We Study Billionaires - The Investor’s Podcast Network - TIP 126 : The Third Wave - A Review of Billionaire Steve Case's Book (Business Podcast)

Starting point is 00:00:00 We study billionaires in this episode 126 of The Investors Podcast. Broadcasting from Bel Air Maryland. This is the Investors Podcast. They'll read the books and summarize the lessons. They'll test the waters and tell you when it's cold. They'll give you actionable investing strategies. Your host, Preston Pish and Stig Broderson. Hey, how's everybody doing out there?

Starting point is 00:00:31 This is Preston Pish, and I'm your host for The Investors Podcast. And as usual, I'm accompanied by my co-host, Stig Broderson, out in Seoul, South Korea. And today we have a book for you. And the name of this book is The Third Wave by Steve Case. And if you don't know who Steve Case is, he is the CEO and basically the main guy behind America Online, which was huge back whenever I was a kid. And ever since that time, really, Steve Case, as far as I'm concerned, really hasn't gone on and done any major deals. Kind of like we were talking to Reed Hoffman, how he just had one major hit after another.

Starting point is 00:01:08 Steve Case, really, his big hit was America Online. And ever since that, he really hasn't been too aggressive on the business scene. But this was a book that we had recommended to us. So people were curious, Steve Case's current net worth is around $1.3 billion. And he personally wrote this book, so we gave it a try. I thought the book was okay. I wouldn't say that I loved it. I didn't hate it, but it was an okay read.

Starting point is 00:01:33 It was interesting. Talked a lot about his time at AOL and kind of going through that whole development phase. I found that interesting. And what's also kind of interesting is I don't think that he really wanted to talk about that much. I think he actually wanted to talk about other things. Right, Stick, because I think he even mentioned. Yeah. It was more like a nostalgic look.

Starting point is 00:01:53 back, as you said, present, like, oh, you remember back then when everyone was using AOL? Yeah, that was a good time. I think it was more like a book like that. It was not like one of those, oh, now I really understand what will happen with the internet in the future. And I think he wanted to put it out like that, but it didn't give us any revelations or at least not on my end, I want to say. Yeah. So I think his intent was to talk about this new wave in the internet that he kind of sees happening. But for me, when I was reading it, I was kind of like, this isn't anything that for me is groundbreaking or something that everyone doesn't already know. That was my take at least. So I was much more interested in the thing that he didn't want to talk about, which was his time at AOL.

Starting point is 00:02:36 Because I enjoy hearing his conversation on his thought process as he was going through different key decision points. For me, that's much more entertaining and something that I feel like I can learn from. So, all right. So what we're going to do is we're just going to go chapter by chapter. There's 12 chapters in this book and we'll just kind of breeze through each one of them to kind of give you an overview. So the first chapter is titled Opportunity. And in this, he talks a little bit about his background. He talks about whenever he was in college, he read this book by a gentleman named Tofler.

Starting point is 00:03:08 And he wrote a book called The Third Wave, which Steve Case had read. And this book was all about what was the come in the future. And this book really captured his interest and it had a huge impact on the way that Steve Case thought. about things. And so it's kind of neat for him to basically write his own book years later as a billionaire, and he titled it the third wave as well. And what he was really trying to project in this book that Stig and I had briefly mentioned earlier is that the internet, when it first started was in this first phase, then his AOL time until right about now, I would probably call the second phase. And then what he was trying to talk about in the book is what's to come in this third phase

Starting point is 00:03:52 and like, where's the internet going? So Stix's going to give you a little bit more details beyond that on each one of these phases. Yeah. So the first wave that he talks about, and you should really be thinking about this in like the first wave of the internet. That's basically what he's saying. And he's talking about how the ruffler took place from 1985 to 2000. And this was really defined by companies like AOL, Cisco, Microsoft, really creating the underlying infrastructure by bringing America and then the rest of the world online. And again, as we talked about before, this was really like a nostalgic look. And a lot of fun facts too, for instance, one of the things he said was that up to 1992, it was actually illegal for commercial sites like AOL, even to link up

Starting point is 00:04:39 to the internet. And he remembers back on an interview he did with PBS back in 1995, when he actually got the question, so why do we need the internet? And this was actually a decade after AOL started. So I just found that to be a neat story of what does how fast things has really progressed with the internet. And then he goes on to talk about the second wave. And the easiest way to think about that is to think of companies like Amazon. and Facebook and eBay. So basically we're talking about companies that can grow really, really fast and grow with a marginal cost next to zero.

