Steve Case is the co-founder of America Online, the company that democratized online access. Steve is currently the chairman of the Revolution investment firm and also the Case Foundation. President Obama named him Presidential Ambassador for Global Entrepreneurship. Additionally, Steve has chaired Startup America and Startup Weekend, initiatives to promote entrepreneurship.
In short, he’s a billionaire. But let me tell you a story that will give you a better insight into the man. I had dinner with Steve and his crew immediately after Apple blew up the contract for Steve’s company to create an online service for consumers called AppleLink Personal Edition.
I remember telling him that Apple did him a big favor because Apple was, and still is, a hardware device company. Steve asked me to consult to what became America Online and to do some online conferences, and I agreed. (I should have gone to work for the company, but what did I know?)
Two years later I saw Steve, and he asked me if I was still working with his folks. I told him that I wasn’t. Then he asked me if I ever got the stock options that were promised, and I told him that I hadn’t but not worry about them because I hadn’t done that much.
But he insisted that I get the options, and let’s just say that those options were like the proverbial two fish in Matthew 14 that fed thousands of people. He didn’t have to give me those options, but they changed the trajectory of my net worth.
And now he’s written a book called The Third Wave: An Entrepreneurs Vision of the Future. I recommend that you read it to gain insights into the next curve of tech entrepreneurship. You can get it here. Here’s a short interview about entrepreneurship and the book.
Q. Why did AOL succeed where better-funded services such as Prodigy, Genie, MSN, and CompuServe failed?
A. We had the 4 Ps going for us: people, product, partnerships, and perseverance.
First, people. Our team really believed in the idea of the Internet. When we started AOL in 1985, just 3% of people were online, and they were online for only one hour per week. But despite that, we felt we were ushering in a revolution that could change the world. Some of the bigger companies we competed with saw it as a business; we saw it as a movement.
Second, product. We knew the Internet had to be easy to use, useful, fun, and affordable if it was going to get broad consumer adoption. And we worked tirelessly to build a great consumer-friendly service and evangelize—with your help!—the benefits of going online. We wanted to democratize access to the Internet, so everybody could benefit. Our rallying cry in those early years was we needed to make AOL easy enough for my mom to use.
Third, partnerships. We recognized we couldn’t go it alone, and we worked hard to establish partnerships. In our early days, we crafted partnerships with the PC manufacturers such as Commodore, Radio Shack, Apple, and Tandy, and the modem companies like Hayes. Then we worked with network companies such as MCI and Sprint, to drive down the cost of connecting (when we started, it was typically $10 per hour!).
Finally, we worked with dozens of media and software companies. An African proverb comes to mind: if you want to go quickly, go alone, but if you want to go far, go together. We wanted to go far, so we went together, knitting together a tapestry of alliances.
And fourth, perseverance. We stuck with it, despite numerous setbacks. For example, when Apple canceled the deal to jointly offer AppleLink Personal Edition, that created a crisis and forced a pivot. We renamed the service America Online, which soon became AOL.
I used to joke that AOL was a decade-in-the-making overnight success. We just would not give up. Our investors almost forced us to sell, but we convinced them to stick with it. Finally, we broke through. We were the first Internet company to go public (in 1992), and the best-performing stock of the 1990s. At our peak, nearly half of all U.S. Internet traffic flowed through AOL. But we wouldn’t have made it without those 4 Ps.
Q. Then why do incumbents fail?
A. Startups are attackers. They play offense and seek to seize opportunities. Incumbents tend to be defenders, trying to protect the status quo. As companies scale, it gets harder to continue to be an attacker.
I certainly lived that as AOL got large, and especially after we merged with Time Warner. Sadly, we lost our entrepreneurial mojo, but it is possible for incumbents to continue to be agile attackers. In my book, I outline the steps that companies like Google and Amazon have taken to lean into the future and focus on maximizing opportunity, not hedging risk.
