Speaker 1: Welcome, Welcome, Welcome back to the Bob Left Sets podcast.
Speaker 1: My guest today is Steve Case who's chairman and CEO
Speaker 1: of the investment firm Revolution. You know him as co
Speaker 1: founder of a O L and he has a brand
Speaker 1: new book, The Rise of the Rest. Steve, thanks for
Speaker 1: being on the podcast. Great to be with you, Bob.
Speaker 1: What do you hope to achieve with this book? Well,
Speaker 1: I've been working on this effort for about a decade,
Speaker 1: trying to shine a spotlight on entrepreneurs all around the
Speaker 1: country that are building amazing companies in the process renewing
Speaker 1: their communities, creating job growth, economic growth. But their stories
Speaker 1: aren't really told, uh and most people don't really know
Speaker 1: what's happening in most of these cities. And so that
Speaker 1: was the reason to write the book. It was a
Speaker 1: long journey for me when we started a little over
Speaker 1: a decade ago working on this, initially on a policy
Speaker 1: kind of framework working for the President Obama and his
Speaker 1: Jobs Counsel, also cheering at a White House initiative called
Speaker 1: start Up America. And the more I looked at, the
Speaker 1: more I realized there was a problem we need as solved,
Speaker 1: but also an opportunity we should seize and so that's
Speaker 1: led me to this effort over the last decade of
Speaker 1: trying to help entrepreneurs in in these what we call
Speaker 1: the rise of the rest cities outside of the normal
Speaker 1: tech helps. For those who don't follow this, uh, if
Speaker 1: you look at the data, the venture capital data, about
Speaker 1: seventy of venture capital has gone to just three states, California,
Speaker 1: New York, and Massachusetts. The other forty seven states, they're
Speaker 1: kind of fighting over the remaining and we're trying to
Speaker 1: change that dynamic, get more of the capital backing more
Speaker 1: of those entrepreneurs and more of the cities around the country.
Speaker 1: So how bad or good are things in the other
Speaker 1: forty seven states. Well, it's a mixed bad and that's
Speaker 1: part of part of what I tried to explain the book.
Speaker 1: The bad is that for the last several decades, a
Speaker 1: lot of people in the middle of the country who
Speaker 1: wanted to be part of what we think of as
Speaker 1: the innovation economy, the tech sector, the startup sector, concluded
Speaker 1: they had to leave where they were to go to
Speaker 1: the coast because the action terms of other people, the
Speaker 1: action in terms of where the money was was in
Speaker 1: places like Silicon Valley, so that actually led to a
Speaker 1: brain drain in many parts of the other country. Um,
Speaker 1: and you know what, what we were hoping to see
Speaker 1: as a slowing of the brain drain and a kind
Speaker 1: of a boomerang of people returning to some of these cities.
Speaker 1: And some of that's been accelerated by the by the pandemic.
Speaker 1: So the talent has always been there, but the opportunity
Speaker 1: hasn't been there, and that's led to some of these
Speaker 1: you know, these dynamics. What's encouraging to me is just
Speaker 1: what's happened in the last few years. There's far more
Speaker 1: focus on these cities, and there was a decade ago.
Speaker 1: There's a lot of new venture firms that have started
Speaker 1: up in these rising cities. Fourteen hundred new venture firms
Speaker 1: have started in cities outside of San Francisco, outside of
Speaker 1: New York, outside of Boston. In these in these rising cities,
Speaker 1: there's a sixfold increase in the venture capital in those cities.
Speaker 1: But perhaps most importantly, there's now a recognition that some
Speaker 1: of the big potential opportunities for entrepreneurs and for investors
Speaker 1: in this next decade are going to be as sort
Speaker 1: of the Internet meets the real world. And big sectors
Speaker 1: like healthcare or food and agriculture are reimagined and disrupted,
Speaker 1: and in those sectors, expertise matters. Domain expertise matters, partnerships matter,
Speaker 1: and that's actually an advantage I think some of the
Speaker 1: entrepreneurs in these rising cities, even though they've been largely
Speaker 1: disadvantaged for the past, you know, a couple of decades. Wait,
Speaker 1: let's start with the framework. Let's start with the bus tours.
Speaker 1: So you pick a city where a multiple cities, you
Speaker 1: get people in a bus, you go and in each
Speaker 1: city you give a hundred thousand dollar investment to what
Speaker 1: you feel is the best startup. How did you come
Speaker 1: up with the idea and what are the logistics of
Speaker 1: the bus excursions? Well, the idea we started this a
Speaker 1: little over eight years ago, and the original idea was
Speaker 1: building on some of that work I mentioned with the
Speaker 1: White House to start up America effort. Why don't we
Speaker 1: just hit the ground and see what's happening in different
Speaker 1: cities around the country and in the process try to
Speaker 1: showcase some of the things that are positive developments in
Speaker 1: in in those cities and also see what we could
Speaker 1: do to help this next generation of entrepreneurs and so
Speaker 1: Frank we didn't quite know what we're going to get
Speaker 1: into what we did the first one, but we did
Speaker 1: a tour that included cities like Detroit and Pittsburgh, Cincinnati, Nashville.
Speaker 1: Those were the first ones we did, and we found
Speaker 1: it remarkable to see what's happening on the ground, to
Speaker 1: use the bus a little bit as a media prop
Speaker 1: to get attention and and you know, local media to
Speaker 1: pay more attention to the entrepreneurs, even getting national media.
Speaker 1: A few years ago, sixty Minutes Falls Around did a story,
Speaker 1: for example, So that was part of the reason to
Speaker 1: have a bus. Yeah, there was just practically to get
Speaker 1: between city and city and around the cities, visiting different
Speaker 1: companies and universities and so forth. The bus was helpful,
Speaker 1: but the thing was most helpful. And this was one
Speaker 1: of the things I didn't really fully appreciate going into it,
Speaker 1: was using the bus as sort of a platform to
Speaker 1: bring people together, a platform for convening. And in the
Speaker 1: cities we visited now it's it's dozens and dozens of cities,
Speaker 1: we found it really is important to make sure people
Speaker 1: in those cities are aware of what each other is doing.
Speaker 1: There's not as much of the connectivity that that you
Speaker 1: really need to have a thriving startup community. So the
Speaker 1: bus has been a helpful way to bring people together
Speaker 1: and within the community, as well as invite people from
Speaker 1: other places, either journalists from the coast or investors from
Speaker 1: the coast, to see firsthand what's happening in some of
Speaker 1: these cities. Okay, we literally talking like a music tour
Speaker 1: bus with sleeping bugs, etcetera. Now, not the bunks, not
Speaker 1: the bunks. We we we get we do, uh you know,
Speaker 1: least a tour of us that is generally used by
Speaker 1: musicians or politicians doing campaigns and so forth. And and
Speaker 1: we kind of wrap it with our logo of the
Speaker 1: Rise of the the Rest logo and and images and and
Speaker 1: so we do not sleep on the bus because we
Speaker 1: we do bring We packed the bus pretty full. Uh
Speaker 1: so it's not quite like a rock and roll tour bus,
Speaker 1: but it's certainly within the city. We do use it,
Speaker 1: as I said, to move around and also to bring
Speaker 1: people together. So on one of these typical ventures, how
Speaker 1: many people are inside the bus, Well, it's pretty full.
Speaker 1: I'm not sure what the I'm not sure I want
Speaker 1: to report the number because it probably breaks some fire codes,
Speaker 1: but we pack them in pretty pretty pretty tight. Uh.
Speaker 1: And as we're moving around, we have different people coming
Speaker 1: and going, sometimes a governor, of the mayor and the
Speaker 1: university president. CEO is a big company, you know, there
Speaker 1: are some of the people that we try to invite
Speaker 1: on So it's definitely does it's a dozen to people
Speaker 1: that are that are on the bus, and over the
Speaker 1: course of the time we're in a particular city, it's
Speaker 1: it's probably upwards to a hundred people that join us
Speaker 1: for some you know, some part of it. And then
Speaker 1: the events we do in different cities, including you mentioned.
Speaker 1: So we do a pitch competition. We invite companies in
Speaker 1: the city to apply it to pitch generally get you know,
Speaker 1: close to a hundred companies kind of putting their hands up,
Speaker 1: and then we have a team that picks the best
Speaker 1: date or ten to be on stage, and then we
Speaker 1: have a panel of judges that joins me in deciding
Speaker 1: which is the one that is most promising, and then
Speaker 1: we do invest in in that company and have found
Speaker 1: that others will because they're on stage and are telling
Speaker 1: their story to a bigger audience. Generally, you know, somebody
Speaker 1: three or four, five hundred people are at these events.
Speaker 1: Uh that many of the other companies also get you know,
Speaker 1: some some attention and sometimes some funding as well, but
Speaker 1: not just the winner. It's sort of it's it's trying
Speaker 1: to spotlight what's what's unique about some of these some
Speaker 1: of these cities, and how many other professional investors would
Speaker 1: be on one of these bus tours. Again, it depends
Speaker 1: on the city, depends on how many people join us
Speaker 1: in any particular time, but generally there for these tours,
Speaker 1: there's you know, a couple of dozen coastal investors that
Speaker 1: join us for some some part of it just trying
Speaker 1: to see firsthand what's what's happening and in some of
Speaker 1: these cities. Okay, you read the book and it appears
Speaker 1: like I'll use the term underground because many people are
Speaker 1: unaware of them. There's a startup scene everywhere you go.
Speaker 1: Is there a startup scene in every city in America?
Speaker 1: I wouldn't say there's a start up scene in every
Speaker 1: city in America, but it was definitely a startup scene
Speaker 1: in dozens of cities in America, and we obviously profiled
Speaker 1: quite a number of them. Uh in the book. We
Speaker 1: now have investments with our Rise of Rest Fund in
Speaker 1: a hundred different cities. Uh, and so it is much
Speaker 1: more widespread than people think. When I first started talking
Speaker 1: started talking about Rise of Rest, people say, oh, I
Speaker 1: got it. There's ttunities to back companies outside of Silicon
Speaker 1: Valley or New York City or Boston, which are where
Speaker 1: most of the action historically has been. But they assume
Speaker 1: it's like one or Tuesday. Well, maybe Austin is doing,
Speaker 1: you know, pretty well, or Chicago doing pretty well, or
Speaker 1: you know that there's no sense that it's actually dozens
Speaker 1: of cities that are showing real, real momentum in terms
Speaker 1: of what's happening in in in terms of startups and
Speaker 1: you know, the resulting benefits they can provide to the company.
Speaker 1: So that's been the real AHA moment for me as
Speaker 1: I've traveled around over the last decade, and that's certainly
Speaker 1: been the most common kind of feedback I get based
Speaker 1: on people who have read the book, as they are
Speaker 1: surprised that so many cities, each doing it in their
Speaker 1: own particular way, that really are emerging. So you're right,
Speaker 1: it's kind of like a little bit of a underground
Speaker 1: that is now becoming much more more visible now. You
Speaker 1: talk about universities in the book being a generation of
Speaker 1: talent and that talent staying in the city as opposed
Speaker 1: to going to the coast. But generally speaking, you invested
Speaker 1: in a hundred cities. What is creating the startup culture
Speaker 1: or you just can't keep startup entrepreneurs down. Well, entrepreneurs
Speaker 1: at the core see a problem and decide it's an
Speaker 1: opportunity and decided to do something about it, and for
Speaker 1: them that's starting a company. Um. And that insight in
Speaker 1: terms of seeing a problem and and believing it's a
Speaker 1: it's an opportunity, is something that's you know, pretty widespread,
Speaker 1: pretty universal. Uh, it's just that in certain places it's encouraged,
Speaker 1: in other places it's not. Some cases, actually it's discouraged.
Speaker 1: You know, entrepreneurship. Startups are viewed as kind of too
Speaker 1: risky in in some places. Uh. And that's what leads
Speaker 1: to this this dynamic we talked about before where people
Speaker 1: feel like they kind of have to get out of
Speaker 1: dots and where where they're living is not really conducive
Speaker 1: to starting a company. Uh, it is going to be
Speaker 1: able to attract the the money they need. They are
Speaker 1: gonna be able to track the talent they need to
Speaker 1: build a team, They're not going to be able to
Speaker 1: get the attention they need to really scale up, and
Speaker 1: so they feel like they have to leave, and I
Speaker 1: think that's sad. And so we're trying to create a
Speaker 1: dynamic where people really can decide where they want to live,
Speaker 1: decide where they want to you know, kind of build,
Speaker 1: as opposed of feeling like they have to be in
Speaker 1: a certain place where they really don't have kind of
Speaker 1: a shot. And there's some parallels. Obviously, you've done a
Speaker 1: great job over several decades obviously chronicling the music industry.
Speaker 1: There's some parallels there that there there was a time
Speaker 1: where if you wanted to be in the music industry
Speaker 1: you kind of had to be in in New York
Speaker 1: City or Los Angeles. So you're in the movie industry,
Speaker 1: you know, similarly, you kind of Hollywood was the place
Speaker 1: to be. If you're in the financial services industry, Wall
Speaker 1: Street was the place to be. And now over the
Speaker 1: last half century, while those cities still have a lead
Speaker 1: and there's still reasons to be their benefits to be there.
Speaker 1: You know, many ways you're creating music, many ways you're
Speaker 1: creating movies and you're less tethered to a tickler plate.
Speaker 1: That the tech industry is still largely tethered to Silicon Valley,
Speaker 1: and that's starting to change, and I think that change
Speaker 1: will accelerate in the next ten or twenty years. And
Speaker 1: that's a positive because one of the things that really
Speaker 1: surprised me when I first started working on this, as
Speaker 1: I said over a decade ago, uh, it was a
Speaker 1: two data points. One I mentioned that sevent venture Copita
Speaker 1: goes to three states. The other is that most of
Speaker 1: the jobs in this country are not created by small
Speaker 1: businesses or by big businesses, but by new businesses, companies
Speaker 1: under five years old, basically startups. That small business as
Speaker 1: a sector accounts for a ton of jobs. It's very important,
Speaker 1: but as a sector, it doesn't grow a lot of jobs.
Speaker 1: And it kind of makes sense because if a restaurant
Speaker 1: goes out of business, chances are some other restaurant will
Speaker 1: take over that space and will probably hire about the
Speaker 1: same number of people. Similarly, with the big companies of
Speaker 1: fortune companies, some are growing, but some are declining, and
Speaker 1: as a sector ends up being kind of, you know,
Speaker 1: kind of balances itself out so if you're going to
Speaker 1: create jobs, you've got to back new companies. And if
Speaker 1: if in order to start a company, it's not always
Speaker 1: required that you raise capital to start a company. Some
Speaker 1: are able to boostrap those companies, but most of the
Speaker 1: biggest companies that have had the most success, create the
Speaker 1: most jobs, create the most economic you know, kind of
Speaker 1: growth and vitality, do raise venture capital, well, then it's
Speaker 1: kind of a disconnect if if that capital is not
Speaker 1: available to most people in in in most places, and
Speaker 1: so leveling the playing field so that everybody who has
Speaker 1: an idea feels like they have a shot if they
Speaker 1: want to starting a company and they feel like they
Speaker 1: can do that wherever they are, as opposed to feeling
Speaker 1: like they're kind of left out and left behind and
Speaker 1: don't really have a shot at building and frankly a
Speaker 1: shot out the American dream is something I think it's
Speaker 1: important to address boast to maximize the number of innovations
Speaker 1: that come out of this country, the new ideas that
Speaker 1: that you know, kind of lead to the new companies
Speaker 1: and even lead sometimes the new industries. Uh. And it's
Speaker 1: also frankly the best way to maximize the likely of
Speaker 1: the United States continues to be the most innovative entrepreneur
Speaker 1: nation in the world. That's not you know, kind of guaranteed.
Speaker 1: There's some risk to you know, the United States, based
Speaker 1: on what's essentially been the globalization of entrepreneurship over the
Speaker 1: last a couple of decades or venture capital years ago
Speaker 1: was invested in the in the United States of global
Speaker 1: venture capital, and now it's in so other countries have
Speaker 1: figured out that innovation entrepreneurship is kind of the secret
Speaker 1: sauce that's kind of made America America, and they're trying
Speaker 1: to kind of kinta win the next industries. And so
Speaker 1: we need to double down on innovation entrepreneurship, and we
Speaker 1: need to do it in a more inclusive way, so
Speaker 1: not just certain people in certain places doing it really
Speaker 1: well and and other people in other places feeling kind
Speaker 1: of left out and left behind. Okay, in Silicon Valley,
Speaker 1: you had the transistory, had fair Child, so you grew up.