Starting point is 00:05:21 At least that was how he explained it. So really scalability. That was the key for the second wave. And it was even more a thing about community than the first wave. So back then, up to year 2000, EOL was actually really on the frontier in terms of community, in terms of communicating with each other. Even though that we didn't have Facebooks, we still have some way to communicate with each other, like chatting,

Starting point is 00:05:45 but it became much more visual in the second wave. And then he gives a brief introduction to the third wave, which is basically having an internet integrated in all of our products. One way he explains this is that right now we might say that, yes, this device has internet, but he says that would be completely superfluous in the future. It will be like this device uses electricity. you don't say that today either.

Starting point is 00:06:09 It would just be the way they would use all devices in the new world. So that was the first, second and third wave. You know, I heard a person, this was years ago, talk about, you know, the future. And the way he described what you were just talking about Stigas, he said, if you went back to, you know, a hundred years ago and you walked into a room, there wasn't necessarily this assumption that there should be a light switch in the room and that you could just flip the light switch and have light, just automatically. there. But now, as a person would walk into any room anywhere in the world, as soon as they walk into that room, they immediately start feeling around for a light switch. And the way that they were describing the internet and intelligence being networked into every single room in the world, you know, five years ago, you would not walk into a room and just assume that there was

Starting point is 00:06:59 Wi-Fi. Now it's a little bit more common, but you go 10, 20 years into the future. To walk into a room and there not be some type of Wi-Fi or some type of intelligent network that can automatically interact with you or whatever device you might have on you is what I think Steve Case is really getting at where it's just going to be something that's automatic as electricity.

Starting point is 00:07:22 That's what he's really getting at with this third wave. Yeah, and it's not just your smartphone or a computer. It's basically all the things that you use in your data life. So it might also be your refrigerator or your oven. And the way to make that not only be connected to the internet, but to make it intelligent, would to be that, like, your oven wouldn't be able to cook meat that wasn't good. I mean, that was one made to have an intelligent oven. So that was how he explains it that. It's going to be a part of a daily life, and we won't

Starting point is 00:07:49 think about whether or not that oven would have internet, because obviously it would. Yeah, so let me give another example with which you were just talking about. So Brett, who made the Alexa app for our show, he was so kind. Whenever we told him we didn't even have the Alexa device at our house, he mailed us one completely for free, both stagged myself. And so I got to play around with this thing and I set it up in the kitchen of our house and I was just trying different things out. And I said, Alexa add a gallon of milk to my shopping list. And the Alexa app responded back, added to your list. So I pull out my smartphone and I go to the application for Alexa and sure enough, there's a shopping list that's

Starting point is 00:08:32 automatically built into the app and there was the thing that I just said. It was just like magic. It was just there. And I think that what you're going to see is you're going to see this interoperability between devices, whether it's your phone, whether it's this built-in artificial intelligence that's just automatically networked into the room that you're at. And it's going to know it can maybe pick up your voice tones and basically differentiate you from your kids, your wife, all that kind of stuff, I think, is really coming on the horizon, maybe a little bit faster than people realize. And it's really, really some fascinating space.

Starting point is 00:09:06 And you see Google, Amazon, and Apple really coming at this very hard. And I think that is exactly what Steve Case is getting at when he's talking about this intelligence that just is automatically networked into any room that you would walk into. So pretty astounding stuff and miraculous stuff when you think about it. Let's say you'd leave your house, you'd go over a friend's house. Your phone is basically giving off a signal as it would walk into that room. It would then be interoperable with the other person's network. And all this stuff is just amazing the direction that this could potentially go.

