a purple exercise ball and a floor lamp.

Ka-chunk! Deeper inside the house, a foosball hits its target. The man in the vest raises his arms and shouts triumphantly, unintelligibly, above clapping and laughter.

So goes another day in the life of Case, the 56-year-old investor, philanthropist, and the co-founder and former CEO and chairman of America Online.

On this October morning, Case leads this entourage comprised mostly of journalists on his “Rise of the Rest” road trip. They’re in Kansas City’s Startup Village, a collection of modest houses built in the 1930s and ’40s that straddle the Missouri-Kansas state line. The first neighborhood in the country to get superfast Google Fiber broadband, Startup Village is home to some 80 entrepreneurs working on almost 30 businesses.

At another house, Case chats by video conference with the homeowner, Colorado-based entrepreneur and venture capitalist Brad Feld, but their connection is faulty. “We’ve got Google Fiber here,” Case tells Feld, “but in Boulder, I think you’ve got dial-up!”

“I’m connected to you guys by AOL,” Feld deadpans.

The room erupts in laughter. “Burn down the house, burn down the house! Where are the matches?!” Case chants. “All right, that was a good one.”

“You have to realize he’s naturally introverted,” Ted Leonsis says about his longtime friend Steve Case. “But when he’s with entrepreneurs, he’s an extrovert.”

Leonsis served as a senior executive at AOL with Case, and is an investor and co-founder with him in the $450 million Revolution Growth Fund.

Case’s efforts to support entrepreneurs probably stem from a sense of social responsibility, Leonsis says, as well as legacy. “But I think intrinsically he’s an entrepreneur, and the best times of his life growing up were when he was starting businesses and in the early days of AOL. And the people he admires and likes—the energy he gets is from entrepreneurs.”

Case took the Rise of the Rest Tour to nine cities last year to focus attention on entrepreneurial activity and its impact on regional economies in “the rest” of the country—outside Silicon Valley and other tech meccas. At each stop, he visited startups and incubators, held “fireside chats” with community members, led business pitch competitions and awarded $100,000 to each winner.

Case hits the road again in May for his 2015 Rise of the Rest tour through Richmond, Va.; Raleigh/Durham, N.C.; Charleston, S.C.; Atlanta and New Orleans.

“I enjoy it, and I think it’s fun,” he says. “But the reason I do this is because I want to do everything I can to make sure we remain the most innovative, entrepreneurial nation. We’ve had a great run the last 250 years. We’ve gone from startup ourselves as a country to being the leader of the world. But we’ve seen a globalization of entrepreneurship, and other countries are stepping up their games.

“To be successful, we have to do that all the way across this country. We can’t just focus on what’s happening in California, New York and Massachusetts. Great things are happening in those states, but great things are happening in the 47 other states. Yet 80 percent of venture capital goes to three states. I think there’s a mismatch there that we need to address.”

Case is, in fact, working on that as CEO of the Washington, D.C.-based Revolution LLC. The firm has committed to invest 90 percent of its capital in businesses outside of Silicon Valley, most of them east of the Mississippi River. The first six investments from the Revolution Growth Fund have been in businesses outside traditional startup hubs. In all, Revolution Growth and Revolution Ventures, which funds earlier-stage enterprises, have backed more than 30 companies, including Sweetgreen, Bigcommerce, LivingSocial, Zipcar and Booker.

But Revolution’s investments include more than money; mentoring, partnerships and guidance are part of the package. Revolution investors serve as board members and advisers to help build and scale companies, and recruit key executives and other prominent board members. The firm’s approach is aimed at creating built-to-last rather than built-to-flip companies.

Case likes to cite an African proverb to explain his thinking: “‘If you want to go quickly, you can go alone. But if you want to go far, you must go together.’ I celebrate entrepreneurs trying to do anything anywhere, but I particularly celebrate the ones taking on big problems and doing it in a collaborative way. And I also particularly celebrate entrepreneurs in the off-the-beaten-track places, the rise-of-the-rest places. They do need more of a helping hand.”

 

Increasingly, entrepreneurs do seem to be getting more support and respect, he says. “I’ve been heartened that in every city we’ve been in so far, there’s more of a sense of the central role entrepreneurs play in building communities than there was five years ago,” Case says. “They’ve figured out that communities are only as strong as the economy, and the economy is not just about the current incumbent large companies, but also the small companies, some of which will become large companies.”

He cites Cincinnati’s once crime-ridden Over-the-Rhine neighborhood, which was labeled “ground zero in inner-city decline” by Reason magazine in 2001. “The entrepreneurs moved in and created a sense of vitality. And restaurants opened, and condos got built, and it’s now become the cool place,” Case says.

In Kansas City’s Startup Village, a trio of early-stage businesses was already at work in 2012 when Google announced plans to install Fiber here, which quickly attracted more entrepreneurs, ultimately reversing the neighborhood’s decline. Entrepreneurs now share refurbished houses including some that had been in foreclosure or disrepair, and neighborhood property values are on the rise.

Kansas City already was known for encouraging entrepreneurship through the Ewing Marion Kauffman Foundation, established in the mid-1960s by the late pharmaceutical entrepreneur. Today, not only do nonprofits and governmental agencies actively support startup activity, but Kansas City-based corporations do, as well. The Sprint Accelerator powered by Techstars offers immersive, mentorship-driven programs for startups, and regularly hosts reverse-pitch sessions in which healthcare professionals outline their problems to entrepreneurs who try to come up with solutions. Digital Sandbox KC, established in 2013, also helps connect entrepreneurs with the corporate community, and has helped them raise more than $13 million to turn their ideas into working prototypes.