Speaker 1: These businesses grew up around tech, the logical innovation to
Speaker 1: begin with. To what degree is it a matter of
Speaker 1: like COVID where people work remote being one issue, so
Speaker 1: you can work anywhere, or do these locations actually come
Speaker 1: with advantages that you don't get on the coast. Uh.
Speaker 1: Both the first little backstory, even even if you look
Speaker 1: at the the early days of the Internet, when companies
Speaker 1: like mine AO all got started, we were in northern
Speaker 1: Virginia outside of Washington, d C. But that first wave
Speaker 1: of Internet, the first you know, kind of a couple
Speaker 1: of dozen companies that ended up playing a key role
Speaker 1: in building the Internet, building on ramps to the Internet
Speaker 1: were fairly regionally distributed. You know, as I mentioned, we
Speaker 1: were in the DC area. Hayes, the big modem company
Speaker 1: was in Atlanta. CompuServe one of the early online services
Speaker 1: with Columbus Ohio. IBMS PC operations were in boc Overton, Florida.
Speaker 1: Sprend the communications company was in Kansas City. Uh, you know,
Speaker 1: the Dell was in Austin. Microsoft actually started in Albuquerque
Speaker 1: until you know, they moved to Seattle. So the a
Speaker 1: lot of companies were all across the country. It was
Speaker 1: only in the last twenty years where it shifted from
Speaker 1: building the Internet to building software on top of the Internet.
Speaker 1: That's really when Silicon Valley grew to you know, kind
Speaker 1: of its prominence. Indeed, it's it's dominance I think in
Speaker 1: this next era, This next wave what I've called the
Speaker 1: Internet third wave. UH. It is sort of when the
Speaker 1: Internet meets the real world, and that's when some of
Speaker 1: these sectors that we've been talking about, like healthcare and
Speaker 1: food and others start getting disrupted. And some of the
Speaker 1: expertise you need and some of the credibility you need
Speaker 1: to establish partnerships in those sectors are you know, in
Speaker 1: the middle of country healthcare, for example, it depends on
Speaker 1: to see when you're trying to build there. But if
Speaker 1: you're trying to build a disruptive healthcare company, you're gonna
Speaker 1: need partnerships with hospitals so they actually integrate what you're building.
Speaker 1: And you know, you need to get doctors and nurses
Speaker 1: to actually use it, you need to get health plans
Speaker 1: to actually pay for it. Uh. And having some connection
Speaker 1: to that industry, some insights into that industry, some relationships
Speaker 1: with people in that industry likely will advantage you. If
Speaker 1: you're trying to get a deal with Cleveland Clinic in Ohio,
Speaker 1: or Mayo Clinic in Minnesota, or MD Anderson in Texas,
Speaker 1: there Johns Hopkins in Maryland, some of the key companies
Speaker 1: that could really help put your your company on on
Speaker 1: the map. So there is some value to these rising
Speaker 1: cities in this next era we're entering. But to the
Speaker 1: other part of your question, there absolutely is something that's
Speaker 1: happened during the pandemic where it has been a unlock.
Speaker 1: The sense that you had to be in certain places
Speaker 1: is less clear. There's clearly more flexibility in terms of
Speaker 1: how you live and where you live and how you work,
Speaker 1: and the whole idea of more hybrid work and remote
Speaker 1: work is opening an opportunity for people to decide where
Speaker 1: they want to live and not feel like they have
Speaker 1: to be in a certain place, and for companies, and
Speaker 1: as a result, you're seeing an acceleration of companies start
Speaker 1: in these these rise of rest cities. So I think
Speaker 1: it's it's both factors. This next era. There are certain
Speaker 1: cities that give you an advantage, but also there is
Speaker 1: this pandemic induced almost shake the snow globe moment where
Speaker 1: we're as a society trying to figure out this next chapter,
Speaker 1: and clearly flexibility is part of it. Okay, Historically the
Speaker 1: image of an inventor was a lone guy tinkering in
Speaker 1: the basement, But in the book you make a strong
Speaker 1: statement about network effects community. To what degree today is
Speaker 1: important to call on a team or does the loan
Speaker 1: inventor still have a role. Well, it is that the
Speaker 1: loan inventor is a little bit of a you know,
Speaker 1: kind of figment of imagination. Most important thing. You know,
Speaker 1: Thomas Edison a century ago was invented a lot of things,
Speaker 1: but he wasn't really doing it on his own. He
Speaker 1: always had teams that helped take those ideas and scale them.
Speaker 1: And certainly we've seen that in the work I've done,
Speaker 1: including with the with with a O. L. It required
Speaker 1: a mix of skill sets and I provided a certain
Speaker 1: kind of perspective, but I, you know, absolutely couldn't have
Speaker 1: done it on my own. It required a team, and
Speaker 1: I've learned that entrepreneurship is a team sport. As we
Speaker 1: enter this new era where the problems you're solving as
Speaker 1: entrepreneurs tend to be more complicated, more multifaceted, where partnerships
Speaker 1: do become more important, Even understanding policy often becomes more important.
Speaker 1: You've got to have a broader, broader skill set, and
Speaker 1: so that that is I think can increasingly be the
Speaker 1: story of entrepreneurship. Sometimes I think we celebrate the the
Speaker 1: entrepreneur too much and not the team that really takes
Speaker 1: that idea and turns it into something significant that that
Speaker 1: team should get more more attention. And there's also something
Speaker 1: which is part of your question to clustering of people.
Speaker 1: And you know there's something too. When a company is
Speaker 1: successful in a city, what we call a tent pole company,
Speaker 1: that leads to other success in that city. And we've
Speaker 1: seen that in the last couple of decades in Austin,
Speaker 1: the success of Dell there has really been helpful. The
Speaker 1: success to the south By Festival got a lot of
Speaker 1: people visiting Austin that otherwise within the visit of Austin,
Speaker 1: and as a result, it became a magnet for for
Speaker 1: for people. And now there's hundreds of companies that startups
Speaker 1: that have great success there and that was not the case,
Speaker 1: you know, to three decades ago. And so this tent
Speaker 1: pole company dynamic is critical. I mentioned Microsoft moving to Seattle.
Speaker 1: The only reason Microsoft moved to Seattle is the two founders,
Speaker 1: Bill Gates and Paul Allen, We're from Seattle and they
Speaker 1: want to go home. That's fun. They moved to Seattle
Speaker 1: at the time Seattle was struggling. It was overreliant on
Speaker 1: some industries that were in decline, uh and didn't really
Speaker 1: have a new act and you know, because Microsoft ended
Speaker 1: up scaling there and became a tech hub because Microsoft
Speaker 1: was there. Jeff Bezos actually got in a car left
Speaker 1: New York City to drive to Seattle when he was
Speaker 1: starting Amazon for one reason and one reason only. He
Speaker 1: was he wanted to hire some Microsoft engineers. So I figured,
Speaker 1: you can pick off some of those Microsoft people to
Speaker 1: build to build Amazon. Now, Amazon, of course has become
Speaker 1: a very successful company, also strengthened the Seattle startup ecosystem.
Speaker 1: So what was a struggling city just a few decades
Speaker 1: ago now is a thriving city. And the success of
Speaker 1: some companies leads others, you know, companies to start up,
Speaker 1: and some of the early employees at those companies, you know,
Speaker 1: want to be part of some new companies, or they
Speaker 1: had made some money on stock options want to invest
Speaker 1: in new companies. And it creates that positive kind of
Speaker 1: increasing returns network effect, kind of tipping point dynamic for cities.
Speaker 1: And that's one of the things we're seeing more of
Speaker 1: in recent years. And again that's part of the reason
Speaker 1: I even wrote the book because I think people don't
Speaker 1: realize what's happened in these cities, and I think they
Speaker 1: will be surprised and frankly also encouraged that there that
Speaker 1: this innovation economy in this next next chapter can be
Speaker 1: more inclusive. And that really ties also in, you know,
Speaker 1: at least a degree with some of the political dysfunction
Speaker 1: we have in this country where where you know, there
Speaker 1: were in these tribes and there are a lot of factors.
Speaker 1: Obviously I don't want to make it overly simplistic, but
Speaker 1: one of the factors is an opportunity gap where there
Speaker 1: are definitely people that are doing really well in some
Speaker 1: places and a lot of people, most people in most
Speaker 1: places are feeling left out. They are feeling left behind.
Speaker 1: They're not celebrating the disruption and Silicon Valley. They're kind
Speaker 1: of angry about it. And you know, we need to
Speaker 1: you know, kind of create more companies in their own
Speaker 1: cities that can create more jobs in those cities and
Speaker 1: create more opportunity and even more hope in those cities.
Speaker 1: And if we do that, that will be good for
Speaker 1: those cities, and also I think it can be good
Speaker 1: for the country more broadly. Shark take Nipause dive or
Speaker 1: negative for entrepreneurship in the kind I think and that
Speaker 1: positive it it's it's really opened people's eyes to the
Speaker 1: idea of starting a business and and you know, probably
Speaker 1: inspired a lot of people who might not otherwise even
Speaker 1: thought about it. And as people when I was growing up,
Speaker 1: I didn't know what an entrepreneur was until I was
Speaker 1: a little bit older. Uh, And so you know that
Speaker 1: I think is is a is a is a net
Speaker 1: positive just in terms of getting people thinking about things.
Speaker 1: And as I said before, maybe next time they see
Speaker 1: a problem they turned it into an opportunity. One of
Speaker 1: the stories I love it, and it's in the book
Speaker 1: as there's a mom living in a suburb outside of
Speaker 1: Indianapolis who five or so years ago was kind of
Speaker 1: worried about the water quality because in Flint, Michigan, there
Speaker 1: was a well publicized crisis about water quality and safety.
Speaker 1: And she said, I've got young kids. I want to
Speaker 1: test my water to I want to make sure that
Speaker 1: they're drinking safe water. So she called the water companies,
Speaker 1: I want to test my water and they said, what,
Speaker 1: we actually don't do that. I said, okay, and she
Speaker 1: called some other company that specialized in and in sort
Speaker 1: of industrial technologies. Uh and and said, I'd like to
Speaker 1: get my water tests and it will do that, but
Speaker 1: we're really set up to do that for big companies
Speaker 1: and it will cost you a thousands of dollars to
Speaker 1: test your water in your home, and so what makes
Speaker 1: no sense? So she said, well, this is crazy. I'm
Speaker 1: sure that other people like me or concerned about their
Speaker 1: water quality. And she started a company called one Water
Speaker 1: that created a very affordable way for people to inconvenient
Speaker 1: way for people to get their their water tested, and
Speaker 1: that outscaled. It's even providing some of these testing services
Speaker 1: to cities, including cities like like San Francisco. That was
Speaker 1: just somebody who saw a problem and and turn it
Speaker 1: in an opportunity. And so hopefully things like Shark Tank
Speaker 1: will open people's eyes that they see a problem rather
Speaker 1: than just talking about it or complaining about it, they
Speaker 1: maybe can do something about it by by starting a company.
Speaker 1: And increasingly because of what's been happening, they have more
Speaker 1: flexibility to do that anywhere they are as opposed to
Speaker 1: feeling like why I have this idea, I want to
Speaker 1: do something about it, but I really don't have any
Speaker 1: ability to do it. Because I'm you know, living in
Speaker 1: some part of the country that just is not well
Speaker 1: known for for startups and innovation and entrepreneurship, and that
Speaker 1: needs to change. Okay, let's talk about the basics on
Speaker 1: your side of the fence. Obviously, there are legendary venture
Speaker 1: capital firms in the Silicon Valley. They're well known ones
Speaker 1: in New York. Then you read about somebody who's got
Speaker 1: their own little fund. Tell me about the creation of
Speaker 1: the venture capital firm, whether there's competition amongst you, how
Speaker 1: the investment works, a revolution where you get your money
Speaker 1: to fund your funds. A couple of parts of that. First,
Speaker 1: venture capital as an industry as a sector is a
Speaker 1: relatively modern phenomenon. It's really the last fifty years that
Speaker 1: it emerged, and initially emerged in New York and then
Speaker 1: in San Francisco, then in Boston. That's part of the
Speaker 1: reasons why those cities have so strong in terms of
Speaker 1: where venture capitalists have clustered and therefore where entrepreneurs have
Speaker 1: have clustered. There's three ways people raise money for venture firms.
Speaker 1: The first is they've made some money from some other
Speaker 1: thing and start reinvesting. It goes back to this dynamic
Speaker 1: of of of having a successful company leads to people
Speaker 1: making money from that company, and some of them decided
Speaker 1: to invest in the next generation of entreprenurs. That's actually
Speaker 1: how I got started. After you know, starting a O L,
Speaker 1: I started making some investments and then I wrapped it
Speaker 1: up from there. So that's that's one way. They just
Speaker 1: have some access to you know, to the capital. A
Speaker 1: second way is in a more common way, is they
Speaker 1: tap into institutional investors, so big pension funds, university endowments.
Speaker 1: They're trying to maximize the return they get for those
Speaker 1: endowments so they can do more programs for their particular
Speaker 1: university or for the particular hospital. And so they are
Speaker 1: sort of professional investors that have a whole series investments.
Speaker 1: Obviously they have fairly diversified portfolio. But one part of it,
Speaker 1: and recently it's become a more important part of it,
Speaker 1: is investing in these private companies, uh, you know, the
Speaker 1: by terms of venture capital in in in particular. And
Speaker 1: there are also groups that are what are called fund
Speaker 1: of funds that also might make raise capital from some
Speaker 1: large investors and then kind of divate out to a
Speaker 1: group of of of smaller funds, so there's different ways
Speaker 1: you can raise that money. We did something a little
Speaker 1: bit different, uh, for this most recent Rise the Rest Fund. Historically,
Speaker 1: revolutions started initially where it was just money I was investing,
Speaker 1: so essentially my capital. Than about ten years ago, we
Speaker 1: opened it up to institutional investors and we have a
Speaker 1: Revolution Growth Fund and Revolution Inventors Fund investing companies like
Speaker 1: DraftKings and Sweet Green and Clear and and dozens of others.
Speaker 1: And that's with the support of institutional investors who are
Speaker 1: essentially investing alongside of us. For this more recent rights
Speaker 1: Rest furred, we just reached out to individuals and so
Speaker 1: we have very prominent successful entrepreneurs and investors executives who
Speaker 1: have joined us as investors in our Rise of Rest
Speaker 1: seed fund, which is investing in these cities all around
Speaker 1: the country. People like Jeff Bezos and Howard Schultz, and
Speaker 1: you know hedge fund people like Gray Dally, and private
Speaker 1: equity people like uh Henry Kravis, David Rubinstein, you know,
Speaker 1: venture investors like Jim Bryer and John Dorther, entrepreneurs like
Speaker 1: Sarah Blakeley and Tory Birch, and you know, you know
Speaker 1: Eric Schmidt Mike Milk and a great group of individuals
Speaker 1: who basically believe in this idea of the rise the
Speaker 1: rest believe that their entrepreneurs all across the country believe
Speaker 1: there's a disconnect between no ability for most people in
Speaker 1: most parts of the country to access venture capital. So
Speaker 1: are co investors with us in that particular fund? Do
Speaker 1: you personally know all those people or do someone on
Speaker 1: your team reach out? Are you more of a cerebral guy,
Speaker 1: you very social such that you have relationships with these
Speaker 1: investors and could just bring them up just because of
Speaker 1: what I've done over a number of decades, I've have
Speaker 1: built a pretty good network, so you know, I wouldn't
Speaker 1: say all there are a few people that invested. It
Speaker 1: was part of Rise Arrest too. I didn't know personally before,
Speaker 1: but the vast majority I didn't know personally, and many
Speaker 1: actually were aware of what we're doing, and we're kind
Speaker 1: of intrigued with what we're doing and express an interest
Speaker 1: and and and being investors alongside of it. So we
Speaker 1: structured something so uh, there's an ability for those people
Speaker 1: doing it's and it's super helpful if we're going around
Speaker 1: the country that you know some of these prominent successful
Speaker 1: entrepreneurs and investors you know, are are essentially backing them.
