Steve Case 0:00 

Almost every company, there's a few overnight successes, but very, very few, most of them are a struggle and a slog. And there are times where it doesn't look like it's even going to be successful, and just being able to punch through that power, through that stick with it, I think, is incredibly important.

David Novak 0:22 

You everybody loves the success story, but not enough people talk about what it takes to stay in the game long enough to build one. Welcome to how leaders lead. I'm David Novak, and every week I have conversations with the best leaders in the world to help you become the best leader you can be my guest today is Steve Case, the co founder of America Online. These days, he's the chair and CEO of revolution, a firm that backs entrepreneurs from all across the country, including companies like kava and framebridge. Now the internet might feel like the air we breathe today, but in 1985 when Steve co founded AOL, that sure as heck was not the case, Steve and his team had to persist through years of doubts and setbacks and chaos before America really did get online and make AOL the top performing stock of the 90s. So what do you do when progress is slow, like that? In today's episode, you'll see how Steve built the resilience to keep going when success felt like a slog, and how the good news is for us, that same mindset he used to grow his business is one you can learn from too. So let's see how it's done and hear how that iconic You've Got Mail line came to be. Here's my conversation with my good friend and soon to be yours, Steve, case,

you know, Steve, I was thinking about, you know, here we are doing this interview right now, completely online from two different locations. I'm in Louisville, Kentucky. You're in Washington, DC, and this is impossible. This isn't possible without all that you built. You know, what's it feel like to have changed the world like you did with American online? Well,

Steve Case 2:14 

you're kind to say that, obviously, there's a lot of people, a lot of companies all came together to kind of make the internet part of everyday life, but I'm certainly proud of the role our team played when we got started. To your point, 40 years ago, we started the company in 1985 only 3% of people were online. Those 3% were online an hour a week. Nobody knew what the internet was, nobody cared what the internet was. And even those people who got online were using very, very, very, very slow modems that could barely send texts and let alone sending photos, and certainly couldn't send video. So we have come a long way from nobody being connected and essentially everybody being connected, and most people not believing in the idea of the internet and everybody recognizing it is a pretty fundamental aspect of everyday life. So it's been a remarkable journey. I'm just honored to be have had a seat seat on that bus,

David Novak 3:06 

yeah. Well, you certainly did. I think you're at the you're the driver, you know. And I got to ask you, you know, what's the best AOL username you ever had?

Steve Case 3:16 

Steve?

David Novak 3:18 

And it

Steve Case 3:19 

pays to get in early. I got Steve I got Steve C I got Steve Case, and Steve worked pretty well. We only had, like, hundreds, even 1000s of members, but we had millions and 10s of millions of this didn't work so well because people would would end up I also sent a welcome email to every new member of AOL, particularly the early days. They were kind of pioneers, joining us on this journey, joining us on this mission, and we wanted to feel part of the community. And I felt part of my job would not just to be CEO, but almost be mayor of the community, kind of setting the tone. So I would send those out, which is no big deal in the early days, you know, some people would click on reply, but later on, and we were getting 10s of 1000s of emails every day. At one point, you have like 30 people full time who were part of the Steve Case email team. So that's a case of what seemed like a good idea when we were small. Didn't scale so well. What

David Novak 4:14 

would be the most embarrassing username you ever had? Or did you have one in that category?

Steve Case 4:19 

I couldn't. I had one, but if I partly because I'd have been embarrassed to have it, everybody, everybody on our team would have known about it, therefore wouldn't have been fun.

David Novak 4:29 

Well, we're going to talk more about AOL in a bit, but these days, you're partnering with entrepreneurs through your investment firm revolution. Tell us about what's really driving that passion that you have. Well,

Steve Case 4:44 

it goes back to, you know, the AOL internet journey, you know, was about a 20 year journey from the time I first, you know, kind of learned about it, time we started the company, time we scaled the company that we merged with, with Time Warner and I stepped aside as CEO, and then a couple later, stepped a. Side as chair. It was about a two decade kind of journey. And when I did step aside as CEO, I was only, like, four years old, 41 something like that. So I was like, Okay, what am I going to do next? I decided what my real passion was was on building things and backing entrepreneurs and assembling teams and climbing mountains that people didn't think were climbable. And so that led to revolution being more of a kind of a venture capital firm, but with a bias towards backing people and ideas that can change the world, and also doing that in areas of people's lives that were important. So attacking some of the biggest industries in the world, healthcare and financial services and things like that. And also doing it from by backing entrepreneurs in places that often feel left out and left behind, so like where you are in Louisville, not just backing people in Silicon Valley or New York City, backing people everywhere. And so that kind of became, sort of the passion it was, partly being able to as venture capitalists get to do, kind of live in the future, get a sense of what's going to happen next, and be part of making it happen by investing in companies and mentoring entrepreneurs and doing what I could to take them to the, you know, the next level, but also with this bias towards kind of leveling the playing field and trying to create more opportunity for more people in more places, which frankly, was the same idea that drove my interest in AOL the internet was like leveling the playing field so everybody had access to these tools, or media would be more distributed, not just a few big TV stations, et cetera, et cetera. And so it's not that surprising, as I've now looked back over the past 40 years, 20 focused more on internet 20 focus more on backing entrepreneurs. That in some ways it's the same idea, kind of backing people, backing ideas, and trying to do it in a way that's a little bit more inclusive of people who otherwise might be left out, left behind. So

David Novak 6:56 

you go into different cities, you don't just go into Silicon Valley or New York, or places where you might think, are these hubs, you know, how do you, how do you get the word out that this is this, this is what you're trying to do. Well, early

