Open Book with Anthony Scaramucci - The New Frontier Of American Entrepreneurs with AOL’s Steve Case 

Episode Date: May 15, 2023

In this episode, Anthony talks with AOL cofounder and bestselling author Steve Case. Steve has travelled across the country, with his latest book The Rise of the Rest, to promote startups away from traditional investor cities. He tells Anthony where, who and what we should be looking to for the future of America.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Hello, I'm Anthony Scaramucci, and this is Open Book, where I talk with some of the Riders minds out there about everything surrounding the written word, from authors and historians to figures in entertainment, neuroscientists, political activists, and of course, Wall Street. Sorry, I can't resist. Before we get into today's episode, if you haven't already, please hit follow or subscribe, wherever you get your podcast, and leave us a review. We all love a review, even the bad ones. I want to hear the parts you're enjoying or how we can do better. You know I can roll with the punches, so let me know. Anyways, let's get to it. AOL, America Online, what an iconic company. Many of my age mates listening will remember

having an AOL email address. I still have mine. Kara Swisher said Steve Case is the nicest guy in tech, and I have to say I agree. He's also one of America's most accomplished entrepreneurs and is on a mission to bring our attention to entrepreneurship all around America, not just in the pockets we'd expect. I'm lucky enough to call Steve a friend that he makes a great case for America and its innovation in this conversation. Pardon the pun there. So joining us now on Open Book, a dear friend and a wonderful entrepreneur, bestselling author, New York Times bestselling author, the co-founder of AOL and Revolution, writing an amazing book for Our Times, The Rise of the Rest, how entrepreneurs in surprising places are building the new American dream.

It's such a timely book for so many different reasons. But as we think about our country and we listen to the media, we sometimes miss the great entrepreneurs large and small in the country, the great micro innovations that are taking place around the country. And Steve, thank you for doing the homework on this. But let's go to you for a second before we get into the book. Let's head back into the 80s when you started AOL. This is before you were making pineapple pizza for Pizza Hut, or right around the time, right after that, I guess.

You started AOL in 1985. Only 3% of the people were online. You grew up in Hawaii, but there you were in Washington. So you are in the book, weirdly, right? Because that's you. You are rising from the rest with some no-name company you're calling America online, but it becomes this transformational business. everybody has an AOL account. That's my vintage, at least.

Maybe you're not my kids, but I stole my O account, tied to my Amazon. So there you go. Tell us about that. Tell us about your start, sir. Yeah, it was an interesting journey. I was born and raised in Hawaii, as you mentioned, went to college in Massachusetts,

and knew I wanted to get into the internet. I graduated 1980, but there was no internet companies to go to back then because it was still more of an idea. And venture capitalists certainly weren't backing 21-year-old kids back then. So I ended up working for Procter & Gamble in Ohio for a couple of years. and Pete's Hut and Wichita, Kansas for about a year, and then moved to the Northern Virginia area to join a startup that promptly failed. But thankfully, two of the people I met there, Jim Kimsey and Mark Serif and I co-founded America Online AOL in 1985. So that was the path, a little bit

circuitous, but I knew what I wanted to do. It just took me a little while to get on that path. But I think some of that experiences you referenced, both growing up in Hawaii and even starting a company in Northern Virginia where there really was no startup hub, there really was no venture capital and it gave me an appreciation for some of the challenges of entrepreneurs all across the country. And that's really, I think, animated a lot of our work both as investors over the last decade as well as sort of champions of regional entrepreneurship. And ultimately led to writing this book. Okay. So before we get to the book, what did you see? Because you write about this, the visions that people have for their companies. Three percent of the country's online.

No one's really using it as a format. What did you see that other people didn't see? And what were you looking at over from, let's say, 85 to 95 to 05? What were you thinking? Well, 85, we were just trying to raise the initial capital get started. We were able to cobble together about a million dollars from venture capitalists in New York, San Francisco, Chicago, Toronto, none of it from the northern Virginia, Washington area. That got us going. We established some partnerships with some of the major PC manufacturers. Back then, Commodore was big. Radio Shack was big. Apple, IBM were, of course big. And those partnerships really got us going. And then about five years into it.

We kind of relaunched it as America Online as our own brand name before it's kind of white label partnerships with those PC manufacturers. And I think what got what was made us successful in retrospect was we really had a partnership bias. We didn't want to go it alone. We wanted to partner with major players who could accelerate our, you know, creating awareness and, you know, marketing trial, things like that. And also we from day one in 1985 thought that the killer app of the internet was people.