Speaker 1: When we make an investment in a company with our
Speaker 1: Rise Arrest Fund, it's it's it's really the these these
Speaker 1: dozens of other people are essentially investors in your company
Speaker 1: as well, and I think that's helpful. I guess people
Speaker 1: are some a little bit more more momentum when they're
Speaker 1: hiring people that they're they're more likely to join the company,
Speaker 1: and a little more momentum when they're they're trying to
Speaker 1: attract customers or partners, a little more momentum when they're
Speaker 1: trying to attract follow on investors. So having that that
Speaker 1: network I think has been been been quite helpful. But
Speaker 1: just me doing this personally, I don't think we've had
Speaker 1: nearly the same level of interest or attraction than having
Speaker 1: several other dozen people you're kind of joining us on
Speaker 1: this effort. Let's talk about venture capital in general, and
Speaker 1: revolution general is opposed to just the rise of the
Speaker 1: rest fun they're different stages of when people invest in
Speaker 1: recent horrowits another venture capital firm. It's famous for coming
Speaker 1: in late, So there's early tell us about the different
Speaker 1: stages you might invest in a company. Well, that the
Speaker 1: very earliest stage. You know, some think of it as
Speaker 1: sort of seed investment or angel investment, where you're raising
Speaker 1: a relatively small amount of money just to kind of
Speaker 1: get going, just to kind of get that idea on
Speaker 1: the playing field, build a initial product or service, and
Speaker 1: you know, hire a few people just to kind of
Speaker 1: get going. So that's called the seed stage. Uh, I
Speaker 1: think if it varies depending on what the company is,
Speaker 1: but yet seed state, you know, the investments generally are
Speaker 1: in the know, few hundred thousand dollar range. Sometimes it
Speaker 1: can be more, sometimes it can be less, but generally
Speaker 1: that's sort of the range that people are talking about.
Speaker 1: And then there's sort of the venture stage, which is
Speaker 1: the company is more developed and and the team is
Speaker 1: more assembled and uh there's a little bit more clarity
Speaker 1: regarding product market fit things like that. So there's still
Speaker 1: risk associated with it still is still a fledgling company,
Speaker 1: but at that point the company and the entrepreneur back
Speaker 1: in the company really feel like they need to raise
Speaker 1: more capital. Usually it's a few million dollars and that's
Speaker 1: a whole other group of venture firms to specialize at
Speaker 1: that stage. And then, as you said, there's a later
Speaker 1: stage where people think of as the growth stage, where
Speaker 1: the company really has you know, kind of got some traction.
Speaker 1: It's kind of a real business. It still needs more
Speaker 1: capital to expand it's still not yet profitable, but but
Speaker 1: it's clear that there really is an idea there, and
Speaker 1: that's the growth stage. And generally people are raising tens
Speaker 1: of million dollars in the in the growth stage, and
Speaker 1: more recently sometimes a lot more people. You know, some
Speaker 1: of the companies more recently have delayed going public and
Speaker 1: be able to raise you very large kind of private
Speaker 1: you know, late stage rounds before they go public. So
Speaker 1: the way to think about it is it, you know,
Speaker 1: kind of whether you're at the very early stage where
Speaker 1: you need some of that initial seed capital to just
Speaker 1: get going, or at the venture stage where you have
Speaker 1: a little bit more attraction but but do need some
Speaker 1: some capital and and also some expertise to help you
Speaker 1: build a company, or the somewhat later stage where you
Speaker 1: really do see a big opportunity and you really want
Speaker 1: to kind of put a foot on the accelerator and
Speaker 1: need the additional capital to hire more people or to
Speaker 1: spend more on marketing or whatever whatever. The you know,
Speaker 1: the focus might be and a revolution participated all those
Speaker 1: different levels, whether it be with different funds. Yeah, we do.
Speaker 1: We do, and then other firms do. There's some that
Speaker 1: just focused on one stage. But we we really want
Speaker 1: to be able to back entrepreneurs to kind of every
Speaker 1: stage of the of the journeys and but way so
Speaker 1: we have dedicated teams focused on that early seed stage,
Speaker 1: another dedicated team focused on the venture stage, and a
Speaker 1: third team focused on the on the growth stage. Okay,
Speaker 1: so you go into one of these cities and you
Speaker 1: start with X number of companies who would like to
Speaker 1: gain the hundred thousand dollars uh, and then you win
Speaker 1: to it down and then you ultimately award one company.
Speaker 1: What are you seeing there? Are you seeing a lot
Speaker 1: of you're an expert, are you seeing a lot of
Speaker 1: viable ideas? Were you're seeing only a couple? What is
Speaker 1: out there in the marketplace? Now, we're seeing a lot
Speaker 1: of ideas that of course a lot of them are
Speaker 1: are not great ideas. You get a mix. But by
Speaker 1: the time we our team kind of talks to people
Speaker 1: and filters it from the initial called hundreds in each
Speaker 1: city to the best ten. You know, the ten are
Speaker 1: are always pretty, pretty interesting, pretty compelling in some way
Speaker 1: or fashion. But one of the things that that we've
Speaker 1: learned as while the idea is important, obviously, it's it's
Speaker 1: sort of the core of what you're building is you
Speaker 1: need to understand what exactly you know is the is
Speaker 1: the goal? What is the vision? What kind of what
Speaker 1: what mountain are you trying to climb? What what you know?
Speaker 1: What what battle are you trying to fight? So it
Speaker 1: starts with that the vision, or it starts with the idea. Uh.
Speaker 1: You quickly realize that it's sort of and there's a
Speaker 1: Thomas Edison quote from a century ago. Vision without executionist hallucination.
Speaker 1: You quickly recognize it's how do you take that idea
Speaker 1: and really scale it? Which gets back to some of
Speaker 1: the things we talked about before that what what is
Speaker 1: the team dynamic and how does that really allow you
Speaker 1: to scale that. So when we're talking to entrepreneurs, whether
Speaker 1: it be in these pitch competitions and are just kind
Speaker 1: of one on one, we understand the idea, we also
Speaker 1: understand want understand the team that's going to turn that
Speaker 1: into a real a real business. Uh. And then you
Speaker 1: also need to have some evidence, particularly as you're looking
Speaker 1: at these some of the later stage investments that there,
Speaker 1: it really has competitive advantage with some people think of
Speaker 1: as competitive moats or something that is unique about what
Speaker 1: you're you're doing. And I also want to understand what
Speaker 1: some of the partnerships are that are allowing you to
Speaker 1: scale the business. So there are a number of different
Speaker 1: different factors, but it's really it starts with trying to
Speaker 1: understand what that big idea is and what's the what's
Speaker 1: the dynamic of the team that's going to execute against
Speaker 1: that idea and turn into a real business. Now they're
Speaker 1: these accelerators, and one is tech Stars and tex Stars
Speaker 1: Music started up a few years ago and they choose
Speaker 1: like ten companies and they come in and they want advisors,
Speaker 1: and I went in to advise, and just about all
Speaker 1: these people were delusional. They did not have an understanding
Speaker 1: of the landscape. They had a slight understanding of what
Speaker 1: was going on, but it wasn't a practical understanding. And
Speaker 1: there were one or two that I thought were could
Speaker 1: possibly be viable, and then ultimately none has really broken
Speaker 1: through on any big level. There's a number of questions here. One,
Speaker 1: you know, to what degree to people know the landscape
Speaker 1: and our sophisticated maybe, and then there's timing. There's a
Speaker 1: lot of investment capital in vtric capital UH. In the
Speaker 1: music business years ago, most people lost all their money.
Speaker 1: As I sit here right now, I don't see a
Speaker 1: ton of opportunity. So what is the landscape do? Is
Speaker 1: it about choosing the right vertical? Is it about having
Speaker 1: expertise in some area that you're matching with the vertical
Speaker 1: or understanding that vertical? Look, I know that there are
Speaker 1: no strict rules, but give us some insight. Well, I
Speaker 1: think it's involving. I think it's an interesting, interesting, wait
Speaker 1: your friend question, because in Silicon Valley there's sort of
Speaker 1: this uh truism that the biggest disruptors often go into
Speaker 1: a new industry knowing nothing about it, and as a result,
Speaker 1: they see things that people in the industry don't see,
Speaker 1: have insights in terms of different products or services, just
Speaker 1: different way of doing things, and as a result having
Speaker 1: that fresh perspective, having that almost naive perspective and asking
Speaker 1: sort of basic kind of questions and looking for kind
Speaker 1: of emerging opportunities, they're able to build some some very
Speaker 1: significant companies. And there are many examples of that. That PayPal,
Speaker 1: which twenty years ago was one of the first really
Speaker 1: successful you know, you know, digital payment companies. Elon Musk
Speaker 1: and others were part of that. None of the team
Speaker 1: really understood the financial service industry or the credit card industry,
Speaker 1: and they were able to do some things because of
Speaker 1: that naivete that allowed them to to to be successful.
Speaker 1: More recently, you know, ten fifteen years ago, a similar
Speaker 1: dynamic happening with Airbnb. The you know, the founders there
Speaker 1: didn't really understand the hotel industry, the hospitality industry, so
Speaker 1: they came up with what most people thought was sort
Speaker 1: of a crazy idea, but it turned out to be
Speaker 1: a great idea. So there's definitely that thread, that that
Speaker 1: stream where those fresh perspectives are are important. Those fresh
Speaker 1: insights are important and can lead to great entrepreneurial success stories.
Speaker 1: But there's also another dynamic, and this I think is
Speaker 1: becoming increasingly important. It goes back to some of the
Speaker 1: things we're talking about earlier that in industries, whether you're
Speaker 1: talking about the music industry or the healthcare industry, or
Speaker 1: the agriculture industry or the sports industry, there are many
Speaker 1: industries where in order to be successful, you have to
Speaker 1: go beyond having that insight and actually be able to
Speaker 1: build partnerships to be be get real scale. Otherwise you
Speaker 1: don't really have much success. Going back to the example
Speaker 1: I mentioned in in health care, if you built really
Speaker 1: cool software, but you couldn't get hospitals to partner with you,
Speaker 1: what's the point. And so increasingly you need to have
Speaker 1: the balance the blend of some of that fresh perspective,
Speaker 1: but also have some real expertise in in the industry.
Speaker 1: That's probably why in terms of tech stars, because you
Speaker 1: have expertise in the industry, they said, let's bring some
Speaker 1: people together that can help these entrepreneurs and complement some
Speaker 1: of the perspectives they might bring by bringing some of
Speaker 1: the real world insights that come from that that that industry.
Speaker 1: I think that balancing act is going to become much
Speaker 1: more important in the next ten or twenty years. And
Speaker 1: and occasionally they'll still be companies that launch where the
Speaker 1: people within the company know nothing about the industry they're
Speaker 1: trying to disrupt, but more often at least some members
Speaker 1: on the team will bring that perspective, bring that the
Speaker 1: credibility that comes with that. That will result in some
Speaker 1: of those companies being much more successful because they have
Speaker 1: on their teams, or on their boards, or in their
Speaker 1: investor groups, or somewhere in their in their network, some
Speaker 1: of the people that really are able to to take
Speaker 1: that idea and scale it, in part by building partnerships
Speaker 1: with people in the industry that will ask some of
Speaker 1: the basic questions that anybody industry would would not ask.
Speaker 1: To what degree do you encounter headstrong entrepreneurs? Here's an
Speaker 1: analogy between the music business. You find someone who says,
Speaker 1: I want to be successful, and if you try to
Speaker 1: give them any advice, say no, no, no, I gotta
Speaker 1: do it my own way, and you end up rolling
Speaker 1: your eyes. Do you encounter that in your ventures companies? Sure,
Speaker 1: And it's a balancing act. We want entrepreneurs who are
Speaker 1: you know, confident and passionate, and you know, have strong
Speaker 1: convictions and and a strong perspective on how the world's
Speaker 1: gonna change, how the market's going to change, why that's
Speaker 1: going to create opportunities and and evangelists for their idea
Speaker 1: and can recruit other people to their team and so forth.
Speaker 1: So you definitely want that that that competence, But I
Speaker 1: do think it's helpful to balance that at least a
Speaker 1: little bit of humility, a little bit of listening, a
Speaker 1: little bit of maybe I don't have all the answers,
Speaker 1: and and but sure we've we've backed a whole mix
Speaker 1: of entrepreneurs over the over the years and find the
Speaker 1: ones that are at least the best fit for us,
Speaker 1: and you know, usually the most successful. The ones that
Speaker 1: are you know, have pretty strong views, but also recognize
Speaker 1: that there's value to to listening and engaging with with
Speaker 1: others and that helps them refine their ideas. Ultimately they
Speaker 1: can be be more successful because of that, that that
Speaker 1: team dynamic. Now, if I win and I get a
Speaker 1: hundred thousand dollars, do you wave and take the bus off?
Speaker 1: And that's the last they ever hear of you? Or
Speaker 1: how involved are you in the company you invest? Now? Well,
Speaker 1: first of all, I should say we started these bus
Speaker 1: tours we talked about earlier eight years ago. We've done
Speaker 1: eight bus tours and visited over forty cities and done
Speaker 1: over forties pitch competitions. Uh, but I said earlier, we
Speaker 1: also invested about two hundred companies and hundred cities, So
Speaker 1: most of our investments are in companies we did not
Speaker 1: meet via bus tours, and most of our investments in
Speaker 1: cities that we haven't visited on our bus tours. So
Speaker 1: initially it was about the bus tours and the pitch competitions,
Speaker 1: but as we saw more and more opportunity, we kept
Speaker 1: extending this. This network of over three hundred regional venture
Speaker 1: firms we co invest with that has been a source
Speaker 1: of more opportunities. But answer your question, I do get
Speaker 1: involved with the companies. I get more involved with the
Speaker 1: companies at the later stage, and I do at the
Speaker 1: earlier stage. But we have a whole team here that's
Speaker 1: focused specifically on working with the companies at the earlier stage.
Speaker 1: We host regular summits who we call Rise of the
Speaker 1: Rest summits, bringing the entrepreneurs together that we're back bringing
Speaker 1: the investors we've how invested with, back bringing the community
Speaker 1: startup community leaders in different cities altogether to to learn
Speaker 1: from each other. So I'm certainly actively involved in this.
Speaker 1: I'm working as hard as I was when I was
Speaker 1: running a well twenty plus years ago, and it's it's
Speaker 1: because it's a lot of fun. So you know, obviously
Speaker 1: the cities should go to the uh you're there with
Speaker 1: the bus there's other people who have you know, combed
Speaker 1: through the companies, but the people ever just knock on
Speaker 1: your door. And for those who have knocked on your door,
Speaker 1: have any of them been good and you've invested in them? Yeah.
Speaker 1: A bunch of I wanted to particularly read about in
Speaker 1: the book is entreprene Jonathan Webb just showed up at
Speaker 1: our office here in Washington, c kept kept pestering the
Speaker 1: people to you know, get a meeting. You know, we
Speaker 1: finally got a meeting. Uh. And initially, you know, we
Speaker 1: thought what you had in mine was a little a
Speaker 1: little crazy, But the more we've listened to them, the
Speaker 1: more we became convinced it was actually a pretty interesting idea.
Speaker 1: And that's gone to you know, create a company in
Speaker 1: eastern Kentucky called app Harvest. UH. That went from an
Speaker 1: idea on a napkin, and we provided some of the
Speaker 1: initial you know, an initial hundred thousand dollars of capital
Speaker 1: to get that idea going and now raised a couple
Speaker 1: hundred million dollars and and have scaled. That's it's about.
Speaker 1: It's in the egg tech sector, agriculture technology sector. They've
Speaker 1: now built the largest indoor greenhouse in America and They
Speaker 1: built it in eastern Kentucky outside of Lexington. Uh. They
Speaker 1: picked that site in part because seventy of the US
Speaker 1: population is with the twenty four hour drive, so that
Speaker 1: fruits and vegetables can get the market quickly. They designed
Speaker 1: it so it uses ninety less water, so it's much
Speaker 1: more sustainable, good for the climate. And did it specifically
Speaker 1: there because that area is known as Apple h a
Speaker 1: coal country which for decades has been in decline and
Speaker 1: it really seen some real challenges as the coal industry
Speaker 1: largely disappeared. Uh. And so Jonathan had this idea for
Speaker 1: creating a company that can could scale, but also creating
Speaker 1: jobs in a community that has felt, you know, kind
Speaker 1: of left left left behind. And so that was one
Speaker 1: example of somebody just kind of knocked on our door,
Speaker 1: heard about what we were doing, and wanted to be
Speaker 1: part of it. And as I travel around, I spent
Speaker 1: a good bit of time obviously not doing the pandemic,
Speaker 1: but in the last year year and a half, been
Speaker 1: a good bit of time traveling around the country meeting
Speaker 1: people and you know, always like you know, people come
Speaker 1: up to me with ideas and uh, you know, sometimes
Speaker 1: they're they're really interesting and we have follow on meetings.