Starting point is 00:09:42 And he hits at some of this stuff in the book, which is pretty neat to hear some of the conversations that he's having. So let's go ahead and jump into the second chapter. Now he goes into a little bit of his background and how he got his start. He worked at Pizza Hut when he was really young before he got started. Then he was working for this company called CVC, which was an online gaming company, way back before, I mean, really, you didn't even have like a dial-up internet service provider like American Online that was making this easy. So like the internet existed, but it was not easy to access another IP address from maybe

Starting point is 00:10:20 the computer that you were on. And I think that for our younger generation that's listening to this, if you're 25 years or under, that might not even be, that might be really hard for you to understand. But I remember whenever I was a kid and you wanted to get online, you had to use your phone line. So no one had a cell phone. You had a landline.

Starting point is 00:10:38 And if you wanted to get on the internet, you'd have to use that landline in order to dial up onto the internet. And it would take all this time and make all these weird noises. And then you'd be on the internet. And I remember during this period of time, you would call a friend, like you were trying to get a hold of your buddy. And you'd call their house and the line would be busy because they were on the internet. And then you'd try to call back an hour later and they would still be on the internet and the line was busy. And this is what it was like early on with America Online. So the reason

Starting point is 00:11:08 I'm telling all this because whenever he was starting this company, this CVC Online Gaming company, this is before you even had a service like America Online where you could do the dial on internet. So he was way ahead of his time as to how the internet could be used. I remember at that time where no one had a clue how it could be used. It was kind of like, you know, the normal person myself was walking around. I had no idea how this was going to be utilized in the future. But Steve Case was way ahead of the game. He could see where this was going. So this gaming company falls flat on its face because there's no way to basically link one node to the other, because there's no interface that can facilitate that connection.

Starting point is 00:11:53 So that does not go well. So the next thing that he tried to morph that company into was a music business where he would basically be able to sell like online, digital MP3s and like music, you know, basically your iTunes store. But this is like 15, 20 years before iTunes, you know? So again, he's like so far ahead of the game kind of seeing where this is going. And he actually worked a deal with Apple to, they got a small contract with Apple to start doing some things, but it just felt completely on its face, never got off the ground. And they actually ended up suing Apple because they terminated their contract and they made $3 million in their lawsuit with Apple.

Starting point is 00:12:37 So then his company rebranded itself as America Online, which became an enormous success. and what I've really kind of found interesting about this, and we talked about it during the Reed Hoffman book, is although he had these big aspirations and these big goals, he was pretty fluid and dynamic in how he was looking for new opportunities and adaptable to keep things going. He was always, I would say, a positive thinker, the way I kind of took it away in the book was,

Starting point is 00:13:12 he was really determined that something was going to work. He was going to be able to land something. He wasn't discouraged by all those initial setbacks, even though he had brilliant ideas. So I think that that's a key takeaway when we're talking about this second chapter. Yeah, and let's take a quick break and hear from today's sponsors. All right, I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future.

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Starting point is 00:17:36 I do want to say that Steve K is definitely knew how to hustle. That's for sure. Just an example, whenever they were talking within their own company about the deal with Apple, they kind of said that, oh, we're really in the pickle here because Apple was really, even though it was a minor contract for Apple, that was really the lifeline of the company. And the investors would never forgive them if they didn't get anything out of it. So even though they decided that they should rebrand the company, the only kind of funds that they can actually get that was from that settlement.

Starting point is 00:18:07 So they actually made a huge bet on seeing how much money they could get out of Apple and they ended up with $3 million. And that actually completely financed AOL at the very beginning. So that was a pretty honest story, I guess, that probably didn't come up as nice as it probably should from Steve. But I think it was a very interesting story of how they got started. And it was really a big success, as Preston said. I mean, it was a big, big success. And really to understand the magnitude of AOL. So back in 1996, the servers were down for 23 hours.