So we focused on a lot of the what's now we think of as social media, things like message boards, instant messaging, chat rooms, all that kind of stuff that a lot of people to connect with each other. At the time, our competitors were focusing on content, focusing on commerce. We were focusing really on community, also really focused on ease of use, trying to make it easy to use, useful, fun, and affordable. And so that focused on the consumer, focus on community, and focus on partnerships really took us from a fledgling startup that most people weren't paying attention to, you know, the first internet company to go public in 1992. It was, we raised $10 million dollars, Anthony, you'll appreciate this at a market value that day, have $70 million.

Nobody knew or cared about what we were doing. Seven years later, that $70 million went to $160 billion. So it was actually the best performing stock of the decade. And that's when we decided to merge with Time Warner and I stepped aside as the CEO. So it was a great journey. Well, you know, this is before you and I knew each other personally. I was on the sales desk with a guy named Michael Perek. You remember Michael Pirek?

He was one of the research analysts covering us. Exactly. So he was so excited. about your business. He said, listen, I no longer want to be a salesperson. I need to move down to the research department and cover AOL, which is going to totally transform the internet and totally transform our businesses. And it did, frankly, you led to a lot of amazing innovations. AOL Messenger, we're still using that. We're just using it in different forms, as you know, but you guys obviously invented that. But I want to talk about the country that you and I love. Because when I read your

book, and I love the book for so many different reasons, but when I read your book, it reconnected me with the core values of this country and the core values your parents in Hawaii or my immigrant family here in New York. Tell us about your road trips and the country that you love and what did you learn about the country when you were doing the research to write this book. Well, there's so much, as you know, so much focus on, you know, what divides us as a country, so much focus on, you know, what's not working. And I think by spending a lot of time over the last decade traveling around the country, visiting dozens and dozens of cities and meeting thousands of entrepreneurs, it left me with a much more optimistic take on America, that they're really great people all across the country with big

ideas. We need to help those entrepreneurs. We're willing to take the risk of starting a company, help them by providing some of that initial seed funding to get going, help them as they're trying to create some visibility, help them as they're trying to establish some partnerships. But if we can do that we can not just continue to lead as the most innovative entrepreneurial nation in the world, but do it in a more inclusive way. So it's not just some people in some places doing well, and a lot of people, a lot of places kind of feeling left out and left behind. And so it just kind of redoubled my own commitment to do what I can to support these entrepreneurs to champion these cities, these rising cities that are really fighting to become more relevant in the future by

creating some of the new companies of the future, sometimes even creating new industries of the future. And if we can continue to do that, then I think this country can continue to lead the way. But it's not going to be what's happening here in Washington, D.C., where I am, or even in places like Silicon Valley, those are going to continue to be important. But I think the real action is going to be all across the country, it needs to be all across the country. And the big surprise to me when I got into this work over a decade ago was that while small businesses are very, very important and big businesses, like Fortune 500 kind of companies are very, very important, new businesses that are under five years old, startups are the biggest job creators in our economy. So if we want to create jobs everywhere in the country, we need to launch new companies everywhere in the country, not just tech startups, by the way, startups of all kinds. And that's what we're trying to do with the rise of the rest.

Well, do you see yourself, Steve, in some of these entrepreneurs that you met? Of course. When I was in my 20s, I had this idea around the internet. I was able to, you know, kind of align with other people who shared the passionate, build that initial founding team. We were able to raise some of the capital. it was a struggle. A couple times in that first decade that we almost hit the wall, had to go through layoffs. It was, you know, it looked kind of dire. But we kind of fought through it and eventually came out the other side and at our peak, about half of all the internet traffic went through AOL and it was the most valuable internet company. So it was a great journey.

A lot of like it was kind of a roller coaster. And that is the story of most entrepreneurs. As you well know, it's sort of, it's rarely an overnight success. It's usually 10 year in the making overnight success. So I love to talk and the people hearing their stories. And, you know, sometimes championing their successes, but also helping commiserate with them a little bit when they're having some struggles. Listen, I got tire tracks on my back. I know you've had various tire tracks on your back over the years. I think that's what makes the country so interesting. You know, Bill Ackman, who's a friend of mine, he's running Persian Square. He said something to me a few days ago, which I'll share with you, which you get intuitively, he's like, you've got to just survive and you've got to push forward. And no matter how bad it looks, if you keep pushing, you know, there's the pathway to the opportunity.

is a pathway to the riches, the execution, et cetera. You talk to 40 entrepreneurs in the book, and I know you wanted to include many more, and you write about this. Tell us what you did to narrow it down. This book could have been 2,000 pages, not 200 pages, given all the experiences. We've met, people we met, we met cities we visited. But we just wanted to obviously make it more digestible and create a narrative that people hopefully would find, you know, compelling. So we did have to, you know, kind of edit a lot of things we wanted to include it in a book. But some of the cities and some of the companies and some of the stories that I found interesting, I start off the book, as you know, in Detroit, which is where we did our first bus tour, you know, 10 years ago almost.