Q. How do entrepreneurs get your attention?
A. Getting our attention at Revolution is less of the challenge–we see so many companies especially on our rise of the rest bus tours nationwide. It’s holding our attention that is harder. The five common mistakes that entrepreneurs make when pitching their startups are:
(1) “We don’t have competitors.” This leads us to believe either they are lying, ignorant, or they’re pursuing a tiny market.
(2) “Our growth forecast is conservative.” It’s usually a slog when you’re building a startup, and plans are rarely conservative.
(3) “Me, me, me.” Not discussing their team is bad because we believe entrepreneurship is a team sport.
(4) “I need you to sign an NDA.” Sorry, but the secret is never the idea—it’s the team and the execution.
(5) “We don’t have partners, and we don’t think we need them.” We believe partnering is key, especially for startups in the Third Wave trying to disrupt big industries.
Q. Based on your prediction of the Third Wave, how should young people prepare for their careers?
When I graduated from college in 1980 the safe play was to join a large corporation. You would get job security and might stay with that same company for decades. That’s much less common these days.
People switch jobs more frequently and many even switch careers. So people have to take more control of their careers and their lives, and constantly be on the lookout for new people and ideas. And they should lean into the future, trying to get in front of some of the massive changes the Third Wave will unleash.
For example, in this next wave we’ll see dramatic change in the way we work, the way we educate our kids, how we stay healthy, even how we eat. These are big changes in society, that create big opportunities for people who are focused on where things are going.
It was said that Wayne Gretzky was a great hockey player because he didn’t focus on where the puck was, but rather where the puck was going. I’d encourage young people to do the same, as the Third Wave picks up steam.
Q. What is the role of government in innovation and entrepreneurship?
A. The government will play a central role in the Third Wave. Entrepreneurs may not want to hear that, but it’s true. If you can’t figure out how to work with government and how to get government to work with you, you’re likely not going to be a successful Third Wave entrepreneur.
That’s because Third Wave industries such as health, education, transportation, energy, and financial services are regulated. Government will set the rules of the road, so whether you’re the entrepreneur guiding a startup or an employee of a larger company, you’ll need to appreciate what policymakers are doing.
In the First Wave, technology risk was the great concern: can you build it? In the Second Wave, market risk was paramount: if you build it, will people adopt it? In the Third Wave, policy risk will be front and center: will you be able to navigate the rules and successfully bring your product or service to market?
Q. Geographically, where will innovation thrive in the next ten years?
A. Silicon Valley will remain strong as will New York City and Boston. But we’ll see a broadening of entrepreneurship in the Third Wave. More capital will flow to more entrepreneurs in more places.
We’re already seeing this happen, and it will accelerate in the coming decade. I’ve devoted a chapter in my book to explain why this is happening, and why Americas innovation economy will be more widely dispersed in the Third Wave. This will be great for these “Rise of the Rest” communities, as it will create jobs and drive growth. It will also be great for the country overall.
Q. Zippy’s or In-N-Out?
A. Like you, I grew up in Hawaii, so of course, I came to love Zippy’s plate lunches. And when I head back to Hawaii to visit, Zippy’s remains a regular stop. And I’ve come to love In-N-Out burgers, so when I’m traveling out West, they too are part of my repertoire.
But to be honest, my “go to” choice these days is Sweetgreen, a fast casual concept my firm Revolution invested in, that I sit on the board of.
Guy | Steve,
The book will be a great success and provide many insights for entrepreneurs. Enjoyed reading the post here and was in lock step until my head started to explode. Right around the part that Steve dropped in his view of the world.
Back in the day when the two of you guys were starving entrepreneurs, eating light bulbs for breakfast and creating the future. I wonder what you would post to a tech giant of the day who would be preaching that only way you are going to be successful is if you ‘appreciate’ policy makers or regulators who think its governments role to regulate the means of your production and services.
Whoa! What about, ‘we put a man on the moon, nothings impossible’… Or hey “if we can draw it, we can do it” thats my credo. The future belongs to those who see the possibilities before they become obvious. My best guess is the entrepreneur has a better pulse on ‘the possibilities’ than some senior policy fellow at blah…blah…blah..
