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Steve Case is best known for his role as a co-founder and the former CEO of America Online, the trailblazing internet company that made the world wide web more accessible to everyday Americans. Now he’s putting his entrepreneurial skills to use to help people launch their own businesses. Case joined Judy Woodruff to discuss his efforts and his new book, “The Rise of the Rest.”
William Brangham:
Steve Case is best known as co-founder and former CEO of AOL, or America Online, the trailblazing Internet company that helped bring the fledgling World Wide Web to millions of Americans.
But, today, he’s putting his entrepreneurial skills to use in a different way to help regular Americans launch their own businesses.
He spoke about his efforts when he recently sat down with Judy Woodruff to discuss his new book, “”The Rise of the Rest.”
Judy Woodruff:
Steve Case, welcome back to the “NewsHour.” Congratulations on the book.
Steve Case, Co-Founder, AOL:
Thank you, Judy. Always great to be with you.
Judy Woodruff:
So, it was way back in 1985 when you started AOL. It was all about, you said at the time, getting all of America online.
And it turns out that has a bearing on what you’re trying to do when you talk about the Rise of the Rest. Explain that.
Steve Case:
Yes, there are some parallels.
I mean, in those early days, it was, how do you level the playing field so everybody has access to information and education and so forth? Now, with Rise of the Rest, it’s, how do you make sure everybody has an opportunity? If they want to start a company, they can start it anywhere in the country, not just on the coast.
Most of the venture capital that backs new companies goes to places like California, New York and Massachusetts. They get 75 percent of venture capital. We want to get more of that venture capital to entrepreneurs all over the country. And that is really what led us to the Rise of the Rest.
Judy Woodruff:
You have been working on this for years, and you have been traveling around the country, spending time in these places.
What was it that drove this for you?
Steve Case:
It started a little over a decade ago.
I was asked to chair something called the National Advisory Council on Innovation and Entrepreneurship, which then led to a White House initiative called Startup America Partnership that President Obama asked me to chair. So, that really got me on this trajectory.
And I realized the role new companies play in job creation, but I also realized this issue of it’s harder for entrepreneurs in many parts of the country to start those companies because they don’t have access to capital. So then we started hitting the road with our Rise of the Rest buses, and we have gone all over the country.
And part of the reason I decided to write this book is, there’s amazing stories about entrepreneurs building extraordinary companies in surprising places that people don’t think of as the place where new start-ups are launching. When people think of start-ups, they sometimes focus too much on tech and too much on Silicon Valley.
Start-ups are any new company. And they’re happening all around the country. But most people don’t know about some of those stories, which has led to the book.
Judy Woodruff:
What defines a successful start-up? I mean, what is it that makes the difference between one that has a good shot at making it and getting the money, frankly, that they need invested to do it and ones that don’t?
Steve Case:
Right.
So it starts with, what is the idea? But then you have to build a team around the idea. It’s not — entrepreneurship is a team sport. It’s not just about the founder. It’s about the team they build. You have to establish the partnerships that you need to really scale. But a lot of it does come back to that initial capital, which is why we’re focused on trying to level the playing field and get more capital to more of those entrepreneurs, no matter where they are in the country.
Judy Woodruff:
And why has that been so hard? Is it just habit that, as you said, people think of Silicon Valley, or they think of New York or some big city, but they don’t think of some of the places you…
Steve Case:
It’s a mix. Venture capital just started about 50 years ago. It’s a relatively new idea, and actually started in New York and in Boston and San Francisco, and it got built up around those places.
As a result, so that’s where most of the capital is. A lot entrepreneurs in the last couple of decades in different parts of the country felt like they had to leave where they were to go to the coast, because that’s kind of where the action was. That was where the money is. There’s been a brain drain of people leaving.
And what we said even when we started nearly a decade ago is, how do we slow the brain drain of people leaving and create a boomerang of people returning, so you can start and scale more companies and create more jobs in these communities?