And it's amazing what's happened in Detroit. 100 years ago was the most innovative city in America. The car was the hot technology of the day. It was kind of the Silicon Valley of its time. It's the fifth largest city in America going gangbusters. And then over a half century lost 60% of its population. And the year before we rolled in on our bus, the city of Detroit declared bankruptcy. So it went from being this dominant innovative.

Batesian sitting in a city to being, you know, essentially bankrupt. In the last 10 years, it's really fought its way back. We back companies like Shinola and Stockax. And there's, you know, both those companies now have over a thousand employees in downtown Detroit. And it's really giving people more hope and sense of possibility in Detroit. So that was interesting to see. We also found, you know, companies like in Atlanta, a company called Hermius, it's building a Mach 5 engine. So you can go from Atlanta to Europe in like 90 minutes. And the Air Force, not surprisingly, is a big, a big customer of theirs. The fact that that company is in Atlanta, not in, say, Silicon Valley, I think is striking. Or not far from where I am now here in Washington, D.C., in Richmond, Virginia,

there's a company called Temper Pack that we backed that created essentially sustainable packaging, trying to rid the world of styrofoam. It's important from an environmental standpoint, but it's also important that pharma companies can get their drugs to people and keep them cold, and food companies can get food to people and keep them cold, but we need something other than styrofoam. The team there decided to build that company to create more of a sustainable solution to packaging and do that in Richmond or in Baltimore. You know, this company, Cadillight, is basically using AI, which a lot of people are scared of, to essentially help people understand what their real talent might be.

And for a lot of people, nobody talked to them when they were a kid about what coding or some of that kind of career path. But if you're a Cadillite, you take a test and you do well on a test, Cadillite will put you through a program at their own expense to teach you coding and then place you in a job. And so it enables people. I remember one was a UPS truck driver. Nobody talked to them about coding when he was, you know, growing up. And suddenly he realized he had that skill, got retrained and was making, you know, I think it was more than two times more in terms of his salary once he got the catalite training. So these are stories of entrepreneurs in different cities, you know,

building companies that are disrupting, reimagining different industries. And so it's not about any one company, about any one entrepreneur, about any one city. It's just if you take a step back, it's a broader story of this next chapter of America. I think, you know, it's so well said. You mentioned AI. It's very topical. Just 30 seconds, if you don't mind. Should people be afraid of AI? What's your opinion? Yeah, I think there should be some concern about any new technology, but at same time, try to focus on the positive, figure out what are the things that it can do that can move things forward in different, different sectors. I think we're beginning to have that conversation. AI, as you know, is something that's been building for really 40 years. It just became something in the last few months because the, really, the success of chat GPT became much more, you know, a lot more attention. So now we're starting to have a conversation about what can the technology enable? What should the guardrails be in terms of, you know, kind of government policy so that you get the benefits of new technologies like AI or robotics or other technologies while also hedging against some of the downsides? I'm glad we're now having that conversation.

Listen, I have to confess that I'm addicted to chat, GBT. I can't tell you the questions I've asked. It is pretty good. It is pretty good. You know, and I could have, my producer and I didn't, but I could have said, hey, chat, GBT, what question should I ask Steve Gase on the rise of the rest? I'm sure it would have been better than the ones I'm actually asking, but I read your book and loved your book, so I wanted to focus on the things that I found so interesting in the book.

Let's go to some of these stories. Let's go to Dallas, Texas. Some of the people that you found there and some of the ideas. And I guess there's a very hopeful, aspirational book about America, actually. This is a book that Americans need to read to remind themselves what the country, the better parts of this country, the better parts of our angels are really like. What's going on in Dallas, Texas that you discovered? Well, it's true with all these different cities. As I said, it's not any one or two cities.

It's really dozens of cities. In Dallas, it's historically been around kind of legacy industries, oil and gas, things like that. But Dallas as well as Houston, San Antonio, and, of course, Austin, there's a lot of momentum around some of these new technologies, some of the industries of the future. We back several companies in the region, including Nixon, which is basically reimagining apartments so that you can basically move into apartment and have it all set up for you. If you're only going to be there for six months, you can move somewhere else and not have to worry about storing the furniture or reselling the furniture. It brings kind of a hospitality lens to the apartment business or Canaris, which is focused on, helping companies understand how to move more towards, you know, diversity, equity, inclusion, and, you know, track things with metrics and different kinds of businesses.