Starting point is 00:18:40 In another way, the internet was actually down 24 hours because EOL was handling 50% of all the internet back then. So it was definitely huge. And just also to tell you about how big a thinker Steve was, and he was only 32 of this part in time, his company was the first to IPO. It was the first internet company in history to do that. But it also tells you a clash about the old and the new world. he was actually forced to step down. The board was pretty sure that they couldn't have someone as young, 32, to be leading the company.

Starting point is 00:19:12 So it was actually forced to step down as an executive VP, even though he was still kind of running the company. So they could look good to attract investors. So it was a very, very different world. I mean, if you try to IPO, if you're 32 today, people always think you were too old, I guess, to be running the show, but it was very different. So I don't know how much you learn about the third wave, especially not in these chat, but there's a lot of funny stories, especially if you're around, I'm 32 as well, and Preston

Starting point is 00:19:40 is about the same age. So if you're from that age group, I guess there's a lot of funny story, or if you're just curious about, like, old people like us, what we have been went through with the internet. There's a lot of funny stories when like, oh, so that was what happened back then. So I guess, for what it's worth, that was one of the good things about the book. All right. So in the third chapter, this is titled The Third Wave, we talked, I think, a little bit about what that all meant. So we're not going to really dig into this one too far. The one highlight that I would add to this chapter is really two things.

Starting point is 00:20:12 The first one is that Steve Case thinks that in order to be successful, operating in the third wave, you've got to really be great at harnessing relationships between two different companies. These companies have to learn how to work together, opposed to against each other in order to navigate the third wave successfully. The other thing that he highlighted in this chapter is that he's really interested in fixing healthcare in the United States. And he thinks that the third wave is going to really help to add tremendous value into

Starting point is 00:20:46 health care moving forward if this is harnessed appropriately to take advantage of the opportunities that it's going to present. All right. So chapter four, this is called Startup, Speed Up. And there's a really good story in this second. about Paul Allen, so I'm going to throw it over to Stig, and he's going to talk about that. So it was really interesting because we read this book, Idea Man by Paul Allen. I think it was episode 112, so that was not long ago.

Starting point is 00:21:12 And in the book, Paul Allen talks about buying into AOL. And the way that he describes that in the book and also the way he describes everything else, he is doing, like if anything, it seems like Paul Allen really comes up, if not as a victim, but definitely as a very, very nice guy that sometimes people hurt. And the way that Steve Case talks about Paul Allen in this book, he talks about him almost like a predator in lack of better words, where Paul Allen was trying to doing almost a hostile takeover of AOL. And they learned pretty early in the process that Paul Allen is starting to accumulate stocks

Starting point is 00:21:52 in AOL. And they started to be friendly with him, invited him on the book. He was not actually on the board, but they talked about him being on the board and said that up to a 10% ownership, that would be okay. And I don't know if he necessarily agreed to that, but he definitely kept accumulating stocks. So at least according to Steve Case, he's kind of had this idea that they have at least an oral agreement that he can only buy 10% of a pile and bought more.

Starting point is 00:22:19 And what they did in OIL was that they said they wanted to do a poison pill. A poison pill is a way for the management to protect the. company for a hostile takeover. So what could that be? Well, that could, for instance, be that existing shareholders can buy stock and a discount, which would make it more expensive for the acquired to take control of the company. Or it might be a very lucrative employee stock option plan that is only effectuated if it's taken over. So whether or not a poison pill is a good idea, I think it lies in the eyes of the beholder. We also briefly talked about that when we're talk about Carl Icault, like, is this a good idea that someone would try to go into that

Starting point is 00:22:57 company. But in any case, Steve Case really didn't like that, and they really did everything they could to have Pal Allen to stay out of this. So they actually succeeded, or so he thought, because then Bill Gates called up Steve Case and said, why don't you drop by for a meeting here and our headquarters? And Steve Case definitely knew something funky was going on, because he knew that Gates have done this with other competitors at the time. And he actually gave them a choice. Like, either you will sell at a good price to us, all will crush you. That was not what he said, but that was what he said.

