Header image via Chicago Tribune
One of the coolest parts of being a Kenzie Academy student is interacting with tech industry innovators through events like AMAs (Ask Me Anything). These events give students a better picture of our industry and get them pumped about starting their careers in tech.
So you can imagine how excited we were to host Steve Case for an AMA a couple of weeks ago. Steve spoke with Kenzie students about how he started AOL (America Online), where he served as co-founder and CEO. AOL was the first Internet company to go public and also became the world’s largest Internet company (casual). Steve was also the founding chairman of the Startup America partnership, which was launched at the White House in 2011. He currently serves as the Chairman of the Smithsonian and the Chairman of The Case Foundation. For the last 15 years, he’s led the venture investment firm Revolution. So how does one find the kind of success Steve’s had in his career in tech? Check out the video or read the video transcript below to hear his story.
Steve told us he was “always intrigued with the idea of the Internet.” But like many in tech, he actually didn’t start out in this industry. After graduating from college, he began working in marketing at Procter & Gamble. He then took his skills to work at PizzaHut as the Director of New Pizza Development — a tasty job that allowed Steve to travel around the country trying different pizzas (we’re a bit jealous, not gonna lie). Throughout his time at these jobs, his interest in the Internet grew stronger. He moved to Washington D.C. and took a position at a startup. Though the startup failed, he met Marc Seriff and Jim Kimsey who would become his co-founders at AOL. And the rest is history.
One of our favorite takeaways from the interview was when Steve explained how his various experiences helped him become the professional he is today, even though they seemed unrelated to what he wanted to do at the time. Since we believe anyone can start a career in tech if they’re motivated enough regardless of their background, hearing him share how his different life experiences could be married into a successful tech career particularly resonated with us.
Peep this quote to see what we mean:
“You just have to keep your mind and eyes open, look for patterns and insights and not just view each as a separate chapter. How do you, as you evolve, continue to expand your understanding and insights into things? It’s a cumulative knowledge based on a lot of experiences. Even though at the time, they might seem odd and not particularly helpful. As I look back, some of those odd experiences ended up being super helpful.”
Steve shared his journey into the tech industry and answered student questions over the course of the call. Interested in checking out more AMAs from Kenzie Academy? Head over to our YouTube page to hear from more movers and shakers in the tech industry.
Full Video Transcript
– Hi it’s Anna Mason here, can everyone hear me okay? Awesome, good to see you guys. I’m one of the investment partners with Revolution’s Rise of the Rest Seed Fund and we’re incredibly proud investors in Kenzie and by extension in all of you. It’s incredible to me to see so many of your faces. I feel like I know so many of you through Truck and Emily and the rest of the extraordinary team and it is my privilege and honor to spend some time with you all today interviewing my boss, Steve Case, a man who I think probably needs no introduction but since he’s my boss I’ll go ahead and share a little bit of context before, before we kick things off. Steve is one of America’s best known and most accomplished entrepreneurs and he’s a real pioneer in making the internet part of our everyday life. Many of you I think probably know Steve as the co-founder and CEO of AOL, America Online. Under his leadership, AOL became the world’s largest and most valuable internet company and AOL was also the first internet company to go public. It was one of the best performing in the 90s and at its peak, this is wild, nearly half of the internet users in the United States were on AOL. But Steve didn’t stop there. He was also the founding chairman of the Startup America partnership which was an effort that was launched in the White House in 2011. He was the founding co-chair of the National Advisory Council on Innovation and Entrepreneurship. He also currently serves as the Chairman of the Smithsonian and the Chairman of The Case Foundation and of course for the last 15 plus years he’s led our venture investment firm, Revolution, including all of our funds with the Rise of the Rest Fund. So with that, as an introduction Steve, I’d love to turn it over to you as I just shared. I think you know most of the folks and students on the call probably know you best as the co-founder and CEO of AOL and now the Chairman of Revolution. But before all of that, you had several jobs outside of tech. So I’d love to start with just asking you to share a little bit more about how you broke into the industry to first start AOL and what was that journey like?
– Sure, well, first of all, it’s great to be with everybody. We’re big fans of Kenzie. We first met Stock when we were with our Rise of the Rest bus tour in Indianapolis two or three years ago. And you know decided to invest and have watched with great admiration how the company scaled mostly because of what it’s able to do for all of you. Giving you the skills to you know, move into a coding job that will pay a lot more than probably what you were doing before in a world where those skills obviously are increasingly important. So it’s great be part of the Kenzie family and great to be with all of you today. On a dear question, it was a little bit of a circuitous path for me. I was born and raised in Hawaii, went to college in Massachusetts. Graduated in 1980, so just about 40 years ago, exactly 40 years ago in fact. When I was graduating I actually was intrigued with the idea of the internet. I read a book then in the late 70s by Alvin Toffler called “The Third Wave”. Talked about the future, electronic frontier. I was really quite taken almost smitten with that idea but when I was graduating in 1980 there really wasn’t much of a startup ecosystem back then. There weren’t venture capitalists funding 21-year-old college graduates with crazy you know, ideas. And there still wasn’t much in the way of actually internet companies. It was still more of a government-funded project that was restricted to, ’cause government agencies and educational institutions. There was no consumer internet in 1980. There was no business or enterprise internet in 1980. So that’s kind of what I wanted to do but I didn’t know how to get into it s
o I ended up taking a job in Cincinnati, Ohio for Procter & Gamble which has you know, great marketing program. I figured that would be a good way to kind of build up some skills. Interestingly the first job I had there in 1980, we were doing a test market of new product and one of the two test market cities was Indianapolis. So I went to Indianapolis a number of times in that first job checking on how things were going. Did that for a while and then switched to another company, it was a division of PepsiCo, Pizza hut which some of you may know. I became the director of new pizza development which was an interesting job, traveling around the country and eating pizza. But all the while I was still you know, wanted to get into this online world. Bought a person to peer, bought a modem. Got it connected, you know, got onto some of the early services. A thing called CompuServe, The Source, some of the real early pioneers. And then finally in 1983, did find an opening and I moved to the Washington D.C. area to join a startup. Was kind of doing an online service for video game. At the time, Atari game machine was really popular and this was like a, almost like a Netflix for gamers and you could you know, download games to play on your Atari game machine which seemed like a great idea at the time which is why I agreed to do it but unfortunately, the Atari market blew up just as you know, a few months after I showed up. So a company kind of hit the wall, struggled. But thankfully two of the people that I met there, Marc Seriff who was an engineer and Jim Kimsey who was more of a you know, finance guy. I co-founded America Online, AOL in 1985, in the Washington D.C. area and interestingly, the founding was 35 years ago this week and so it’s been interesting to see how it’s developed over time. When we started, only 3% of people were online and those 3% were only online an average of one hour a week. So it really was the early days in terms of getting America online, getting the world online. So as I said, it was sort of a circuitous path from college to working for some larger companies but wanting to work for and help build, wanna work for a smaller company and help build, what we now think of as the internet.