Speaker 1: Sometimes you're less interesting and and I try to be
Speaker 1: polite and figuring out a way to to to pass.
Speaker 1: But you know, it's one of the great things about
Speaker 1: entrepreneurship is is people having these ideas, these sparks of imagination,
Speaker 1: and then wanting to turn them into something. And so
Speaker 1: after many years, I was early years of a oh well,
Speaker 1: and we just got started. I was still in my twenties,
Speaker 1: you know, I would you go up to people at
Speaker 1: conferences and start pitching my idea, and you know, most
Speaker 1: people ignored me. A few people listened, and that sometimes
Speaker 1: led to some partnerships ended up being very helpful to us.
Speaker 1: And so having lived through that, I recognize I have,
Speaker 1: you know, an opportunity and degree of responsibility to help
Speaker 1: this next generation of entrepreneurs. So I'm always open to
Speaker 1: getting pitched by anybody. Okay, this comes down to the money.
Speaker 1: With money comes power. What kind of deals do these
Speaker 1: entrepreneurs get when you invest money in UH and how
Speaker 1: heavily is it negotiated. There's no such thing as a
Speaker 1: standard deal, but are there general splits and things like that? Now,
Speaker 1: they vary pretty dramatically, and it obviously depends on what
Speaker 1: we're going back to before talking about the stage as
Speaker 1: a seed stage, the venture stage, that the growth stage.
Speaker 1: It varies on the earliest stage of seede stage. A
Speaker 1: strategy there with with the Rise of Rest has been
Speaker 1: the partner with other venture firms that are located in
Speaker 1: these cities all across the country, so they really take
Speaker 1: the lead in setting the terms of the deal, evaluation
Speaker 1: and things like that, and then we're participating in in
Speaker 1: in those rounds and then connecting the people were working
Speaker 1: with together in the ways I talked about before. On
Speaker 1: the later stage funds like the Revolution Ventures and Revolution Growth.
Speaker 1: There we we do lead the round, we do get
Speaker 1: more involved, including taking board seats of the companies were back,
Speaker 1: so we really can help them terms of scaling those
Speaker 1: those businesses, uh, and those tend to be more negotiated
Speaker 1: based on kind of what the stat status the business is,
Speaker 1: what the comparable companies, what valuations are of comparable companies,
Speaker 1: particularly the public markets. So it's it's a little more
Speaker 1: complicated to get to the kind of a win win,
Speaker 1: you know, veal where where it makes sense for for
Speaker 1: us as investors and also makes sense for the companies.
Speaker 1: Our entrepreneurs born or they built a little bit of both.
Speaker 1: I think early on, I think the general view was
Speaker 1: they're probably born, but I've had and I was one
Speaker 1: that I think in retrospect, I was kind of born
Speaker 1: in entrepreneur and if I didn't know what it was
Speaker 1: at the time, but I've also had the experience of
Speaker 1: meeting lots of people who had great success and and
Speaker 1: kind of came to it later in life, and so
Speaker 1: you know, it was not something they really were you know,
Speaker 1: familiar with, or not a path they were pursuing, but
Speaker 1: they stumbled into some opportunity that where they were able
Speaker 1: to turn into a company, including some of the most
Speaker 1: you know, celebrated, you know, success stories in the last
Speaker 1: you know, half century, things like McDonald's right Croc basically
Speaker 1: was you know, took the idea of McDonald's when he
Speaker 1: was selling milkshake mixers, you know, two different restaurants, and
Speaker 1: as you know, a couple of McDonald brothers somewhere in
Speaker 1: southern California were started ordering a lot of his mixers,
Speaker 1: and they said, huh, why are they ordering so many
Speaker 1: of my mixers? And so visited them and I saw
Speaker 1: what was essentially the first or one of the first
Speaker 1: fast food restaurant concepts, and that's why they were ordering
Speaker 1: so many of them because they were they were designed
Speaker 1: the restaurant to to basically do high volumes, and got
Speaker 1: more intrigued and so eventually bought the you know that
Speaker 1: you know, the rand and and sort of the some
Speaker 1: of the core ideas and turned that into McDonald's. And
Speaker 1: he was in his fifties when he did that. Sam
Speaker 1: Walton started a little store in Bentonville, Arkansas, you know,
Speaker 1: and just with the idea of providing you know, broader
Speaker 1: selection to people, better prices and so forth. And that
Speaker 1: little idea in Bentville is now Walmart, which is one
Speaker 1: of the largest companies in the world. So, you know,
Speaker 1: some I think are born with that sort of entrepreneurial
Speaker 1: creativity builder you know, new ideas, you know, start businesses streak.
Speaker 1: But there are also many who end up seeing something
Speaker 1: that they just find uh, you know, fascinating and decide
Speaker 1: to pursue it as a as a as a business opportunity,
Speaker 1: as a as a startup, even if they're quite a
Speaker 1: bit older, and if they never really saw themselves as entrepreneurs.
Speaker 1: I realized every investment has a different amount of capital involved.
Speaker 1: But generally speaking as a VC, what kind of hit
Speaker 1: to ship ratio you're looking for your success ratio? Well,
Speaker 1: it again depends on the stage that earlier you're investing,
Speaker 1: when it's more the in the idea stage, it's going
Speaker 1: to be you know, more misss than the later stage
Speaker 1: where the company is a little bit more more developed. Uh.
Speaker 1: You know, we try to minimize what's in the industry
Speaker 1: called the loss ratio, where you basically you know, strike out. Uh.
Speaker 1: And it's easier to do that with the later stage
Speaker 1: investments because there's more to diligence. They're generally pretty significant companies.
Speaker 1: We backed the company started in the Washington c area
Speaker 1: almost fifteen years ago called Sweet Green, which was a
Speaker 1: fast casual restaurant concept. And this really it was just
Speaker 1: one place and there was a few places, and then
Speaker 1: they started expanding, and so we invested in that to
Speaker 1: help them expand other regions and that's gone to you know,
Speaker 1: they're building now a pretty significant business and now it's
Speaker 1: a public company with a couple of billion dollar evaluation uh.
Speaker 1: And they were able to use that capital to to
Speaker 1: scale up. We always new when we invested in them
Speaker 1: that it would be successful. We just didn't know how
Speaker 1: how success would be, how how big it might be.
Speaker 1: But certainly in the earlier stage there's more risk. But
Speaker 1: by co investing with other people were able to you know,
Speaker 1: kind of hedge some of that risk. But for sure, uh,
Speaker 1: you're always going to have as you say, and then
Speaker 1: it's like in the music business or the movie business.
Speaker 1: Some are going to work and some are not gonna work,
Speaker 1: and and you just try to maximize the numbers that
Speaker 1: are the ones that are working and minimize the ones
Speaker 1: that that don't work. How many people work at Revolution
Speaker 1: and how do they get their jobs and what do
Speaker 1: they do? It's a mix of things overall, because about
Speaker 1: seventy five people now, and some of them are focused
Speaker 1: on each of these funds I mentioned. Some are focused
Speaker 1: on sort of broader corporate functions, finance, legal, communications policy,
Speaker 1: you know, things like that, UM, and they know they
Speaker 1: get their jobs like anything, you know, sort of they
Speaker 1: were looking for great people and always on the hunt.
Speaker 1: And sometimes we know somebody because they work together in
Speaker 1: some company or at some other venture fund, or had
Speaker 1: some other role. Uh, And sometimes they just surfaced through
Speaker 1: a you know, kind of a more traditional kind of
Speaker 1: search process. Uh, but you know we have, We've been
Speaker 1: able to build and build a great team. Okay, let's
Speaker 1: go a little into the personal stuff. You grew up
Speaker 1: in Hawaii. What do I know, even at this late
Speaker 1: date living in Los Angeles, we're three hours behind, and
Speaker 1: you frequently an afterthought and an elections, national elections, they're decided,
Speaker 1: except for the last major one with a lot of
Speaker 1: mail in votes out to be counted, were decided before
Speaker 1: we even you know, the polls even closed in California.
Speaker 1: So growing up in a y on some level, that's
Speaker 1: all you knew. But what was it like, Well, it
Speaker 1: was all I knew, and most of that I did
Speaker 1: like it's a great place to grow up and for
Speaker 1: a whole host of reasons. But you're right, I did
Speaker 1: feel a little bit like I was, you know, out
Speaker 1: of the swing of things, a little bit off the
Speaker 1: beaten track. Even when I was up, and the television shows,
Speaker 1: the sitcoms, everything would would run on in Hawaii week
Speaker 1: after they ran on the main land. Basically the tapes
Speaker 1: would get shipped over or flown over. We would watch
Speaker 1: them a week later. So, you know, thankfully, back then
Speaker 1: people weren't using the Internet or lots of phone calls
Speaker 1: because there's been a big spoiler, you know, effact because
Speaker 1: the reality of most people in the country already knew
Speaker 1: what was going to happen before we we did, UH,
Speaker 1: and so that was that was a little bit it
Speaker 1: was a little bit strange. And also I write about
Speaker 1: some of this the book Growing Up in Hawaii. It
Speaker 1: was interesting to see how the economy was evolving because
Speaker 1: for most of the previous century it basically had been
Speaker 1: around agriculture, growing pineapples, growing sugar. That was really the
Speaker 1: core industry of Hawaii. And then you know, competition and
Speaker 1: global competition from other countries really decimated that industry and
Speaker 1: they had to pivot. And thankfully we're able to pivot,
Speaker 1: uh from and move out of agriculture and into tourism.
Speaker 1: And particularly when the Boeing business jet came along and
Speaker 1: the I think it was the early nineteen seventies, you know,
Speaker 1: that really accelerated the amount of people visiting Hawaii, increased
Speaker 1: the number of hotels being built and other other things
Speaker 1: to cater to the you know, the tourism industry. And
Speaker 1: I was able to kind of reposition itself UH and
Speaker 1: benefit from from from from tourism, so there are lots
Speaker 1: of benefits in in in growing up there. And I
Speaker 1: went to a school, uh, I lived near, and it
Speaker 1: was it was fun to you know, go to that
Speaker 1: school and actually you know, and it's a small world department.
Speaker 1: One of the people I met in high school was
Speaker 1: President Obama. I was a senior when he was a freshman,
Speaker 1: so he didn't have classes together, but he didn't. I
Speaker 1: do remember playing basketball with him a couple of times,
Speaker 1: and I do remind people when I'm speaking to two
Speaker 1: younger folks that always be nice to everybody because you
Speaker 1: never know who might be president United States controlling like
Speaker 1: the CIA and the I R S all these other
Speaker 1: other other things. It was kind of kind of interesting. Okay.
Speaker 1: Basketball has mentioned multiple times in your book, as is
Speaker 1: your competition with your brother? How how dedicated to basketball
Speaker 1: were you? How good were you? Into what degree did
Speaker 1: your competition with your brother ultimately inform and enhance your
Speaker 1: career efforts? Oh, I think it's an ext that was
Speaker 1: an average basketball player. It wasn't wasn't definitely not a superstar,
Speaker 1: but but enjoyed it. Uh. In terms of my brother,
Speaker 1: he was a really good tennis player, So that probably
Speaker 1: led me to basketball, you know, wanting to do something
Speaker 1: a little different than what my brother was doing. And
Speaker 1: then he was definitely the one. It was a year
Speaker 1: older and definitely was the one who was getting straight a's.
Speaker 1: I was I was not getting straight a's. And maybe
Speaker 1: that was another way I was going to differentiate him
Speaker 1: if it wasn't necessarily, you know, something my parents were
Speaker 1: or loving um. And then he ended up going to
Speaker 1: college at Princeton and end up being a Rhodes scholar,
Speaker 1: so really quite successful, and then went on to be
Speaker 1: part of an investment banking firm that was one of
Speaker 1: the storied firms and Silicon Valley firm called hambrogton Quist
Speaker 1: took companies like Apple Public and gene Tech Public, and
Speaker 1: he was a close advisor to people like like Steve
Speaker 1: jobs Uh and the fact he was focused more on
Speaker 1: the on the financial side of things, investment banking side
Speaker 1: of things, and I was focused more on the entrepreneurial
Speaker 1: side of things. That was a nice kind of balance.
Speaker 1: And he could help me and I could I could
Speaker 1: help him. Sadly, he passed away over two decades ago
Speaker 1: from brain cancer. He was, you know, in his early forty's,
Speaker 1: had a young family, and it just was a wake
Speaker 1: up call that none of us can really control our
Speaker 1: our destiny, controller or future. He was on the top
Speaker 1: of his game and then you know, sell me. He
Speaker 1: finds out he is brain cancer. Fourteen months later he
Speaker 1: passes away. So that was a a just a reminder
Speaker 1: of the fragility of life and and uh, everybody in
Speaker 1: my family a reminder not to again any of her. Granted, Okay,
Speaker 1: you end up going to school at Williams in western Massachusetts.
Speaker 1: Was that culture shock or your father going to Williams?
Speaker 1: But had you spent enough time on the mainland or
Speaker 1: do you feel like a fish out of water in Williams? Uh?
Speaker 1: I had not spent much time in the man was
Speaker 1: mostly in in in Hawaii. Uh Uh, I didn't necessarily
Speaker 1: feel like a fish out of water. I certainly had
Speaker 1: to adjust to a rather sudden shift in terms of
Speaker 1: seasons because you know, there's of course no snow in
Speaker 1: Hawaii and or there's a little bit of snow on
Speaker 1: one top of one mountain, but essentially no snow. Uh.
Speaker 1: And there was quite a bit of snow and in Massachusetts,
Speaker 1: as you know, Uh, so there's some some adjustments like that,
Speaker 1: but I really enjoyed it. It was it was, you know,
Speaker 1: an interesting place to be. And in full disclosure, at
Speaker 1: that point in time, both high school and college, my
Speaker 1: passion was not around UH technology or things like the Internet.
Speaker 1: It actually was the music business. In high school, I
Speaker 1: did a number of things that were related to writing,
Speaker 1: you know, contra views and taking pictures and and UH
Speaker 1: and UH. I worked with a bunch of people then
Speaker 1: did a lot of interviews when I was a kid,
Speaker 1: you know, Aerosmith and Wolf pan Jack and other bands
Speaker 1: that were coming through town. And I was in college,
Speaker 1: part of my little side hustle was promoting some some concerts.
Speaker 1: So I was initially focused on the music business. A
Speaker 1: couple of things happened that shifted my focus. The main
Speaker 1: one was I started in in the late seventies UH,
Speaker 1: when I was still in college, getting really fascinated with
Speaker 1: the idea of well we now think of as the Internet.
Speaker 1: I remember reading a book by a futurist, Alvin Toffler,
Speaker 1: when I was a senior UH in nineteen seventy nine,
Speaker 1: and the book was called the Third Wave, and he
Speaker 1: was talking about, UH, this next wave was going to
Speaker 1: be around digital technologies, and you know, the first wave
Speaker 1: was agriculture and the second wave was industrial revolution. Third
Speaker 1: way was going to be a dual revolution, and I
Speaker 1: was smitten with that idea. So that was part of
Speaker 1: what you led me onto a different path. But also
Speaker 1: I had some stumbles in the in the music business
Speaker 1: because my strategy, like Venture Capitel, was to back bands
Speaker 1: when I heard their albums and thought they could be
Speaker 1: hits and booked them for dates like six or nine
Speaker 1: months later, with the idea that you know, obviously sometimes
Speaker 1: to get it wrong and nobody would come to the concert,
Speaker 1: but if I got it right, I would lock in
Speaker 1: a band at a pretty good price. And that seemed
Speaker 1: like a pretty, you know, pretty clever idea to me.
Speaker 1: But what I didn't realize is is often you were
Speaker 1: wrong and nobody would show up. But when you were
Speaker 1: right and you were just a promoting college college concerts
Speaker 1: in New England and had no cloud, the bands that
Speaker 1: were successful would cancel on you. And I had two
Speaker 1: examples of this, and I booked both Meat Loaf I think,
Speaker 1: for one of their first dates and Cheap Trick Uh
Speaker 1: for one of their early dates for five dollars each.
Speaker 1: For our concert that were like six months down the road.
Speaker 1: Both of them canceled on me a cheap trick. We've
Speaker 1: got a deal with our offer to be on Don
Speaker 1: Kirsha's rock concert or something like that. So I said, Okay,
Speaker 1: this is not working for me. If I guess wrong,
Speaker 1: nobody comes. If I guess right, they cancel on me.
