Usually, founders travel to meet investors in coastal towns. But in 2014, Steve Case and his team of investors began an annual bus tour, traveling to meet the founders where they or they lived. It was the next step in a longtime Case goal; after his work as president and CEO of America Online, he had founded an investment company called Revolution, with the goal of empowering entrepreneurs across the country — not just in clusters like Silicon Valley and New York. The bus tour, complete with a pitch contest, targeted places like Detroit, Chattanooga, and more.
“It wasn’t clear what we would find when we hit the road and drove around town,” Case writes in his new book. The rise of the rest, which has the same name as the bus tour. But after more than eight years, more than 11,000 miles of travel, and more than 40 city visits, Case is passionate about what they’ve encountered: he describes a country full of thriving (or on the verge of) entrepreneurial ecosystems and a radical change in how and where businesses are developed. Here, he explains why he thinks the greatest innovations will now come from everywhere.
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You make a bold prediction in the book. You write: “Over the next decade, the majority of iconic startups, the ones that create tens of thousands of jobs and end up being worth billions of dollars, won’t be in Silicon Valley, but across the country. .” Why do you feel so confident about this?
Because we have seen it with our own eyes. If you look back 250 years ago, America itself was a startup. The country then paved the way for the industrial revolution, the agricultural revolution and the digital revolution. And that allowed us to become the world’s leading economic power. This happened all over the country. It’s history. It’s really more in the last few decades, when innovation has become about software and coding, and Silicon Valley has become where most of the money is, and people have therefore left different parts of the country to go there.
This has started to change over the past decade. In a number of cities, momentum has been built around startup communities, bringing people together, attracting more capital, slowing the brain drain of people leaving, accelerating the boomerang of people coming back and having those successes resounding. Then with a pandemic – obviously it’s a tragedy in many ways, but one of the good things is that it’s made people rethink their lives a bit. It has led to a separation of where you work and where you live, how you work and how you live. He broke the lock that Silicon Valley had on the innovation economy. Today, there are really dozens of cities, and not just a few, that are developing.
I have heard many people say that the next wave of innovation will be in “boring” – but fundamentally important – sectors like, for example, insurance, health or transport. There’s a lot of expertise out there already outside of, say, Silicon Valley, isn’t there?
The sectors you mentioned, you might call them boring – but I call them the biggest industries in the world and some of the most important aspects of our lives. How do we move? What are we eating? How do we stay healthy? Health care alone accounts for about one-sixth of the economy. This is where the puck moves. This is where the innovation in this next wave of the Internet will be. And there are some cities where that domain expertise really benefits startups in those places.
For example, we’re seeing many companies in the healthcare sector moving into large research hospitals – building on that expertise, that understanding inherited from those companies, which is going to become increasingly important. Because health is not about technology. It’s not about the software. This is the stake of the table. Real value is created by partnering with many organizations and hospitals, health plans and others to adopt and integrate your technology. It takes the ability to build trust, and often that will come from the entrepreneurs in those cities who really understand those industries and live side-by-side with some of the key partners who could really propel their businesses to greatness.
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It’s true, because in specialized industries in particular, people want to feel understood.
When we were in Chattanooga, we found a company called FreightWaves that built a data platform for the trucking and logistics industry. Well, I didn’t know this until I was there, but some of the biggest trucking companies in the country are headquartered in Chattanooga. Or, we invested in a Northwest Arkansas company called AcreTrader which is basically a platform for finding investors to invest in farmland. The founder was in San Francisco but decided to move to Arkansas because they were trying to attract farmers to the platform – and if you want to be credible and trustworthy in this industry, you better be where it’s at. there is a culture around agriculture.
Image Credit: Courtesy of Steve Case
Many small towns are trying to create entrepreneurial ecosystems, which you describe as a wheel with seven spokes – startups, investors, universities, governments, businesses, startup support organizations, and local media. But what does it take to make all of this really work?
The first step is to slow down this brain drain. Capital is a key element. But there are other more subtle aspects. You must have a community. You see the creation of neighborhoods in many cities where entrepreneurs tend to cluster because it helps to bounce ideas off of each other. It’s also important that local leaders really shine a light on and celebrate entrepreneurs.
We encourage entrepreneurs to focus on growing their business, but also find ways to increase connectivity with more people in the community. This then helps to maximize the likelihood that some of those businesses will succeed – creating those small group successes that attract more capital and more talent.
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What advice would you give to an entrepreneur who lives in a small town and wants to help build their local ecosystem?
First, believe in yourself and your community. Entrepreneurship is about seeing the world from a different perspective, but it’s important to recognize that entrepreneurship is a team sport. So who else should be on your team to help take this idea and bring it to life? Then recognize that it’s not just about you, your team, and your business – you’re part of a bigger whole. communityso how to facilitate the rise of all the boats?
At present, the country is partly divided according to opportunity. Many people feel left behind, left behind. How do we create the impression in their cities, in their communities, that they are on the move and that there is real hope and possibility?