– [Anna] And as an extension of that, I know sometimes you talk about some of the feedback you got from your folks and your parents as you were breaking into tech. Any insights you can share there about the reactions and the feedback you got from, from those closest to you as you were going off to do this crazy thing called the internet?
– Well, it wasn’t super supportive but they, you know really were worried about the path I was, particularly when I joined the startup that I mentioned almost immediately after I joined kind of was hitting the wall and laying people off, and so like were yikes and it sort of seemed like he was off on this trajectory with these companies like Procter & Gamble and now he’s moved to the startup world and is struggling and even when we started AOL in 1985, it really took us you know, close to 10 years before we really kind of broke through and it really became a significant business. And so there were a lot of struggles a lot of times where you thought, we thought we would you know, we’re gonna break open with some new idea, new partnership something and didn’t work and we had to kind of retrench sometimes. You know, lay off people and kind of live to fight another day. But eventually, we broke through and I did learn the importance of kind of passion. The you know, if you don’t really believe in the idea kind of in your bones, you likely will give up when the times get tough. And also perseverance. That you know, often revolutions happen in evolutionary ways and you’ve gotta take the, you know, the long view and those are some of the lessons obviously we now try to apply to our thinking when we’re making investments at Revolution. What are the big ideas by passion entrepreneurs or building great teams that really are trying to have a significant impact in our everyday lives, have an impact in the world. But recognize that the entrepreneur journey is hard and sometimes scary and you kind of need to you know, kind of take the long view. I also should say since Kenzie obviously, everybody on this is part of Kenzie coding efforts. I did take one programming class in college, this was the late 70s and I was terrible at it. Now this was the days of kind of mainframe computers, punch card. You’d write a little program and you know, put it on punch cards and then walk to somebody and put it in the system or put you in the queue to be put in the system and then a few hours later they’ve actually run the cards and you get your result which for me often was you know, didn’t work, had to do it again and start the whole process. So that whole punch card era was sort of a turnoff in that sense but it did open my eyes to the, which helped when we did launch AOL, how do you really make computing and communications and all the services that are now, we now take for granted as part of the internet, how do you make them really easy to use and really useful and even fun? And also affordable so that experience, even though it was not you know, kind of a particularly positive time in my college career that I really struggled at it actually did help with some of the takeaways did ultimately help in terms of what we ended up doing and frankly even some of the jobs I took. I mentioned Procter & Gamble in Cincinnati, they’re a great marketing company. One of the ways they launched new products, new shampoos and things like that was what they called sampling. They would basically put a little small version of the, of the shampoo in a little packet and distribute it with newspapers or direct mail, things like that. To give people the ability to try it for free with a hope that some of them would like it and end up buying it. That ended up being a core strategy for AOL and you know, during our years of hyper-growth, particularly in the late 90s we were you know, quite aggressive in distributing free trial versions of AOL, free disks to get online, a month or two of free service and it was really the same idea I’d learned from P&G. So I learned that these experiences you have, even if sometimes they’re negative like my programming experience in college or even their, if they’d seem a little bit orthogonal, not really down the strike zone. Such as working for a consumer products company, you know, kind of in selling haircare product. Some of the ideas you learn, there are some of the lessons you take away can apply to other things you do. You just have to keep your mind open, your eyes open and kind of look for patterns, look for insights and not just view each as a separate chapter but how do you, as you kind of evolve continue to expand your understanding of things and your insights into things. I mean it’s a cumulative knowledge based on a lot of experiences. Even though at the time, they might seem odd and maybe not particularly helpful. As I look back, some of those odd experiences ended up being super helpful.
