Sending Foreign Nationals to West Point and other Steve Case-isms

AOL Investor Relations
Source: AOL Investor Relations

Last night, I had the opportunity to attend a Cambridge Innovation Center ”Fireside Chat” with Steve Case and Tim Rowe.  Never mind that the fireplace was a Home Depot fireplace screen sans the fireplace.  [Note to self:  will have to recommend the purchase of $39.95 faux LED fireplace logs to enhance the atmosphere.] But I digress.

Steve, one of the earliest employees at AOL, originally known as Control Video Corporation, was the chattee. Tim Rowe, the founder and CEO of CIC, was the emcee.  What was probably lost on the young audience, is that AOL was the pioneer of “online” and the early internet, and was near death many, many times.  Its incarnations after Control Video included Quantum Link, Apple Link, PC Link, America Online, and finally AOL.

Steve stayed in the Washington, D.C. area, after AOL migrated North to New York  City.  He has made that inevitable migration into politics, issues, non-profits and venture capital that one does as a second career.  While I don’t want to put words in his mouth, he appears to be part of Obama’s kitchen cabinet for tech-related issues.

Steve started off on the JOBS Act, saying that IPO’s are huge job creation machines and acquisitions are net job killers.  I couldn’t agree more.  In fact, I would add that a healthy IPO market is de rigueur for a healthy M&A market.  With an IPO, small companies, receive a non-trivial cash infusion and a stock that is a liquid currency.  In an instant, their approaches to potential acquirees are taken seriously.  Many companies that I took public at sub $100m market caps are now trading at over a billion dollar market caps.  These companies continue to be candidates for potential acquisitions, and indeed, some of them eventually did get sold to much larger corporations.

Case believes the JOBS Act will have the ability to transform the early investment arena, and that the definition of an “accredited investor” will morph as the JOBS Act startup activity matures.  We agree that the JOBS Act does have the potential to be a kind of Kickstarter for local businesses.

Steve has an startling analogy with regard to the pending immigration bill:   Imagine that you take some of China’s best and brightest and educate them at West Point and Annapolis.  And then you tell them “Whoops, we don’t have a place for you.  You’ll have to go back home to China and find a job in its military.”  Whew.  That’s one way to look at it.  A bit extreme, but it gets the point across.  Did you know that we have a number of foreign nationals at U.S. military academies?  As an aside, he believes that the current immigration bill has an excellent chance of getting through Congress

Finally, as a ray of hope to those trying to build companies, he said “Don’t give up,” with emphasis, repeating it four or five times. His family, friends, people who cared deeply about him, told him that America Online wasn’t going anywhere.  “Give up and get on with your life.”  Thank goodness for pugnacious people who refuse to give up.

BTW, Steve does claim that there is hope for an end to the current stalemate in Washington, D.C.  Clearly, he’s seeing something that I’m not.  Hopefully, he’s right.

Finally, if you aren’t familiar with the story—I’d forgotten—take a look at AOL’s history in Wikipedia.  Did you know that in the first six months of this year, AOL’s advertising revenue grew seven percent, it’s revenue was just under $1.1b, and it was profitable?  Who would have thunk?  The lyrics of “The Eye of the Tiger” are going though my head.

Finally, for John Merson, I have retained my AOL email address:  John, an Amherst grad a few years before Tim Rowe, has always chided me that Steve (a Williams alum) couldn’t sleep knowing that I was giving up on my AOL service.  No worries.