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tv   Communicators with Steve Case  CSPAN  July 24, 2017 2:22pm-2:52pm EDT

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enemy forces that were in the city. small units of marines and troopers were being ordered to attack positions that were held by overwhelmingly superior enemy forces and entrenched positions. sunday night at easter on c-span's q&a. >> steve case is the author of this book: the third wave of entrepreneurs vision of the future. mr. case, this is not the first book known as the third wave. >> i'm borrowed the title. it came out in 1980 and is a senior in college then and i read that book was completely mesmerized. he protected four decades ago that the technology revolution and what we now know as the internet. i knew that's what i wanted to do and it took me a few years to get into that world but i did and when i decided to write a
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book i borrow that title and thankfully he was still alive and provided a blurb to how to connect those dots. >> what are your three ways which work. >> i focus on the internet. the first wave of the internet was getting everyone connected, getting america online in the world online. we started aol back in 1985, so 32 years ago and only 3% of people were online and they were only online one hour a week. when we said we wanted to create this connect world you would be tough and it took us a decade. many companies were involved in that in the beginning of that, the first wave essentially no one knew about the internet or care about it but by the year 2000 everyone is connected and couldn't live without it. that set the stage for the second wave which lasted 15 years or so which was building
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the software and services on top of the internet, google, facebook, twitter. that has defined the second wave. now we are seeing the third wave pick up speed and that is the internet, integrated much more seamless and place of ways -- sometimes invisible waves throughout our lives. things like healthcare, transportation, energy, food and important aspects of the lives big sectors of the economy. i wrote the book because there's an acquired mindset into the playbook whether you're an innovator or policymaker if going to be successful in this third wave split can you give an example of what you mean by product that we will see in the third wave or that's already in the nation form? >> healthcare. everyone focuses on the challenge of healthcare and there's a big 16 of our economy right now and how to use technology to make health care more convenient and have better
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outcomes and lower costs. andy anderson from the cancer hospital in texas, 25% the time they reversed the first opinion and that's a data problem. that's it analysis problem. people's lives are hanging in the balance and there's work now on their that i met with that's creating an operating system for cancer using technology to be much more precise in terms of the diagnosis. and more precise in terms of what drugs or therapies people should take. that's an example. education -- people learn differently, some are visual and how do we use technology to create a more personalized adaptive approach to learning. there will be a revolution in learning and the third wave. there's all kinds -- if you look at healthcare sectors, education, some change in the first and second wave but not that much. >> in your book, you talk about a 20-40 scenario and you stay in
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there that google is not going to be that big company that everybody talks about. >> aol, when we started itself, about half of all the us internet traffic was through a ll and it still around today but not nearly as important as it was at its peak. that's the story of business in the past two centuries. comedies rise and fall, industries ride in rise and fall and there's this natural evolution of things. exactly who the leaders of the pack are in 20-30 years, hard to predict but some of them will be new brand businesses that didn't exist 20 years ago. we need to make sure we find district level the playing field so there entrepreneurs are building great new companies everywhere, not just in a few places. in the last year, 80% of venture capital went to just three states. california, new york, and massachusetts.
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forty-seven states -- 20% of venture capital. we need to figure out ways to support entrepreneurs everywhere and we saw that in this recent election. a lot of people were basically saying i feel left out, left behind by globalization and digitization. we need to make sure the third wave we have a more inclusive innovation economy and we are backing startups that are creating jobs everywhere and not just in the few places like the silicon valley. >> when i read that statistic about 75% going to california, massachusetts, and new york. two things. i was present washington state wasn't included in their and you have another stat which is only 15% of venture capitalists went to the red states, 30 states that voted for donald trump back what we are essentially doing as we are backing the entrepreneurs in places like san francisco or new york or boston, they are doing interesting, innovative but disruptive things. some of that disruption is destroying jobs in other parts of the country.
