The capital region’s business sector is “uniquely well positioned” to succeed in the next generation of the internet, said AOL co-founder Steve Case — to ride the “third wave,” as he calls it in his new book.
Speaking to reporters after a presentation for the Economic Club of Washington, D.C., Case said sectors like health care, education and transportation are ripe for innovation, and the federal government’s position as a regulator and customer in these areas will only help local entrepreneurs looking to make their mark.
“I think D.C. is on the rise,” said Case, now chairman of D.C.-based investment firm Revolution and a heavyweight in the local business community. “When I started 30 years ago, [it was] not a very entrepreneurial community. But now, it is.”
The presentation focused on his book, “The Third Wave: An Entrepreneur’s Vision of the Future,” in which Case argues innovation in the internet has come in three waves: In the first, companies like AOL actually built the internet. The second had startups like Google and Facebook building apps and social networking atop that original infrastructure.
The third wave, a term borrowed from Alvin Toffler’s 1980 book of the same name, describes a point when entrepreneurs will use technology to transform sectors and seamlessly connect people to the internet. This change rests on three “Ps,” he said: partnerships (“if you want to change education, you’ve got to partner with a university… it’s not just about the software”), policy (“these are regulated businesses”) and perseverance.
These three qualities “were very important in the first wave, but not that important the second wave,” he said. “They’re going to be important again in the third wave.”
To help entrepreneurs find success in this third wave, the government needs to make sure the Securities and Exchange Commission’s crowdfunding rules set out in the JOBS Act work to level the playing field, he said. He also called for immigration reform so that companies “can win a global battle for global talent.”
“There’s a role for government to play in sort of setting the table, setting the rules of the road,” he said.
During the event, Case talked about moves he made at AOL — including the disastrous merger he helped broker with Time Warner, considered one of the worst deals in American business history. He said the idea of the merger made sense, but it was hard reconciling the cultural differences between the two companies.
“It just wasn’t able to get organized with the right people focused on the right things, with the right spirit of cooperation,” he said during his presentation. “There were a lot of turf wars and things like that.”
Since he resigned as chairman of the board at AOL Time Warner, Case co-founded Revolution — which has invested in startups like Zipcar, LivingSocial, fast-dining chain Sweetgreen — and he served as the founding chairman of the White House’s Startup America Partnership. Recently, Case and his wife Jean and others made a $7.2 million investment in the D.C.-based startup incubator 1776.
Case noted Obama administration has done much to encourage startups. But when asked whether the president’s enthusiasm for startups would lead him to become an entrepreneur once his term ends, Case grinned.
“He has not said that to me,” Case said. But, he added, “I’m sure he’ll figure out a way to continue his support.”
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