At the EmTech MIT event this week, Director of the MIT Media Lab Joi Ito sat down with AOL co-founder and former CEO Steve Case to talk about investing in innovation.
Among other things, Case talked about the early days of AOL, how Detroit used to be like Silicon Valley in the ’50s, how the geographic locations of where innovation happens are becoming less important, why partnerships and networks are becoming more important, government policies relating immigration and how they affect innovation in the U.S., and why sometimes building things slowly and methodically can turn them into world-changers.
“In the 1950s, Detroit was Silicon Valley,” said Case. “It was the hottest entrepreneurial region in the country — arguably in the world — because at the time, the automobile was the hot technology of the day. Detroit was on fire. It was crazy.” Case went on to argue that Detroit lost its way largely because it “lost its entrepreneurial mojo” as competition around the world got more intense.
Case thinks that Detroit is in the midst of turning itself around, and he has started investing in Detroit-area companies. Case believes Silicon Valley currently has “tremendous momentum” but said, “Not all great companies are in Silicon Valley, not all great companies are in California, not all great companies are in Massachusetts, not all great companies are in New York, et cetera.”
He continued, “There are other companies out there, and those companies, if you find them, usually they need your money more and your help more because often they’re a little bit lonely. And usually those companies you can invest in at lower valuations than if those same companies were in Silicon Valley. So there’s sort of a desire to have an impact, but there’s also an opportunity as investors.”
Case believes that over the next decade, all of the top venture firms will adopt more regional investment strategies because, in his words, “it’s beginning to get easier to start companies anywhere” thanks to crowdfunding and outsourcing computing tasks to things like Amazon Web Services, which make it more attainable for a smaller company to create a big hit. “More companies will be created in more places, and I think we’ll shift away from just a few centers of innovation gravity, if you will, to a more broadly dispersed innovation economy — which is healthy for the country, and I think investors will follow those opportunities,” said Case.