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that will accelerate in the next ten to 20 years with artificial intelligence, robotics, driverless cars and trucks and things like that. that's inevitable, technology has always done that. twenty years ago 90% of us work on farms and now only 2% because of technology. it made it easier to farming. these technologies will continue to answer and there's nothing you can or should do to stop that but what we need to do is make sure that were offsetting some of the jobs that are being lost in the country by backing the startups who can create jobs in the middle of the country and not just backing the entrepreneurs on the coast. there got to be something to come together to buy parts the hue and figure out ways to make sure capital flows evenly. the other statistic that is sobering is 90% of venture capital went to men, 10% to women. 1% went to african-americans and it does matter where you happen to live or who you happen to know or what you have to look like in terms of getting capital
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access and we need to level the playing field so everybody has a shot at the american dream. >> americans are having two distinct conversations about technologically driven change. does this go to the digital divide we talk about? >> and the digital divide. some acts don't have access to digital broadband and we need investments that erodes bridges for physical infrastructure we also need to invest in the digital input structure, things like broadband and make sure it's probably available across the country. so we don't have this world where some people have these connections which then are the platform that enables them to do innovative things and create jobs.
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that is part of the dynamic the other dynamic talks what we call the book the rise of the rest. how do you make sure the entrepreneurs everywhere have access to capital and media telling the story so you places where only wealth and innovation is happening in the rest of the country is left behind. >> for the last several years, mr. case, we've been using the term internet of things. you use the term internet of everything. >> and trinity of things is exciting and how you can use that in your offices, cities, but the third wave is broader than that. the internet integrated into everything in a way that even internet as an industry, phenomenon, to become taken for granted. like electricity. electricity was a new technology and now we take it for granted. it's embedded in what we do. the internet is on the path and that's one of the dynamics in the third wave. it does have completed issues. the internet is embedded in everything and integrated into our lives in a fundamental thing like how we stay healthy, how we
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move around cities, what we eat, things like that and there are responsibilities that come with that and that the big theme of the book. that's the reason i wrote the book. so that the policymakers understand the dynamics in the third wave so we get the rules right but i also want to make sure the innovators, entrepreneurs, know that they have to engage with the policymakers to make sure that the rules of the road are structured in the right way. innovation needs to perish and some of the issues around privacy, big brother, when things are connected what about cyber security and cyber terrorism and all of these are big deals. won't have driverless cars on the road and drones in the sky without some kind of regulatory framework. that will be different in the third wave that was in the second wave. the policy wasn't that important and you didn't need it for facebook, things like that.
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it just became largely unimportant in the second wave and i'm predicting in the book you will become important to get in the third way. look back in those early days of the internet. the government really did find the basic research come defense agency darpa that created the internet. then the government decided to judicial decision by judge green and a courthouse not too far from here to break up the phone company, break up ma bell, at&t into the number of regional companies. that at least competition in a net down prices. it cost ten dollars an hour to
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be connected. now it's pennies an hour or even because of broadband wi-fi connection it's embedded in us a flat rate. that won't happen because of that judicial assistant within one monopoly phone company we would notice the competition, when noticing prices come down. that's another role of the governor finally congress. when we started aol it was illegal for consumers or businesses to connect to the internet. at the time it was restricted to government use, government agencies and educational use. if you work for a government agency or a student on a university campus you could connect to the internet but everybody else whether consumers at home or in businesses could connect. congress passed the telecom act in 1992 that commercialize access to the internet and finally the governor decided in the early days of unit we are not quite sure how this is going to work so will adopt a relatively light touch in terms of regulation. not just sales tax on e-commerce in the early days. let's help develop.