Starting point is 00:23:36 And he did that. I mean, so Steve Case knew that that was probably the meeting that he would go to. And what happened? Bill Gates called him up and smiled why he said it, but he'd more or less set between the lines, if you don't allow us to buy you, we'll crush you. We will launch this, a new service, and it's going to be called MSN Dial-Up,

Starting point is 00:23:57 and we're the biggest, and we'll crush you. It's the way it is. We're going to launch Windows 95, and we're going to have that as a feature on the opening screen. So if you think you can take us up on that, go ahead, but we don't think you can. And then Steve Case called his bluff. And that was what I really liked about the story,

Starting point is 00:24:18 Steve Case basically heard this, said, I'm not scared of you and continued to go on his path. And then Bill Gates played his hand that he said he would play. And he rolled it out. And then what was interesting is Microsoft came in and undercut the price that AOL was offering it. Steve Case rolled around literally within two days and matched the price that Microsoft had come out with. And then they went toe to toe on the price, which that was a really interesting discussion. I think that if you're going to buy the book, that's probably one of the highlights for me to read that competitive marketplace dynamic where you have two really big heavy hitters from the 90s going toe to toe with each other. And to hear that conversation firsthand was pretty cool. All right. So let's move into chapter five, the three P's. I'm going to go through this one real fast. He said that in order to be successful in the third wave, these companies that are going to be successful have to possess the three P's. And those are policy. perseverance and partnership. I already hit on the partnership piece there in the third chapter.

Starting point is 00:25:24 The perseverance, I think, really kind of goes pretty straightforward. I don't see how that's any different in the third wave than it is today. And then the policy, he thinks that policies are becoming stricter and stricter and more difficult to navigate. And he thinks that a person that's going to be successful in the third wave has to become a master at navigating all these policies. So for me, this chapter was kind of, yeah, I guess that sounds right, but not anything that was really too worthwhile to share. No, the highlight of this chapter was like this very brief story where he calls up Steve Jobs, and he offered to host Amblech music on his platform. And Steve Jobs was like, well, I'm not really sure. I have something called iTunes.

Starting point is 00:26:10 And Steve Case is like, oh, come on. It only works on Magintosh, and that's less than 2% Magistia. That's never going to be successful. So that was kind of a neat story, I guess. But yeah, other than that, chapter five was not that great, I guess. Okay, so chapter six, this was titled Pardon, the Disruption. I'm going to throw this one over to stick. So we have talked about disruption a few times before in the show.

Starting point is 00:26:33 I think the first time we did that was in Clayton Christensen, Innovator's dilemma. So the concept disruption is basically that a new technology and a new technology, new way of doing things will alter the way that the industry works. And this is especially true in the tech industry because that's just where the changes are the fastest. And he quotes both Jeff Bezos and Steve Jobs in terms of really grasping the concept of this. And Jeff Bezos said, I'm not concerned at all about disruption. I know it will happen. And another thing, that was the thing that job said is that if I don't cannibalize myself, someone else will. So this is some of the mindset he's saying that you need to have in a third wave. You can't think about a sustainable

Starting point is 00:27:20 competitive advantage per se, because you need to reinvent that all the time. Nothing is static. I think that was the thing I got out of chapter six. But basically, as I read chapter six, pardon the disruption, that was all about the reader having to wrap the head around the concept of disruptive technologies. All right. So then in chapter six, This one was titled The Rise of the Rest. This is a really basic premise. What he's basically saying is that this isn't going to be concentrated progress, economic progress for just a few geographic areas.

Starting point is 00:27:52 If you look at what's happened in the last 20 years, you see major hubs in the state of Washington, Seattle area, you see the Silicon Valley area, you might see New York, and some of the major hubs in the U.S. that basically get a majority of all the economic cash. flowing through those cities. What he's saying is in the future, that's going to be much more distributed across not just the United States, but also the world.