– [Anna] Well that’s, to that point let’s, I’d love to talk a little bit more about, some of the key learnings from AOL and maybe some of the behind the scenes to the point in your reference to the seed planting and how that became a core marketing strategy for AOL. I imagine you know, many on the call perhaps when they think of AOL, either think of the CD-ROMs, that you know, everyone across the country was getting delivered you know, to their homes, or the You’ve Got Mail, you know famous welcome that everyone always remembers or perhaps it was the you know, first email address for many on the call, it was mine. But I’d love to actually go a little bit behind the scenes and you know, talk about you know, were there any story, you know are there any stories you can share about building such a transformative company that might surprise people. Were there, you know, was there ma
ybe a make or break moment in the company’s history where things really could’ve gone a different way? There were a lot and I just you know, pick a couple. When we first got started, I mentioned 1985, the idea of the internet wasn’t very mainstream. Most people thought it would be kind of a nichey market, kind of computer hobbyists, kind of hackers would be interested. But you know, most people would never be interested. So it was frankly hard to raise money and harder still that we were in the Washington D.C. area where there really wasn’t any venture capital. But we eventually were able to cobble together about a million dollars to get started and in the seven years before we went public and you mentioned that we were the first internet company to go public in 1992. Over those seven years, we raised a total of $10 million and then when we went public it’s crazy to think back now because of some of the big IPOs these days but our IPO, we raised another $10 million and the value of the company was about $70 million. So it was still relatively early in terms of getting going. It was really hard to raise capital. Most people didn’t believe in that idea of a company trying to create consumer access to the internet. And they were skeptical I was you know, when I started the company I was 26 years old and sort of like well what does he know? The era of dorm room startups and young you know, kind of executives was not really, I was not very accepted back then. In fact even one story that was kind of ticked me off to be honest, just before we went public, the board asked me to step down as CEO and put the cofounder who was 20 years older in as CEO because at the time I think I was 31 or 32 and the board said like Wall Street you know is not, is barely gonna buy into the idea of the internet but they’re not gonna buy into the internet with some like 31-year-old kid CEO. So I did step aside for about a year and I came back in as CEO. Of course, that’s changed a lot as well but it was, it was just a different you know time. I also remember, this ties in with some of the work you know, folks who are at Kenzie now will, some of the experiences they likely will have in the coming years but there was a really good partnership, even though I wasn’t bringing the technology expertise, I was bringing more of a marketing kind of perspective, the partnership I formed and our team formed with the people doing the actual coding is critically important. Because it wasn’t about just telling them what to code or them kind of just on their own deciding what to code. It was an iterative process to figure that out and some of the best ideas, the most innovative ideas including adding the voices to the software like You’ve Got Mail and welcome things like that came out of that you know, cooperation. Back then you know, it was not broadband, it was not WiFi or relatively slow. Dialup modem, some of you may remember these screeching modem tones when you got connected. It was super slow, it’d take a couple hours to download a single song. So you couldn’t do video at all and you couldn’t really even do audio. So we decided to, based on the dialogue with the folks who were doing the actual coding of the software to store those messages, You’ve Got Mail, welcome things like that. In the software, so we didn’t have to transmit them over the phone lines. As a result, it allowed us to create that more engaging kind of multimedia-friendly experience. Even though the communication technology of the time didn’t allow the transmission of that kind of thing. So it was that kind of partnership that was, was hugely important. Another partnership we formed which at the time I thought was like, terrific, brilliant. But it turned out to be a real problem is in probably 1987, 1988 our whole strategy was to partner with larger companies. Not try to do it on our own but partner with larger companies and one of the companies we convinced to work with us was Apple which at the time had, the Apple II computer, it had just introduced the Macintosh. They agreed to license the Apple brand name to us and we created a service called AppleLink Personal Edition and they were gonna help market it but then they decided since we decided to give away software for free and back then they were selling software and only selling it in an authorized Apple Store, not, there’s no downloading of software. Certainly, no free software like you now see in their App Store. They were in the business of selling commercial shrink wrap software and we are in basically saying we wanna take this software and give it to people for free because we thought once they tried it, they would become paying customers and we’d generate revenue over a number of years. They didn’t like that at all so we had a lot of tension and ultimately we decided to tear up the contract. They said we would, I think it was a mistake to license our Apple brand name to you ’cause you’re doing things that are not really consistent with what we think Apple should be doing and that was a scary moment. A lot of people thought we were gonna hit the wall, we weren’t gonna be able to recover it. But because we couldn’t call it AppleLink anymore we said well we need to come up with some other name, we didn’t have the money to hire like a branding company so we had a little internal competition within the company. We probably had 50 employees at the time, something like that. And America Online basically was the name that came out of that. So it was, and then we relaunched the service as America Online and that’s actually when things started really taking off. So what looked like a disaster, Apple basically pulling back, pulling their brand name, kind of leaving us kind of empty-handed, ended up propelling a strategy that ultimately led to our, our growth and momentum in the next decade that followed. So I’d also learnt from that that sometimes what seems like a disaster, there might be a silver lining and that’s how I view this COVID crisis. Obviously there’s terrible things happening, 100,000 people have lost their lives, 35 million people have lost their jobs just in this country. It’s obviously terribly tragic and there’s a lot of horrible, horrible aspects to it but also, there’re probably some silver linings in that that will result in some opportunities emerging that might not otherwise emerge. Some ideas that had been percolating somehow and suddenly accelerating. So I think it’s always that lesson from Apple was you know, you’ve gotta constantly take a step back and make sure you’re looking at things with kind of fresh eyes, bringing a fresh perspective and being open to new ideas, new possibilities as opposed to just spend all of your time kind of looking in the rearview mirror.
– [Anna] Well I know you always, you often say that people have pegged AOL as an overnight success but it was an overnight success 10 years in the making. So it’s, it’s, it’s fun to go you know, to go behind the scenes with you on some of these stories. To double click on couple, just to pull out a couple fun facts. Do you happen, I’m curious if you recall what any of the runner up names for the relaunch were if it hadn’t been America Online?
– Yeah there were like a dozen. Like Explore was one, Crossroads was another, but ultimately what led us to America Online goes back to the point I made earlier. That we didn’t really have a lot of venture capital and we were competing with some big companies. You know Knight Ridder a big newspaper company had a service called Viewtron. AT&T was launching a service. You know a lot of the big banks were launching home banking services. IBM and Sears had come together to create a service called Prodigy and committed one billion dollars to launch it. Microsoft was talking about entering the space. So it was sort of scary what these big companies with a lot of capital behind them. We didn’t really have much you know, much capital. So we had to adopt a different strategy, a little bit more of a you know, kind of lean and mean kind of guerrilla s
trategy and part of the reason we picked America Online is it was sort of descriptive. We could say America Online and people would know what it was. We’re trying to get America online. If we had adopted some of the other names, like Prodigy as a competitor or Explore or Crossroads, some of the other kind of finalists. Nobody would necessarily know what that was and we didn’t have the money to spend on marketing to tell them what it was. So we ended up picking it in part because it was sort of descriptive of what we were trying to do and that we thought was a shortcut that would allow us to attract more customers with less of a marketing budget and that turned out to be the case.
