Steve Case on America’s ‘Secret Sauce’
The man behind the iconic “You’ve Got Mail” reminder says he knows the “secret sauce” that built the American economy. “Entrepreneurship is the reason that America has leading companies that employ tens of thousands of people, and we need to support and encourage these companies,” says Steve Case, co-founder and former chief executive officer of AOL, co-founder and CEO of investment firm Revolution, and chairman of the Startup America Partnership.
As if he wasn’t busy enough, he also recently opened a winery, Early Mountain Vineyards.
Free Enterprise staff writer Sheryll Poe caught up with Case during a September event put on by Empact, an organization devoted to facilitating a culture of entrepreneurship among young people.
FE: You’ve said that there are two kinds of entrepreneurs—those starting a business and those who are trying to change the world. What do you mean by that?
Case: Well, they’re both important. And anybody who is willing to start any kind of business and take the risk of starting a business I think is terrific. The mind-set of somebody who essentially starts a small business with the intent or the expectation of keeping it small—for example, someone who starts a restaurant and never intends to have any more than one restaurant—is different than the mind-set of someone who is creating companies that they really do want to scale and grow.
There are people who start companies with the idea that they will build up something and some product and then two or three years later sell it to some larger company. And that’s fine. But I think what we need more as a nation and what we try to support more through Revolution are the kind of firms that are attacking big problems—health care or education or energy—and are trying to build significant, sustainable, built-to-last, change-the-world companies.
FE: What is the role of entrepreneurship in American society?
Case: It’s part of the story of America. The United States was a startup 200 years ago. Our history is in part about pioneers building a democracy, but it’s also about entrepreneurs building the economy. The reason we’re the leading economy now in the world is because of the work of entrepreneurs in not just building their own companies but in collectively building industries that were centered in the United States.
But we run the risk of getting complacent and thinking somehow we’re just going to continue to be the big economy in the world. We need to take it seriously and double down on entrepreneurship, or we’re going to lose our way as other nations around the world step up their own activities to stimulate entrepreneurship.
It’s good news that we’re the leading economy in the world. The bad news is that we have 8% unemployment, which is too high, and a 2% economic growth rate, which is too low. Other countries are growing faster and moving rapidly to embrace entrepreneurship, recognizing that entrepreneurship is sort of a secret sauce that has built the American economy. They’re saying, ‘Well, you know, we’d like to replicate some of that and move the center of gravity around to entrepreneurship, innovation, growth for our country.’
FE: When you say “double down on entrepreneurship,” what does that mean?
Case: On the legislative front, the JOBS Act that passed about six months ago jump-started our business startups, changed some regulations around capital, modified Sarbanes-Oxley regulations on smaller companies, and created an on-ramp for the younger, smaller companies to go public sooner and quicker. As a result, more of them went public, which will result in more job creation.
Startup 2.0 legislation is also important. We’ve got to win the global battle on talent. If we attract people here, educate them here, give them a Ph.D. or a master’s here, and then kick them out of the country and force them to go to another country and compete with us, they will. Then suddenly we’ll wonder why some of these companies and why some of these industries are now developing in China or India or Brazil or Israel or someplace other than the United States. Let’s stop doing that.
FE: You’re on the president’s Council on Jobs and Competitiveness. Are you pleased with the progress that the council has made? What’s the status of the council’s recommendations?
Case: I am pleased. I specifically focused on the entrepreneurship side of things, and our group presented our recommendations to the full council and to the president just about a year ago. Those recommendations were the foundation of what became the JOBS Act. Anytime you work on one of these councils, you worry that you’re going to spend a lot of time, and it’s going to be a nice little report that sits on the shelf somewhere and doesn’t really get any action or follow-through. That didn’t happen here, which is good.
Now, the next step is to deal with the high-skilled immigration issue. My expectation is that once the election is over, whether it’s in a lame-duck session or starting in January, it will get attention. I’m optimistic that we will be able to build bipartisan support so it can get done, because both President Obama and Mitt Romney have come out in support of the idea of STEM green cards.
FE: Last question. Why open a winery? Is wine part of the secret sauce?
Case (laughing): No. Well, maybe. No, my wife and I just like to drink wine.