Starting point is 00:28:18 And that's going to be something that I think is advantageous for the world itself, but for people that might not live in those economic hubs, it's going to be a good thing. The way that he argues about this is that it makes a lot of sense to have hops if it's technology driven. And he's coming up with Silicon Valley as an example. And he said, there's a lot of synergies if you have to have. a new product that's an app. But in the third wave, the product is not an app. An app might be what you need to support the system. But since internet will be built into everything, it's basically

Starting point is 00:28:51 just the problem that you're solving. That's the key thing. And you can solve problems anywhere in the world. The technology is not an obstacle at all in the third wave. So that was why he said that we don't need hops the same way anymore. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. Vanta automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC 2 or running an enterprise GRC program, VANTA keeps you secure and keeps your deals moving.

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Starting point is 00:32:04 Past performance does not guarantee future results, current distribution rate as of 1231, 2025. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. All right. So then in chapter 8, this one's titled Impact Investing. And this is something that I'll tell you is really this mindset is sweeping most business schools across the United States. This idea of profits with purpose. And he believes that in the third wave, you're going to see companies and investors that are doing and conducting what's called impact investing, where it's not just about the bottom line and producing profits for the shareholder. but it's actually producing profits that have some type of social and altruistic benefit for society. And this is something that I know Stig and I are absolutely on board with.

Starting point is 00:33:08 We think that this is super important and something that's going to make the world a better place. So we're on board and I don't necessarily know that it's because of the third wave that that's happening. But I think that this mindset is something that is definitely being taught in schools around the United States right now. All right. So then chapter nine was titled A Matter of Trust. And this one was the one that I think most people probably wanted to read. And this was all about the merger with Time Warner and from Steve Case's perspective.

Starting point is 00:33:43 Now, what I liked about this chapter in particular compared to the book that we read on Ted Turner was we got Ted Turner's take on this deal, which was, you know, my impression after reading that book, and it's been a little bit since we read it. But Ted Turner really played the card that he knew nothing about it until the last minute and that he was totally duped into the deal was the way that I kind of remember his take on it. Now, Steve Case's take was much different than that. It was more like, hey, you know, everyone thought that this was going to be a great deal. You know, that's the way he kind of described in the book. Like, you know, Time Warner was excited. We were excited, and then it just wasn't a good deal. After the internet bubble pop,

Starting point is 00:34:29 that caused major problems for us, which was out of our control. But I think at the end of the day, you got to look at this from Steve Case's vantage point. If you're AOL and you pretty much have no bottom line profit, but you have a stock price that's just shooting to the moon because everyone's valuing these internet companies because it's new and it's got everyone's interest and they're paying insane prices for them. Steve Case, I mean, is the guy who owns that share of the equity, he made a fantastic deal when you think about what he pulled off. He took Time Warner and he acquired a company that had a bottom line that was as fat as

Starting point is 00:35:11 you could possibly get in that space that he's operating relative to his own company and the equity that he holds. And he conducted this deal. So this was like, this was the deal of all deals from his vantage point. I think it's really important that people understand that I'm talking about from Steve Case's vantage point, not the shareholders of both companies and the employees of both companies because I think when you look at it from a big picture, all those players and even down to the customer level, this deal was a disaster. This deal was just a total train wreck disaster. And so it was interesting to hear his vantage point, and I think that he's obviously still sticking to his guns that, you know, if I was back at that point again in history, I would have made the same decisions. And that's how it came across in the book. Yeah, once you definitely go back to episode 84 and then listen to Ted Turner's side of the story and then you can listen to this episode, it's not the same story, that's for sure. But it is true. Like Steve Case, he's saying that he knew that his stock price was overvalued. And back then, the mile cap was a lot.