Speaker 1: I got to move on and thankfully was able to
Speaker 1: pivot to the pivot to the internet. There are stories
Speaker 1: of you being an entrepreneur in college selling different things.
Speaker 1: Are those true? Yeah? Yeah, I was definitely. Uh. We
Speaker 1: had all kinds of different side hustle, some of those
Speaker 1: concert promotions. Some it was one business we had was
Speaker 1: called Williams Fruit Baskets and the pitch was went to
Speaker 1: parents because we realized the parents had the money, the
Speaker 1: kid didn't really have the money. That when it was
Speaker 1: coming time for like to study for exam at the
Speaker 1: end of the semester and send these letters to parents saying,
Speaker 1: you know, don't you want your child to eat healthy
Speaker 1: when when they're studying for exams, And why don't you
Speaker 1: order a fruit basket and we will we will hand
Speaker 1: pick the fruit and deliver it to your your student
Speaker 1: just when they're in this uh, this challenging period. And
Speaker 1: that business did did pretty well. And we also had
Speaker 1: some other bus businesses things like that. So yeah, again
Speaker 1: none of them were big successes, but I enjoyed starting
Speaker 1: them and I got learned a little bit from each
Speaker 1: of them. Well, so if I was on campus, not
Speaker 1: that many people go to Williams would say, oh, yeah,
Speaker 1: that's the guy who starts the businesses. That's the guy
Speaker 1: who does that. That was me. That was me. Really
Speaker 1: sad part is, at one point professor pulled me aside,
Speaker 1: I think it was a junior at the time and said,
Speaker 1: essentially they realized that I was spending less time in
Speaker 1: class doing the work I should have been doing, and
Speaker 1: more time on these businesses on the sides and said
Speaker 1: sat me down, said you know, Steve, you know, we
Speaker 1: know you're like super passionate about some of these ideas,
Speaker 1: but you know, college is kind of a once in
Speaker 1: a lifetime opportunity. You're only here for four years and
Speaker 1: you have an opportunity to learn things and meet people
Speaker 1: and really kind of ban your mind and so forth.
Speaker 1: So it's it really encourage you to spend a little
Speaker 1: less time of the business things, but you can always
Speaker 1: do later and more time on on the you know,
Speaker 1: the college things. And of course I recognized he was right,
Speaker 1: but at that point I was, you know, too far
Speaker 1: into my other things. So I did okay in college,
Speaker 1: but nobody you know, thought I was gonna, you know,
Speaker 1: kinda was gonna win any awards. Your father was a
Speaker 1: lawyer that you grew up in a somewhat comfortable upbringing.
Speaker 1: Were you forming these businesses to make money or to
Speaker 1: have the experience of building a business? Yeah, I think both.
Speaker 1: I dad was a lawyer and I'm a teacher, as
Speaker 1: you said, and he was always lived a comfortable, kind
Speaker 1: of upper middle class, you know kind of life, um,
Speaker 1: and so I never had to worry about kind of
Speaker 1: some of the basic things a lot of people have
Speaker 1: to worry about. But my parents also really believed in in,
Speaker 1: you know, people being independent and resilient, and so I
Speaker 1: got a little bit of allowance, but not much and
Speaker 1: had to do a lot of chores for it. And
Speaker 1: if we really wanted to, you know, buy something, you
Speaker 1: need to figure out some way to make some money.
Speaker 1: So it was not you know kind of here's here's
Speaker 1: our credit card. Uh, you know, you know, I guess
Speaker 1: at back then the credit cards were not even a thing.
Speaker 1: But but you know, you want to buy something, you know,
Speaker 1: you know we'll pay for it. That was not the
Speaker 1: the the ethots. It was more of a we'll give
Speaker 1: you a little bit of money if you do a
Speaker 1: bunch of chores. Uh. And but if you really wanted,
Speaker 1: you know, you have any real flexibility to do anything much,
Speaker 1: you know, you have to go get a job and
Speaker 1: whether that. Sometimes it was just getting jobs, basic jobs
Speaker 1: and doing different things um over the years. And sometimes
Speaker 1: it was starting things, you know, to to also have
Speaker 1: a path to you know, make some make a little
Speaker 1: extra money. But as you said, also there was something
Speaker 1: about the idea of starting the businesses that that also
Speaker 1: was kind of intriguing to me. So you know, for
Speaker 1: me it was sort of a two. When I was
Speaker 1: going to college a few years ahead of you, Uh,
Speaker 1: Williams was not co ed, And I said, no way,
Speaker 1: what was the status of men and women when you
Speaker 1: went to Williams? It had shifted a few years before,
Speaker 1: not too many years, but just a few years before
Speaker 1: I was there in seventy six through eighty. Uh by
Speaker 1: then was co ed. It was still uh majority men.
Speaker 1: But it was it was definitely co ed, okay. And
Speaker 1: what kind of kid were you there? You have a
Speaker 1: million friends? Were you ostracized? Were you popular? Unpopular? Sorry?
Speaker 1: In the middle. I was involved in a bunch of
Speaker 1: different things, including co chairing the entertainment committee that was
Speaker 1: booking concerts to come to the college, worked at the
Speaker 1: radio station, and and uh and so I had some
Speaker 1: and at some of the side businesses that I that
Speaker 1: I mentioned. Um, so I was involved in a bunch
Speaker 1: of different different things. But I would say it was
Speaker 1: sort of kind of the the middle of the pack in
Speaker 1: terms of you know, friend groups and things like that.
Speaker 1: So you applied to get an m b A and
Speaker 1: you didn't get in anywhere? Were you just going through
Speaker 1: the motions or did you really want to get an
Speaker 1: m B A? And how did you feel when you
Speaker 1: didn't get it? Yeah, that was kind of a bummer,
Speaker 1: which is you know. Of course it's been made for
Speaker 1: a fun story since because the two schools I applied to,
Speaker 1: Harvard and and Stanford both rejected me and spoken on
Speaker 1: their campuses a bunch of times. I'm always quick to
Speaker 1: remind them of what In fact. One time it came
Speaker 1: out with another book about six years ago called The
Speaker 1: Third Wave. And I was uh in Boston going to
Speaker 1: some television station to film something and drove by the
Speaker 1: Harvard Business School campus and I said stop, stop, stop,
Speaker 1: and we got out and uh, I did a little
Speaker 1: quick I think it was a Facebook live thing or something. Uh,
Speaker 1: some live video basic wandering are on the campus, you know,
Speaker 1: to find the admissions office to ask why they turned
Speaker 1: me down whatever a number of thirty plus years ago,
Speaker 1: so it's kind of a yeah, fun So I answer
Speaker 1: the question I was. I was not sure what I
Speaker 1: was gonna do at that point. I thought that was
Speaker 1: a good path at least pursue. And at the time,
Speaker 1: most of the business schools didn't really accept them many
Speaker 1: kids right out of school. They wanted to get some
Speaker 1: few years of work experience first. So I didn't really
Speaker 1: have a high expectation that I get in, but figured
Speaker 1: if I did, that at least would be an option
Speaker 1: I would consider. Meanwhile, I was interviewing for a bunch
Speaker 1: of other jobs and New York and other member of
Speaker 1: interview and HBO and some ad agencies and so forth,
Speaker 1: just trying to figure out what what I was gonna
Speaker 1: do at the time, I really knew I wanted to
Speaker 1: the old a company like an A O L. I
Speaker 1: knew it even back in when I was graduating that
Speaker 1: I believed the idea of the Internet was a big
Speaker 1: idea and I wanted to figure out some way to
Speaker 1: pursue that path. But when I was graduating, since the
Speaker 1: Internet was still mostly a research technology, it was still
Speaker 1: limited to government agencies and educational institutions. Consumers and businesses
Speaker 1: weren't able to use the Internet when I was graduating
Speaker 1: from college. Uh, there really wasn't an Internet industry. I could,
Speaker 1: you know, inter act in the Internet company I could
Speaker 1: could join. And back then when I was graduate college,
Speaker 1: venture capitalists, you know, weren't backing twenty one year old
Speaker 1: kids coming out of college. They were they were They were,
Speaker 1: you know, looking for more seasoned people with more experience.
Speaker 1: And so that's what led me on the path. We're
Speaker 1: working for some big companies, Procter and gam once Cincinnati.
Speaker 1: Well before you before you get there, so you talk
Speaker 1: about reading the Toffler book and having an inspiration. Did
Speaker 1: you learn anything about that in college or was it
Speaker 1: all self education? And did anything you learned in college
Speaker 1: help you as you went down the line or it
Speaker 1: was just a contained experience. Uh, well, it's it's it's
Speaker 1: a complicated question. Break into a couple of parts. Uh.
Speaker 1: The interest in essence the Internet technology, uh was inspired
Speaker 1: in part by the top of the book. But even
Speaker 1: before I read the top of the book, I was
Speaker 1: spending a lot of time doing my own research in
Speaker 1: the college library, reading all kinds of newspapers magazines, because
Speaker 1: back then, in the late seventies, there was some of
Speaker 1: these new technologies that were being trialed, things like mini
Speaker 1: tel in France and Prestel in the UK, and concept
Speaker 1: like video text and teletext and interactive TV warrant amics
Speaker 1: at a system called cube and being tested in since
Speaker 1: saniel Hio and Columbus, Ohio. So there are a bunch
Speaker 1: of things that were bubbling even the late seventies that
Speaker 1: I found really intriguing that in retrospect were kind of
Speaker 1: a really early days first experiments and what then ultimately
Speaker 1: led to, you know, the Internet. Uh. So I was
Speaker 1: learning a lot, but it was not necessarily classes I
Speaker 1: was taking that we have related to to you know,
Speaker 1: things that I was focused on then. But I would say,
Speaker 1: and this is true, I think for any uh, you know,
Speaker 1: kind of liberal arts education. I think the value, at
Speaker 1: least the value to me was learning a little bit
Speaker 1: about a lot of things, which gives you a broader
Speaker 1: perspective on life and broader perspective on the world. Learning
Speaker 1: how to aggregate and synthesize information and come up with conclusions,
Speaker 1: points of view, learn how to communicate you know, those conclusions.
Speaker 1: So I think there are a bunch of things that
Speaker 1: that did end up serving me well, even if any
Speaker 1: the specific course material, uh you know one specific things
Speaker 1: you could connect to what I ended up you know,
Speaker 1: later doing. So I'm actually bullish on the value of
Speaker 1: a liberal arts education, uh, while at the same time
Speaker 1: recognizing that that entrepreneurs will end up being passionate about
Speaker 1: a particular idea and likely will pursue that idea in
Speaker 1: a lot of different ways, and and many of them
Speaker 1: are uncoupled from what they might learn and while they're
Speaker 1: in in college. Although it might also would say it's
Speaker 1: changed quite a bit. I have visited, uh dozens of
Speaker 1: dozens universities over the years, including related to our work
Speaker 1: with rise Rest, and even saw him in the last
Speaker 1: month since the Rise of Rest book came out and
Speaker 1: it's amazing to see how many universities really are leading
Speaker 1: into entrepreneurship. And in Phoenix a couple of weeks ago
Speaker 1: is at Arizona State University. They have a whole dorm
Speaker 1: focused on entrepreneurship and makers and builders and so forth.
Speaker 1: So there's a lot more happening on campuses now than
Speaker 1: we're when I was there. You were there in the
Speaker 1: in the in the in the seventies. Uh So I'd say,
Speaker 1: you know that I did learn a lot kind of
Speaker 1: self taught around the The ideas of that ultimately for
Speaker 1: me became you know, kind of a o L and
Speaker 1: more broadly, you know, the Internet. And do think looking
Speaker 1: back that I've benefited, you know, considerably from that that
Speaker 1: kind of broad liberal arts education. So you got rejected
Speaker 1: by PNG, but you showed up then they gave you
Speaker 1: a job. Yeah, I'm this line of questioning, Bob. It's
Speaker 1: really kind of it's gonna kind of making a little
Speaker 1: PTSD for mere. Yes. Yes, every every school, in business
Speaker 1: school I applied to reject the man. Yes, the companies
Speaker 1: I really wanted to work for, not just P and G,
Speaker 1: but HBO and many others rejected me. So thank you
Speaker 1: for pointing out that out no, no, no, when I
Speaker 1: kept fighting and I kept fighting, and and I think
Speaker 1: the second part of that PNGNG story, as you know,
Speaker 1: was they did reject me. I just didn't did an
Speaker 1: interview on campus, and you know, they just you know,
Speaker 1: weren't interested in a follow on interview. But I really
Speaker 1: was interested in P ANDNG. There's something about the company
Speaker 1: and their training program for marketing people that I thought
Speaker 1: would be really good fit for me. So it basically
Speaker 1: appealed their decision. That wrote to Lennon said I'm sorry.
Speaker 1: I don't remember exactly what it was, but something like,
Speaker 1: I'm sorry that interview that goes so well. I really,
Speaker 1: you know, I think P ANDG would be a good fit.
Speaker 1: Here's two or three reasons why I think it would
Speaker 1: be a good fit. Please give me another chance. I'd
Speaker 1: like to have, you know, a second bite at the
Speaker 1: Apple if you will. Um And so they said, okay, well,
Speaker 1: if you'll get to New York City, you know, in
Speaker 1: a couple of weeks, um on, thus in such a
Speaker 1: day that we will have somebody who will meet you.
Speaker 1: And I think they're just kind of testing me. When
Speaker 1: I was a little bit of a hassle. I had
Speaker 1: to you know, kind of take the you know, the
Speaker 1: bus to the city and figure out some way to
Speaker 1: kind of get there. And with the middle of winner,
Speaker 1: so it wasn't exactly the easiest time to be getting around.
Speaker 1: And the fact I just showed up, I think I
Speaker 1: think I passed the persistence test and the passion test,
Speaker 1: and that was a better interview. So ultimately I did
Speaker 1: end up, you know, getting that job and moving to
Speaker 1: to Cincinnati. Well, you're talking about the PTSD. I guess
Speaker 1: the reason I'm asking these questions is not to point
Speaker 1: out the bumps in the road, but to ask how
Speaker 1: did you maintain your optimism? Well, I understand that, and
Speaker 1: I appreciate that. The the um I don't know this
Speaker 1: is this is part of uh, the entrepreneural journey. You know,
Speaker 1: you're gonna you're gonna have a lot of setbacks. Even
Speaker 1: the early days of A Oh well, we struggle a
Speaker 1: couple of times. We had to go through layoffs. Many
Speaker 1: people thought we wouldn't survive, you know, the company would
Speaker 1: just kind of hit the wall. Uh, we had many,
Speaker 1: you know, many challenges there. Remember one point we had
Speaker 1: a deal with Apple worked on for months and months
Speaker 1: and months and the licensed their brand name is create
Speaker 1: something called Apple and Personal Edition, and they decided to
Speaker 1: not long after we launched, to cancel it and and
Speaker 1: uh tear up our contract. And a lot of people
Speaker 1: then thought, you know, company would would hit the wall.
Speaker 1: We had all kinds of you know, challenges, and that
Speaker 1: that is the entrepreneur journey. There's very few overnight successes.
Speaker 1: Most of them are kind of a slog and eventually,
Speaker 1: you know, things kind of you know, if you stick
Speaker 1: with it, things you know kind of turned out. So
Speaker 1: I think that gave me that if you believe it's
Speaker 1: a you know, idea worth fighting for, a business worth building,
Speaker 1: that that you know that you keep keep fighting, you
Speaker 1: keep persisting. And I think some of that may have
Speaker 1: been you know, kind of some of those early days,
Speaker 1: maybe even some of those rejections as you noticed and
Speaker 1: noted and you know, continuing to fight to get what
Speaker 1: I thought was was at least for me, the right,
Speaker 1: right next step. I think you just learned the importance
Speaker 1: of persistence and keep fighting. Even frankly, when I started
Speaker 1: the the the A O. L and we you know,
Speaker 1: struggle to raise capital in those early days, and most
Speaker 1: people did not believe the Internet would ever be a
Speaker 1: mainstream phenomenon. It seems crazy now, but most people would
Speaker 1: say things to me like, what you really think people
Speaker 1: are going to buy something called a personal computer and
Speaker 1: and then sit down in front of a keyboard to
Speaker 1: type a message to somebody when they can just pick
Speaker 1: up the phone and call somebody. That feels like a
Speaker 1: crazy idea. Said no, I actually do think that that's
Speaker 1: gonna happen. Uh, and others. You know, a few years later,
Speaker 1: when things around home shopping and electronic commerce started developing,
Speaker 1: people said, well, do you really think that average people,
Speaker 1: like normal people, would be comfortable buying a product from
Speaker 1: somebody they don't even know, and and you actually think
Speaker 1: they'll be comfortable with this internet thing to type their
Speaker 1: credit card in that somebody might some hacker might steal.
