First Friday Book Synopsis

The Rise of the Rest means just what it says: a way to lift the prospects of the rest of the nation—those who live and work outside the coastal tech centers in California, New York, and Massachusetts. Currently, 75 percent of venture capital for startups flows to those three states, with the rest of the country left to fight it out for the remaining 25 percent.

When we decided to hit the road with our Rise of the Rest bus, we wanted to go deep into each city we visited, to really understand what was happening, to use our platform to shine a spotlight on people and ideas, and to drive more collaboration. We also wanted to attract local press attention, so the stories of startups would get more focus.

Their reasoning for the relaunch was in sync with the Rise of the Rest message: you don’t have to be in Silicon Valley to make it, and in fact sometimes other cities can be more welcoming for your company.  

Here is my prediction. Over the next decade, a majority of the iconic startup companies—the ones that create tens of thousands of jobs and end up being worth billions of dollars—will not be in Silicon Valley, but all across the country. It’s already happening.  

The most critical challenge for entrepreneurs in the twenty-first century is building the tools for a sustainable world.  There’s been a significant shift from defining it as a problem to solve, which of course it is, to more of an opportunity to seize.

Investors, communities, and local governments are waking up to the fact that most of the job creation in this country does not come from small businesses or big businesses. It comes from new high-growth startups. Therefore, local communities, states, and regions increasingly recognize that it is a worthwhile investment to back startups.

Government can—and must—play a role, but it’s clear that we can’t rely solely on government to fix something that’s wrong in the marrow of our communities. We need to lead from the grassroots, and we especially need the nation’s entrepreneurs to step up. My goal is to see that entrepreneurial dynamism happening all across the country, so we can create jobs, hope, and opportunity everywhere, and build a brighter shared future for America.

Some might think my views are a little naive, or Pollyannaish, but I truly believe that a key to unifying America has been—and will be—unleashing innovation and growth.

Steve Case, The Rise of the Rest:  How Entrepreneurs in Surprising Places are Building the New American Dream

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At the November First Friday Book Synopsis, I presented my synopsis of The Rise of the Rest: How Entrepreneurs in Surprising Places are Building the New American Dream by Steve Case.  Steve Case has been at this technological innovation for quite a while; he co-founded America Online (AOL).

I am liking his books.  I included this quick review of his earlier book, The Third Wave, in this presentation:

• A quick review (from his earlier book, The Third Wave):

• This is an optimistic book — It starts with developing a point of view—a hypothesis that the world is changing.  {Note; in this new book, he states: When we look back at this moment in America’s history, all the complicated challenges that face our country may be summarized most simply as a battle between optimists and pessimists. I am an optimist}.

• Alvin Toffler’s three waves:

#1 –  The “First Wave” of humanity was the settled agricultural society that was dominant for thousands of years.

#2 – The “Second Wave” was the post–Industrial Revolution world, where mass production and distribution transformed how people lived.

#3 – The “Third Wave” was the information age: an electronic global village 

• Steve Case’s three waves of the Internet:

#1 — The First Wave of the Internet was all about building the infrastructure and foundation for an online world

#2 — The Second Wave was about building on top of the Internet. Search engines like Google. …Amazon and eBay turned their corner of the Internet into a one-stop shop. 

#3 – Everything and everyone is “connected.”  (moving from “the Internet of Things” to the “Internet is Everything”).

• A couple of lessons: 

• Lesson – Once a wave” is past, you have to operate within the new wave!
• Lesson – invest for impact (“invest” = time, money, collaborations) – invest for impact, not for profit!
• “invest for profit” is short term
• go for lasting impact to make the world, and our lives, better

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This new book is all about the need to have entrepreneurs rise up across the country; not just in the big three technological innovation centers of Silicon Valley, Boston, and New York.  And, he chronicles efforts in many of the places where this is happening.  His own efforts, with a bus criss-crossing the country with “The Rise of the Rest” plastered on the outside, is providing cash prizes for budding entrepreneurs and their startups.

If you are concerned about spreading the possibilities, this book is worth reading.

As I always do, I begin my synopses with “What is the point? of this book.  Here is the point for The Rise of the Rest:  The future will be built by entrepreneurs through their many, many startups.  This is being done, and will be done, all across the country.  (Not just in Silicon Valley, Boston, and New York).  It is the rise of…the rest!