– [Anna] Well done. One of the, one of the other stories that you had just shared that I’d love to double click on was how you, you shared about some of the partnerships that you and the leadership team really focused on with you know, with the quart, you know the large number of engineers that you all employed at AOL. I’d love to parlay that into how you think about some advice for you know, some of the students at Kenzie who are gonna be the you know, future class of engineers hopefully working. Both for traditional, traditional companies and startups all across the country. How, what advice would you offer when you think about the role of an engineer and how they can kind of partner and collaborate across an organization?
– Well obviously they play a critical role in building you know the core technology. Whether it be software or other kinds of aspects of what will make the future possible and that, it will continue to be a core skill but one of the things I think you need to constantly be adding to it. It goes back to the point I made before. Not just coding what you’re told to code but trying to make, you know you’re sure you’re taking a step back and understanding the problem you’re trying to solve and maybe there are better ways to solve that problem and maybe you can suggest some of those, you know kind of better ways to solve that problem. So that’s number one, kind of looking at the work you’re doing in a broader you know context and there are some times you’re, you’ll be at a specific task you’re asked to do and you should do that but in wherever possible thing, you know, what are, what are we really trying to achieve here and what are the different options to do that? And not presume you know the obvious or even some options. Somebody else said that they’d you know, go focus on coding is not necessarily the, you know the right answer. But I think having that perspective and asking those questions about why are we doing this, what are we trying to accomplish I think is important. The other which ties in more broadly with what I think will be the future in next 10 or 20 years. What I’d call the third wave of the internet, strategic partnerships are gonna be critically important. You know in a simplistic way I think of the first wave of the internet, about getting everybody online. I mentioned when we started, essentially nobody was online. Nobody thought the internet was gonna be important, that was in the 1980s. By the year 2000 or so, essentially everybody was online and couldn’t live without it. So that was that first phase of building the on ramps and the servers and the you know, the content, the access software and all the different things that’ll enable everybody to get online. And that really set the stage for what I think of as the second wave which has been the last 20 years or so. Which has basically been apps, software, writing on top of the internet. You didn’t have to build the internet, it was already built. You didn’t have to get people online, they were already online. So it was really more focused on what apps you could build and obviously Google and Facebook and Twitter and many others ended up emerging as iconic apps in that second wave. The third wave is when I think the internet meets the real world and really starts transforming important aspects of our lives, important sectors of our economy. Healthcare, food and agriculture, things like that. And it’s actually not just about the software. That’s important but it’s also about how you deal with a broader systems issue. Some of which is technology but some of it also is cultural. Healthcare systems for example. It’s not just about coding the software, it’s making sure it’s embraced by nurses or doctors or hospitals or health plans and so forth and so understanding there’s a broader challenge but also a broader opportunity I think is gonna be very important in this third wave. That wasn’t really the case for Facebook and Google. They didn’t really need partners to get going, they you know, Mark Zuckerberg happened to come up with this idea about Facebook and when he was at Harvard, launched it and it got some traction on college campuses and they kept expanding and they opened it up and virtually overnight in a year or two it was kind of a big phenomenon. That was also true with Instagram and SnapChat and Twitter and many other services. Partnerships weren’t critical and for an app centric second wave it’s gonna be very critical in this more systems-oriented third wave and that creates an opportunity for Kenzie graduates again to not just focus on the tasks at hand but understand the broader context and build some skill sets. You’ll be a lot more valuable if you, in addition to doing the core coding also can yeah, help in terms of getting these ideas, getting this software deployed and integrated in systems. That’s much more of a people, culture aspect. Not just a software coding dynamic. So this notion of partnerships which were critical in the first wave, we couldn’t have, none of our early internet companies could’ve done it on their own. It was about a tapestry of alliances to basically stand up the internet. That’s gonna be critical again in this third wave.
– [Anna] Well that’s, well for everyone, for everyone on the call you can see in the background that Steve set and he’s got a book up on his bookshelf called “The Third Wave”.
– Yeah product placement, product placement. Another thing you have to learn.
– Always marketing.
– You always have to market, you also have to be storytelling. I’m not ashamed, that’s the book right there. The Third Wave.
– [Anna] Yeah always marketing. So that Steve, very hopefully had preempted my question which was to actually tell us more about his bestselling book that came out in 2016 called The Third Wave but it’s a phenomenally inspirational read and I encourage everyone on the call to pick up a top, to pick up a copy. So Steve, let’s talk a little bit about Revolution and Rise of the Rest. You started Revolution, our investment firm in 2005. Subsequently launched Rise of the Rest as a, a subsidiary investing effort in 2014. Well what is the core guiding philosophy and investment pieces of the fund and why is it different from everything else that’s out there?