So there are just a variety of different things that are happening in these different cities that are really giving me hope for those cities and also hope for America. Louisville, Kentucky. Louisville, Kentucky is another example of a city we've actually been back to twice. We went there the first time and they led an effort and, you know, the mayor and the university president and some other, you know, leaders in banking and so forth that, you know, get us to get the bus back again. And then there's some amazing, you know, companies that are scaling there, not too far from Louisville in the different part of Kentucky. There's a company we back

called App Harvest that is basically focused on indoor agriculture, the largest indoor controlled environment agriculture in the country. And they picked that area because it's really well situated with, within the country. But, you know, 80% of the American population is within a 24-hour drive of where they're headquartered and they're using 90% less water. So it ties in with a sustainable solution and it's just healthier in terms of the fruits and vegetables that they're growing. And the other thing that's striking about that is the area where they built this very large production facility is Appalachia, which for decades has struggled with job loss and even a loss of hope. And now there's hope in that area of Kentucky because of the success of an entrepreneurial company like an app harvest.

There's a very old investment banker, not old, and he's only 70, but he went to jail for insider trading. His name was Dennis Levine. I don't know if you remember Dennis. I do remember. He has started something called Water Garden Farms, which is in your neck of the woods in Virginia, and he's producing six-X. It's indoor agriculture. He's producing 6x, the produce, making packaged salads for people, indoors, everything you just said, less energy, more efficient, 24-hour cycling process. So there's continual harvesting. You don't have to wait for the boom-buss

climate conditions to create the produce. And so, I mean, this is a great example of innovation and lead to environmental success as well, right? Yeah, absolutely. And as you say, it's happening in many parts of the country. And it's entrepreneurs reimagining, you know, farming, reimagining agriculture, we're reimagining our food systems so we can have healthier food that's also more sustainable. And it ties in with it. One of the real battles that's brewing and, you know, getting some attention now, we'll get more in the coming months, essentially battle over water rights in the western part of the country. You know, Colorado, California, you know, there is Arizona. There's limited water. And, you know, not everybody can get the water they need. And some of the water, a lot of the water right now is going to agriculture in California. Obviously, that's important. But some of these new solutions that allow you to do agriculture in other parts of the country and with using 90 percent less water are going to become increasingly important. Right. Well, we both agree on that.

How about Puerto Rico? What did you find in Puerto Rico? Puerto Rico is interesting because Jose Andres, the chef who started a number of restaurants, Haleo and others, but also started a World Central Kitchen and is really, you know, even the nominated for a Nobel Peace Prize for his work around the world. He has been really loyal to Puerto Rico in terms of helping them in their recovery. And so when he was, he's been a friend for, you know, 20 years when he heard we were doing these rides the rest bus stores. He said, you've got to get him to Puerto Rico and he would agree to

kind of host it. And so we were there probably now four years ago, something like that. And there's still some recovery issues going on because some of the issues they've had with hurricanes and other natural disasters. But there's a really spirit of possibility there. People are our focus going back to the agriculture side. How do they become more self-sufficient? You know, over 90% of food is imported from outside of Puerto Rico. So how do they use their own land to grow food and create more sustainability, which will hedge against potential future kind of climate risks that they face. And again, as we've seen in different parts of the country, there's this entrepreneurial spirit that's been flickering and it's starting to accelerate. And that's something that bodes well for this next

decade. Yeah, it's amazing stuff. I got to ask you about the recent regional banking situation, because when I read your book and think about what you're saying about small businesses and the growth, you and I both know that the regional banks are a great part of the capital arterial structure for these sorts of businesses. You know, the money center banks are maybe too small to go to these money center banks or, you know, sometimes you need a local banker to help you get your financing. What do you think is going on in the regional banking sector of our economy? And how do you think it will inhibit or hurt innovation or am I over exaggerating the issue there? No, I think it's a concern. I actually did it. I wrote an op-ed in the Washington Post,

couple weeks ago about the Silicon Valley Bank situation. And part, it was expressing the concern you're raising that we need to make sure we're funding the innovation economy. The biggest, most successful banks, JP Morgan and so forth, aren't really kind of set up to deal with these emerging entrepreneurs. That's one of the things that SVB did well. So they obviously had some challenges. It wasn't about loaning to entrepreneurs. The loan portfolio was actually in pretty good shape. It was, as you know, a mistake on the balance sheet where they locked in, I think it was $80 billion at 1.7% interest rates as interest rates were rising. So things kind of became upside down. And that's why you had the need for this rescue, the backstopping of the deposits. And so now that they've been acquired,

you'll see what happens there. I know a number of regional banks and even some new companies are trying to fill that void to make sure that they're providing the banking services that young emerging companies need. And it is critically important. It doesn't get a lot of attention. More of the attention is on the venture capital, the equity risk capital that is invested in these companies. But as they scale, a number of them also do rely on banks in terms of venture debt and other kinds of products and to make sure that's still available to them. Otherwise, we'll see fewer companies starting, fewer companies, scaling, fewer jobs being created, less economic growth, et cetera, et cetera.