Starting point is 00:36:13 163 billion, and he said he knew it was just ridiculously overpriced. And with these acquisitions, he also bought Netscape for $4.2 billion. NetScape was the browser that was competing with Internet Explorer back then before everyone started to using Chrome and Safari, but those of them that can remember it. But it was like his way of diversifying and, yeah, basically put a forward to the evaluation whenever the bulb would pop. At least that is how he describes it. I don't know if he was actually surprised of how much it was popping, but he definitely knew. that the stock was overpriced. And he talked about why they decided to team up with Time Warner because they actually had a lot of other options. They were even talking to Disney about this.

Starting point is 00:36:54 But they said that Time Warner was the best match because they had access to cables. It was still at the time where, as Preston said, you were having a modem and everyone knew that the future was cables. So that was why they teamed up with Time Warner. Now, as it happened, they never even got to the point where they actually got access to the cables even after they acquired the company because there was so much friction between the two management. I think there was like a point or two with Steve K said that, well, OL probably also made some mistakes and yeah, people thought that I was kind of arrogant because I was not really involved, but that was actually because I wanted people to really stand on their own and not feel like

Starting point is 00:37:34 I was breathing down the neck. But if you do read the book in this chapter, it was very, very clear that he put 95% all the blame on Time Warner. And he's probably not on Christmas cuts with Tetan today. So it was a very interesting story with a lot of bruised egos, that's for sure. Yeah, it was fun to read. All right, so go in the chapter 10. This one's called The Visible Hand. And this is just a real quick roll up.

Starting point is 00:38:00 This is where he's saying that if you want to be successful in the third wave, you have to integrate with government, and you have to play nice, and you have to have them on your side if you want to be successful in the long run. Yeah, and I think also his point was that even in today's world where most companies or many companies are born global, you still need to figure out a way to work with the local authorities. And that's just not going to change in the future.

Starting point is 00:38:29 And he's also talking about, he has a lot of critique and feedback to the American system and why it's not supporting entrepreneurs as well as they should. and he goes into detail with that. But I think one of the interesting things is that apparently he was one of the founding fathers behind the Jump Starop Business Startup Act in 2012. And back then to invest in private businesses, as a shareholder, you should be an accredited investor. That would mean that you need to have a net worth of a million dollars or an annual income of

Starting point is 00:39:00 $200,000 over the past two years. And he revoked that. So he also made it possible for crowdfunding. And it was kind of clear, like reading chapter 10, but also chapter 11, that that was one of his landmarks, one of the things that he was really proud of. Like, he had this thing with AOL until that went south. And now he saw himself more as a, not necessarily only as a businessman, but also someone who is working for society. And that was kind of like his masterpiece. So I think that was an interesting discussion as well and a very good initiative at that.

Starting point is 00:39:33 All right. So in chapter 11, this one's titled America Disrupted. And this one has a really simple theme to it where he says that a lot of the times new technologies, new ideas are born here in the United States. And one of the examples he gives is the car industry. So the automobile was invented in the U.S. You had U.S. car companies that were initially established. But now after the market matured, you see that the best car companies in the world are foreign car companies. There are the Toyotas, they're the Mercedes-Benz, there are the whatever one you want to say, but they're not the Chevys or the Fords. This is Steve Case's opinion that it has a tendency for the technology to be born in the U.S. And then for the optimization to basically be migrated out of the country to some other foreign country.

Starting point is 00:40:27 And what he's saying that in this third wave, it's more likely to be beneficial to countries outside of the United States. and that's his argument. Yeah, well, it's really a political loaded chapter. And I mean, this is all for his own account. I mean, he's talking about something like immigration policies saying, oh, so we're really lucky that Steve Jobs could get a visa, for instance. Could you do that today? And he talks about, well, the founder of Snapchat, he tried to get an American visa.

