When Steve Case helped found internet startup America Online (AOL) in 1985, about 3 percent of people were using the internet.
“We talked about the idea of the internet connecting the world; nobody believed us,” Case told a group at Dallas’ Old Parkland Monday for the Rise of the Rest tour, an initiative of investment firm Revolution, where Case is chairman and CEO.
“Just imagine a scenario in which they might be successful and might actually be the great companies of tomorrow.”
Getting buy-in from investors and consumers during the formative years is a struggle many disruptive companies can relate to. There are usually plenty of naysayers pointing out why it can’t be done. Former Apple executive Guy Kawasaki echoed a similar tale about innovation in his visit to Richardson last fall.
AOL eventually rose to be valued at $160 billion, but there were many times in its first decade that it could’ve folded, Case said. He told the group of Dallas area leaders and investors to keep an open mind to early-stage entrepreneurs.
He cautioned not to immediately think of why something won’t work after hearing a pitch.
“Just imagine a scenario in which they might be successful and might actually be the great companies of tomorrow,” Case said.
About four years ago, Revolution began its Rise of the Rest tour traveling to cities outside of Silicon Valley to highlight and spur more growth in entrepreneurial ecosystems around the nation.
LOCAL LEADERS DISCUSS IMPORTANCE OF STARTUPS AT KICKOFF BREAKFAST
Rise of the Rest made its first 2018 stop in Dallas Monday, kicking off a five-city tour.
The day started with a breakfast featuring Harlan Crow, chairman of Crow Holdings; Ron Kirk, former Dallas mayor and U.S. Trade Representative; Rob Kaplan, Federal Reserve Bank of Dallas president and CEO; Richard Benson, president of the University of Texas at Dallas; Andre Fuetsch, president of AT&T Labs and AT&T’s chief technology officer; Jennifer Sampson, CEO of the United Way of Metropolitan Dallas; and Dale Petroskey, president and CEO of the Dallas Regional Chamber.
“Our next Fortune 500 company is here.”
The local leaders talked about the vital role startups play in the community’s future.
“I bet it drives them crazy to see us bend over backwards to bring in a Boeing or an Amazon when we should be reaching out to these small businesses that have the potential to go from two employees in a garage to 10 guys … and then 100. Our next Fortune 500 company is here,” Kirk said.
They outlined successes seen from initiatives and programs in place across sectors from AT&T Foundry connecting corporations and startups to cultivating the entrepreneurs of tomorrow at universities.
“Innovation is expanding, driving, and transforming growth both in our economy and in our community,” said Sampson, who helped create the United Way’s GroundFloor accelerator program for social entrepreneurs.
Still many acknowledged more could be done, especially when it comes to funding early-stage startups.
“We’re not investing enough in our human capital and we’re probably not investing enough in entrepreneurship — for-profit and not-for-profit,” Kaplan said.
Currently, 75 percent of venture capital funding goes to three states — California, Massachusetts, and New York. Texas gets about 2 percent of VC funds, said J.D. Vance, managing partner of the Rise of the Rest Seed Fund.
“The expertise in cities like Dallas is going to be critical, instrumental in this next wave …”
“That means there’s this remarkable arbitrage opportunity to invest in the entrepreneurs in Texas and to do it in a place where they’re still getting overlooked,” Vance said. “I don’t think only 2 percent of the good, high quality business ideas are in Texas.”
Case thinks Dallas has an important place in what he calls the internet’s “third wave,” looking out how it can bring more connectivity to health care, education, transportation, and other sectors.
“The expertise in cities like Dallas is going to be critical, instrumental in this next wave, which creates an unbelievable opportunity for this community to rise even further in terms of its startup sector over the next 10-20 years,” Case said.
NICKSON WINS $100K INVESTMENT IN PITCH CONTEST
The daylong event included a stop at Paul Quinn College, where President Michael Sorrell talked about the college’s efforts to combat food insecurity in southern Dallas by transforming its football field into an urban farm. The Rise of the Rest crew also headed to The Dallas Entrepreneur Center to hear from a collection of local startups and made visits to rewardStyle’s office at The Centrum and Trinity Groves.
During a fireside chat Monday evening, rewardStyle co-founder Amber Venz Box talked about growing the Dallas startup she created with husband, Baxter Box, to monetize her fashion blog. For a time, she was focused on getting the approval of industry groups and fashion houses, until she realized her efforts were better spent on consumers.
“While I had tried so hard to get the approval of the elite, now we’ve actually come back around and they can’t ignore us because we’ve just disrupted all of their businesses,” Box said. “That’s the cool thing about technology today is you don’t need anyone’s approval to be able to do it … no longer do those hierarchies hold.”
It all led up to the big event at Community Beer Co., where eight local companies (Friendly, Deep Cognition, Roomored, RoseGold, CounterFind, Pickup, Nickson, and Fetch) vied for a chance at $100,000 from the Rise of the Rest Seed Fund.
Apartment furnishing startup Nickson received the investment for its service that CEO Cameron Johnson says takes the hassle out of moving.
“We empower renters to effortlessly transform their new apartments to what would otherwise be completely empty boxes to fully-furnished, custom designed homes on-demand,” Johnson said.
Case encouraged attendees to “seize the moment,” and get engaged with growing the startup ecosystem.
“I think the game is changing in terms of entrepreneurship and the sector being disrupted. I think capital will start spreading more broadly,” he said.
Photos by Dallas Innovates staff.