So it's very important that we learn from what happened there and try to make sure we don't have a situation like that again, but we don't lurch and overcorrect in a way that stifles some of the ability for these banks to support these young companies. Your summer is about to get a major upgrade. Get ready to power up your home with Wayfair's Black Friday in July. For four days only, July 26th through July 29th, you can get up to 80% off everything home. That's right. Say big on rugs, bedroom and living room updates, home decor, outdoor, and way more.

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I also think that you identified something I'd like you to share with everybody, which is about the American dream. So I want to take you back, Steve Case, 1980, coming out of school, define for me the American dream. And then I want you to then say, Steve Case, 2023, has the American dream been redefined? So what is it like today? Well, I'd say when I was coming out of college in 1980,

there was still that sense of possibility, a sense that you could do well. If you put your mind to something and really stuck with it, you could accomplish something. And, you know, in some ways the core, I think definition of the American dream is you have the opportunity to do better than your parents or better than your grandparents. There was sort of a ladder up that was available to almost everybody, not everybody, but almost everybody. And the question was, how do you make sure that was available to everybody?

You know, now we fast forward, I guess now four decades plus later, I think there are a lot of people in this country that aren't so sure that that American dream is available to them. They're not so sure that they haven't been left out and left behind. And that's part of why we're so focused on the rise of the rest. It's not just about backing the companies in these particular cities, supporting the entrepreneurs in these particular cities, but recognizing that successful companies, as they grow, as they create jobs, create a broader set of jobs in their community.

The best data I've seen on that says, for every job in a tech startup, there's five other jobs in the community. So we have to be creating these new companies, have to be creating these new jobs and places all around the country and giving people that sense of a possibility. People do have an idea to start a company. Most people do not have money. Most people do not have friends and family that have money. How do you make sure they too have a shot at building a company and a shot at that American dream? So I'm still optimistic. I know as you are about the America and the future of America, I've been chair of the Smithsonian Institution for the last few years,

and we're planning for America's 250th birthday in three years in 2026. It's something that's getting a lot of attention. How do we celebrate what got us to now, but also make sure we're leaning in the future? And I remind people what got us to now was, you know, 250 years ago, America itself was a startup. It was just an idea and a pretty fragile idea that, like, many startups, almost hit the wall.

But thankfully, we were able to power through, persevere, and went from this fledgling nation that most people around the world didn't think would survive to the leader of the free world because we have the leading economy in the world. And that wasn't an accent. That was, as you know, the work of entrepreneurs who led the way in the agricultural revolution, led the way in the industrial revolution, more recently led the way in the technology revolution. How do we continue to lead the way in a world that is more competitive? We're obviously seeing global battles around innovation entrepreneurship with China and other countries. We need to win that battle, but we also need to do it in a more inclusive way that brings along more people and more places with. in our country and allows everybody everywhere to have a real shot at that American dream. So it's interesting because, you know, you've lived in why, Steve, I could only last 11 days in Washington. I was blown out like a James Bond villain in the old Asson Martin in terms of the way I got ejected. But you are smarter than me. You stayed at you, you got close enough to politics, but stayed out of it. But I do believe that our political system was the

petri dish for all of this. It was the checks and balances in the system, the separate, but equal powers, the diffusion of power at the top led to a fairness, if you will, a trust in our laws. There was no autocrat that on his or her whim was going to change the laws. So we're able to put our contracts in place and able to keep things going directionally. And I'll just share this with the garrison. I was in a con law class at Harvard with Larry Tribe. He asked people what the most important part of the Constitution was my friend who was a lot smarter than he went on to clerk for Justice Scalia. He said it was the Commerce Clause. And Tribe didn't like that. that tribe was a Fourth Amendment guy, but he said, why the commerce codes? He said, well, you know,

we didn't tax each other for interstate commerce, a result of which we accidentally created this continental free trading block with one currency through this incentive to create more and more commerce, which ultimately, in this gentleman's opinion, led to our freedoms, our Bill of Rights come from the economy. The strength of the economy allows us to be free. I guess why I'm bringing all this up, you live in Washington, you see the hysteria, the tribalism. Is there a way to break that fever, sir? Is there a way to ring the bell of these people and call for renewal and a recognition that the first name of the country is united? It's not the tribal states of America or the dish United States of America. How do we put it back together so we can go another 250 years?