Steve Case 7:07 

on, it was a little more difficult. We when we started this effort. Initially, I started revolution, the venture firm, then started doing some things like bus tours and to visit different different cities. And remember the first one we did over a decade ago, we went to Detroit and Pittsburgh, Cincinnati, Nashville, I think, through the first cities now we've gone to 5060, other cities. We've now made over 200 investments in companies located over 100 different cities. So it's been a fairly broad kind of, kind of outreach. In the process, we built a fairly significant network, really, really all across the country. And so we had a team that would kind of advance these cities, find out what's happening in those each of the particular cities, and identify interesting companies that we might want to visit, or people we might want to invite to different events. And we coordinate with the mayor, sometimes, the governor, senators, others, to try to kind of shine a spotlight on what's happening in the city, try to drive more collaboration in the city. So the first few might have been a little more challenging. Over time, we started building some momentum. It got visibility. We then started getting university presidents and mayors writing to us, saying, Come to my city. Come to my city. We want to show you everything that's happening. And so it got a little bit easier as we progressed, but it's really been a gratifying journey to see these cities up close and personal. See essentially most of the country, not by plane but by bus, driving between these different cities, when in these cities, driving around the cities, and really kind of getting a sense of it, and seeing a new sense of, I think, hope and possibility in parts of parts of all, really, all parts of America that don't get much attention. The data you probably know this, but maybe not everybody does that. Over the last decade, about 75% of venture capital has gone to just three states, you know, California, New York and Massachusetts do really well. The other 47 states you know got to struggle. States like Kentucky get less than 1% California alone gets 50% so how do we, the entrepreneurs in places like Kentucky or Ohio or Michigan or many other other states, often feel they kind of have to leave, leave where they are, to go to the coast to have an opportunity, and that, I think that's tragic. We want to make sure people can start and scale anywhere. So that's really driven a lot of this passion. It's not just about backing companies to generate a return on investment. Of course, that's what venture capital is all about. There's this higher calling, if you will, higher purpose around backing entrepreneurs in these what we call rise to the rest cities. You know,

David Novak 9:34 

I always say, show me a good leader, and I'll show you good business. And you've been picking leaders for a long time. As you pick companies that you want to invest in. And you obviously think about the entrepreneur, and I'm sure you have a perspective on that. What do you look for in a leader? What do you think makes a great entrepreneur? Well,

Steve Case 9:51 

we back at revolution. We have three separate groups, very, very early stage, seed investment group, when you're really just investing in. A very small team, or more, more backing of the idea of venture group, where it's invests in companies that have a little bit more scale. Maybe there's a couple dozen employees at that point, they started to figure out what business they're in and what the business model might look like. We also have a later stage growth team that focuses on companies that really have kind of broken through, but really have, we think significant potential. And the way, one way to think about it, from an investor standpoint, that seed fund generally, is writing $500,000 checks for these companies, the venture fund maybe $5 million checks, and the growth fund maybe $25 million check. So it's scaling. So the way we think about your your question, differs at each stage, because at that earliest stage, you're really betting on that person, and that particular idea, as you head towards more of the growth stage, these really are starting to be real businesses. They might have 1020, $30 million of revenue, and we get convinced that they can be a billion dollar plus of revenue. So those are some of the differences. There are some things that are pretty common, which is, obviously, this is about people, and it's not just about the entrepreneur. It's about the team the entrepreneur is able to assemble. Do they have the right mix of skills, whether they're tackling healthcare or tackling, you know, sports, tech or FinTech or whatever it might be, having the right mix of skill sets that really bring to bear is critically important at every stage. And really having people that are thinking big, you know, we entrepreneurship is hard, you know, startups are hard. Many, many, obviously fail. We really want people that are super passionate about what they're doing, and therefore we'll stick with it when times are tough with my experience with AOL, eventually it broke through, but it really took us a decade before we became kind of an overnight sensation, and we've seen that time and time again with other companies. So having people that are really driven by the pursuit of that idea, that pursuit of that vision, pursuit of that mission, is critically important. And last thing I make is a little bit of humility. You know, confidence in entrepreneurship is critical. You have to really believe. You got to get a lot of other people to believe, to join your team, to invest alongside you, to partner with you, to be your customers. And so you've got to be super confident, but you also have to have a degree of humility, because, you know, these are challenging situations, and you know, nobody knows exactly what's going to happen next. There's a lot of ambiguity. And so have bringing a balance between, you know, being quite confident, but also having a certain understanding that you don't necessarily have all the answers, maybe you don't even have all the questions. And so you're on a on a learning journey. As these things develop, you know, it's always

David Novak 12:44 

speaking a journey. It's always fun to really hear about the journey that someone like yourself has taken to get to where you are today. And I, I like to take people way back. Can you share a story from your childhood that really shaped the kind of leader you are today? Sure. Well,

Steve Case 12:58 

my I grew up in Hawaii, you know, so, which is kind of interesting, actually, I was born when Hawaii wasn't you Hawaii wasn't yet a state. It became a state on my first birthday, which is kind of, kind of interesting. Both my parents were born and raised in Hawaii. They went to the mainland to get education. My mom in Berkeley, in California. My dad went to Williamson, Massachusetts, and then went to law school in Colorado, and then both moved back to Hawaii. That's when they met, and thankfully they did, because they decided to get married, and they had me and three other siblings. And so that's a little bit of the backstory. The other part, I think it's interesting there is my dad was a lawyer, and he worked for the same firm for 60 years time he got out of law school to the time he retired well into his 80s, worked for the same firm, so there was a modeling of hard work, but also of a certain kind of loyalty to a certain organization. In my case, it was my journey has been all different, because I did in the early days bounce around a little bit. I kind of knew what my destination I thought I knew what my destination was, which I wanted to play a role in building the internet, but I know quite how to get there, so I had to jump around a little bit to finally position myself to do it. And the other aspect I remember growing up is I was always interested in business, starting things. I didn't know what the word entrepreneur meant at the time, but I knew I liked to come up with ideas and turn them into businesses. None of them really amounted to much, but some of the experiences I got at a relatively young age, 810, 12, I think, were super kind of formative, and ultimately led me on this pursuit of entrepreneurship. Curiously,

David Novak 14:32 

what was the first idea you had that you tried to make some money on? Well,

Steve Case 14:37 

of course, my first idea, like everybody's first idea, is a lemonade stand. I did learn a lesson there, which is, we had a recept lemonade stand. And the first couple of times we did it, it was, it was great, because we basically would get all these ingredients, you know, free from my mom's kitchen, and then go out and make it and sell it and get 100% of the revenue. After, after a couple of times, my parents decided this was not. The right lesson to learn. And they said, Okay, now, now you actually have to pay for, like, the lemons, and pay for the sugar and so forth. And then I realized, oh, it's, you know, it's not 100% margin. There actually is this thing called cost of goods, and business suddenly became much less interesting when I when I the profits diminished when I had to actually pay the real cost. But it was a good lesson in terms of building something, and also a good lesson in terms of learning some of the cost structure. I also sold things like Christmas cards, door to door, cable television, door to door. There I learned that, you know, you know, you have to be get used to a lot of no's. You just keep knocking, and eventually you'll get to a yes. So yeah, those were some of the those early experiences that ended up have, you know, kind of implanting on me. I think some lessons that have been helpful and you