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as the result it skyrocketed. it is an example of the government playing a central role in making the internet possible ushering in this connected society but then having a relatively hands-off like touch approach to regulation. the question in the third wave is sectors like healthcare or energy or transportation what is the right balance. how do you keep some of the bad thing from happening but make sure you're unleashing the innovation, the new ideas back ancan allow the third way to floors. >> host: indie book you talk about aol being a decade in the making overnight success. >> guest: when i first read the book in 1980 i just knew in my heart that the internet was going to happen but when i graduated from college, there were no internet company to go to at that time. it wasn't much of a startup culture. i ended up working for some big companies, procter & gamble in cincinnati and division of
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pepsico pizza in wichita kansas for a few years and finally moved to the d.c. area to join a startup in 1983. that didn't work. it was a big failure but to the people i met and i started america online in 1985 but it really took a decade before anybody knew what we're doing. it was a struggle for will were the first in the internet company to go public. we had less than 200,000 customers after a decade. it is just an example sometimes revolutions happen in more evolutionary way. >> you just have to have perseverance. that was two in the first way. was also true in the second way. facebook and snapchat really were overnight successes. started in a dorm room a couple years later, they are big companies. then the third wave, some of the dynamics are so fundamental around healthcare and partnerships become more important and policy will become more important if you will need more perseverance.
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those three p's or not so important in the second way but are going to become very important again in the third way. that's partly reasonable to book about the book. i realized i could write about the future telling stories from the past that could help inform the future including the idea of those three p's. >> host: why did you develop in washington? >> guest: a little bit accident. in terms of my own journey as i mentioned a little bit surtout it is. i was able to do but a company based year, a startup in the tysons corner area and they were doing, when most of the net personal computer. a lot of people had atari game machine so the idea was communications capability you could connect to those atari game machines thought it was a good idea but as we were coming to market with the product atari game market blew up, imploded and so it turned out to be an unsuccessful. but because i was here and some of the people at the company including jim and mark were here
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as well, we then started america online so it was all of the accident what i was here although in the first wave the d.c. area played a pretty pivotal role in making the internet possible because of the fact darpa the defense agency that funded the basic research of that created the internet was in northern virginia and other communication innovators, mci and others were in the d.c. area. so d.c. played a really quite significant role in the first wave. the second wave silicon alley by the most significant role because the center of gravity shifted from networks and on the software apps. the third wave am hoping and expecting it will distribute a get and we will have more regional entrepreneurship and continued the innovation places like silicon valley there will also be innovation in the rest of the country, these bus to us for a few years, visited 26 cities, success mild like detroit detroit, pittsburgh, des moines, atlanta, madison, minneapolis, st. louis,
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albuquerque all kinds of cities that are developing third startup communities building on expertise they have and try to track the capital and the talent to take these ideas to scale. and in the process great the jobs in those communities that are so desperately needed. >> host: what are you finding out there beyond the coast? >> guest: it's very encouraging. i wish more investors were sitting in new york city or san francisco would get on planes to visit these entrepreneurs in the middle of the country and find there are great ideas and companies that are starting to scale. some examples that are really showing breakout potential when we were in baltimore, we met with under armour, started there, relatively small company, now it's got thousands of employees worth 15, $20 billion. a company in indiana those called exact target that was acquired by salesforce. we back to company in detroit that basically is trying to build displays autoworkers basically unemployed, we train them instead of building cars,
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gold watches and other products and they are going like gangbusters. the story of american entrepreneurship is not just about tech or silicon valley pickets all the sectors of our economy that's happening all over the country. but we do need to make sure you are more investors attention to what's happening in the country may be as part of the agenda at the trump administration may be one of the areas that hopefully will get focus on is how do you create investment incentives to consent more of that capital going to ought to produce in these other places. there was some legislation introduced in a bipartisan way innocent last year called investing in opportunity act that just did that, created some capital gains deferral to invest in these emerging rising cities. >> host: did the trump administration has announced the american tech council, and do you see that as perhaps a mover? >> guest: i applaud that. i think when you get more constructive engagement between
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people doing innovative things in some of these third wave sectors and the president and his administration. somewhere that dialogue. there are some have criticized people like elon musk was criticized by some for engaging with the president. it's important. i want to have them in the room, make sure he's explained the president and the white house team some of the challenge is also some of the opportunities that are possible in the third way. hoping he's advocating for things, investment incentives in the cities or immigration reform so we could continue to win what's not a global battle for calendar anything the white house, the present will reach out to innovators not just in silicon valley but all over the country. i encourage people who have interesting ideas and interesting perspectives at what's going to happen in the future to make sure those perspectives are understood whether by the president or folks in congress or regulators were trying to figure out what the rules of the road should be for this third wave. >> host: back to your book "the third wave."