 

Watching Case interact with entrepreneurs in Kansas City, it’s hard to imagine him taking anything but an active role with the companies he funds.

At the offices of EyeVerify, a biometric mobile-security company, he eagerly follows instructions given by founder and CEO Toby Rush, snapping a selfie of his eye to test the EyePrint ID system. “Does it matter if your eyes are bloodshot?” he asks.

Later, at MindMixer headquarters, he peppers co-founder Nick Bowden with questions about how his online civic engagement platform works. “It wasn’t like surface-level stuff,” Bowden says later. “He was genuinely interested in both Kansas City and what we’re doing. That’s always a great affirmation, but it’s also encouraging for people who may not be at our stage, just to get that kind of access.”

At Feld’s house in Startup Village, Case chats with Leap.it founder and CEO Mike Farmer about his work to reinvent search by enabling users to curate searches and then share them. “You’re basically trying to undermine Google right here in Startup Village in Kansas City on Google Fiber!” Case says, his voice rising along with his excitement. “That’s kind of cheeky!” Later, Leap.it would win the $100,000 prize in the pitch contest.

“He’s still very curious,” Leonsis says about Case. “He’ll be the first to play with the product, go to the message boards, find out what he can. He’s still young at heart. He doesn’t outsource a lot of due diligence. He does it himself.”

In addition to his work with Revolution and Rise of the Rest, Case serves as chairman of UP Global, an organization aimed at promoting entrepreneurship, and he’s worked with Republicans and Democrats on public policy initiatives as a member of the National Advisory Council on Innovation and Entrepreneurship and the Presidential Ambassadors for Global Entrepreneurship. He previously was a member of President Obama’s Council on Jobs and Competitiveness. He’s also chairman of the Case Foundation, which he and wife Jean founded in 1997 to use entrepreneurial approaches to solving world problems.

“Something I’ve learned is that revolutions happen in evolutionary ways,” Case says. “Entrepreneurs bring urgency to solve problems but they’re also pragmatic enough to know we’re not going to change the health care system overnight, the education system overnight, the transportation system overnight. It’s going to take a partnership approach.”

This philosophy goes back to AOL’s difficult early days and years, Case says. “AOL couldn’t have been successful without partnerships. We needed partners in [personal computer] manufacturing to build modems in, partnerships with communications companies to get them to lower costs from $10 an hour to 10 cents an hour, partnerships with media companies to get them to create compelling content. There were a whole slew of partnerships, and it took a while and it took perseverance, but it was critically important.”

 

Born in Honolulu to a lawyer and a teacher, the young Steve Case had no idea what entrepreneurship was. “But I know I liked the idea of starting businesses probably to make money because I thought it was fun. Lemonade stands, newspaper deliveries, selling greeting cards door to door, stocking snack machines—pretty basic stuff, but I enjoyed it.”

Case headed east to Williams College in Massachusetts and dabbled in entrepreneurship by writing concert reviews in exchange for tickets while earning his bachelor’s degree in political science in 1980. His first job was with Procter & Gamble as a brands manager. In 1982 he joined Pizza Hut as manager of new product development.

But Case had a yearning the corporate world couldn’t satisfy. “In the late ’70s, I got intrigued with the idea of the Internet,” he says. “I was reading a book that talked about the notion of the electronic frontier, new ways to get information, and I was fascinated by it.”

His older brother, a venture capitalist, introduced Case to the owners of a gaming service for Atari computer users. They offered him a job in marketing, he ascended the ranks and the company morphed into America Online.

“When we started AOL 30 years ago, only 3 percent of people were online and they were only online for an hour a week,” Case says. “So it wasn’t obvious to most people that there would be a mass market for Internet. But even though we had some tough times and moments when parents and friends and others were saying ‘maybe you should give up on this dream because it doesn’t seem like it’s happening,’ I believed in the idea. I believed in the vision, if you will, of a connected society, so for me, that light at the end of the tunnel—even though sometimes it was a dim flickering light—that light never went out.”

Eventually, at its peak, over half the Internet traffic in the United States went through AOL.

 

“I hope I can say this without getting emotional,” a young man says into the microphone at the Big Kansas City entrepreneurship conference sponsored by Silicon Prairie News. He’s addressing Case, who is holding his “fireside chat” onstage. The young man continues: “Thank you for changing the course of my life.”

It’s been a decade since Case officially parted ways with the company he built, following the disastrous merger he finalized in 2001 between AOL and media giant Time Warner, which sent share prices plummeting. He resigned as chairman in 2003 and left the board of directors in 2005.

But it’s his role in making the Internet part of everyday life that’s on the minds of those who have come to see Case in Kansas City.

Case says he’s proud and humbled by their kind sentiments. But his legacy isn’t complete.

“I hope to also contribute to making the world a better place by empowering entrepreneurs all across the globe. The best hope for peace and stability in places like the Middle East, Africa and Cuba is hope and opportunity—and entrepreneurs must lead the way. And here in America we need to understand the American story is not just about the politicians that forged the democracy, but also the entrepreneurs that built the economy,” he says. “Entrepreneurs helped create the American Dream, and now, as we struggle with a growing opportunity gap, entrepreneurs can help save the American Dream."

Are you ready to lead the way as an entrepreneur? Find out how to quit your day job and go solo.

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Lisa Ocker

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