David Novak 15:47 

wanted to work your way into building the internet. But one of the, one of the things that you and I have in common is that we both lived in Wichita, Kansas, and we both had roles at Pizza Hut. What's a leadership lesson you you picked up working at a company like pizza

Steve Case 16:02 

Well, obviously you got better lessons, because you ended up being, you know, and the CEO of Yum, which is Pizza Hut, and a whole lot of other other other things. But one of the lessons I learned at two things ties in what I said earlier, when I graduated from college in 1980 I actually, by then, kind of knew what I wanted to do this idea. The internet was just beginning, emerging, and I wanted to jump into it. But when I was graduating, there was no internet companies to go to, so I couldn't, like, find a job at an internet company. It was still more of a concept than a reality. And back then, venture capitalists were not backing, you know, 21 year olds with harebrained ideas, so I didn't have the ability to start something. So then I said, Well, what am I going to do? How am I going to get learn some skills, maybe build some a little bit of a track record, some credibility, some momentum that will ultimately enable me to kind of do what I really want to do, which was this internet thing. So the first job I worked for was in Cincinnati, Ohio for Procter and Gamble and their brand management program. And learned a lot there. I was just there a couple of years, but learned but learned a lot about, you know, testing things, and they're, as you know, very diligent about how they come go to market with products, and very thoughtful around using technology. Also learned an important lesson there around succinct communications. Their, you know, their one page memo was every you know, you learn that it takes much more time to write a short memo than it does to write a long memo, and it really forces you to crisp up your thinking, which is, I think served me well. So I did that for a couple of years. And I did work for for about a year for pizza when I was owned by PepsiCo, and I was, you know, kind of moved to Wichita to become the director of pizza development, which seemed like a pretty good title when I was 2324 and a pretty good jump in salary. But the lesson I wanted to learn there, and did learn there, was Procter and Gamble, as you know, is a very centralized, top down company. Pizza was, again, you know, it better than I, but was much more of a bottoms up, franchisee led company, and a lot of the innovations happened at the periphery and either through franchisees, or even part of my job as director of new peace field, and I travel around the country, or something like 50,000 pizzerias. I said, rather than sit here in our test kitchens in Wichita, why don't I hit the hit the road and find out what other people are doing that might lead to some interesting ideas. So that that that was, I think, helpful, both in terms of understanding that ideas can be found anywhere kind of ties in what we're now doing with the with Rise of the rest, as well as a bias towards kind of getting out of the office and hitting the road. Hey,

Koula Callahan 18:33 

everyone, it's Kula from how leaders lead. And if you've watched our podcast for any number of episodes, you probably know that a common theme from all of the great leaders we interview is that they are active learners. They have this commitment to continuing to learn and grow so that they don't stay stagnant, and so that they continue to see success in their leadership and in their life. This theme of active learning is so important, and it's what David's latest book, how leaders learn is all about it's all about helping you develop that skill of active learning so that you too can continue to see success in your leadership and in your life. The book is really entertaining. It pulls stories from some of our greatest podcast guests and pairs those stories with insights that you can incorporate into your leadership and into your life right away. Grab how leaders learn on Amazon or wherever books are sold. And I think you're really going to love it. You feel David's personality through the pages and through his storytelling. And it's a really powerful way to level up your leadership.

David Novak 19:31 

You know, you end up starting AOL, and it seems so obvious now why it was such a big, big idea, but, you know, take us back to those early days. Give us a little bit of a history lesson on, on, you know, how AOL was born, and how you convinced yourself that it was such a breakthrough idea because you were heading that way it seems, you know, take it. Take us through that.

Steve Case 19:54 

Well, the reason I thought it was an interesting idea when I was still in college, this is 7879 1980 I was reading about these experiments that different companies were doing in France, or something called Minitel in the UK, something called press tell these interactive services. There even were some in the United States. And also, while I was in college, read the book The third wave by Alvin top of the futurist, and he basically laid out, you know, what was going to happen in terms of the internet, talking about electronic cottage and different ways people could get information and connect with people and so forth. And I read this, this is definitely going to happen. I want to be part of making it happen. So that idea became something I was pretty passionate about relatively early on the way I got to it was, as I said a little earlier, a little bit circuitous. At first, a little bit of PNG, then a little bit at pizza. And I moved to the Washington, DC area to join a startup that was doing something in this internet space. But a few months after I joined, the company was nearing bankruptcy. They raised a bunch of money. The product was having some some challenges, and so that was a little bit my lesson around entrepreneurship, a little like, welcome to the NFL. It's not so not so easy, and so we struggled for a couple of years just trying to keep that company alive. But thankfully, two of the people I met there, Jim Kimsey and Mark serif, ended up being my co founders of America Online AOL in 1985 so it was a, you know, a strange journey. My parents were a little worried about my, my trajectory, having again, my dad, having been at one place for six years, I was at P and G for two years, pizza for one year. Then, you know, at this new startup for about a year before it stumbled, and then was starting something else. So I think they were, you know, you know, I know they were quite concerned about, you know, my trajectory. But eventually we were able to break through. But the reason it took so long for the Internet to take off, in retrospect, it's more obvious at the time I was pretty frustrated by it, is most people didn't see a reason to be online. There wasn't any digital content, there was not any e commerce. Yet we had to create all that infrastructure, all those services. Most people didn't have personal computers. The few people that did have personal computers didn't have communication modems to connect their computer to the these networks. The cost of the time was something like $10 an hour. So it was kind of for, you know, pretty, pretty scary to be online. You'd only want to be on for brief periods of time. There was nobody to talk to because there was nobody else on. So there were a whole host of reasons, and it just took us a while to really create a service that was easy to use and useful and fun and affordable, and convince people they wanted it, and convince PC manufacturers to build those modems in and work with the telecommunications companies to lower the cost of communications and work with the government to commercialize access the internet and open access to the telephone network. There's a whole bunch of things that needed to happen, and it just took a decade. So that was why, as I said earlier, one of my lessons is, is revolutions sometimes happen. In fact, often happen in more evolutionary ways. You're where it really is a slog, where sometimes you may even think you should give up, but eventually, you know, the sun comes out and you start seeing some real momentum. Yeah, the sun