And I ask Why is this book worth our time?  Here are my three reasons for this book: 

#1 – This book chronicles the modern history of the movement away from the tech centers of yesterday and today to the many, multiple tech centers of tomorrow.

#2 – This book assumes that technology can be “practiced” anywhere and everywhere.

#3 – This book is a reminder that business effectiveness and success is about spotting problems, and coming up with and providing the best solutions. 

I always include a few pages of Quotes and Excerpts from the book—the “best of” Randy’s highlighted Passages.  Here are quite a few of the best of the best of my highlighted passages  from this book:

There are a number of reasons for America’s success over nearly two and a half centuries, but much of the credit goes to the inventors, entrepreneurs, and innovators. 

The strategic questions are clear: How do we continue to lead, inventing the technologies that can enable the industries of the future to flourish? And how do we figure out ways to create more opportunity, for more people, in more places, so the United States can develop a more inclusive innovation economy? Part of the reason our country is so divided right now is that many people feel left behind in the new economy. 

We must be more thoughtful about backing startups in every part of the country to offset inevitable job losses with new opportunities and help more people participate in a growing economy. 

Kurt Vonnegut expressed dismay at the state of the nation and suggested that the country could use a new cabinet position: the secretary of the future.  

Worried about changes, people often became cautious and risk-averse—less open to change. 

AOL, promoting grassroots access for everyone, was ahead of its time.  Our challenge was to help people visualize it, experience it, and believe in it. We had to show them that the internet could be life changing—not just technology for technology’s sake.

Startups are reimagining cities.  …And they are cracking the equity code, engaging diverse populations.  

In many ways, the Rise of the Rest is the answer to the question of whether America can maintain its lead in the world. 

One hundred years ago Detroit was the Silicon Valley of its day. The tech stars then were called Car Guys. 

About 90 percent of all startups fail—good idea or not.

It didn’t take long for us to realize we were on to something. First in Detroit and then in the other cities, we found tenacious communities determined to fight their way back to relevancy.   

We learned that there is real value in showing up. Showing up, and meeting people face-to-face, in their cities, opened our eyes to what was really happening and strengthened our connection to and affection for each community we visited. Our interactions, on and off the bus, were meaningful and catalytic. 

It’s all about making connections, which is pretty much the same thing I was doing early in my career when I cofounded AOL. With Rise of the Rest, I’m back in the network-building business.  

Entrepreneurs need somebody to back them and say, “I’m going to invest in you because I believe in you and believe in your idea.” …Everything starts with one yes. At Revolution we try to catalyze more yeses. 

At Rise of the Rest we have found that small but mighty startup communities can help the cities rise, as a more manageable, accessible, and founder-friendly market can attract top talent and startups to the region.   

We focused on the “three Cs”—capital, community, and celebration. We concluded that there needed to be more of a celebration of entrepreneurship and startups. 

On the road with Rise of the Rest it is becoming increasingly common to hear entrepreneurs express a desire to change the world, or at least their corner of the world. It’s not enough to do something cool; they want to do something that matters. 

On every Rise of the Rest tour, we’ve had public officials present who serve as hands-on partners, and often leaders of these innovation efforts. …one of the most consistent driving forces in the emergence of successful ecosystems is universities, which are often the leading laboratories for innovation.

I suggested to the audience that Louisville could benefit by thinking of itself as part of a broader region that also includes nearby Midwestern cities, such as Cincinnati, Indianapolis, and Nashville. They could draw resources from each other and help each other grow. That’s an example of what we mean when we talk about entrepreneurship as a team sport.   

As we toured the center, I took note of a famous Ali saying, as it was especially relevant to entrepreneurs: “It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.”   

The only way out of the decline was to find ways to create more jobs, and that’s where startups come in.   

Forbes set out to identify which cities were emerging as the top startup cities for the next decade and beyond. Columbus, Ohio, earned the number one spot. Forbes cited its low cost of living, low cost of doing business, college support, and the number of venture capital deals since 2013 that showed Columbus was on the rise.  …Starting with 208 cities in the United States that had more than 150,000 people, they developed a set of criteria. “The biggest was cost of living, which immediately took out Boston, New York, San Francisco, and anywhere in Hawaii.”  Once they narrowed the candidate cities down to twenty-one, they looked at different livability factors for various demographics, and came up with the finalists: Austin, Raleigh, Durham, Nashville, and Columbus.

