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'We believe we will prove them wrong': Billionaire AOL founder Steve Case says skepticism around his 'Rise of the Rest' project reminds him of AOL's early years
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Steve Case is the billionaire founding CEO of AOL and the head of Washington, DC-based venture-capital firm Revolution.
AOL was the leader of the first wave of internet companies, and Case says we are at the start of "the third wave," where what's essentially an "internet of everything" will transform industries outside of Silicon Valley.
He said the level of opportunity and skepticism around his current "Rise of the Rest" investment project gives him "deja vu" of AOL's early years.
This article is part of Business Insider's ongoing series on Better Capitalism.
Throughout the 1980s and '90s, Steve Case worked toward building the dream he formed at the end of college: ushering in a new digital age.
After reading futurist Alvin Toffler's 1980 book "The Third Wave," Case became convinced that Toffler's vision of a world where people could work, chat, and form communities through interconnected computers was not only going to come true, but that he would be part of it. It was America Online, the company he cofounded and led as CEO, that helped turn that into reality.
In a recent interview with Business Insider for its podcast "This Is Success," Case said a project he is currently working on through his venture capital firm Revolution, the "Rise of the Rest" initiative developing startup communities in overlooked cities across the United States, is giving him "déjà vu" about those early days of AOL. "I recognize a lot of people are skeptical, but we hope to prove them wrong, and we believe we will prove them wrong," he said.
Case left AOL on a bittersweet note in 2005, having overseen the creation of a massive company that revolutionized the way Americans used the internet, but also seeing the failure of the $165-billion mega merger between his company and Time Warner. The experience, he said, taught him about the importance of relationships when it comes to executing a grand plan. This lesson served as bedrock for work with President Barack Obama's administration around laws benefitting entrepreneurs, as well as years of investments through Revolution, and led to his own "Third Wave" thesis.
As Case saw it, AOL led the pack of the first wave of the internet, establishing the networks that led to the second wave of internet companies — like Facebook, Google, and Amazon — where the rise of smartphones helped make near-instant online access an inescapable facet of life. The third wave, then, is where the "internet of things" will essentially become the "internet of everything," where we will move past novelties like light bulbs you can control with a smartphone app to industry-transforming developments like new methods of collecting and analyzing real-time livestock and crop data.
Shayanne Gal/Business Insider
The third wave, Case believes, will certainly not make Silicon Valley, New York, and Boston (the three account for 75% of all venture capital in the US) irrelevant, but will flourish outside of them. It will require startups to work more closely with industry mainstays and regulators than second wave companies were willing to.
Through tours of the country marked by pitching competitions, Case has invested across 38 American cities to make his new vision come true. He and JD Vance, the former Silicon Valley investor and "Hillbilly Elegy" author, are also leading a $150 million seed fund with many of the world's most famous investors involved as limited partners.
"There's a fairness aspect to it, but also just a kind of an opportunity aspect to it," Case said. "How do you make sure that we really are going to level the playing field, and we really are trying to back entrepreneurs everywhere across the country, across many sectors of the economy, so that we can continue to be the most innovative entrepreneurial nation in the world, and we can try to create jobs everywhere, not just in a few places?"
He's been building a Rise of the Rest team to maximize the network he's building, so that connections and investments go much further than a single 12-hour bus tour visit. Like he was in the '90s with AOL, he wants to be at the forefront of a new era.
"I want to be involved in that, and there's something I can do to help drive that," he said. "Because I've done it in the past. I have a voice, and a platform, and I want to do something constructive with it."
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