Closing the investment gap is in investors’ best interest, says billionaire Steve Case. “Most venture firms tend to focus on what they call pattern recognition–doing more in the future of what’s worked for them in the past,” says Case, who pioneered the Internet by co-founding America Online (commonly known as AOL) and now works as a venture capital investor and philanthropist. Those who back only “white guys in Silicon Valley” are missing out on valuable opportunities, he says.
Case thinks he has some good ideas for finding a way forward. His Rise of the Rest initiative has conducted eight bus tours, visiting 44 cities across the U.S., investing a $ 350 million seed fund. In Inc.‘s latest Real Talk: Business Reboot streaming event, Case spoke about bringing greater diversity to entrepreneurship, how crises often create the best companies, and the changes he expects to come out of the pandemic. A few highlights:
Diversity in Entrepreneurship
Case says that, from an investment perspective, ignoring entire groups of people and their life experiences means missing out on valuable opportunities. He says a racially diverse investment portfolio is “not just the right thing to do, it’s the smart thing to do.”
And diversity isn’t just about race, but also about place, says Case, noting that 75 percent of venture capital went to just three states last year: Massachusetts, New York, and California. The data he’s gathered on entrepreneurial ecosystems in the U.S. is sobering: “A lot of people in a lot of parts of the country are not optimistic about the future.”
Instead, he says, people are worried about technology from Silicon Valley–like robotics and AI–destroying jobs.
“They don’t see the new jobs to offset that (loss) because they don’t see startups in their own communities creating new opportunities,” says Case. “It’s critical that we recognize that ideas and creativity are broadly distributed. We need to make sure that we are bringing everybody along.”
A Way Forward
Though the outlook may seem dim, Case says, the darkest times produce great opportunities. He pointed to an example from his AOL days. In 1988, AOL partnered with Apple to produce Internet software. After having a change of heart about the partnership, Apple decided to pay AOL millions to rip up the contract. Case and his co-founders thought it was the end of AOL. But company survived–in fact it thrived: the founders were able to take the software, change the branding, and produce AOL Online, which became a huge success–and arguably played a major role in getting the whole world online.
Now, Case says, entrepreneurs should be trying to do more than survive. They should be imagining what comes next, and how they can produce solutions to our current problems. For example, telehealth, a business niche in development for a decade, has progressed rapidly in the past three months because of the pandemic. It’s now set to become a growth industry.
“Spend some of your time thinking about what is possible, says Case. “Imagining is the art of the possible.”