– Well I really built on my experience as an entrepreneur. You know with AOL and some of the challenges. Some of the struggles I had, including accessing capital because we didn’t happen to be in a place like Silicon Valley where most of the, you know, the capital was and still most of the capital is today. So part of our focus is looking for great entrepreneurial companies outside of Silicon Valley, outside of big cities like New York which have pretty strong startup ecosystems. Outside of Austin which also has a pretty strong, particularly around biotech ecosystem. You know interestingly, but somewhat you know kind of concerningly, last year 75% of venture capital in this country went to just three states. California, New York and Massachusetts, 75%. So a state like Indiana, less than 1%. Ohio, less than 1%. Virginia, less than
1%. Pennsylvania, less than 1%. Michigan, less than 1%. As a result, if you’re an entrepreneur in one of those places it’s just harder. It’s harder to get the capital and get started. It’s harder to get the you know, the expansion capital to grow. It’s also harder frankly, not just in terms of where you live but you know kind of who you are and what you look like. Last year believe it or not over 90% of venture capital went to men. Less than 10% to women last year. Less than 1% of venture capital went to African Americans. So just look at the data. You know, even as a great entrepreneurial nation I’m super proud of it. I think we all should be super proud of it. I think we still are the you know, most innovative entrepreneurial nation in the world. But reality is, just look at the data. That it does matter where you live, it does matter what you look like, does matter kind of who you know, what school you went to, things like that, to be able to tap into the venture capital, to really create the companies of the future and really fully pursue the American dream. So what we’re trying to do at Revolution is level the playing field. So anybody anywhere really has that shot, that opportunity and so that’s our investment strategy. To back great entrepreneurs trying to do important things, really trying to change the world but with a bias to backing entrepreneurs in different places and with different kinds of backgrounds because we think that that’s an, and it will turn out to be a better investment strategy, be it also the way for us to try to contribute to creating you know, jobs and economic growth and opportunity all across the country as opposed to have an increasing divide. A lot of people talk about income inequality divide which does exist and is obviously a huge problem but we also have a regional inequality divide where some places like Silicon Valley are doing super well and other parts of the country are struggling and startups do create most of the jobs. So how do you create more startups in more places to create more jobs and opportunity in more places? So that’s really been a journey of moving from an entrepreneur myself and dealing with some of the struggles as an entrepreneur to basically trying to back the next generation of entrepreneurs doing interesting things. Particularly in this third wave of the internet and doing it from increasingly interesting places. I might hope and I think there’s some early evidence to support that this probably is gonna be the case. I hope again one of the silver linings of this terrible you know, COVID crisis is that it might change some of those dynamics in terms of where innovation happens. It might lead some of the people that weren’t growing up or going to school in maybe the middle of the country, felt like they had to go to the coast ’cause that’s where the opportunity was, maybe it’s time for them to come back home or rethink about where they really wanna live and if we are living in more of a remote work environment, I think it’ll be a hybrid between offices and more remote work. Then you’ll have more flexibility to choose where you wanna live and that also means startups will have more flexibility in choosing where they wanna start and scale and Kenzie’s a good example of that. With you know, Chuck basically deciding Indianapolis was the place to do it. Not you know, Silicon Valley and we think we’ll see more and more of those stories in the next five or 10 years which I think will be great in terms of innovation happens, it does improve our lives. Whether it be in the area of distance learning or the area of better healthcare outcomes with more affordable costs. You know, greater levels of convenience. You know in reimagining our food systems with more of a bias towards health and sustainability, in rethinking our cities, things like smart cities. There are a lot of great ideas that are you know, bubbling out there. We need to make sure we’re championing those ideas and championing a whole variety of entrepreneurs doing a whole variety of things in a whole variety of places. Not just doing more of the, of the same.
– [Anna] Yeah well I know on behalf of our many Rise of the Rest team we’re incredibly proud to work alongside you in that effort and have already invested in 140 companies across more than 70 cities in the country and I think it’s about 43% of our founders of our companies are led by women or founders of color. So I think we love working alongside and continuing to try to change that status quo. One final quick question Steve before we turn it back over to Chuck and the Kenzie students for some of their questions. You know I’ve always heard you share many inspirational quotes when we’re out on the road and you know, doing our, you know doing our events across the country. Different quotes and sayings. I’m curious if you have a particular favorite that speaks to you in this intense moment that we’re all in right now that you would offer the Kenzie community just as we close out our discussion.
– There’s a lot of them. I’d say a couple that are, are considered favorites but also are timely is a Nelson Mandela quote. I had the opportunity to meet with him at his home 20, probably 20 years ago and he said something I’ll never forget which is, “It always seems impossible until it happens.” The idea that sometimes just seem impossible and certainly that was my case you know, my experience as I mentioned before with AOL and the idea of the internet. What now seems obvious for a lot of years didn’t seem obvious at all and was really hard and a struggle and we almost you know, kind of went out of business ’cause we couldn’t you know generate enough customers, enough revenue to you know, to survive. We just barely broke through and then suddenly what seemed so impossible suddenly happened and then we saw a great acceleration of you know, people talking about you know tipping points and things like that. But that, I think sticking with it, if you really believe in an idea, I think is critically important. And recognizing that most big ideas are gonna start being perceived as crazy ideas. You know the idea of Airbnb, of people actually, when it first started you know, Brian Chesky and his team were saying well you know, we have this idea we’re gonna like rent out an air mattress in somebody’s apartment. And people go well that’s not gonna work, nobody’s gonna be comfortable sleeping in somebody’s they don’t, apartment you don’t even know and like nobody in that apartment would be comfortable having somebody, some random person walking in and you know, spending the night. That’s, maybe a few people would do that, but most people won’t do that. Well it turned out you know, they scaled the idea. There was broad interest in that idea of homesharing, apartment sharing, things like that. But in the early days it seemed like a crazy idea. So that’s one, just making sure you are recognizing that sometimes those big, revolutionary ideas do happen in more evolutionary ways and they almost always will seem crazy at the time before finally they get mainstream acceptance. Another that I would say that is, goes back to you know, Thomas Edison, one of America’s greatest inventors who said vision without execution is hallucination. That having a big idea, having a big vision, having a grand strategy is important but ultimately comes down to execution and that come down to you know people and priorities. And the last one I’d say because it ties in with the third wave partnership idea. There’s an African proverb that I also love which is, basically says, “You wanna go quickly, you can go alone “but if you wanna go far you must go together.” You must build alliances, you must build partnerships and so if you really wanna change things in a dramatic way it’s about going together. So that’s another one that I, that always has inspired me.