David Novak 23:00 

definitely came out and, you know, and I've heard you say that, you know, we always believe the killer app of the internet was, was people not content, not commerce, people, you know, say more

Steve Case 23:14 

Well, the reason we felt that, and even from the earliest days in 1985 the majority of the usage of AOL was communications, features community features, things like people connection, where you can chat with people, or instant messaging now texting or bulletin boards, or just a whole variety of ways that connect people to people they already know and just are trying to stay connected with. Obviously, email and things like that are pretty, pretty fundamental, as well as connecting to people, to communities they care about. So they meet some new people that they they extend their their their network. And so we knew that was a powerful idea that people have always wanted to be connected. That's part of the reason why people go to restaurants, part of the reason why, you know, people historically, use the telephone to make, you know, phone calls. So there was always this, this human desire for connectivity with other people, and we wanted to use this technology to do that. We also wanted to humanize the technology, because people take it for granted now, but we started 40 years ago. The internet was kind of scary. It was, it was sort of felt like it's sort of a weird, you know, kind of, kind of hacker world, and can have we wanted to put a friendly face on it. And one way to do that was to, you know, to focus on people. There also was, frankly, a pragmatic reason that, that some of the bigger players out there own significant content, you know, come, you know, publishers like Knight Ridder and, you know, Time Inc and, and, you know, or owned, you know, commerce, one of the big competitors was prodigy, which is backed by IBM and Sears. Obviously, Sears was the major commerce kind of company, and prodigy had committed $1 billion to launch. So we knew we couldn't compete with them head to head in terms of how much money we had versus how much money they had, and we couldn't compete by trying to do a better. Job of what they did well. So we said, let's focus on what really is unique for us and differentiates for us. And that was focused on people and community. And even today, if you look at the popular services, whether it be Facebook or Tiktok or many other things, they're really showing that continuing that power of community, absolutely.

David Novak 25:17 

And I have to ask you, how'd you, how'd you come up with the name American, America Online?

Steve Case 25:24 

Well, like many things, a little bit accidental and little bit actually of a crisis, creating an opportunity that our strategy in those early days, because we didn't have much money, we only raised $1 million in venture capital, was to partner with the PC manufacturers and create custom kind of what some would call now white label online services. So we partnered with the Commodore, which had the Commodore 64 computer, and created something called Q link. And partnered with Radio Shack Tandy, which at the time was a big PC manufacturer, created something called PC Link, partnered with IBM to create something called promenade, and partnered with Apple to create something called Apple, Inc, we got Apple to agree to license the Apple brand name to us to launch this service, and we launched the service. And then about a year into it, Apple said, Come to think of it, we don't really like the fact that you are using our Apple brand name. You know, we regret we did that deal. We want to tear up that deal. And that was a little bit of a crisis, because that was what we thought would be our biggest growth driver. So we kind of negotiated a transition, and a settlement wasn't a lot of a couple million dollars, but that gave us the ability to relaunch the service, and we didn't know what to call it. Couldn't call it Apple Inc anymore. Couldn't afford a branding agency, so we basically had an internal contest to decide what to name. There are three or four names that were explorer and promenade and some others, but one of them was online America as well. That sounds interesting and also has the benefit of kind of describing what we're doing. Since we don't have money to spend on building a brand, we need to have something that's pretty descriptive, but I thought it would sound better if it was America Online. So we just flipped the words and and that suddenly became our brand. So it was an internal contest. I think somebody got 100 bucks for suggesting that, and the rest is history,

David Novak 27:07 

and you end up being the first internet company to go public back in 1992 What was it like going into unchartered territory like that, and what did you learn as a leader doing something that hadn't been done before.

Steve Case 27:23 

Well, a couple of things. One thing that was a little bit of a negative when we were going public, as you said, it was 1992 but as we're planning for it, in 1991 the board was concerned that the public markets, Wall Street, if you will, was not necessarily going to easily embrace this idea of the internet, and decided that it would be even harder if the CEO of the company was just 3132 years old. So they actually decided that I should step aside as CEO, have the other co founder, Jim Kimsey, was 20 years older, come back as CEO, and that was pretty frustrating. Obviously, I didn't think it was fair, but I almost quit, frankly, and even some of our team threatened to quit, and I said, No, we believe in this company. We believe in this idea. Let's like, hang in there. Let's play the long game. So I stuck it out. We did go public. Six months later, I became CEO again. So that was one interesting kind of story, because obviously things have changed. Now, many companies are going public with CEOs in their in their in their 20s, and it's obviously worked. You know, I worked pretty well. The other is, I viewed it as an opportunity to sell the idea of the internet. If we could sell the idea of the internet, people would then see that America Online as a company, as an investment might make sense. So it was really more evangelizing the idea of the internet, and that's, you know, I did for a lot of years, and just trying to kind of put the internet on the map and then position AOL within the internet. So it was long and hard and a struggle. We we our road showed. We ended up raising $10 million in our IPO. The value of the company when we went public, that day, was $70 million you know, yeah, nobody really knew or cared what we're doing. But then, frankly, seven years later was it was $160 billion and it turned out to be the best performing stock of the decade. So a lot of those skeptical institutional investors on our IPO roadshow regretted not taking the meeting or at least paying a little bit more attention, because it turned out we really were onto something.

David Novak 29:24 

Well, you know? And you said your your first decade was really tough, and then, then, then, then it started to take off. How do you know when to stick with something, or whether you you pivot? And what did you learn about that? Well,

Steve Case 29:37 

it ties in a lot of your focus on on leadership, what I learned was that context matters, circumstances matter, and the leader I needed to be as CEO, when the company had 50 employees was different than when it had 5000 employees, and when we were a small private company that was different than a larger public company, and as the company. Scaled. It had a I had a broader set of responsibilities, a broader set of constituents. Was including governments around the world, again, trying to educate them about the internet. So, you know, my my leadership styling changed. I went from, like most entrepreneurs, being involved in everything, to trying to really build a team and delegate as much as possible and empower and trust the people that work for me so I didn't have to be involved in everything, and just had to reassess pretty much every year, what changes should we make to the organization? What new perspectives do we need? Maybe somebody who's done a great job in marketing or finance or whatever it might be, maybe they're not going to be able to, you know, make the next, you know, take the next lap for us. Maybe we need to bring in somebody else with a broader set of experiences. Or maybe we need to launch a new effort in some new area, like mobile or something else, and we need to bring in somebody that had that experience. So it was, it was constantly trying to kind of look in the future, two, three years, to kind of understand what the overall market might look like then, what our company might look like then, and start putting in place before we needed to the structure and the team that would enable us to get to that next, next stop on the on the journey. So it was a constant reassessment. And the last point I'll make is part of what I was doing, traveling around a lot, was constantly on the outlook for people. They was called the Chief Executive Officer, but I really was more like the chief recruiting officer, because I was constantly on the lookout for talent, even when I remember meeting you in the late 90s, when you came to the office with Bob Pittman, I was thinking, Oh, this guy seems like he's pretty good, pretty good operator, and we could pull him into the orbit. I was not successful there, but I was always on the lookout

David Novak 31:43 

You've Got Mail became one of the most iconic phrases of of its time. It's practically the soundtrack of the early internet. Can you tell us the story of You've got mail?