From my perspective, it seems you surrendered to the machine your now part of; considering your wealth and access. I see Steve hanging out with the President and involved at very high levels. Evangelizing tech is important and the both of you have completed very meaningful life’s work that democratized information and technology adoption.
For someone on a quest to build a global service provider managing and interacting with all the ‘things’ that make up the Third Wave. The future requires rules to be shattered and some new rules written. We are not going to get there with the heavy hand of regulations weighing down young men and women entrepreneurs. Im not advocating anarchy business practices with no regulations just a climate where entrepreneurs are free to crete and thrive.
Hopefully your just being politically correct, because you need to be in order to play in the sandboxes the both of you find yourselves in. Hopefully its not because political ideologies have taken you down the socialist, marxist path. Thats okay if it has, but there is a different view of the future out there. One that unbridles thought and innovation not places barriers at every turn.
This is a great read. I find it interesting when Steve mentions mentions we’ll see “a broadening of entrepreneurship in the Third Wave.” I am definitely seeing this in my own city, Reno. There have been so many new startups and tech businesses popping up that it’s beginning to change the culture of the city as a whole, which has been a much needed shift for us coming out of the Recession. There’s a certain energy to it, and I’m definitely excited to see the Third Wave arrive.
We are basically living through the 3rd wave of the Internet right now. First it was our computers, then our mobile phones and tablets. Now? VR of course. There will be a time in which you go visit my VR store, walk in and select a shirt you want to wear, click buy and it will show up in your doorstep the next day. It sounds ridiculous but if you told a person in the 80s that in 20 years they could buy a TV set from a personal cell phone and have it delivered to their homes they would probably look at you like you are crazy. VR is going to be where the next generation of marketing dollars goes into
Awesome, I like to concept of the 3rd wave… and definitely the internet is the best vehicle for any entrepreneur. Thanks
This post and this book are awesome! It really gets me excited to be apart of the next big wave of Entrepreneurs! I’ve already begun using the internet in my entrepreneurial endeavors and this only encourages me to continue to do so! Thanks so much!
Amazing Article. Being an Entrepreneurs is an great things in nowadays and this article gave me idea and good thoughts to become an entrepreneur…!! Thanks alot for this wonderful article !
Being an Entrepreneur is a great feeling these days especially when you are doing something that people though you never gonna do in your life. Entrepreneurship is the best feeling I ever have. Thanks for the great story for motivating to become an Entrepreneur.
Farming becomes more technological in developing countries, people are leaving traditional villages and go to the city. People who live in the city tend to open small businesses. Having the world more connected the trend of launching startups should grow, I expect to see more companies from currently developing countries “playing offence”.
This post and this book are really awesome. its Amazing Article, Being an Entrepreneurs is an great things in nowadays and this article gave me idea and good thoughts to become an entrepreneur,Thanks for the tips
Glad to read such wonderful article, Guy :). Nice meeting you.
Reading this post was great moment for me because of having informative concept on first wave, second wave and third wave of the internet. As a internet lover person, I must like the concept of 3 rd wave and it’s the best way for entrepreneur.
It was very interesting moment for me to reading about the Steve views on this article of particular topic. I’m excited to watch out the third wave arrive. I have got a wonderful idea to be a great entrepreneur through this post and would like say thanks for this.
Have a nice upcoming days
~ Ravi. :)
Great article! From a professional who has recently ventured into her first ever startup and is loving every moment!
I’m going to start the preparation right now! Thanks!
We are all in the third wave. There are so many companies and the revolution will choose the fittest to survive.
This reminds me of another Steve Case interview from the early 90s. He was asked about the various offerings at AOL that seemed to be unnecessary with the advent of widespread internet adoption. Case bragged that AOL’s customers didn’t use the internet, and preferred to remain within “the four walls of AOL”.