Speaker 1: I said, yeah, oh yeah, I think I think people
Speaker 1: will be interested in that. So there was a lot
Speaker 1: of skepticism, and it really was a decade of struggle
Speaker 1: before finally, you know, we we broke through. And when
Speaker 1: we first started Rise the Rest ten years ago, it
Speaker 1: was a little bit dejabu all over again. When I
Speaker 1: started talking about the idea of backing entrepreneurs all around
Speaker 1: the country. What would happen with these rising cities, How
Speaker 1: we could slow the branger into people leaving boomerang people back,
Speaker 1: more capital and more people, more places, you know, things
Speaker 1: we talked about earlier. Most people were skeptical. Most people
Speaker 1: kind of didn't necessary roll their eyes, but they thought
Speaker 1: it was a mission that likely was gonna end up unsuccessful.
Speaker 1: And you know, it's been great to see the progress
Speaker 1: we made in the last decade, and particularly the momentum
Speaker 1: in the last couple of years, which ultimately loved me
Speaker 1: to write the books. To me, it is around persistence,
Speaker 1: But I don't think it's unique to me. Most of
Speaker 1: the entrepreneurs I've known who ended up being successful had
Speaker 1: to deal with, you know, setbacks, but they just keep fighting. Okay,
Speaker 1: let's bring it up to today. Since you've been a
Speaker 1: seer technologically in the past, what is your view on
Speaker 1: the metaverse and Facebook's pivot to the metaverse. Well, I'm
Speaker 1: a believer in the metaverse. We actually launched one of
Speaker 1: the first metaverse products in the late nineteen eighties. We
Speaker 1: did a partnership with Lucasfilm to create essentially a virtual
Speaker 1: world with avatars. This was very rudimentary technology actually was
Speaker 1: a common or sixty four computer with a three bod modem,
Speaker 1: but essentially was in the early version of the metaverse.
Speaker 1: Since I've always believed in that idea with gaming. I
Speaker 1: think some of the more recent applications in terms of
Speaker 1: kind of business use terms of creating much more immersive
Speaker 1: experiences for people, including things like video conferencing really feels
Speaker 1: like you're you know, sitting with somebody and it's really
Speaker 1: like a real room. All those things I think hold
Speaker 1: a lot of potential, but these things tend to take
Speaker 1: a while before they really are ready for prime time.
Speaker 1: And I think what Facebook now you know, meta is
Speaker 1: struggling with is have been making very very significant investments,
Speaker 1: you know, ten billion plus a year, and these metaverse
Speaker 1: technologies they're a little slower to to take off than
Speaker 1: they thought, while they're seeing some challenges in their their
Speaker 1: core business and so they likely will you know, kind
Speaker 1: of you know, pull back at least a little bit
Speaker 1: on some of their their their efforts. So they probably
Speaker 1: are right in the long run, that's an important new platform,
Speaker 1: but they might have gotten a little ahead themselves in
Speaker 1: terms of the pace at which they were pursuing that
Speaker 1: the timing is certainly key. We certainly saw that with
Speaker 1: music being the canary in the coal mine for digital disruption,
Speaker 1: as I say, twenty odd years ago. But if we
Speaker 1: look forward within our lifetimes, will the public at large
Speaker 1: never participate in the metaverse? Or is augmented reality more
Speaker 1: the thing? What's your prediction there? Well, I think I
Speaker 1: think metaverse is one of these concepts like kind of
Speaker 1: like Web three, which is a basket of ideas and
Speaker 1: so you have to kind of parse it a little bit.
Speaker 1: I think I think, uh, augmented reality, virtual reality are
Speaker 1: are parts of the you know, the technology suite that
Speaker 1: make things like a metaverse possible and other things like that,
Speaker 1: and I do think they'll get broader adoption. Additional running
Speaker 1: a revolution the investment company, I'm currently the chair of
Speaker 1: the Smithsonian Institution. We have the twenty museums in Washington,
Speaker 1: d C. And research operations around the around the world,
Speaker 1: and a big focus there is how do you to
Speaker 1: not just assume people are going to come to d
Speaker 1: C to visit our physical museums, how do we take
Speaker 1: the Smithsonian to them? How do we take the Smithsonian
Speaker 1: to every home in every classroom, and obviously digital technologies
Speaker 1: are key part of that, and some of things including
Speaker 1: a virtual reality, augmented reality, or some of the things
Speaker 1: that we're testing out because it is a way to
Speaker 1: expand our kind of educational mandate. And I do think
Speaker 1: these technologies will get you know, get get broader adoption.
Speaker 1: But you say, sometimes there are these things are just
Speaker 1: take a little while. In fact, it reminds me the
Speaker 1: first time I think we met in person was twenty
Speaker 1: years ago and backstage at an Eagles concert not long
Speaker 1: after a Will merge with Time Warner uh And and
Speaker 1: even then when we did the merger, which was in
Speaker 1: two thousands of twenty two years ago, we talked about
Speaker 1: at the time what was going to happen with streaming
Speaker 1: technologies for for movies and and television. We talked about
Speaker 1: what was gonna happen with music being digitized, things like Napster.
Speaker 1: We're just bumbling bubbling at the time, but there's a
Speaker 1: lot of nervousness in the in the music industry about it.
Speaker 1: The things that we we identified twenty years ago is
Speaker 1: being likely to happen, uh and likely happened soon did happen,
Speaker 1: but they took longer to happen and salally that company
Speaker 1: well in time, Warner together weren't able to capitalize on
Speaker 1: some of those opportunities. In retrospect, you know, we really
Speaker 1: should have lad the charge, not not the Apple with
Speaker 1: the iPod or or Spotify or or or Netflix or
Speaker 1: other things that really were the ultimate successors. It was
Speaker 1: clear even twenty years ago what was going to happen.
Speaker 1: We just didn't get organized to be able to pursue
Speaker 1: those opportunities. In a way, I wish we had some
Speaker 1: of them. Sometimes it's timing sometimes to just execution, not
Speaker 1: having the right people focused on the right priorities and
Speaker 1: working together in the right right kind of ways. And
Speaker 1: so that was one of the lessons from that that merger.
Speaker 1: You know, it could have been this dominant company ended
Speaker 1: up kind of shooting itself in the foot. Okay, let's
Speaker 1: go back to a o L. So the stories your
Speaker 1: brother talks about, an opportunity, you get a job that
Speaker 1: ultimately morph into a O L. What is the special
Speaker 1: sauce that you bring? What is your skill that allows
Speaker 1: you to be successful and allows the companies you're working
Speaker 1: with to be successful? No, it it's hard to say.
Speaker 1: I think it's a it's probably like most people, mixed
Speaker 1: of things. I think I do have a certain sense
Speaker 1: of the future, certain sense of what's possible. I think
Speaker 1: I think that that that's helpful. I do bring a
Speaker 1: certain passion and persistence to it. We talked about, you know,
Speaker 1: some of that before. I think that's that's helpful. I
Speaker 1: think I do bring up particular, uh, particularly early day
Speaker 1: to day well in particular skill set around marketing, you know,
Speaker 1: and some of the things that we did to really
Speaker 1: build the able brand and even distribute these free trial
Speaker 1: disc to the world to get people that you know,
Speaker 1: try out some of those marketing things. I think we're
Speaker 1: also kind of in my in my wheelhouse and thinking
Speaker 1: pretty good at building teams and getting people to work
Speaker 1: together on a on a shared mission and make it
Speaker 1: something that is aspirational, kind of a battle worth fighting.
Speaker 1: I think those are some of the dynamics. But I
Speaker 1: also would point out that none of the things I've
Speaker 1: been able to do I could have done on my own.
Speaker 1: It really is about the the team and even those
Speaker 1: early A O L days. I brought some of that
Speaker 1: marketing sense to the other co founders. Mark Sarah brought
Speaker 1: the technology sense. Jim Kimsey brought them more of the
Speaker 1: business financial sense, and you know, none of the three
Speaker 1: of us could have done that without the other the
Speaker 1: other two. So it's just always a reminder to me
Speaker 1: about this notion of off. We talked earlier about entrepreneurship
Speaker 1: really being a team sport. I have certain things I
Speaker 1: can contribute, but there are many other things I'm not
Speaker 1: good at and need to make sure the overall team
Speaker 1: has the right mix of skills and a shared sense
Speaker 1: of purpose and passion. Okay, I remember getting a free
Speaker 1: subscription to a O L via Warner Brothers Records. They
Speaker 1: had I think they had like ten free subscriptions. Had
Speaker 1: to give me one in nine two, and then I
Speaker 1: started to hear from college students based on an article
Speaker 1: I wrote in the Tower Records magazine saying, you know,
Speaker 1: can I connect with you via the Internet? But I
Speaker 1: really did not become Although I had a modem bud
Speaker 1: at the time and I was connecting, it wasn't really
Speaker 1: till the summer of ninety five that I became to
Speaker 1: say it was an active user. Was ultimately a gross understatement.
Speaker 1: When did you know on the inside that you reached
Speaker 1: a turning point the either gaining traction or traction was imminent. Well,
Speaker 1: it was about that time. We started in eighty five,
Speaker 1: but as I said before, it was really ten years
Speaker 1: of of slog to stay alive, tried different things to
Speaker 1: ultimately get successful. Uh. You know, we did go public
Speaker 1: and was the first Internet company to go public, so
Speaker 1: that was a little bit of a rite of passage.
Speaker 1: But even then there was a considerable skepticism in our
Speaker 1: I p O. We raised ten million dollars and the
Speaker 1: value of AO all that day was seventy million dollars,
Speaker 1: and nobody knew or cared about this little company. A well,
Speaker 1: that was you know, going public. It was kind of
Speaker 1: a you know, a non event um and for a
Speaker 1: few more years it was still the struggle. Most people,
Speaker 1: you know, weren't really believers in the idea of the Internet.
Speaker 1: But it was about where interest started accelerating and people
Speaker 1: started hearing about this thing called the Worldwide Web. People
Speaker 1: started hearing about some of the services available on this
Speaker 1: Internet thingy and and started wanting to get online. Thankfully
Speaker 1: at that point in time, because we've been at it
Speaker 1: for so long, you know, I always kind of the
Speaker 1: right place at the right time, and that really drove
Speaker 1: our our growth in the late nineties UH and and
Speaker 1: uh our peak about half of all the Internet traffic
Speaker 1: United States went through a well. So it was to
Speaker 1: me an example of believing early in the idea, sticking
Speaker 1: with it even though it took a decade and there
Speaker 1: were a bunch of near death experiences there. Even my
Speaker 1: parents one point called and said, like, Steve, it's like
Speaker 1: it's not working. It's you know, maybe it's time to like,
Speaker 1: you know, give it up and get a real job.
Speaker 1: And no, I think, I think, I think it will work,
Speaker 1: and give me think think I'm gonna stick with it,
Speaker 1: and eventually eventually we we we broke through. So it's
Speaker 1: a to me, it's sort of revolution sometimes happened in
Speaker 1: evolutionary ways and you have to you know, kind of
Speaker 1: take the long view and and kind of be able
Speaker 1: to you know, kind of live to fight another day.
Speaker 1: But to answer your question, it was sort of inn
Speaker 1: were things really accelerated. I also remember I think it
Speaker 1: was probably seven we moved to you know, from charging
Speaker 1: per hour to unlimited use. Not surprisingly, you should skyrocketed
Speaker 1: and our systems went down. There was so much demand
Speaker 1: that basically systems crashed. I it's for twenty three hours,
Speaker 1: AO was was inaccessible, which obviously was a problem because
Speaker 1: we had tried to get people to rely on us
Speaker 1: and we were not not providing the service they understandably expected.
Speaker 1: So in that sense, it was kind of mortifying, but
Speaker 1: also was it was It was in one way gratifying
Speaker 1: because it had gone from this thing that nobody cared
Speaker 1: about too suddenly it was this national story. It was
Speaker 1: lead story on the TV network, the lead headline most
Speaker 1: of the newspapers A well down and even a few
Speaker 1: years before, nobody even cared about it all. I who
Speaker 1: cares whether ails up or down? That's not that's not
Speaker 1: a story. So that to me was at one point
Speaker 1: where it felt like the Internet had arrived, Ail had arrived,
Speaker 1: had gone from being ignored to being essential. Okay, meanwhile,
Speaker 1: you get married and start a family, and frequently being
Speaker 1: an entrepreneur a musician, which is almost like being an
Speaker 1: entrepreneur requires all your time. Income is low. Uh did
Speaker 1: you hesitate saying, well, it's like telling your parents calling
Speaker 1: you know the job or joys feel that maybe I'll
Speaker 1: land on my feet. What were your thoughts going through
Speaker 1: your head then? No, I think there were there are
Speaker 1: some tough moments. Uh. It was it was still in
Speaker 1: my twenties that we're when we got started at mid twenties,
Speaker 1: and so when we went public, uh, I was early thirties.
Speaker 1: So this was kind of the real difficult years. We're
Speaker 1: kind of late like twenties, and and I think there
Speaker 1: were some moments where I wondered if I should do
Speaker 1: something else, but I really believed in the idea, and
Speaker 1: thankfully he was able to kind of you know, kind
Speaker 1: of get get by and kind of, as I said before,
Speaker 1: kind of lived to live to fight another day. Again.
Speaker 1: That's not you know, just my story. It's pretty common
Speaker 1: entrepreneur stories, you said, pretty common story, and other industries,
Speaker 1: including music, where people are you know, struggling For a
Speaker 1: while Springsteen was playing a whole lot of clubs, did
Speaker 1: nobody cared about until finally he was able to to
Speaker 1: break through. And I think it's a little bit of
Speaker 1: a test. You learned some things about yourself thing that process.
Speaker 1: You also have some experiences that probably do make you
Speaker 1: better and stronger ultimately. But you know, there was some
Speaker 1: difficult periods of time, but thankfully I I stuck with it.
Speaker 1: And eventually, even though sometimes it felt like the light
Speaker 1: at the end of the tunnel was the light was
Speaker 1: far away and flickering, you know, I kind of stay
Speaker 1: with it, and eventually the tunnel got a little shorter
Speaker 1: and the light got a little brighter. Okay, so a
Speaker 1: O L is marching along. In tech, you have to
Speaker 1: be ahead of the game or you die. Whereas like
Speaker 1: other industries talking about Internet, in intellectual property industries, they
Speaker 1: have a catalog, They have a back list which keeps
Speaker 1: them alive. So alll starts to roll. To what degree
Speaker 1: were you focused on where we're going next? I was
Speaker 1: mostly focused on where we go next, and then secondarily
Speaker 1: focused on continuing to build a team to scale. Always
Speaker 1: started with a couple of dozen people. By the time
Speaker 1: we went public, it was less than two hundred people.
Speaker 1: Uh six seven years later at ten thou people. So
Speaker 1: it really it really scaled up pretty pretty dramatically. So
Speaker 1: I had to, like many entrepreneurs, you know, learned to
Speaker 1: to not do certain things I had been doing and
Speaker 1: build a team that I could empower and trust to
Speaker 1: do them because I needed to focus on some things
Speaker 1: that I could perhaps uniquely do, and some of it
Speaker 1: was trying to understand what was next and positioning a
Speaker 1: company for it. So was you know, building the team.
Speaker 1: Some of it also was being kind of a spokesman
Speaker 1: evangelist for the medium. I had to do a lot
Speaker 1: of things in the particularly the late nineties to educate
Speaker 1: people around about the Internet, the press, you know, Congress,
Speaker 1: other other other other folks, to other people in other countries.
Speaker 1: Even that, because all was visible, I became kind of
Speaker 1: a a spokesperson, not just very well but in many
Speaker 1: ways for the for the industry. So I had to
Speaker 1: focus on those things. I had to spend less time
Speaker 1: on some of the things I had done, including some
Speaker 1: of the marketing things, or some of the product things,
Speaker 1: or some of the technology things that I spent more
Speaker 1: time on in the early early years. Okay, so from
Speaker 1: my perspective, once a again I had a free subscription
Speaker 1: when you charged by the hour, never mind a free
Speaker 1: subscription through the nineties I was living on the service
Speaker 1: was a big education. I remember vividly in the summer
Speaker 1: of nine six you could launch a browser on AOL.