Starting point is 00:40:58 Like, I mean, I definitely don't want to say that's pro or con. But like, he's talking about like how the policies are basically affecting all small businesses, primarily a negative way. And if we don't change the policies in the States, then we will lose our competitive advantage compared to the rest of the world. I think that was more like a red flag kind of chapter. And whether or not he's right about that, I definitely don't want to be involved in that discussion. Again, it was not so much his own business and what he had previously done. It was more like, how can we make American competitive, probably more to look himself as a statesman today. So moving on to the 12th,

Starting point is 00:41:35 chapter, and this is the last one, it's Ride the Wave, and the wave that he's referencing is the third wave. And this was basically just the summary of the entire book and the ideas in the book and how this third wave is going to be very dynamic, faster than anything we've seen in the past. And if you're not doing something to continue to grow your understanding of what it is that's going to be coming, you're going to be left in the dust and not being able to navigate this new environment optimally. And so that's really kind of the highlights from the book. Stig, did you have anything else for the final chapter?

Starting point is 00:42:11 Anything else you wanted to highlight? No, there was more like summing up all the other chapters and encouraging people to start up their own companies and saying, it might sound stupid that you can be the largest hospitality provider and don't own a single hotel. Today it's called a B&B. How can you have the largest transportation company in the world not owning a single car? It's called Uber today. saying you need to challenge the common beliefs, start up your new company, and make US better.

Starting point is 00:42:38 I guess he was like his send-off message, his takeaway to the reader. Overall, I would say it's a good book. I would leave it at that. It seems like, we were like really skeptic in the beginning, and then you were like, hmm, now we talk about it. It was a lot of fun stories. It was okay. It was good. Yeah, it was a good book. All right. So I got a couple highlights here for everybody. We do this annual shareholders meeting out in Omaha where we go and see Warren Buffett, Charlie Munger live. It is the Woodstock for capitalists. And I'm telling you, if you've never been to this, it is a blast.

Starting point is 00:43:16 And our community is so much fun. Let me tell you, there's so much fun. And on Saturday night after the meeting, we have a pub crawl, which is a blast. If you want to go to this thing, go to our website, go under the, About Us tab and you're going to see a spot where you can sign up for live events. That's where this is at if you want to sign up and go to this. We would love to have you there. We can hang out all weekend.

Starting point is 00:43:41 We can talk about whatever you want to talk about. And the people in our community have pretty similar interests when it comes to investing. So there's a lot of people there that can talk your ear off about intrinsic values and anything else you want to talk about. You'll be in a good community to do those conversations. So sign up for that on our website. The next thing that I want to tell you is that we read all of our books on Audible. If you want to get your free book, if you want to read this one that we just talked about for free,

Starting point is 00:44:07 go to our website, click on the link. You get a free Audible book. And some of these books are expensive. They're like $30, but you get the first one for free. And Audible also is only $15 per book. So it's a great deal. The other thing, sign up on our email list. You'll get our executive summary of this book.

Starting point is 00:44:22 I'm looking at it right here, and it's about five pages long, and it summarizes every chapter. and that is completely for free. Just go to our subscribe link on our website and click on the email list. And that's what's going to get you on those so that you receive these book summaries completely for free. We don't spam you. The last thing is check out our TIP Academy site. We have some things that are free, some things that are paid.

Starting point is 00:44:45 There's a lot of learning to be done on our TIP Academy site. I can't recommend this highly enough for you guys. So if you're on our website, The Investorspodcast.com, go there, check it out, see if there's anything that you like. This was all that Preston and I had for this week's episode of The Investors Podcast. We'll see each other again next week. Thanks for listening to The Investors Podcast. To listen to more shows or access to the tools discussed on the show, be sure to visit www. www.com. Submit your questions or request a guest appearance to the investors podcast by going to www.com. If your question is answered during the show, you will receive a free

Starting point is 00:45:25 autographed copy of the Warren Buffett Accounting Book. This podcast is for entertainment purposes only. This material is copyrighted by the TIP Network and must have written approval before a commercial application.

We Study Billionaires - The Investor’s Podcast Network - TIP 126 : The Third Wave - A Review of Billionaire Steve Case's Book (Business Podcast)

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