Steve Case 31:56 

Yeah, again, that's it's really a function of being a very small company. I think at the time, we had maybe 30 or 40 employees, and I was trying to figure out ways to, again, make the service friendlier, more approachable. At the time, because the modem speeds, the communication speeds were so low, we couldn't send, you know, kind of any audio over the phone lines, but we could put on the physical disk, the floppy disk, you know, kind of messages. So I said, Why don't we add to the add to our software some friendly, welcoming, you know, voices like welcome and you've got mail and things like that. That would seem like a we just implant on our disk, and when somebody signs on, basically, the network says, Welcome, you've got mail. I thought that would be another way to make it seem more friendly, more more approachable. And somebody in our Customer Service Center, Karen Edwards, heard me say that, and she so, you know, my husband, Elwood, is a radio guy. He does, he does work at a radio station. Has a pretty good radio voice, if you just write down what you want you know, to put on the software. I'll, I'll see if he'll. I'll go home tonight and see if he'll. He'll do it. So I got a little post it note and wrote down three, four things. And, you know, gave it to her. And you know, next morning shows up, a little cassette tape, plays it. And, you know, Elwood, his voice was perfect. So I told our our engineers, you know, add this to the software, and went out in the next version of the software. And a year or two later, Elwood had one of the most famous voices in the world. So again, kind of an accident, more just, you know, kind of musing about some way to improve the product. And somebody happened to overhear me, and she happened to have a husband who had a good radio voice and and it was, you know, it was, and that's the story of a lot of the companies. We back the entrepreneurial journeys that we've we've seen that you have a plan, you have a sense of your where you want to go, but you always have to be flexible and agile and curious and kind of trying new things, and experimenting new things, talking to new people, just to kind of, you know, kind of try new things. And so that was an example of kind of stumbling into an idea that ended up being one of the defining aspects of AOL and the in those days of the internet.

David Novak 34:12 

It's interesting. You said you're really trying to improve the product. And that was something that you were doing at Pizza, something you did at Procter, and gamble that improving the product is sort of in your in your DNA.

Steve Case 34:24 

Yeah, you guys, it's never good enough. It's always gonna be better. And having that, being proud of what's been built, and the team that built it, is part of it, but also kind of always, you know, kind of leaning in the future, thinking about what you can do next. One of the areas which I'd said, say, most people who were there at the time, would say I was not as good at and I think they would be fair to say, this is I sometimes didn't celebrate our current successes. I was more saying, Okay, that's all fine, but let's raise the bar. What can we do next? And I've learned that you need to strike the right balance there and make sure you are rewarding and celebrate. Using your your interim wins, even if you're kind of focused on a, you know, kind of a larger, you know, kind of larger picture, a larger destiny.

David Novak 35:07 

Steve, was there ever a time,

Steve Case 35:10 

I'm sure there was. But when was that time when it really hit you that, hey, man, we are having a huge impact here. This is really, this is big, I mean, maybe even bigger than I thought it was. There were a lot of examples of that. Because, particularly in the late 90s, you know, the internet went from they said before, nobody knew or cared about it, to suddenly, everybody wanted to be part of it. There was, it was sort of this almost Gold Rush mentality in terms of people wanting to become subscribers of AOL, people wanting to become employees of AOL, people wanting to invest in AOL. People wanted to partner with AOL. So a lot of different, different experiences, you know, one that I remember, which was a real challenge, but it also kind of opened my eyes to how things had changed, is we made a decision, I think this was probably in 96 maybe 1997 to move to unlimited pricing. You know, we up until then, it was paid per hour to be on the service, and we decided to move to essentially a flat fee, $20 a month, and you could use all you could want. We and we knew when we did that, that usage would would skyrocket, but when we announced it, it skyrocketed far more than we anticipated. As a result, we had huge problems with people getting online. It was a busy signal, you know, kind of dynamic that back then, before broadband and Wi Fi, things like that, you had to dial up and connect to one of our modems. And it was a real problem. At one point, the entire AOL service was down for 23 hours. And it was the lead story of almost every newspaper in the country and almost every broadcast network, broadcast news operation that the AOL down. I was like, wow, that's kind of embarrassing and and in some kind of we told people to trust us, and we're letting them down. So it was frustrating. We did a lot of things to deal with, but I also took a step back and said, Wow. You know, even a few years ago, nobody would have known or cared if we were down. Now suddenly, it looks like the world is coming to a halt because we're down for 23 hours. That was really a sign that, I think the internet had arrived, AOL had arrived, and we went from being kind of, you know, irrelevant, to being central, yeah.