– Well I love closing with that and turning it back over to Chuck ’cause I know that is very simpatico with Kenzie’s learning model
and collaborative efforts. So Steve, thank you for chatting with me to share some thoughts with the Kenzie community and Chuck, and now I’m turning it back over to you.
– All right I see Chuck is on the call. Let me, I don’t know if there is some Zoom technical difficulties going on but I do wanna turn it over to our students for questions. And so Steve, I definitely appreciate you sharing like, it’s so amazing to be part of like the historical foundation of pretty much why we are actually physically able to be here today and I know that you played a pivotal part in my, my childhood as well. So it’s with a warm Kenzie heart that I, and I know many people here, it’s really exciting just to be in the presence of someone who helped connect the world and helped connect us to more information that’s out there that has built a foundation, I think for building a better society. So it is with very.
– Thank you.
– Very much warm thanks and amazingness that we get to sit here with you today. So I do wanna give our students some time to ask some questions. And so our first student up is Julie. Julie, if you wanna go ahead. Unmute yourself and turn on your camera and ask, introduce yourself, say where you’re from, what program you’re on and go ahead and ask your question.
– I see, thank you very much for speaking with us today. That is wonderful. You spoke about the first 10 years of AOL but my question is, is did you have the vision for that timeframe? You talked about your why in your vision but what was it and how did it differ from what actually happened?
– Well it was a mix. I think the longterm vision was to play a role in building this electronic frontier, that Alvin Toffler had written about. The building what we now think of as the internet. Building this new medium that would, allow people to get information and buy things and connect with people and creating a sense of community and that sense of community was always critical. For us the killer app was always people and over half of our usage was things like people connection, instant messaging, you know buddy lists, message boards, things like that, were people connecting with each other. So it’s not surprising to me that now even decades later some of the most popular services also focus and give you a social services like Facebook and Twitter and SnapChat, things like that. So we believed in the idea of the internet. We wanted to play a role in creating that future. We recognized we were a tiny little company so we needed to be pragmatic in terms of how we approached it. Which led us to our strategy around partnerships and we set near-term objectives. What do we need to do this month, this quarter, this year that would set us on a path to be a larger company over time? Recognizing that you constantly had to course correct and it goes back to that quote I mentioned with the Thomas Edison. Vision without execution, you know a challenge for every company is to blend that. If you have no vision, you have no place to go and that’s not good. Same time if you don’t have the ability to execute the vision, that’s not good either. You need to you know, marry those. So our strategy did change. For example, I mentioned at the very beginning, we exclusively, for the first five years partnered with PC manufacturers to essentially create private label, custom, white label service. I mentioned Apple, we created Apple Inc. With Commodore which had the Commodore 64 we created something called Q-Link with Candy which owned Radio Shack was a big computer back in the 80s. We created something called PC Link for IBM. We created something called Promina. That was our strategy until Apple pulled the plug on us as I mentioned and we decided to unify then and launch as America Online. So we still had that vision of what we’re aiming for in terms of trying to build a significant company and help change the world by creating this new, electronic medium but we constantly were course correcting and adjusting based on new data. In the military they, they’re very good at building these plans in terms of strategy. We’re gonna you know kind of invade, do this, and that, the other. But it’s said that every plan doesn’t survive the first contact with the enemy. You can plan all you want but once you’re actually in the battlefield, things change and you have to adjust to that, you know, the new reality on the field. That’s also true with entrepreneurs. They have to have a sense of where they’re going. They have to have a passion about that. They have to persevere. You know, even through some tough time but they constantly need to be taking a step back and figuring what course corrections to make.
– Thanks so much for sharing. Our next question comes from Kelly Brooks. Kelly, if you wanna go ahead and unmute yourself. Introduce yourself, say what program you’re on and tell us from where you’re dialing in from today Kelly.
– All right, yes. My name is Kelly Brooks. I’m from Pennsylvania and I actually grew up where I was the first kid in the neighborhood to be connected to the internet because of AOL.
– So it definitely changed my life there. But one thing that I have been kind of curious about, is I understand like there was a lot of challenges with AOL. But what was your biggest challenge with it and what did you learn from that challenge?
– Well I’d say there were different challenges at every stage in the early days. Nobody really believed in the idea of the 26-year-old entrepreneur. Nobody believed in the idea of the internet, so raising capital was hard. You know, forging some of those partnerships were hard. When we got a little bit more scale and a need to hire people to take us to the next level. Getting people to leave large, more established companies where they had probably a pretty safe career path to join this fledgling startup was challenging. Some people just said yeah, it seems interesting but I’m not willing to you know, kind of take the risk ’cause we got even larger, then there were some broader competitive dynamics. Indeed part of the reason we ended up, ultimately decide, stepped as CEO, we merged AOL with Time Warner was we didn’t really have a great path to broadband. We were strong in that dialup, narrow band, modem world. We didn’t really have a position in the broadband world and we were worried about being left behind. So that led to you know, that merger which unfortunately didn’t get executed well but it was a strategic reason to do it. Really competitive dynamics, creating that kind of pressure to make a move. So I think the challenges we face, I think it’s true with you know, pretty much every company we’ve been involved in. You know vary at each stage. Vary depending on how the context around you is, is changing and it goes back to the earlier question. How do you kind of keep your eye on the prize in terms of what you’re trying to accomplish but be somewhat flexible in terms of what the near-term you know, goals and priorities need to be based on the new realities that emerge really every day and what are always gonna be you know, very competitive markets.