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as we move into the third wave one of the battles i'd like to see and is the animosity that brews between silicon valley and washington, d.c.? >> guest: that's a problem. there are obvious some exceptions but a lot of people in silicon valley but just don't want to engage and get frustrated by government. government regulation slow things down, stifle innovation. at the same time when you're dealing with things like health care, the drugs we take all the medical devices we use or things like the food systems or energy systems or transportation systems, it's not unreasonable that the government would have some regulations around those industries. we need to make sure they are the right regulations. when you ship from the second we focus when he was just the software, the app to a third way focus when it's much more a fundamental part of everyday life, there's going to be some regulation. we need more of a dialogue, build more bridges between the folks in place like silicon valley and the people here in
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the d.c. area so we strike the right balance, figure out how to keep some of the fafsa from happening. we don't want drugs to kill people. we don't want to to make our kids sick. we don't want drones crashing and our kids playgrounds. there are legitimate concerns we have to same time had would make sure the united states leads in the third wave and has a regular framework that's fairly to disruptors, friendly to entrepreneurs, friendly to innovators so innovation can happen here and we can create the jobs and economic growth year as opposed to having it happen somewhere else. >> host: what's the vehicle you used to invest in these companies? >> guest: it's a mixture investment company called revolution and we have two groups, revolution ventures and revolution growth. venture focuses on earlier stage ventures, growth at a later stage. we talked about speedups commissars. we have an initiative when we travel around the country and make seed to come almost angel investments. i do that personally. >> host: what are some of the
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companies that revolution has invested in that perhaps we have heard of? >> guest: some of them are still emerging. some of them you have heard of, a company like zip car ten years ago which was one of the first sharing economy companies that was focus on car sharing. it was then later acquired and has grown quite rapidly. we back to a recently companies in the food sectors one called sweet dreams about a decade ago started by guys coming out of georgetown. they wanted to provide healthier options. it's a fast casual restaurant concept that's growing quite rapidly started first in d.c. now boston, new york, semper cisco, los angeles, chicago, starting to spread around the country. more recently we invested in detroit and another company in chicago. some really interesting things around precision data. we invest in a company in europe that's moving to the united states. it's a mix of different sectors we focus on both on the bench aside and the growth side. a key focus is this rice for us.
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how would we make sure everyone, onto tomorrow's -- entrepreneurs has investment. >> host: there's another vehicle called the case foundation. be back we started that 20 years ago. the focus of invested people and it is a country to world. the issues we focus on change over time in the early just if we focus on things like the digital divide. recently refocus on things like inclusive entrepreneurship will launch the initiative called faces the founders. how do we put a broader more inclusive face on entrepreneurship where backing the whole concept of impact investing, encourage more investors to back entrepreneurs companies that don't just focus on profit but also on purpose com,on impact and measure the impact. there's a phenomenon that is emerged the last decade, benefit corporations that build this in fact, this purpose into their charter. we are focus on civic engagement using in it to engage people
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with a focus on millennials we've done a lot of research on millennials. >> host: steve case, "the third wave" is part biography as well. when you were developing aol, what was your relationship with steve jobs? >> guest: the earliest days wasn't a huge relationship because when we are starting had just been fired by apple. when he came back in, his company was acquired by apple and overtime he became the ceo and delete engaged more and workeworktogether on a number of initiatives including some of his early work around digital music. he obviously was one of the iconic entrepreneurs that kind of lead the way in the first wave, led the way in the second wave and some of the ideas he put in place at apple in the sound he passed with i think will be important in the third way. apple has hinted they will be more focused on things like health care, how did he use the approach apple has run software and services and design to help revolutionize the health care
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system. even though we lost steve some of the instincts he has, the insights he had of that perspective rather innovation oakley will carry on. >> host: there's an incident in the book where the apple corporation puts you in your office at a catatonic state for a while. >> guest: it was the late '80s. our strategy when we got started at aol wasn't able to raise much venture capital, $1 million dollars for the competitor was back to i-beam answers and they committee $1 billion so we knew we couldn't compete head-to-head. head to head. our strategy was to partnerships. we had a partnership with commodore, radioshack and ibm and also apple, a venture between our company and apple. i think was the first of apple ever licensed their branding to another company. after a year or so we decided maybe that was a mistake, you should never license their branding. we wanted to give away software for free.