David Novak 37:20 

And you were right there at the beginning. You saw this massive growth, and here we are today. You know, people are using the internet all the time, so much so that the internet is being criticized in the sense that people are spending too much time on the internet. How do you what's your what's your response to that? That's that argument. No,

Steve Case 37:40 

I understand that, and I've seen this with really every new innovation, certainly every technology there's, there's always a bunch of positives that come with it, but also some negatives, some unintended consequences, if you will. And in the case of the internet, one of them is how much time people spend on that, but another is the way things like social media have developed. And one of the things I thought was super powerful I mentioned it before, was the idea of leveling the playing field so there could be more voices. But we now have an environment where there's so many voices, and sometimes some of them are accurate, but others are not accurate, and people are getting news from lots of different sources, and that's creating some some challenges in our society. And one of the things I hope would happen, which was, if you have access to all these voices, you'd have more of a sense of both sides of the argument, you know, what? Turns out, not just with the internet, but cable television, other kinds of things, people tend to, you know, kind of listen to people that are saying the things they like to hear, and not listening to people that have opposing viewpoints. So it's become much more of a dynamic on really, both sides of people, kind of living in their own, what some people have called filter bubbles. So that's been another aspect of it that's been disappointing overall. I think the internet, obviously, it's had a profound impact on society, has opened up opportunities for lots of different things. It's now really starting to revolutionize in pretty fundamental ways, all kinds of things that maybe we didn't think we're going to we're going to change healthcare, for example, and can improve dramatically. I think we're on a path to, you know, much more precise medicine, you know, better outcomes, better convenience, you know, lower costs. A bunch of things are possible, enabled by technologies like the internet, as other things like AI and other other other technologies. So overwhelmingly, it's, in my view, a positive story, but I certainly understand there are a lot of negatives as well. And the challenge with every new technology, and we're dealing with this as a society now with AI, is, how do we maximize the benefits while also minimizing trying to hedge reduce some of the potential risks

David Novak 39:39 

with the Stanley Cup Finals now underway between the Panthers and the Oilers. It's a great time to revisit one of my earliest episodes with Hall of Fame legend the captain, Mark Messier, who many regard as one of the best sports leaders of all time. And hey, with insights like this, it's easy to see why you.

Mark Messier 39:59 

I knew that I needed people around me to have success, and the only way in a team sport to have success is to try to maximize the performance of each and every one of the people that are around you and make them believe that their contributions are absolutely necessary for any team success and and so that's, I think that's one element. The other element for me would be that you got to establish relationships that go further than just the game itself, which takes time, and it's harder and harder and harder in our world, where players change teams more rapidly than they used to be. But as a leader, I think you have to be, you know, very, very conscious of the fact that in order to give anybody Well, John, you know, well, first of all, Abe Lincoln said, No man can go another without his consent. And a great coach, John wouldn't used to say, give good coaching is being able to give correction without resentment. And so if you really think of those two quotes, which I kind of, really are the pillars of my of my beliefs and leadership is that in order to lead someone, they have to give you their permission, and that permission has to be earned. And I think you earn it through developing relationships so you can tell them the truth, and they don't take it, take it personally. And so then you just start to foster those relationships. And the other thing, I guess, what I would say is that you got to be willing to be completely open, completely transparent, and who you are and what you stand for, and your consistency and your personality. You don't waver in good times and bad. I mean, you're completely exposed and vulnerable, and you got to be doing the right things consistently. But I think you when you do that, it gives everybody a sense of calm around you. Go

David Novak 41:44 

back and listen to my entire conversation with Mark episode 13 here on how leaders lead. I love to get inside the heads of leaders like yourself and how you make decisions. And you have this enormous success, and then you obviously become attractive to other other companies, and as I understand it, Bill Gates made an offer to buy your company. Take us through how you made the decision not to do it. Well, it

Steve Case 42:11 

was a tough time. This is not too long after we'd gone public. So it was still the mid 1990s maybe 1994 something like that. And AOL was the leader of the pack, but other big companies, including Microsoft, were about to enter the market, and we knew it'd be pretty tough to compete with Microsoft, significant companies, significant resources, Windows, which is sort of the monopoly operating system at the time, so it was sort of daunting that we might compete with them. So when Bill expressed an interest in buying AOL and having AOL be part of Microsoft, and having it really power the Microsoft Internet strategy. It had a lot of appeal, but, you know, and it was a pretty good price versus it was, you know, versus what we'd gone public for. But, you know, I felt, and others on our team felt that it was still kind of the bottom of the first inning that, you know, we the inning may have taken a long time to play, but it was still early in terms of the adoption of the internet, and we were just leaving a lot on the table if we sold the company, kind of sold out at this this particular price. So it was close, even with the board. It was a prevailed by one vote. It was some people thought we definitely should sell. Quit. Quit while we're ahead. Take the money and run. And others said, you know that ultimately, agree with me that it was, it was just, you know, premature, but it was tough, because it wasn't just we're turning down an offer from Microsoft that we knew that they were going to then throw the full force of Microsoft against this market opportunity and become a very significant threat. So, and they ultimately have crushed us. So it was, it was not just as I said, turning down the offer is also then realizing we were in for the battle of our lives.

David Novak 43:50 

Yeah, it took a lot of confidence to hang in there and say we could take on a giant like that. Now, in the year 2000 you negotiated the largest merger in business history. At that time, you brought AOL together with Time Warner. Now, when you look back at that, what were the biggest leadership lessons you took away from that experience?

Steve Case 44:10 

A lot of it is things you focus on. You know, really around culture that we knew there were two different companies with two different histories. AOL was a young, relatively young company focused just on the internet. Time Warner. It was a mix of companies that had been built by acquisition of Warner Brothers Studios, and, you know, Ted Turner's, you know, kind of Turner Broadcasting, and Henry Luce's Time, Inc, and you know, basically all these, you know, kind of companies that were at one point independent and became part of broader media conglomerate. So we knew it'd be complicated. They had different, different different cultures, different dynamics, but we just believed, I believe, at least, that the power of the internet would force them all to be more digital first, and that the digital platform, the internet platform, could really be a unifying force that would result in them focusing on the digital opportunities, more as an opportunity and less as a threat. Because, you know. Once you in big companies, people are often focused on minimizing risk as opposed to maximizing opportunity. So that was the hope, and that was the expectation going in that just didn't happen, that people were were focused on their own things were a little bit threatened by these new technologies, new business models. Instead of embracing it, they kind of generally ran from it, also the market reset. We went from the.com boom in the late 90s, when Internet stocks were going like crazy to sort of a bust and valuations sunk, and stock options for employees obviously were worth a lot less. That led to a lot of frustration as well. But at the core, the lesson is, it really is about people. The strategy we laid out 25 years ago is basically what's happened today. Unfortunately, one time, Warner didn't capitalize on that. Other companies, Google and Facebook and Amazon and Apple and many others, have capitalized on it. It wasn't because we didn't know where the world was going. We kind of did. It wasn't because we didn't lay out a strategy to head in that direction, we kind of did. It was because we didn't get organized and have the right people focused on the right priorities, working together in the right way, and as a result, it would end up being a failed merger. So I'm reminded by of the quote I think was a Thomas Edison quote a century ago, vision without execution as hallucination. And when I think of that merger, that's what I think about. I think the vision was compelling, the execution was terrible, and as a result, that ended up being a real debacle. Is there