As you know, part of the divide we have in this country is an opportunity gap, where some people in some places are doing really well, and a lot of people a lot of places are feeling left out and left behind. This is one way to solve that by starting new companies that can create new jobs in those communities.
Judy Woodruff:
To what extent do you think this disparity across the country has contributed to some of our political divides?
Steve Case:
It’s tragic that so many people growing up in the middle of the country or going to school in the middle of country feel like they have to leave a place they love because there’s not enough opportunity there, and they go someplace else.
One of the great stories in the book is an entrepreneur Jonathan Webb. He started a company called AppHarvest in Eastern Kentucky, coal country, Appalachia, which has had a tough run for the last several decades. But he decided to start a company there that’s created 600 jobs in the last couple of years in a place that has really felt left behind.
And so this is part of the answer. We have got to launch new companies. We have got to create new jobs. Half of the Fortune 500, the biggest companies, turn over every 25 years, half. So you can’t just rely on your big companies. You have to be launching new companies, some of which will fail, because that’s the nature of start-ups, but some of which can be the Fortune 500 companies of tomorrow.
And that’s the only way, I think, to renew these communities. And it’s at least a partial way to help get together a very divided nation.
Judy Woodruff:
You also write, Steve Case, about the importance of diversity, of making sure women, people of color, and others who traditionally haven’t been thought of as job creators, that they are part of this.
And the same thing, you have some strong views about immigration too.
Steve Case:
Yes, I have a chapter the book on a diversity imperative and the data there.
I talked about 75 percent of venture capital going to three states. If you look at people, women are 50 percent of the population. Female founders get less than 10 percent of venture capital. Latinos are 18 percent of population. Latino founders get less than 2 percent of venture capital. And Black Americans are 13 percent of population, but Black founders get less than 1 percent of venture capital.
So, it does matter where you live, and it does matter kind of what you look like, but if you have an idea, you have the opportunity to turn it into a company and create jobs and drive growth in your community. So that’s why it’s so important to level the playing field.
And on the immigration front, it’s also important that we continue to be a welcoming nation, that we get people from all over the world who want to be part of this next American story; 40 percent of the top companies, the Fortune 500 companies, were started by immigrants or children of immigrants.
So it’s been part of the secret sauce has made America so strong. And we need to remember that and continue to be a magnet for talent. It has gotten little harder to come to this country. It has gotten harder to stay in this country.
Judy Woodruff:
Yes.
Steve Case:
As a result, some of the companies that could have started here and created jobs here are now starting other places.
Judy Woodruff:
And this is a book about the private sector largely. It’s about people creating businesses and hiring and so on.
But you also write about there is a role for government in all this.
Steve Case:
Yes, absolutely. There’s a role at the national level, in terms of passing legislation around immigration reform or incentives to — around investment, the Jobs Act passed about 10 years ago that helped a lot of start-ups, just this summer some of the legislation that passed, including the CHIPS and Science Act, which passed with bipartisan support, funds from initiatives around semiconductors, but also allocated $10 billion to support regional hubs, exactly what we’re talking about with the Rise of the Rest.
So, there is a role at the national level. And there’s also a big role at the state and local level. The governors and the mayors that are really focusing on new companies, trying to create a fertile — a fertile environment to start new companies are the ones that are really positioned to grow in their coming years.
Judy Woodruff:
So, Steve Case, AOL, Rise of the Rest. What’s next?
Steve Case:
Well, I have got a lot of work to do on the Rise of the Rest.
As I said, 75 percent of capital is going to three states when you talk about people, that there’s a real problem there. So we’re going to be working on this for quite some time, I think. We really need to level the playing field. And I think we can.
And even the pandemic has created a little bit of a tipping point, a little bit of an accelerant. Some people have decided to move to other places. Remote work is offering opportunities for people to live and work differently, which is helping these Rise of the Rest cities.
So I’m optimistic about this next chapter. And I will keep at it.
Judy Woodruff:
Steve Case.
The book is “The Rise of the Rest: How Entrepreneurs in Surprising Places are Building the New American Dream.”
Thank you very much.
Steve Case:
Thank you, Judy.
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