– Thanks, we’re gonna jump over now to Nico. Nico, if you wanna go ahead and unmute yourself and ask your question.
– Hi Steve, I’m Nico Alfonso. Thank you for coming and talking to us today. I’m a software engineering student at Kenzie, talking to you from Pittsburgh, Pennsylvania today.
– And towards the end of your first Q and A you started to touch on this but I was wondering what prompted the dr
ive for, Rise of the Rest to look for tech growth outside of the major hubs and if there are specific areas that you’re looking to fund. Like I know across the country, there are a bunch of like, sort of smaller tech bubbles and tech bursts happening. Like, like Pittsburgh, Pennsylvania or like Indianapolis.
– I was curious what led to all of that.
– A mix of different things. Some of it really was my own experience when we were starting to get started 35 years ago with AOL and recognizing it was outside of Washington D.C. and Northern Virginia and because of, there wasn’t really much venture capital there. It was just kind of harder for us to you know, get going and I remember struggling with that and you know, so the ability to try to improve that lot for other entrepreneurs in other places was a driver. I also got involved now, almost 10 years ago. Nine, 10 years ago with an initiative in DC with the Commerce Department. I was asked to cochair something called a National Advisory Committee on Innovation and Entrepreneurship. That led to a series of recommendations, including one to the White House, to then President Obama who wanted something called Startup America which he launched and asked me to chair. So I started traveling around the country you know, trying to understand what was, what was happening that led to a bunch of things including some legislation. You know the Jobs Act which then led into Rise of Rest as a Revolution kind of sponsored investment strategy. So it really was a mix of experiences and factors that really led me to say this is a problem to solve but it’s also an opportunity to seize. There are great entrepreneurs everywhere and how do you make sure you’re backing great entrepreneurs everywhere and how do you slow what has been a brain drain. As you know, say in Pittsburgh, Carnegie Mellon, you know great university, arguably one of the better and perhaps the best robotics universities in the world. Historically you know, 10 years ago even when you know, people were graduating from CMU a lot of them would leave to go to Silicon Valley. There just wasn’t that much happening in Pittsburgh but you know with Facebook, Google, others started building offices there at a startup ecosystem in Pittsburgh has developed nicely. So now more people graduating Carnegie Mellon are staying in Pittsburgh and some of the people who left are beginning to boomerang back. That will fuel more innovation and growth and create more startups. Some of which will end up turning the speed up. Some which will end up turning into Fortune 500 companies of the future in places like you know, Pittsburgh. Plus we do believe, just from an investment standpoint. If everybody, or most people are focusing on just investing in companies in Silicon Valley, valuations are gonna be higher. It’s a classic supply and demand caveat. Everybody’s chasing the same opportunities. The, it’s different in Pittsburgh, it’s different in Indianapolis, it’s different in Detroit, it’s different in Des Moines, et cetera et cetera. Where the valuations tend to be a little bit more moderate, the entrepreneurs tend to focus a little less on blitz scaling, a little bit more on bootstrapping. They tend to be more capital efficient, so we also think it’s a smart investment strategy. So it’s partly a passion trying to do what I can to level the playing field, improve the you know, the country is partly a, what can we do to help stimulate more innovation, job creation, economic growth all across the country. Not just in a, in a few places. It’s partly just loving entrepreneur ideas and people willing to put it all on the line to try to build something that can have an impact but it’s also a belief that some of the best investment opportunities in the next 10 or 20 years will be in these rising cities like Pittsburgh. Not just in San Francisco.
– Thank you.
– Thanks, let’s jump over to Reggy. Reggy if you wanna go ahead and ask your question. Unmute yourself and tell us where you’re from.
– All right, I’m Reggy. I’m from California. I’m currently taking the back end program. First, thank you for sharing your wisdom with us and then my question is, what is your advice or best practice for newer people in tech who are trying to get ahead but receive negative blockers such as ageism, racism, basically discrimination. Especially when it comes from the higher ups or in faster step, you are desperately needing the support from.
– No it is difficult. It’s certainly a challenge and it goes back to some of the things I was saying before. Even, not just from an engineering standpoint but from an entrepreneurial standpoint. It’s harder for some people to raise the capital to you know, get going. It’s easier for some people, harder for other people and that just not, it’s not fair and it’s not smart. So it’s more of a cultural issue. How do you make sure companies recognize the importance of diversity and there is significant data here. It’s not a debate, the facts are the facts. That companies that have diverse teams are more successful than the companies that don’t and more and more companies are realizing that but not every company is realizing that and trying to be able to more kind of blind in terms of the you know, kind of identifying potential opportunities for people as opposed to bring a certain set of assumptions, as sort of you know, got it, just kind of being willing to hire or promote people that you went to school with or worked with at some other you know, company which ends up being kind of self-fulfilling. You don’t really get the benefit of a more diverse, inclusive approach to things. So it’s difficult. From an individual standpoint, I think a lot of it is connecting to networks. That’s obviously part of what Kenzie’s trying to do, even with what we’re doing with Rise of the Rest. It’s how do you connect people together into networks and that’s a great way to you know, kind of help support different people and help people kind of rise up and even the companies we, we invest in, we help them in terms of recruiting, and help them in terms of partnerships and help them in terms of getting you know, publicity to try to lift them up. But there’s no question, it’s a big challenge. At least now people are talking about it. You know, 10 years ago it was not really as much of a focus but my own view is that you know, we need to shift from talking about it to doing something about it. And part of this may be when you are thinking about your next job joining a company that really hasn’t made a, stated a commitment to moving towards a more diverse workforce as opposed to one of, perhaps the more you know, kind of traditional company that’s still thinking about things in a more of a narrow, historical, rearview mirror kind of perspective.