David Novak 46:32 

anything you would have done differently as a leader to get that execution up front, in the in it, or is this

Steve Case 46:37 

I've already obviously thought about it? Yeah, I did think strategically. It was an important deal. We considered other potential acquisitions because our stock had become quite valuable. There were been some that would have been easier to execute, but we really believed we needed to path the broadband that Time Warner provided it owned Time Warner Cable, which is the largest broadband provider, and that was sort of we didn't have yet to bat we're the leader in narrow band. We didn't have a path to broadband, so we really needed that. So I don't, in retrospect, think that the decision was, was was was flawed. It was more the execution. And as part of the deal, the proposed even the first call I made when I when I suggested to the CEO, then Jerry Levin, that we consider merging our companies, I said in the first minute, and I'll step aside as CEO. You can run the combined company. I believe so much in this idea that I'll let you run the combined company. So I think it's as I think back it was. We're a little bit ahead of the game. Some of the took some of these things a little while to bake in the oven, if you will, and we didn't really get things right in terms of creating the right team dynamic, creating the right culture around collaboration. And obviously it was a big disappointment. I think I've been able to take some of those lessons into some of the work, whether it be working with entrepreneurs, or even some of the work I've done on the policy front, I think I'm probably a little bit more sympathetic, little bit more empathetic, a little bit more emotional intelligence, if you will, trying to put myself in somebody else's issues. So it was a hard lesson to learn, but hopefully, some of the things I've done in the last couple of decades have benefited from that, the challenges I had back then, Oh, absolutely.

David Novak 48:09 

You built a hell of a business, and you've created lots of businesses in our country that are continuing to improve the world, just like AOL did. And you know, you know, having exposure to so many different businesses, what have you learned is the most are the are the most important things a company should have as a part of its culture? Well,

Steve Case 48:29 

it goes back to what you're just saying, the collaboration you need a team that has diverse perspectives and skills, because that's, you know, required to embrace these opportunities in a big way, but that works together in a seamless way, as a team. And so getting that as you well know kind of right is tricky. You also have to couple with that a passion around the idea and a willingness to fight on and persevere. The Persistence aspect is really, really important. Almost every company. There's a few overnight successes, but very, very few, most of them are, you know, a struggle and a slog. And there are times where it doesn't look like it's even going to be successful, and just being able to punch through that power, through that stick with it, I think, is incredibly important. Otherwise, people do tend to quit when that, you know, when times get tough and, you know, miss out on the opportunity if they, if they stuck with it a little bit. You

David Novak 49:23 

know, this has been so much fun, Steve and I want to have a little bit more with you here with my lightning round of questions. Are you ready for this? Sure? Okay, the three words that best describe you, curious,

Steve Case 49:33 

builder, persistent, although some would call that stubborn,

David Novak 49:40 

persistent. I like, persistent, yeah, the positive way flip that script. You know, if you could be one person for a day besides yourself, who would it be?

Steve Case 49:48 

I guess I could just do it for one day. Being like President United States would be good where I could, you know, talk about entrepreneurship and innovation, issue some executive orders, retire that that evening. That wouldn't be bad. Yeah? For one day, President, what's

David Novak 50:01 

your biggest pet peeve? Probably, arrogance. What's the best part about life in an RV which I understand you enjoy the simplicity

Steve Case 50:09 

of my wife and I just enjoy kind of driving around in the country just the two of us. You know, kind of people don't necessarily know where we're gonna go next. Nobody knows really where we are. We end up bumping into people and visiting communities we otherwise wouldn't have seen. So it's sort of a kind of an unplugged view of life. Obviously, have had opportunity to meet a lot of interesting people and do a lot of interesting things, and we're grateful for that. But sometimes the simple aspects of life are also great, and it also allows us to be kind of really connected, because it's just the two of us on our on our road trips.

David Novak 50:44 

What's something about Hawaii? Most people don't know. You

Steve Case 50:47 

know, it's a it's a great melting pot of different people come from different places and bring different perspectives. And it's not all always perfect. They're always challenges, like with any any particular community. I think that probably was an interesting lesson as well, as well maybe being a little disconnected. When I was growing up in Hawaii, you know, the sitcoms on television we'd see a week later because we didn't have satellite back then, so they'd take the tapes and put them on a plane and fly them to Hawaii, so we watched everything a week after everybody else did. What do you and Barack Obama have in common? Well, we went to same high school we went to when I was I was a senior when he was a freshman. So we didn't know each other super well, but we both had that shared experience of being born and raised in Hawaii and going to the same same school.

David Novak 51:32 

You get two front row tickets to see anything you want. Where are you going and who you going to take with you?

Steve Case 51:38 

Well, probably a concert. I enjoy sports as well, but I'm always loved music, and in high school, I thought I'd actually be in the music business. So have to decide which concert would it be. We've had seen a lot of concerts over the years. I have to figure out who would be the one we haven't seen yet. And I would go with my wife, Jean. What's the one thing you do just for you walking? I tend to enjoy disconnecting a little bit. So just when I'm when I'm just by myself and kind of am able to, you know, collect my thoughts, maybe sometimes listen to some music or listen to a podcast or something, but, but it's, you know, it's more of a kind of quiet time, me time,

David Novak 52:14 

besides your family. What's your most prized possession? I'm not sure I have one.

Steve Case 52:18 

I would say it's, you know, the relationships, the people and certainly my family. I don't think there's any thing that I own that I like you know, couldn't live without.

David Novak 52:28 

If I turned on the radio, what would I hear in your car?