Yeah, I do worry about this and even wrote about it in the book. I think there are a lot of challenge, a lot of threats to America. But the biggest one, one is exactly what we're just describing. It's sort of a battle within the country. It's not a battle with external factors, other other countries. And we need to figure out some path forward that does unite us. There's a lot that we should unite us, a lot of things we should jointly celebrate. Of course, there are always going to be political differences, but we need to focus on the areas where we can work together. Thankfully, in this area, innovation, entrepreneurship, it is something that gets bipartisan support. A decade ago, I worked with then President Obama and, you know, Eric Cantor and many others on

passing the Jobs Act, jumpstarting our business startups act. More recently, I worked last year on the Chips and Science Act, which allocated $10 billion for regional hubs. Focusing on innovation entrepreneurship, job creation, economic growth is an opportunity to bring people together. And so that's why I spend so much time on that, not just supporting the entrepreneurs, but also trying to advocate for strong policy that is supportive of innovation, but also can help make sure America continues to lead the charge. And as we travel on the country, interestingly, in doing our bus tours. We often have governors, mayors, senators, others with us. And it wasn't for the fact that I read my briefing documents. I wouldn't know which are Republicans and which are Democrats. When you're

out in the middle of the country and you're talking to entrepreneurs, you're talking about building stronger communities, you know, it's not a partisan issue. And so looking for more opportunities to do that is important. I have done some work in the past, including over a decade ago on with a bipartisan policy center trying to figure out ways to unite the country, We testified in the Senate over a decade ago around immigration reform so we can win what's now a global battle for talent. We need to focus on those issues and we can only do that with more of a bipartisan mentality. And hopefully a path forward is less and less of a divide that separates us and more and more

looking for the common ground that unites us. You want to run? No, I think I'll pass on that. Others are more charismatic to win and have more patience to govern. So I'll just be a kind of kibbutzer on the sidelines. You know, I met your wife 15 years ago at the Sun Valley Conference. She's not going to let you run. Just give you the heads up, okay?

I mean, I don't think you want to run. I'm just making a joke. My wife would, I mean, my wife's political policies, castration, if I ever attempt to do anything like that. I mean, that's a non-starter. I ask our authors, I usually go through five subjects and ask our authors to give me a quick sort of, you know, blink sort of response. So let me go through. I went through your book. I said, okay, here are five things I want to talk to you about.

Let's start with policy. Well, as I write about the book, I think this next chapter of innovation, because we're going to be reimagining health care and food and agriculture and education, a bunch of things that we've talked about, you know, governments are going to matter more. You know, entrepreneurs don't like to hear this because they worry that regulations will slow things down. And I obviously share some of that concern. But when you're dealing with such fundamental aspects of our lives, like how do we, you know, What drugs should we take or, you know, what medical devices should be authorized.

There's going to be more of a connection with government and regulations. And we also have to recognize some of the great innovation, including the Internet that got me started, was funded by the government, funded by the Defense Agency DARPA half a century ago. So rather than just complain about how government screws things up, I think we need to lean into that and figure out what can government do that can actually speed things up around investing in R&D, accelerating some of the technology. of the future, doing it in a more inclusive way, which is why the regional hubs are so important. So I think policy is going to become more important in the next 10 or 20 years than it was in the last 10 or 20 years. I think it's so well said. It has to be more about what's right or wrong for the country and right or wrong for American entrepreneurs and less about left or right. It seems like we're too tethered to those positions based on our partisanship. But I agree with you. Let me fire this out. Which of the companies are you following the closest or sectors?

Well, with Rise of the Res, we also, at Revolution, we have the Riserest Seed Fund, Revolution Ventures, and our later stage Revolution Growth Fund. And the Revolution Growth Fund is back. A number of companies have gone public, like Clear, the biometric security companies, that gets you through airports, or Sweet Green. I'm a member. That's casual concept or draft kings, which did some things in the sports tech space. Some other great companies, we back, like Tempice is doing some amazing things around

health precision medicine. If you get diagnosed for cancer, for example, they have now have. of about 2,000 hospitals where they are taking the data and they allow for a more precise diagnosis of what's going on and what the treatment should be. So those are some of the companies, the later stage companies we're doing. For rise to the rest, we've now invested in over 200 companies in more than 100 different cities. And it's really place-based. So we're investing across all sectors. And there are really dozens, including the ones I profiled in the book that really are rising a number of already gone public. Some are gearing up to go public. And people will be

surprised by how many of these successful public companies of tomorrow are not in Silicon Valley, not in New York City, but in the middle of the country. Well said. I want to ask you about, because again, this is part of being an entrepreneur, regrets or disappointments in your life or in your investing, and what did you learn? Well, a couple of things, including when AOL merged with Time Warner, which was over 20 years ago, it seemed like a great idea. Strategically, I still think it made a lot of sense. And at least from an AOL shareholder standpoint, financially also made a lot of sense, but we weren't able to capitalize on that potential. And AOL went from being the leading internet company by far to being kind of an also-ran.