This looks to be a great read. I particularly liked the characterization of startups as attackers and incumbents as defenders. That’s not something which I had seen phrased that way before but it does make perfect sense. It also helps to explain why the needed leadership styles tend to change over time as a organization moves (hopefully) from the startup phase to a more established organization.
I liked how Steve answered to a question on getting an attention from entrepreneurs, especially that he listed the common five mistakes that are usualy made when pitching a startup!
Happy to read this article. Your articles answered my questions about entrepreneurship. Now I am ready for preparation. Thanks a lot.
Is it really possible to prepare for the next wave of entrepreneurs? Can we actually predict what and who is round the corner? A great article though
Thanks for sharing Guy, I’ll be sure to check out “The Third Wave”.
Hey Guy, great job on the interview; you asked excellent questions.
When it comes to entrepreneurial gurus, they don’t come much bigger than Steve Case. His is a perspective that every aspiring entrepreneur should listen to.
The most striking thing to me about this article, and something that Case stressed several times, was the important of teamwork. Histories bears this out. We all know about tech giants like Steve Jobs and Bill Gates, but they didn’t achieve the things they did alone. They were geniuses in the field, of course, but they never would have built Apple and Microsoft into the companies they are today without incredible teams around them.
Case displays intelligence, and humility, in putting the success of AOL down to the team, not just to himself.
Awesome book This is a great read. I find it interesting when Steve mentions mentions we’ll see “a broadening of entrepreneurship in the Third Wave.”
An interesting article, plus a great angle on the changes in technology. I remember back to AOL days and receiving the disk in the post to install and log on to the Internet! I have logged the book to buy and read, as it sounds like a wonderful book…I’m intrigued enough from the post to go out and buy.
Awesome book This is a great read.
The four P’s are essential for any blooming companies success. Without one of these pillars: people, product, partnerships, and perseverance – you are sure to fail. I feel like a lot of start-ups are lacking in perseverance, honestly. They want it to be successful overnight and that’s just not always the way it happens. As far as ‘the third wave’ anyone else feel like that time is now? I mean we had the beginning of the internet, moved to high speed now everything has moved from desktop to mobile. You can literally walk into an Amazon store, it recognizes you, walk out with items and you are charged. That’s gotta be next tier, IMO. I’m excited to see what the next 5 or 10 years bring and agree it’s a great time for new companies to take the reigns!
What do “price control” and “government regulation” mean in this context? They’re just dumb buzzwords. Have you any idea what an unregulated insurance market looks like? It looks like the AIG mess. If we wanted “free market” solutions, we’d let government do health care, and we’d free business to do … business. The employer-provided health care system makes no sense, promotes economic irrationality in the labor market, and is anything but “free market”.
Very informative article Guy! Thanks for the tips.
Is it really possible to prepare for the next wave of entrepreneurs? Can we actually predict what and who is round the corner? A great article though
Awesome book, Excited to be part of the third wave. LOoking forward to much inovation
What was in the first and second wave? And these waves?
Thank you for sharing your knowledge and tips! I will definitely be adding “The Third Wave” to my book collection. I love to study other entrepreneurs and learn from them. Have a great day!
This is a great read I have come across depicting the wavelength of technology from before and today has changed and how it will be changing the future. The book surely states and I believe will be a good read for entrepreneurship.
Steve has a unique way of representing things and it is true when startups are build sometimes they lack teamwork and teamwork is what has made famous people richer. The society is changing because of the technology and indeed people are jumping from careers to a career which now companies are aware of this loopholes.
This is a must-read for young entrepreneurs as well.
Every entrepreneur has a new perspective. Well, I loved Steve’s mentions in every line.
I liked reading the mistakes that entrepreneurs make the most. Sometimes knowing what to avoid is clearer than knowing what to do!
Loved the book and enjoyed the review here. As usual, thank you!
Being an Entrepreneur, By reading this I learnt a lot to preapare myself for my upcoming challenges. Thank you GuyKawasaki
We cannot find such sources in Turkish. As a digital marketing specialist, we have to follow information from English sources. Thank you very much for your contribution. I follow your articles with interest