Speaker 1: But for me, the real breakthrough moment was in the
Speaker 1: summer of two thousand. I went to visit my sister
Speaker 1: in Minneapolis where she had a high speed connection, which
Speaker 1: of course led you to Napster. Now, in this particular case,
Speaker 1: I maintained, I don't think we had to pay for
Speaker 1: a while my A O L and the high speed connection,
Speaker 1: I got quite a way right away. But for me,
Speaker 1: what killed A O L or put a dent in
Speaker 1: it was more just the fact there was a high
Speaker 1: speed connection sold by the cable company or a third party,
Speaker 1: and that was twenty dollars right there, and people didn't
Speaker 1: want to spend multiple as opposed to it being the
Speaker 1: Web that put a dent in AO. Well, what do
Speaker 1: you think from your inside view, Yeah, I think that
Speaker 1: that's fair. The way AOL when it first launched, it
Speaker 1: as other competitors at the time, was separated from the
Speaker 1: Internet because at the time and when we started, it's
Speaker 1: hard for people to believe us. But it's true it
Speaker 1: was actually illegal for consumers or businesses to be on
Speaker 1: the Internet. A few years later, Congress passed some legislation
Speaker 1: to commercialize the Internet, but the early years it was separate.
Speaker 1: When the Internet got commercialized, that actually accelerated A A
Speaker 1: Well's growth because people wanted to be on the internet.
Speaker 1: We integrated a very fast web browsers, so actually you
Speaker 1: could get the websites through a well faster particularly with slow,
Speaker 1: slow modems, and you could with most of the other
Speaker 1: Internet service providers. And in addition to that, we provided
Speaker 1: a whole suite of services that were exclusive to well
Speaker 1: people connection and a lot of exclusive content and and
Speaker 1: other services, so sort of the Internet and a whole
Speaker 1: lot more for about the same price as the Internet only,
Speaker 1: and that's really what drove our our hyper growth in
Speaker 1: the late nine nineties. You're right, the transition to broadband
Speaker 1: was was more challenging. We actually argued in Congress to
Speaker 1: pass legislation to open up the cable broadband networks so
Speaker 1: it would work like the dial up narrowband networks. The
Speaker 1: phone companies were required to allow other people to operate
Speaker 1: on their their networks. The cable companies were not required
Speaker 1: to do that. Uh, And that effort did not succeed,
Speaker 1: and so essentially the broadband networks remained closed as opposed
Speaker 1: to being opened, which was one of the reasons that
Speaker 1: led to our merger with Time Warner, because the part
Speaker 1: of the reason to do that was Time Warner at
Speaker 1: the time had Time Warner Cable, which was the largest
Speaker 1: cable system with the largest broadband footprints, So we knew
Speaker 1: the market was moving to broadband. We couldn't on our
Speaker 1: own get there, and so by merging with Time Warner
Speaker 1: would have a clearer path the broadband as well as
Speaker 1: obviously all the other businesses that were part of Time Warner,
Speaker 1: including some of the media business, Warner Music, Warner Brothers,
Speaker 1: you know, CNN, HBO, you know, Time Ink, you know,
Speaker 1: many many other things that were part of that. So
Speaker 1: it was sort of the obvious thing to do in
Speaker 1: terms of ensuring our path the broadband, as well as
Speaker 1: having a broad suite of really great brands that would
Speaker 1: be more valuable in a in a digital world. So
Speaker 1: that really was the motivator doing. Unfortunately, once we did merge,
Speaker 1: uh that some of the synergies that struck me as obvious,
Speaker 1: we're not really pursued integrating a Well and Time Warner Cable.
Speaker 1: So it was one bundled offering, which is what you
Speaker 1: mentioned before, never happened, ended up really competing with each
Speaker 1: other as opposed to benefiting from each other, and ultimately
Speaker 1: that led to you know, not capitalizing on some of
Speaker 1: these opportunities, which which led to the a well going
Speaker 1: from the leader of the pact of being kind of
Speaker 1: irrelevant now, which is which is sad to see and
Speaker 1: it's sad to say, but that that that's the reality.
Speaker 1: I think the takeaway from me goes back to some
Speaker 1: of the things we talked about before getting the you know,
Speaker 1: the vision right is helpful and important, but that's really
Speaker 1: just the starting point. If you look at the initial
Speaker 1: press release we wrote when we merged ale on Time
Speaker 1: war two years ago, it was largely accurate and predicting
Speaker 1: what was going to happen over the next ten or
Speaker 1: twenty years. But our inability to organize the company to
Speaker 1: capitalize on those opportunities and some of the friction between
Speaker 1: different divisions basically hobbled our ability to execute against that
Speaker 1: vision and ultimately lead to you know, the company being
Speaker 1: broken up. So at what point, if the merger happened
Speaker 1: in two thousand, at what point did you have the
Speaker 1: idea it was Time Warner always the target or were
Speaker 1: there other companies in the mix. There are other companies
Speaker 1: in the mix. In in nineteen you know, the when
Speaker 1: the internet really was you know, growing dramatically in popular
Speaker 1: already and a Well's growth rate was accelerating dramatically. Also,
Speaker 1: our stock market valuation accelerated dramatically. We went from mentioned
Speaker 1: we went public in seventy million by late ninete it
Speaker 1: was on sixty billion dollars. It was actually the best
Speaker 1: performing stock of the decades, something like eleven thousand percent
Speaker 1: increase from the time we went public. And so we
Speaker 1: did see the value of having more diversified mix of businesses.
Speaker 1: So we did want to use our our stock our currency,
Speaker 1: if you will, to merge with other companies. We considered
Speaker 1: a lot of different options, including some communications companies that
Speaker 1: you know, discussions with A T and T about merging
Speaker 1: for example. We also talked to a number of of
Speaker 1: internet companies, email, electronic arts, you know, others around merging.
Speaker 1: But but we always kept their eye on the prize,
Speaker 1: which we did believe was time warn't for the reasons
Speaker 1: I said before. It was unique in being able to
Speaker 1: you know, provide what at the time at least I
Speaker 1: thought was uh path the broadband that we couldn't get
Speaker 1: on our own and couldn't get with any other other company,
Speaker 1: which is why I pursued that in particular, and indeed
Speaker 1: the first conversation I had with Jerry Levine, who was,
Speaker 1: as you know, the CEO of Time Warner at the time,
Speaker 1: proposing the idea of merging our companies. Within the first
Speaker 1: minute of explaining why I thought we should merge our companies,
Speaker 1: I said, and if we can do this, I will
Speaker 1: step aside as CEO and let you run the combined company.
Speaker 1: Because I knew it would be hard to get a
Speaker 1: deal with with Time Warner had done. Our value was
Speaker 1: quite a bit higher than their value, and they're all
Speaker 1: kinds of other issues that we're going to be complicating issues.
Speaker 1: But since was the only path to get it done
Speaker 1: was to basically propose that the Time Warner side essentially
Speaker 1: run the combined company. So that's why I did. And
Speaker 1: when we when we did close the merger, I did
Speaker 1: step aside as a CEO, even a well didn't no
Speaker 1: longer reported to me. I was chair of the board
Speaker 1: for a couple of years, and then uh, you know,
Speaker 1: on the board for another year or two, and finally
Speaker 1: decided it was time to move on. We just had
Speaker 1: a difference of opinion of what to do, and I
Speaker 1: think they were getting tired of me saying let's go
Speaker 1: left when they wanted to go right, and I was
Speaker 1: tired as well, so it was time to to kind
Speaker 1: of part ways. And and even though it's obviously a
Speaker 1: big disappointment, and that ultimately led me on this path
Speaker 1: that had been on for most of the past two decades,
Speaker 1: instead of starting in their company, starting revolution a company
Speaker 1: to invest in many entrepreneurs with a particular bias, as
Speaker 1: we've discussed around investing in entrepreneurs outside of the usual
Speaker 1: hubs like like Silicon Valley. So the legend is that
Speaker 1: ultimately the time Warner side of the company became resistant
Speaker 1: to the A O L people in the A Well
Speaker 1: ideas set an accurate description, Yeah, I think that's accurate.
Speaker 1: I think in retrospect we could have handled it better.
Speaker 1: We probably were a little toned depth diplomatic as we
Speaker 1: could have been. There. There's definitely a sense that these,
Speaker 1: you know, new kids on the block that haven't been
Speaker 1: around long are coming and telling us you know what
Speaker 1: to do. And I'm sure there was more of that
Speaker 1: than I was even aware of, which was which was
Speaker 1: a mistake, But there also was a reluctance on the
Speaker 1: part of a lot of parts of the was then
Speaker 1: time Warner to really fully embrace the Internet, fully embraced
Speaker 1: the idea of digital convergence, fully embraced the reality. That
Speaker 1: also meant it would challenge some of the existing business models.
Speaker 1: You have to involve some of the interesting business models,
Speaker 1: and I think there was just a reluctance to do that,
Speaker 1: and in a sense that might take longer for some
Speaker 1: of those innovations to to happen. I again sort of
Speaker 1: remember a meeting probably at least twenty years ago with
Speaker 1: some of the folks UM on the Warner Music side
Speaker 1: and talking about was likely I thought it conda happen
Speaker 1: around streaming, and what likely also going to happen around um,
Speaker 1: you know, kind of how music companies might be structured,
Speaker 1: and over time maybe it's a little bit more like
Speaker 1: you know, venture capital, where they're investing in a new
Speaker 1: artist and and share in the upside across multiple, uh,
Speaker 1: you know, parts of the artist's career what then became
Speaker 1: known as three sixty deals. That seemed like it was
Speaker 1: a pretty obvious thing that was going to happen, but
Speaker 1: there was a lot of resistance to that because the time,
Speaker 1: as you know, the way that business was organized, as
Speaker 1: you know, the music companies just put out the music,
Speaker 1: and you know, somebody else did the concerts, and somebody
Speaker 1: else had the publishing, and somebody else did this, and
Speaker 1: somebody else did that, and having a more integrated view
Speaker 1: of it was just not something most people either believed
Speaker 1: in or just believed you practically they could get everybody
Speaker 1: organized and headed in that, you know, that direction. So
Speaker 1: again it goes back to I said earlier, it's sort
Speaker 1: of a lesson around you know, the idea is important,
Speaker 1: but ultimately it's putting that idea into action. Uh. And
Speaker 1: the fact that we had some of the right ideas
Speaker 1: around what was going to happen with broadband, I was
Speaker 1: going to happen with streaming, or what was going to
Speaker 1: happen with many many different things is sort of irrelevant
Speaker 1: because we weren't able to be the company that actually
Speaker 1: made that happen. And so that apply that lesson to
Speaker 1: the work we're doing now at Revolution, including Rise of
Speaker 1: the Rest. And part of the reason they even wrote
Speaker 1: the book on the Rise of the Rest is I
Speaker 1: really wanted to tell the stories of these these entrepreneurs,
Speaker 1: these companies that were doing amazing things that really inspired me.
Speaker 1: And and also surprised me in many ways, and I
Speaker 1: wanted to make sure that people understood what was happening
Speaker 1: with these with these companies, and particularly understood what was
Speaker 1: happening in these cities that we're kind of being renewed
Speaker 1: and revitalized because of the work of those entrepreneurs. So
Speaker 1: it goes back to this issue of of trying to
Speaker 1: make sure, you know, we don't just say we think
Speaker 1: the rest surprize we hit the road, whether it be
Speaker 1: bus tours or launching a fund or writing a book,
Speaker 1: to actually do everything we can to make sure the
Speaker 1: rest rise, to make sure we kind of level the
Speaker 1: playing field for entrepreneurs in America. So in business books
Speaker 1: and in media, the A O L Time and our
Speaker 1: merger is portrayed is the worst in history of business.
Speaker 1: To what degreed is that effect? And usually people writing
Speaker 1: that have no vision, no knowledge of the inside. Is
Speaker 1: that something that has emotionally hurt you? Is that something
Speaker 1: on your back or is that something those people just
Speaker 1: don't understand what's going on. And I've moved on well
Speaker 1: about that because you don't love the fact that it's
Speaker 1: it's you. It is the worst merger in history. I
Speaker 1: understand why it is. It was the largest merger in history,
Speaker 1: and it was the execution of it was flawed in
Speaker 1: the way as I mentioned, So I think it's fair
Speaker 1: to characterize it as that I of course have a
Speaker 1: slightly different view, maybe more than slightly different view of
Speaker 1: exactly what happened and why it happened. UH, and also
Speaker 1: have the view of the CEO a O Well, which
Speaker 1: might be different than the view of the CEO of
Speaker 1: Time Warner, because for for us and our shareholders in retrospect,
Speaker 1: turned out to be a good thing to do. But
Speaker 1: but certainly understand some of the the the dynamic that
Speaker 1: just in terms of the economics that I just did
Speaker 1: quickly you know, cover it. When when we did the
Speaker 1: you know, the merger, as I recall, the numbers were
Speaker 1: something like the combined company UH would do about forty
Speaker 1: billion of revenue and ten billion of profits something in
Speaker 1: those that magnitude. UH and UH A Well contributed about
Speaker 1: a billion of that ten billion of profit. But able
Speaker 1: shareholders ended up with fifty of the combined company. So
Speaker 1: for the able shareholders, it was a way not just
Speaker 1: to have this what we thought would be this great
Speaker 1: path to broadband, but also with more diversified mixt of businesses,
Speaker 1: and we concluded the better for the able shareholders instead
Speaker 1: of owning a well of this much larger, much much
Speaker 1: more profitable, much more diversified company. I get it that
Speaker 1: the people on the Time Warner side, you know, in retrospect,
Speaker 1: did not view it the same way. I understand why
Speaker 1: people were frustrated and when the stock market crashed after
Speaker 1: the merger, not just for our company, but from many
Speaker 1: other company's. Obviously a lot of people got hurt by that.
Speaker 1: I also understand that. But but do bring the lens
Speaker 1: of of you know what I was charged with doing
Speaker 1: a CEO? H Well, okay, Time Warner was ultimately destroyed
Speaker 1: as a company, broken up, pieces sold off. Presently, David
Speaker 1: Zaslav runs has all the content with Discovery with an
Speaker 1: amazing amount of debt, and keeps cutting costs and programs.
Speaker 1: Rupert Murdoch sold the Fox other than the channel and
Speaker 1: the uh TV stations, I believe, sold all the library
Speaker 1: and the production of Fox to Disney. What should these
Speaker 1: people be doing and what do you view the future
Speaker 1: of this big time entertainment going forward? I don't know.
Speaker 1: I think others have a more informed view I've been
Speaker 1: largely out of it for for two decades and focused
Speaker 1: on this, this next generation of entrepreneurs. I think some
Speaker 1: of the things that Disney is done recently are consistent
Speaker 1: with the kind of things I thought all time Warner
Speaker 1: could do in terms of really driving some of the
Speaker 1: streaming doesn't think we have done with Disney Plus in
Speaker 1: particular is really quite impressive and uh and and because
Speaker 1: they really got the whole company behind that initiative. And
Speaker 1: and so I think when companies really get organized and
Speaker 1: have strategic priorities and need strategic imperatives, and Disney basically said,
Speaker 1: we now recognize the future is is streaming. We need
Speaker 1: to control our destiny. We need to have more direct
Speaker 1: control of our customer and not just rely on Netflix
Speaker 1: or others is sort of intermediaries. They put kind of
Speaker 1: everything behind that, and that ultimately led to the success.
Speaker 1: I think that's hard for big companies to do, but
Speaker 1: that's what they need to do. One of the reasons
Speaker 1: I'm so excited about backing entrepreneurs across a variety of
Speaker 1: sectors is having lived that. I kind of know how
Speaker 1: the big companies, the big companies in the industries that
Speaker 1: are up for up for grabs. Now outside of the
Speaker 1: entertainment business, music business, that publishing businesses, that the digital
Speaker 1: businesses that were associated with Ale and Time Warner, but
Speaker 1: some of the things we've talked about before, like a
Speaker 1: healthcare industry or or other other industries, I understand kind
Speaker 1: of the plays that the big companies are going to run.
Speaker 1: And those plays are even clear when the economy is tougher,
Speaker 1: the markets are tougher, inflation is rising, what's gonna likely happen.