And the lesson there is it's not so much about the vision. It's about the execution. And that's, you know, Thomas Edison quote from 100 years, over 100 years ago. And so just focusing on that. It's sort of having the right team focused on the right priorities, executing the right, you know, way is really where the action is. It's not about the idea. It's about how you execute against that idea. That also has impacted other things that we've done.

some of the companies that we thought had a lot of promise, sometimes struggle and stumble and fail because they didn't really get the execution. So those are some of the regress. And when you're making investments, as you know, in young companies, not all of them are going to be successful. If they are all successful, you're not taking enough risk. You're not trying hard enough to really kind of lean into the future. But the ones that are always the ones that are disappointing, kind of like the merger,

was when it was a good idea, but somehow they weren't able to execute to really seize the moment, seize the opportunity. Well, I think it's well said. I also think, you know, you have cultural situations, too, right? You know, if my space is bought by News Corp, well, maybe it can't germinate and become Facebook, right? I mean, and, you know, maybe there was some cultural issues, too, where there was a little bit of... No, no question. Part of the execution, you know, people and culture are obviously kind of tightly linked. Right, exactly. And some cultures are just a little bit more traditional and yours was a little bit more entrepreneurial. Okay, I'm landed from Mars. I'm getting out of my spaceship. I meet Steve Kate. and I ask him to describe America. And I say to Steve, why is it the place for innovation? Well, it goes back to a backstory when we started 250 years ago. It basically was a pioneering spirit, people who believed that there was a better way, a better life ahead, a better land to move to and created a community,

created a country, created an economy that's now the leader of the pack. And we still do have that pioneering spirit. But what we need to do more of, and we've talked about this through this discussion, is make sure that's available to everybody everywhere, not just some of the folks on the coast, like in Silicon Valley. As I've traveled around, I know you've done a lot of this as well. There are people that are definitely feeling dismayed, kind of angry, kind of frustrated. Left out, they feel left out.

They're being left out and left behind. And so how do we address that? And there are different things that need to be considered. And certainly there's a role for government there. But I think backing the entrepreneurs are going to create the companies of the future and create the jobs of the future. And in those communities help some of the communities that have been struggling to suddenly turn the corner and be more hopeful, I think, is critically important. There was a Pew study about probably five or six years ago that said that something like 70 percent of Americans wake up anxious and fearful about the future. That's pretty quite sobering.

How do we change that dynamic by giving more people a sense that there's reasons to be optimistic about the future and just remind people about why this country is. is special, but make sure it's that opportunity, that American dream opportunity really is available to everybody. Yeah, I mean, listen, I mean, you bringing up so many good point. I mean, I mean, you don't need to hear my plather, but, you know, we had 27 amendments to the Constitution. It's a 250-year-old country, so that's an amendment every eight or nine years. Yet our last significant amendment was in 1965. We got to get it together. You know, it was a living document, and it was designed to be amended to reflect what's going on. And if you ended the gerrymandering and you put everybody in the dish, I mean, are we in a real democracy, Steve, if the candidates themselves are picking the voters,

I thought we were supposed to pick the candidates, but they're picking the voters, and they're screening out their enemies, and they're staying in office for 30, 40 years, and it's created a mess, you know, whereas you know, because you're a great marketing person, and these are marketing competitions. If they had a mixture of Republicans and Democrats in the district, they'd have to moderate their views and they would be less extreme, you know, and we, we need amendments, I think, to make this thing healthier sort of to reset the cultural dynamic. I totally agree. And obviously, the fact that most, you know, people running for reelection are in, quote,

unquote, safe districts. And so that encourages them not to kind of move out of their lane, not to try to, you know, compromise, not to try to find consensus. Look what happened to Eric Cantor in Virginia, right? You know? Yeah, totally. No, somehow we've, the words consensus and compromise, which are the hallmarks of a successful democracy have become black marks. And it's very unfortunate.

It's true on both sides. So it's not a, it's not a political statement. Like how do we, how do we get beyond that and figure out how to solve some real problems, see some real opportunities, and do it in a much more bipartisan way. So my last of these five words or themes is location. What, which one excites you the most? You think about it? All of them. It's like asking a.

who their favorite child is something. You have a favorite. You have a favorite cities and a best of the hundred cities. I'm fighting for all of them. Get the hell, Eddie. I'm fighting for all of them. You have a favorite kid, okay? I do not have a favorite child.

I do not have a favorite grandchild. I do not have a favorite city. All right. You heard it here. I just have a favorite podcast host, which is Anthony. You heard it from Steve Gase. He's a very balanced even guy. I have a favorite.