Steve Case 52:32 

Depends my on my mood. More rock and roll anything else. But I like different genres. I love some of the recommendation engines, like Spotify radio, where you're playing one song and you ask them to create, essentially a station with similar songs. So I learned a lot about new artists that way. I basically say, Well, that sounds pretty good. Who is that? And end up listening to more of the music. Sometimes going to one of their concerts is a good way to explore

David Novak 52:58 

what's something about you. A few people would know, probably, that I worked for Pizza Hut. I was the director of pizza development. That's still the best title I ever had. There you go. What's one of your daily rituals? Something that you never miss? It's probably

Steve Case 53:12 

the walking, you know, that trying to think, there's a lot of things I do every day that are pretty, you know, pretty consistent that. But I would say that would be probably, probably one of them. I also tend to, you know, we back the company in your world after, after being working at Pizza Hut, we backed a couple of companies, Sweetgreen and Cava that are both in the fast casual restaurant space, both now successful public companies. And so I have a almost every single day, a sweet green lunch. Occasionally I supplement it with kava, just to be equal opportunity. That'd be another thing that people probably wouldn't expect. Great concept,

David Novak 53:47 

you know, and you're out of the lightning round. Great job. I've got a few more questions here. We'll wrap this up. And you know, I know you're a humble guy. You don't really like to talk about yourself, but you know, I'm, I'm curious, you know, what would you say your your leadership superpower is, I

Steve Case 54:02 

think, leaning into the future and having the confidence or persistence to pursue it, the curiosity, observing, listening, kind of almost like a radar, kind of give me some sense of what might be happening next. Spend a lot of time thinking about that, and then, not just, you know, think about it or look around corners, but then do something about it. So whether it be starting a company like AOL, or backing entrepreneurs or starting companies, you know, helping do what I can to help usher in that future and help them be successful, and

David Novak 54:35 

you have an incredible life partner with your wife, Jean, you know, what makes that, that, that relationship, work. I mean, how do you, how do you lead at home? Well,

Steve Case 54:46 

she leads at home. So starters, knowing that, knowing your place. And now we've worked together now for three decades, and it's been a, obviously, a great kind of relationship and partnership. And, you know, we've kind of. See things eye to eye on most issues at the same time. I think one thing that's been helpful is we have complementary strengths and skill sets. She's kind of taken the lead on the giving side of our lives for the past several decades, and I continue to focus on where I probably can be most effective, which is more on the investment backing, entrepreneur side of things. So understanding having shared a shared vision, kind of having alignment, but at the same timing, having your own lanes, if you will, I think have been helpful.

David Novak 55:30 

What do you see as your unfinished business? Steve, still,

Steve Case 55:33 

you know, more work to do on some of the things we're currently, you know, kind of working on. I'm also spending a lot of time outside of the tech entrepreneurship side on on building physical communities. I've done a lot of work on the early stage of the internet and building digital communities, and then building entrepreneurial communities now in both Hawaii and Costa Rica and other places, building some different things. Just open a resort in Costa Rica, for example, that's anchored by a 600 acre Peninsula anchored by a Waldorf Astoria trying to master plan that kind of have a canvas. How do we build a terrific community there? I've done a lot of things over the years in Hawaii, built 1000s of homes for affordable housing, as well as some resorts like Kapalua on the Maui side. So there's something about that I'm finding interesting. It's sort of a new, chapter, if you will. But after being more the digital guy, having something that's a little bit more physical, a little bit more tangible, I think makes sense. And the last thing that I feel feel like is unfinished business. I'm not sure it's something I'm really going to take on. But for for quite some time, 2030, years, I've been quite concerned about the hyper partisanship in the in the country, and trying to look for ways to bring people together. Indeed, I'm going to a dinner tonight on that, on that very topic. I think it's, how do we make sure we have a stable democracy? Which means, you know, we have to figure out ways to kind of come, to come to come together and focus on on the next 250 years for the country. I was the chair of the Smithsonian Institution for for several years, and they've been planning next year which America turns 250 and I'm hoping that 250th celebration is a time to look back at the great progress we've made over the last 250 years, but also kind of set the path, you know, forge the path for for the next 250 years, and trying to make sure that we're doing everything we Can to position our country, both externally and internally, to do that successfully, I think is quite important.

David Novak 57:25 

You said it earlier that you'd, you'd like to be president for a day, because you could get issue those executive orders running for high office like that. Do you have any interest in doing that someday? I consider

Steve Case 57:36 

that even 2020, 30 years ago and but no, I don't think it's my, my strength. I think my there's other ways I can contribute. So I think I'm playing to my my strengths. And I also recognize at this point in my life. I, you know, we have five kids. We now have five grandchildren, up from 05 years ago, with, with, we think more to come and and having the time to focus on that side of my life is important as well. So I'll do what I can on these topics to try to be constructive. But no, I have no plans to jump into anything in a more, more fundamental way. Indeed, I kind of take a step back sometimes and say, you know, should I be spending time on this or should I be reprioritizing my life towards other things? So why do I always need another mountain to climb. Maybe it's time to stay at the base camp, but I'll keep struggling. All right,

David Novak 58:26 

last question, what's one piece of advice you'd give to anyone who wants to be a better leader? It's all

Steve Case 58:31 

about people. You know, it's not about you, it's about them. And so you're only gonna be as successful as the people you attract.

David Novak 58:37 

You know, Steve, it's been a lot of fun to have this conversation with you, and you know, I want to congratulate you on, on, on having two characteristics that not everybody has. Both of you are a tremendous dreamer, and you're a doer. You've been able to dream and do not many people can do that. And I take my hat off to you for everything you've done for our country by changing the world and how you're supporting, uh, entrepreneurs today that are trying to do the same thing that you did. You're really making a difference, and I thank you very much for it.

Steve Case 59:09 

Well, thank you. You're very kind, and thank you for focusing on leadership. I was happy to be part of this, and I appreciate everything you're doing to try to help you know, the next generation of leaders lead better. You

David Novak 59:23 

Steve somewhere between dial up internet and you've got mail, Steve Case built one of the biggest business stories of a generation, but it took time, more time actually, than people realize, and it's a good reminder, success can be slow going, which is why I love Steve's calm and steady persistence, it's about staying grounded in your purpose, staying curious about what's next, and surrounding yourself with people who bring different strengths and perspectives to the table. That's how you keep going when progress feels like wading through molasses, and it's how you build something extra. Ordinary. So here's something to think about this week. What part of your own success is taking longer than you thought? And what keeps you going? Is it your sense of purpose, your team, something else entirely? Whatever it is, take a moment to connect with it. Because here's the truth, Success takes time, but if you stay steady, focused and fueled by the right mindset, I'm telling you, you'll get there. So do you want to know how leaders lead? What we learned today is the great leaders know that success takes time. Coming up next on how leaders lead is Sanjit Biswas, the co founder and CEO of Sam Sarah, so be sure to Subscribe on YouTube or wherever you get your podcasts so you don't miss it. Thanks again for tuning in to another episode of how leaders lead, where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business, so that you will become the best leader you can be.