– Thank you. So we only have about two questions left and I wanna be respectful of your time Steve as I know you’re a very busy person so. And we also wanna grab with, hopefully some closing thoughts. So let me turn it over to Elizabeth. If you wanna go ahead and unmute yourself and ask your question.
– Hi Steve, thanks for joining us today. My name’s Elizabeth and I am in the UX Engineering program and I am in Indianapolis. So my question is when dealing with a larger company like AOL, how do you ensure that attention is still being given to the more technical but important details like cybersecurity, accessibility, innovation, et cetera.
– No it is tricky and I kind of lived through it. The early days of AOL, when it was dozens of people, maybe even you know, hundreds of people. It was pretty nimble, pretty agile, pretty innovative. Things could move more quickly. As it went from hundreds of p
eople to thousands of people it did get more difficult and certainly when we merged with Time Warner, it went from 1000 people, to tens of thousands of people. That is the peak, AOL and Time Warner together. I mean 90,000 employees. It changed dramatically and not a positive way. What happened is that entrepreneurial zeal, that sense of possibility and you know, momentum, you know, started you know giving way. It did get more you know, political. More you know, bureaucratic and so do we, you know you shift from a mode where you’re kind of playing offense which is what entrepreneurs do to playing defense and sort of trying to protect what you have as opposed to build. It’s more about managing as opposed, the entrepreneurial journey is more about imagining and so it’s a different mindset and so there were some important lessons. Some of which were positive in terms of some of the things we were able to do is really scale, some of them negative including the merger with Time Warner which obviously was a disappointment. So it’s critically important and you know, you know, great entrepreneurs and CEOs understand this. At every phase of a journey, the requirements change and you have to constantly assess kind of where you are, where you’ve been but more importantly where you’re going and what changes do you need to make in terms of priorities, in terms of people to make sure and some of the things you mentioned around innovation, cyber, other things. You really do become front and center of priorities. If you don’t, you’ll end up kind of losing your momentum, losing your lead. Much as sadly AOL did you know post merger. It went from being the most dominant internet company in the year 2000. I think about half of all the internet traffic went through AOL and being the most valuable internet company. I think now kind of being not that important and new companies that brought that passion and vision like Facebook, Google and you know, et cetera. They’ve really kind of taken the lead. Now that’s part of the entrepreneurial dynamic but you know, kind of there’s this process of creative destruction and as companies you know, get larger, they do tend to be less innovative. I’m sure many of you have had that experience with some of the jobs you’ve had and it can be frustrating to figure out how to take a big company and get them to do something more innovative. One of the things we encourage companies to do and this has been a part of our strategy at Revolution is for those big companies to partner with the little companies, with the startups. To be able to tap into some of their innovation and agility and that, allow that small company to tap into some of the scale, distribution, credibility on policy, other things that big companies have. It goes back to the importance of partnerships.
– Thanks so much. Let’s jump over to Vincent. If you wanna go ahead unmute yourself and tell us where you’re from and ask your question.
– Hey Steve, thanks for joining us today. Really appreciate it. My name’s Vincent Newsom. I’m a software engineer student here in Indianapolis, Indiana. And I had a question but you kind of answered it. It was about comparing the tech and entrepreneurship to when you entered the industry in the 80s to now. What the differences were and then what differences you anticipate. But you kind of answered that with the first, second and third wave. So my new question is, where do you anticipate these first partnerships in the third wave and what information, tools or resources could you share with us students to give us a competitive edge.
– Well I think, I think obviously what you’re doing and learning at Kenzie is a critical ingredient to that but I think as I said at the very beginning, trying to supplement that by spending time maybe up on the side. Perhaps now when you’re working more remotely to try to understand the broader context in which the world is likely operating. How is work gonna change as more people are remote? How is education gonna change as it’s more of a hybrid. With kind of distance, some distance learning, some you know, physical learning. How is healthcare gonna change? In part, some things like telehealth have accelerated dramatically in the last two months because doctors offices are shut. And so as a result people, both doctors and patients have had to embrace telehealth and that path of innovation and adoption has accelerated dramatically. So how think of, you know just take a step back. You have some sense of how the world’s changing and whatever sector you choose to focus on or at least choose to initially focus on. You know really try to, within that sector understand some of the dynamic. You know, healthcare for example, there’s huge opportunities for innovation. We are, as a country spend about, almost 20% of our whole economy is healthcare but it’s not that convenient. Certainly not very affordable and the outcomes aren’t always that great. You know technology has a role to play in trying to improve all aspects of healthcare but you know, as part of what you can do, is not just be viewed as the engineer but viewed as somebody who understands strategically what’s happening and also viewed as somebody who can, sometimes even be a diplomat. Working to try to get doctors, nurses, hospitals to adopt the technology in the case of healthcare I mentioned. So you know, viewing the core coding is obviously critically important but what else can you do to build on that? So you can have a differentiated resume and a more, you know, more options in your career and you can help whatever company you join or perhaps a company you start to be more innovative and have more success in whatever they choose to do.
– Well thank you so much. That was all of our questions from the students. We are right at one o’clock and that actually touches on the question I was gonna ask you right then is what can we, any advice to help our students get a competitive edge going into their career? So we at Kenzie are so thankful to both you and Anna for taking time to meet with us and talk with us about the legacy that you established. But also the future legacies that you’re establishing and because you know, through these different areas that you’re impacting. So we give a warm Kenzie welcome and thanks to you for joining us for an hour and sitting down and just having a real conversation with us. So thank you so much from my heart to you all for joining our community and just sharing with us and to all of our students and folks who are online, we really appreciate it. So thank you so much.
– Thank you very much, really enjoyed it. Best of luck to all of you.