I have four boys and one girl. Who do you think my favorite is? I mean, come on. It's obvious. All right. But, but, but, but, but, but, but, I like that. And I think it's elemental to the book. You basically, you wrote this amazing book about the country through the eyes of entrepreneurship and innovation. And it's an aspirational and it's a hopeful

book. And, you know, you're somebody I admire a great deal because you're a doer. You're an innovator. Mike Perrette used to tell me this, Steve. You'll have to verify whether it's true or not. You used to go into the chat rooms at AOL as CEO. I mean, you weren't saying you were this. It'll be just check things out once in a while. Is that something you used to do? Totally. It's my version of management by wandering around. I was wandering around the service chatting up people and finding out what they like. Then we'll do more of that and what they don't like and we'll try to fix it. He was so impressed with that. I remember being in a research meeting. He had a strong buy on AOL and he was just so impressed with your hands-on nature. And that was one of the examples

he used. And I'm going back into the mid-90s now when I was back at Goldman. So anyway, I wish you nothing but great success. What's next for you to do? We have another book on the horizon or no? No, I don't think so. Although I didn't think I, this is a second book I wrote. I wrote a book six or seven years ago called the third wave, the internet's third wave. And I thought when I wrote that book, I was kind of done.

But this, rise to the rest because, as we've discussed, the last decade, I've had the opportunity to travel around the country to see firsthand what's happening and was struck by those stories. There were surprising stories about surprising places. I just felt like this story had to be told. And that's why I wrote the book. I don't think I have another one in me, but I've learned as you have. Never, never say never.

know what's going to happen. But, you know, my takeaway from this podcast is I am your favorite podcaster. Okay, that is my takeaway, okay, from everything that you said. I just want you to know that. All right. I appreciate that. I'm sure that will be the sound like that. I'm going to try to get that in the New York Post. I know I'm kidding. The Rise of the Rest. What a great book. How Entrepreneurs and Surprising Places are building the New American Dream by Steve Case, a bestselling author. Really just a phenomenal book. And you're, you know, the country owes you with debt because you're out there helping everybody, Steve. So thank you for that. And thank you for joining Open Book. Thank you, Anthony. Great to be with you as always. So Steve is right.

We need to invest in tomorrow's innovation, not only in the major cities or the Silicon Valley of the world, but other parts of America. And what I loved about his book is we saw his enthusiasm for entrepreneurs large and small. And who knows, so many interesting things come out of middle America. I'm talking about not the coasts, just things inside the center of the country. Let's talk about Walmart as an example, Bentonville, Arkansas, or Berkshire Hathaway germinating from Omaha, Nebraska. I think Steve's point is that America, in its 50 states, is a major cultural hub for entrepreneurship. I remember Steve himself is a native of Hawaii. I also remember fondly, Stephen's brother, who was the CEO at Hamrick and Quist, and unfortunately,

he passed away about 20 years ago, another very, very great entrepreneur. But the point I am making, which I think is very important for everybody to listen to, is follow Steve's career, read his book, and get a sense for how important it is to think and believe and take risk in America. And so I'm just giving a big shout out to Daniel H. Case III, Steve's brother, who was a great guy and is still missed today. You have the internet in your house or no? I don't know how to do it.

You don't know how to do it, right? So you don't even know who Steve Case is, right? Do you remember America online or you don't remember it? No. Okay, so he invented a system in the 1990s that could allow you to use your email and surf the internet. And it was very, very popular. Why do you think you never caught out to the internet, my wife? You just said to hell with it?

You're probably better off, by the way. That's how I feel. deal because I think that sometimes the internet is not a good thing to do. I feel bad that I don't have the internet so I could order my food on the internet and it would come to my house where I don't have to be. Yeah, but that's what that's... Right, but Deirdre can take care of that for you. Just tell us what you need.

It'll drop it off right at the front door. That's all. You don't have to worry about that. But let me ask you this question, though. Do you believe in the American dream? Yes, absolutely. Okay. You are living the American dream.

Okay. Tell me why I'm living the American dream. Because you're very brilliant, very, very smart, and you use your smartness to make money, and you also share your money. So you have, to me, you're perfect. I mean, if you really analyze your personality, I don't see any force. And I'm not saying it because you're my son. It's the truth.

Okay. You're very loving. You know where it's that. You know the people that are not so good. You read it very well. When you've had enough, you just walk away. You don't belittle him, but you walk away. Yeah, there's no need to punch down.

I don't like punching down. When these reporters write nasty stories, I laugh. It's no big deal. There's no reason to punch down at anybody. But let me ask you this. When you say the American dream, what does the American dream mean to you? What does it mean to you? To have healthy children, number one,

and to be able to buy a home for your own. family and be able to support them as good as you possibly can. And I believe that education is very important to children and you did everything you could with your education. That's for sure. You were unbelievable. All right. Well, Steve Case is a lot like that, Ma.

I enjoyed spending time with him. I interviewed him today for the show. Talking to Anthony. Talking to Anthony. Okay. All right. I love you, Ma. All right.

I'll talk to you later. All right. All right. I am Anthony Scaramucci and that was open book. Thank you for listening. If you like what you hear, tell your friends and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a rating or review.

If you want to connect with me or chat more about the discussions, it's at Scaramucci on Twitter or Instagram. You can also text me at plus one, 911, 909-29-996. I'd love to hear from you. I'll see you back here next week.