Speaker 1: Many of those companies will pull back on their long
Speaker 1: term innovation initiatives because they cost a lot of money
Speaker 1: and they have an uncertain future, which actually creas even
Speaker 1: more of an opening for the entrepreneurs. They're trying to
Speaker 1: challenge those incumbents and and bring on new ideas. And so,
Speaker 1: having lived through that watching little companies that were just
Speaker 1: around the fringes, when when we did the deal with
Speaker 1: the Able and Time Warner, I stepped aside companies like
Speaker 1: Google and Amazon. We actually had a deal with Google
Speaker 1: early on where we were able at five percent of
Speaker 1: the equity and Google because they wanted to help us
Speaker 1: use their search engine for our audience. You know, those
Speaker 1: companies have risen over the last in a year as well,
Speaker 1: uh well has has been in decline, and now are
Speaker 1: these new powerhouses. That's going to happen in industries all
Speaker 1: across the economy, and it's going to happen in cities
Speaker 1: all across you know, the country. And so that's really
Speaker 1: why the sort of some of the work I'm doing
Speaker 1: now around rise the rest and backing these entrepreneurs and
Speaker 1: supporting these cities and partly informed by that that experience
Speaker 1: and a belief that most of the innovation will come
Speaker 1: from uh, these these entrepreneurs with with with new ideas,
Speaker 1: new business models, new perspectives that can move more quickly
Speaker 1: and and uh try things in a more kind of
Speaker 1: agile kind of way than big companies that big companies generally,
Speaker 1: you know, play defense when young entrepreneur companies are are
Speaker 1: playing offense. You know, the big companies generally are are
Speaker 1: are just more short term oriented. You know, younger companies
Speaker 1: are kind of take the long term view. So I
Speaker 1: think it's very exciting time for innovation entrepreneurship in the country,
Speaker 1: and it's going to impact every aspect of our lives.
Speaker 1: You know, how we learn, how we eat, how do
Speaker 1: we stay healthy, how do we move around, how do
Speaker 1: we invest, etcetera. Uh, And you know, a lot of
Speaker 1: that innovation is going to come from this next generation
Speaker 1: of entrepreneurs and a lot of that innovation is going
Speaker 1: to happen and these dozens of rides the rest cities
Speaker 1: I write about in the book, and you know, Silicon
Speaker 1: Valley will still be strong, will still be the most
Speaker 1: innovative startup hub in the country, indeed probably in the world.
Speaker 1: But we hit peaks Anilicon Valley a few years ago,
Speaker 1: and the rise of the rest is accelerating. The pandemic
Speaker 1: has been a tipping point, and so I think people
Speaker 1: are should pay more attention to the people and places
Speaker 1: that have generally been left left out of the innovation discussion.
Speaker 1: I think that's where the action as, that's where the
Speaker 1: puck is going. Okay, so you spoke in both the
Speaker 1: book and earlier about three waves. Could briefly, could you
Speaker 1: delineate the first and second wave and expand upon the
Speaker 1: third wave where we are now? Well, the first wave
Speaker 1: of the Internet was goes back to some of the the
Speaker 1: things we talked about before with companies like A Well,
Speaker 1: but obviously there were many others. It was taking it
Speaker 1: what was just an idea and turning into a reality,
Speaker 1: building the automaps, building the servers, building the content, and
Speaker 1: other reasons that people should get online. Uh, And so
Speaker 1: that really was the eighties and nineties, and and you
Speaker 1: know that was really you know when the Internet when
Speaker 1: exactly what you said before sort of arrived. And you know,
Speaker 1: it took ten, fifteen, twenty years for you before it
Speaker 1: really kind of arrived, but eventually it did. That then
Speaker 1: set the stage for the second wave of the Internet.
Speaker 1: And because at that point the Internet was built and
Speaker 1: everybody was connected, you didn't have to focus so much
Speaker 1: on the building phase or the infrastructure phase. You could
Speaker 1: focus essentially focus on building on top of the Internet.
Speaker 1: And it's particularly building software and apps on top of
Speaker 1: the Internet. And a lot of the big innovations in
Speaker 1: the last couple of decades have basically been that you know, apps,
Speaker 1: whether it be you know, Facebook or Twitter or Google
Speaker 1: or other things. It's basically software writing on top of
Speaker 1: the Internet. And that's been super important obviously created some
Speaker 1: super valuable companies. The third wave of the Internet, which
Speaker 1: is the phase we're now in, is and we talked
Speaker 1: about some of this before is sort of when the
Speaker 1: Internet meets the real world, and that's when it really is,
Speaker 1: you know, disrupting some of the big industries like healthcare
Speaker 1: and the important aspects of our lives. And that's going
Speaker 1: to require, I believe, a different entrepreneurial playbook. It's not
Speaker 1: just about the software, not just about the apps, not
Speaker 1: just about trying to get the idea spread you know,
Speaker 1: you know, kind of you know, viral e and then
Speaker 1: figuring out ways to monetize it. It's going to require
Speaker 1: more systems level change to really change sectors like like healthcare,
Speaker 1: So partnerships will become more important, policy will become more important.
Speaker 1: These tend to be regulated sectors and entrepreneurs don't like
Speaker 1: dealing with regular but the reality they have to if
Speaker 1: they're going to innovate in this in this third wave. Uh.
Speaker 1: And it's also going to play to the rise of
Speaker 1: rest in place. It's gonna advantage the cities that have
Speaker 1: some of the domain expertise, send credibility, and in some
Speaker 1: of these sectors that are up for grabs. So I
Speaker 1: think even though the first wave was certainly exciting and
Speaker 1: taking the Internet from being an idea to being a reality,
Speaker 1: and the second wave also was very exciting because all
Speaker 1: the things that we've had been built on top of
Speaker 1: the Internet that we're particularly doing the pandemic, we're able
Speaker 1: to take advantage of in ways that seemed inconceivable just
Speaker 1: twenty years ago. I think the third wave, when it
Speaker 1: really is, you know, the Internet meeting the real world,
Speaker 1: is where the most interesting and most successful and most
Speaker 1: valuable companies will will be created, and it will have
Speaker 1: a very uh substantial impact in terms of of America's
Speaker 1: leadership in innovation entrepreneurship. And I hope, which is why
Speaker 1: we're working so hard on the Rise of Rest. I
Speaker 1: hope it will be a more inclusive approach to innovation
Speaker 1: entrepreneurship that does include more people, does include more places
Speaker 1: they are. More people can therefore be optimistic about the
Speaker 1: future as opposed to anxious about the future. We can
Speaker 1: maximize the shots on Goald max My is the ideas
Speaker 1: we try by backing more more entrepreneurs and in more
Speaker 1: cities around the country, and hopefully people reading the Rise
Speaker 1: of Rest book will see why I'm so enthusiastic about
Speaker 1: this and so optimistic about it. It's it's something that
Speaker 1: I've had the privilege of having a front row seat
Speaker 1: literally a bus in some cases over the last decade
Speaker 1: as he developed. And I'm excited about the rise of rest.
Speaker 1: I was in that those early days of the Internet
Speaker 1: when it I believe in the idea even when others didn't.
Speaker 1: To me, the rise of rest is sort of deja
Speaker 1: vu all over again. And sectors other than healthcare that
Speaker 1: are right for integration with the Internet or to be disrupted.
Speaker 1: I mention them basically, if you look at the most
Speaker 1: important aspects of your lives, they've changed a little bit,
Speaker 1: uh in in the last ten thirty years. They'll change
Speaker 1: a lot more in the next ten years. And that's
Speaker 1: this acceleration of digital technology, acceleration of the internet. Uh.
Speaker 1: And you know healthcare, for examples one six of the economy,
Speaker 1: it doesn't work all that well, you know, and there
Speaker 1: are ways to provide better care and better outcomes, greater
Speaker 1: convenience and lower costs that new uh. You know, people
Speaker 1: with new ideas. Many of those will come from young
Speaker 1: companies led by entrepreneurs, are gonna kind of you lead
Speaker 1: the charge on where you're reimagining our food systems, which
Speaker 1: generally are too industrial and not particularly healthy and companies
Speaker 1: that that were back there, like like a Sweet Green
Speaker 1: or and many others are really leading the charge. There's
Speaker 1: a lot of things happening around reimagining education, both the
Speaker 1: K twelve education as well as you know kind of
Speaker 1: colleges and universities, you know, lifelong learning. Digital technology will
Speaker 1: play a key role, you know kind of there. So
Speaker 1: it really is, you know, just all across the you know,
Speaker 1: the landscape in terms of really big industries that are
Speaker 1: likely to change a lot, and really important parts of
Speaker 1: our lives that are likely to change a lot. Yeah.
Speaker 1: That what I would encourage people to do, which again
Speaker 1: is probably reason I wrote the book, is don't you
Speaker 1: be a spectator watching this. If you have a particular
Speaker 1: passion or you have a particular insight, jump in, do
Speaker 1: something about it. And the great thing about what's happening
Speaker 1: now with the Rise to rest and goes back to
Speaker 1: what we said before, four hundred new venture firms in
Speaker 1: these rightsrous cities that didn't exist ten years ago. There
Speaker 1: are now existing backing companies in in you know, dozens
Speaker 1: and dozens and dozens and dozens of American cities that
Speaker 1: historically didn't have venture capital. You can now do that anywhere.
Speaker 1: You shouldn't feel like you're in Ohio or Wisconsin or
Speaker 1: Iowa or Tennessee or something. And so therefore you don't
Speaker 1: have the ability to participate in the start up sector,
Speaker 1: participate in the innovation economy. You're left out because you're
Speaker 1: not in Silicon Valley or some other players. No, you
Speaker 1: can be in the game. Uh, and you can do
Speaker 1: it now. Uh. You just have to get started, and
Speaker 1: you just have to say instead of just looking at
Speaker 1: the problem and wondering if somebody else is going to
Speaker 1: solve it, I'm gonna solve it. I'm going to do
Speaker 1: that by starting a company. I'm gonna do it now,
Speaker 1: and I'm gonna do it from wherever I am. Okay,
Speaker 1: just a couple more things then we'll go. Big point
Speaker 1: in the book is about immigration. The HB one visas.
Speaker 1: Certainly has been stories in the news about a lot
Speaker 1: of people foreign countries who would have stayed in the
Speaker 1: United States ended up going back greatly to India and
Speaker 1: starting the businesses there. Are we going to see a
Speaker 1: change in this what's going on? Yeah? We we we
Speaker 1: we must see it changes. I've been working on as
Speaker 1: sadly unsuccessfully for the last decade. Actually testified the Senate
Speaker 1: about nine years ago around immigration reform. And the reason
Speaker 1: is because the data is pretty clear that immigrants have
Speaker 1: played a central role in driving the American economy. About
Speaker 1: of the successful companies have been immigrants or children of immigrants,
Speaker 1: and part of what's made America so so, you know,
Speaker 1: so compelling as this pioneering spirit, this is being a
Speaker 1: magnet from talent all around the world wants to be
Speaker 1: part of the American story, wants to build the next
Speaker 1: chapter of the American story. But we have made it
Speaker 1: more difficult for people to come. We have made it
Speaker 1: more difficult for people who are here, perhaps at a university,
Speaker 1: to stay. And as a result, we were losing some
Speaker 1: of that that that talent ward to other other countries.
Speaker 1: And we need to we need to reverse it. It
Speaker 1: almost happened this past Sumber. Some legislation past Congress, any
Speaker 1: one bill called the Chips and Science Act, had some
Speaker 1: good things in and around you're reshoring some conductors and
Speaker 1: funding the development of war these regional hubs, you know,
Speaker 1: ties in with our rise of rest of work. But
Speaker 1: also there was a startup VISA provision that was at
Speaker 1: one point part of that when the final bill got done,
Speaker 1: it got kicked out, which is unfortunate. If if we
Speaker 1: fast forward, you know, a number of years in America
Speaker 1: ceases to be the leader of the pack, ceases to
Speaker 1: be the leading and common in the world, ceases to
Speaker 1: be the most innovative entreprene nation in the world. Uh,
Speaker 1: it's like very likely will be we got this wrong.
Speaker 1: We lost that that edge we had globally as this
Speaker 1: as this as magnet. So I'll continue to do whatever
Speaker 1: I can to try to, you know, support uh kind
Speaker 1: of reform around immigrations, so we can when this when
Speaker 1: this battle for particularly around some of the talent that
Speaker 1: you know likely could be the entrepreneurs of the future,
Speaker 1: building some of the companies of future and creating lots
Speaker 1: of jobs for for for Americans in the process. And
Speaker 1: we've covered a lot of the viewpoint of the entrepreneur
Speaker 1: that location is not that important now you can do
Speaker 1: it anywhere. But in conclusion, any other advice for entrepreneurs, Well,
Speaker 1: first of all, I recognize, uh that entrepreneurs are choosing
Speaker 1: a path that most people think as a risky path,
Speaker 1: and so it requires a certain boldness, a certain fearlessness
Speaker 1: to take that path. I think we should understand that
Speaker 1: and and respect that. We also should recognize that sometimes
Speaker 1: people who try things stumble the first time. You know,
Speaker 1: it is the first yet that doesn't work, uh, you know,
Speaker 1: but you kind of keep having to take shots. And
Speaker 1: Ruth was the home run king. He had more home
Speaker 1: runs anybody else. Guess what. He also was a strikeout king.
Speaker 1: He had more strikeouts than ab Els. If you're swinging
Speaker 1: for the fences, you're not gonna always get it. Sometimes
Speaker 1: you'll you'll end up with a strikeout. We also need
Speaker 1: to understand that. So if an entrepreneur try something and
Speaker 1: it doesn't work, that doesn't mean they're a failure. That
Speaker 1: just means that particular idea is a failure. So just
Speaker 1: getting more people to realize that the importance of it. Uh.
Speaker 1: And even though if you go back to what we
Speaker 1: were talking about just a bit ago, that America itself
Speaker 1: was a startup two fifty years ago, America was an idea.
Speaker 1: Most people around the world didn't think America would succeed,
Speaker 1: just as most people don't think startups will succeed. There's
Speaker 1: a lot of skepticism in the first couple of decades
Speaker 1: of that American story. Somehow we powered through, somehow we survived,
Speaker 1: and then we thrived and we went from this fledgling,
Speaker 1: you know, almost hit the wall startup nation to the
Speaker 1: leader of the free world. And so how do we
Speaker 1: keep leading? We can't do that unless we're leading around innovation.
Speaker 1: We're leaning in the future, we're trying new things, we're
Speaker 1: taking risk, and we need to celebrate that as a
Speaker 1: core part of the American story and celebrate the entrepreneurs
Speaker 1: out there. Perhaps I'm listening to this right now that
Speaker 1: are you know, taking that shot? Are the ones we're
Speaker 1: thinking about taking the shot? And maybe now is the
Speaker 1: time they'll step in into the game. So that again,
Speaker 1: that's my you know, my real passion here is making
Speaker 1: sure I can do what I can to make sure
Speaker 1: America continues to lead. America continues to be a magnet
Speaker 1: for talent, America continues to be this innovative, pioneering nation.
Speaker 1: But we do it in a more inclusive way that
Speaker 1: we do bring along more people, we do bring along
Speaker 1: more places, and we can inspire the next generation to
Speaker 1: start here, build here, scale here, create jobs here, drive
Speaker 1: economic growth here. So for those entrepreneurs out there, or
Speaker 1: those potential entrepreneurs out there. Thank you for taking the
Speaker 1: risk you're taking. Thank you for taking a shot. Keep
Speaker 1: fighting and hopefully ultimately you'll you'll be successful in that
Speaker 1: one and then strengthen your community, the community you care
Speaker 1: about by creating more jobs and opportunity in those communities,
Speaker 1: and collectively that can also strengthen our nation. Yeah, that's
Speaker 1: what I've been telling people for years now. There is
Speaker 1: no flyover country all in America. Obviously their pockets that
Speaker 1: don't have broadband, but essentially all of America has broadband.
Speaker 1: Everybody has hundreds of channels. Everybody is hip, everybody is informed.
Speaker 1: It's not like you're talking earlier. It takes a week
Speaker 1: to get the TV show in Hawaii. But I must
Speaker 1: admit your book really fleshes it out. It really talks
Speaker 1: about the different locations and what is happening, and it's
Speaker 1: eye opening, especially in an era where living costs may
Speaker 1: be much cheaper in between Boston, New York and Silicon Valley, California.
Speaker 1: In any event, Steve, I want to thank you so
Speaker 1: much for taking the time talking about your history and
Speaker 1: explaining your investment strategy across the country. So thanks again,
Speaker 1: Thanks Bob. Great to reconnect. Love your writings, love your podcast,
Speaker 1: keep it up. Thanks so much. Until next time, this
Speaker 1: is Bob less sex.