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they want to sell only in apple stores. one day i got a call basically apple said we are out, we want to trip the contract, we do like the idea of this apple link servicing more. only the partnership with you. it was a scary moment. some in the company thought maybe we're not going to make it but that force us to come up with a new branding. we couldn't call it apple link so we ended up calling it america online and the rest is history. instead of being in a disaster it ended up being a catalyst that really drove the next wave of our growth. >> host: who is elwood edwards? >> guest: he is pretty famous, at least his voice is pretty famous. he's the guy who recorded on a software the aol software things like you've got mail and the welcome messages. he was the husband of a woman karen edwards to work in our customer service department in the late '80s and overtly talked about how do we make this internet seem more engaging, friendly, approachable? not as tacky as it was perceived
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to be 30 years ago. maybe we should add real voices to the software so when you connected to or service it would say welcome and so you've got mail and felt more personal. she overheard me saying that, my husband elwood does like radio voice over work. i'm sure he would be happy to record something. i got a little post-it note and bow down a bunch of these things i welcome and you got mail and the budget of the statements. she took them home and the next morning came in with one of those cassette tapes and we played it and elwood had the perfect voice. we added the software and if you much later he had one of the most famous voices in america. >> host: what was the toughest year of your life businesswise? >> guest: when we merged with time warner. i agreed to step aside as ceo after leading aol for more than a decade. i took more of a backseat, just on the board and chair of the company but not running the company day-to-day.
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that didn't work for a will. the idea made a lot of sense but the execution of that merger didn't. i have quoted this great thomas edison quote from a century ago, visions with the execution is hallucination. so the idea was good but the execution was not. it was frustrating i think that everybody involved. certainly it was for me because i had this passion for this idea of these companies and what together they could do but we just couldn't get out of our own way. eventually i dear or so later i decide to step aside and leave the board and that's when i started revolution and went back in the garage and started backing the next generation of entrepreneurs. >> host: steve case, let's close with darren samos and a politico you quote in your book. the government doesn't have any single mechanism to address the internet of things or the challenges it is presenting. >> guest: one of the concerns i have which is why the paperback version came out recently i had a whole new chapter, and agenda, a seven
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part agenda, the restored agenda to make sure america can we start the way in the third way. i don't think there's an appreciation of some of the challenges but also some of the opportunities that present themselves in the third wave. there's a fragmented approach to regulation that might have worked in the past but it don't think the work in the future. it requires more of an integrated almost systems approach because some of the things that involved in the financial world, there are some things that are technology issues, things at a financial services issue that have a more integrated view of that that's also true at health care. many of these other sectors. we have to take a step back and figure out a way to make sure we have the right regulatory framework policy framework so this country can lead the way in the third wave. i hope we can. i think we can. i remind people particularly in d.c. that 250 years ago america itself was the start of care it was just an idea and we kind of
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lead the way, going back to your topic question, we lead the way in the agricultural revolution, the industrial revolution, the technology revolution. we need to lead the way in the next revolution, that's going to require getting this right and some of that is getting the innovators working constructively with the policymakers so we have a more cohesive approach to public policy for the third wave. >> host: "the third wave: an entrepreneur's vision of the future" is the book. steve case is the author. >> president trump is meeting today at the white house with what he calls healthcare law victims. he will then give a public statement on health care. we will have that live scheduled for about 25 minutes from now 315, eastern here on c-span2. the senate is planning a boat related to the republicans healthcare plan, and is look at what his head and what else is at in congress this week.


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