“That’s the cool thing about technology today,” she said. “You don’t need anyone’s approval to be able to do it. No longer do those hierarchies hold.”

I always remind entrepreneurs, in the spirit of our nation’s founders, that entrepreneurship is hard. Entrepreneurs are surrounded by doubters and skeptics—even including family and friends who are acting out of love. To press on, through doubt and fear, with no certainty of what will come—that’s the courage it takes to ultimately prevail.  

…a blend of serious commitment by business and government with a strong sense of community engagement. …The experience is always unique to the locale, and it’s often moving. 

There are megatrends that were brewing before the pandemic but which definitely have accelerated. One megatrend is the “Great Resignation”—people leaving their jobs, often to upgrade to better opportunities. The pandemic also led to a great rethinking—what the role of companies should be, increasing the importance of investing in resilient supply chains and a broad range of sustainable businesses. … People are hungry to bring new meaning to what they do, and to be empowered by their work.

The battle for talent—attracting and keeping the best people—would be a priority, and that would necessitate flexibility, including supporting remote work long after the pandemic subsided. 

Once people were forced to use it, and everybody was on the same level—in boxes on a Zoom screen—they realized it did allow for collaboration, with an added level of convenience and flexibility. …But I wondered how companies would adjust to a post-pandemic world, where some are in the office and others are working from home. It’s likely to be much trickier in terms of team dynamics, company cultures, and trust.  

Pew Research predicts that when everything has opened up, the percentage of fully remote workers could remain as high as 25 percent.  

“Cities are going to have to compete for talent. And I think the cities that win will be the cities that most welcome talent.”

According to a Kauffman Foundation study, one-fourth of US-based startups were launched by foreign-born founders; in Silicon Valley, that number is closer to 50 percent. …History teaches us that progress belongs to countries that are open, and that has always been America’s edge. … The global battle for talent is real, and it’s fierce. We want the best talent to come here, as they have in the past.

“After the murder of George Floyd, I saw money move in a way that I’ve never seen before. People were waking up to realities that they had never woken up to before.” 

People are like, ‘Tech unicorns don’t come from McKinney, Texas, or Buffalo.’ And we say, ‘You wanna see?’   

And here are a number of the points and observations from this book that I included in my synopsis:

Randy’s attempt at describing a key difference:

• a startup is started to immediately grow larger; with some intention to disrupt.Startups need investment capital.  Startups are intended to “scale.”  Investors invest hoping to see a home run return on their investment.
• a small business is started to make money from day one.Maybe; consider a small business more “self-contained,” not intended to scale, or disrupt.
• Investors, communities, and local governments are waking up to the fact that most of the job creation in this country does not come from small businesses or big businesses. It comes from new high-growth startups. Therefore, local communities, states, and regions increasingly recognize that it is a worthwhile investment to back startups.

• Steve Case believes:
• Our country was created by entrepreneurs and their inventiveness
• We need to constantly revive and nurture that spirit
• That spirit can be found, and should be nurtured, in every nook and cranny of our country. — Just as they helped build America in its first two centuries, entrepreneurs can once again help to lead the way.
• People were attracted to Silicon Valley; thus they left home. (it looked to me as if 95 percent were from someplace else). Now, he wants to bring the same mindset and help to all places of “home.”
• And I think there is a certain stubbornness that comes from being tied to community that says, ‘There’s no reason we can’t build here.’ 

• What is this book? — part history lesson, part pep-talk, part blueprint 

• Then…now…
• Then, you needed rivers, ports, and like-minded people all gathered in “one” place
• Now, with technology, you can gather enough such like-minded people in any and every place – smaller clusters work wonders – and, they can even be “gathered” remotely.

• Now and next…
• technology has to make a difference; in a way that matters; with the right kind of social and societal impact. (In other words, the pursuit of profits alone is not what will drive tomorrow’s breakthroughs).

• Three great questions:
• We begin with three questions: Why me?  Why now?  Who cares?
• Answering the “Why me?” question forces founders to stand on their own and make the case for themselves and their company. What’s original about it? Does it make sense as a business? Does it meet a felt need? Is it venture backable? Can it scale quickly?
• “Why now?” is a timing question. It is often said that timing is everything, and that became clear during the pandemic.
• “Who cares?” asks about the market. We want to encourage innovation in important aspects of our lives and disrupt—and reimagine—the largest industries in the world. 

• The magic mix…
• Think of the tech ecosystem as a wheel with seven spokes, connected and in motion. The spokes are comprised of: (1) startups, (2) investors, (3) universities, (4) government, (5) corporations, (6) startup support organizations, and (7) local media. These entities use a variety of levers to help convene, educate, inform, and link startups. Their efforts, in turn, inspire an environment that is conducive to innovation and entrepreneurship. — This isn’t a list; it’s a wheel.

• Dallas has its own section in the book:
• DALLAS: Innovation in D-Town — Harlan Crow, chairman of Crow Holdings; Ron Kirk, former Dallas mayor and US trade representative; Andre Fuetsch, president of AT&T Labs and AT&T’s chief technology officer; Jennifer Sampson, CEO of the United Way of Metropolitan Dallas; Dale Petroskey, president and CEO of the Dallas Regional Chamber; Rob Kaplan, Federal Reserve Bank of Dallas president and CEO; and Richard Benson, president of the University of Texas at Dallas.
• Dallas, which is a large city with a tremendous amount of wealth, and get them to focus on innovation and entrepreneurship and the power of startups.
• Paul Quinn College in South Dallas, an area that most of them typically didn’t visit. Paul Quinn College, under the direction of its president Michael Sorrell, was a surprising startup story. — “Forget football. We don’t have food. We don’t have jobs.” — He tore up the football field and turned it into an urban farm.

• Four Trends, building strength, starting to converge:

            #1 – The emergence of tech centers around industry expertise.

            #2 – The rise of more job-creating startup hubs.

            #3 – The pandemic fueled acceleration of innovation trends.

            #4 – The increased engagement of government as a catalyst. 

• Maybe…we should be welcoming on purpose…
• According to Forbes, immigrant entrepreneurs start 25 percent of all new businesses in the United States. An MIT Sloan study found that those new businesses create 42 percent more jobs thatn those started by US-born entrepreneurs. 

• And…we need to work on this: the Diversity Imperative:
• Only 1 percent of venture capital goes to Black founders and less than 10 percent to women.

• Remember – be optimistic; it can be done!
• it stands to reason that the big problems we face, such as climate change, food insecurity, and inequality, can be tackled by creative entrepreneurs.
• And if we can only give everybody with an idea for a new company a way to actually do something about it, no matter where they live, or what their background, or who they know – that’s what will ensure America remains the pioneering country that got us here, and preserve our lead as the most entrepreneurial nation on earth. There is indeed something special about America.  It’s a nation of possibility, focused more on the future than on the past. – I’m reminded of that when we celebrate the founding of our once-startup nation each year on the Fourth of July.

• Big whopping observations
• as good as Zoom and Webex have gotten, today will be the worst they will ever be moving forward! — It’s just that this is the worst video technology will ever be ever again, right? It’s only going to be better. Bandwidth’s going to improve, screen technology is going to improve. We’re going to have more tools for connection. It’s going to get even easier.” He believes that as the technology becomes more seamless, workers are going to have more options to live where they want.
• always…start with “a problem to be solved!” — “If you see a problem that needs to be solved, it’s easier than ever to get into it. And now, more than ever, you can do it from right here.”
• “I had in my head hundreds of cities, maybe, and I’m thinking around the world. So, I think it’s going to be extremely distributed. The place to be will be the internet. You can access it anywhere.”
• Maybe…anyone, at anyplace, at any and all times…
• Take the requirement for a college degree out of the equation and focus on the underlying talent…

And here are my Seven Lessons and Takeaways:

#1 – You need an idea.

#2 – You need like-minded people to help you with your idea; plenty with the right technological training.

#3 – Thus, you need clusters of people who have the training, and the entrepreneurial spirit, to feed each others ideas.

#4 – And, you need lots of help– from government, big business, customers…

#5 – And, you need money.

#6 – For our country to truly continue to succeed, startup world needs to be anywhere, and everywhere, all the time!

#7 – And, though we need to love and nurture new small businesses, the startup eco-system is more than, and different than, just that.

I like books that are calling for innovators to rise up everywhere!  And, I like this book because it is optimistic.  My goodness, do new need more optimism these days.

I think you will find The Rise of the Rest a book worth adding to your reading stack.

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