What’s cooler than a bunch of rock stars going on tour across Middle America? Middle-aged techies going on tour across Middle America! Alright, fine, it’s not nearly as cool, but possibly more relevant for Pando readers.
Starting June 24th, AOL co-founder Steve Case, his Revolution VC firm and UP Global are heading on a four city, whirlwind trip to Detroit, Pittsburgh, Cincinnati, and Nashville to meet the mayors and entrepreneurs of places that are not Silicon Valley. In each city he’ll be investing $100,000 into the startup that wins a regional pitch competition.
There’s a fun backstory here. Case’s team originally contacted Pando to ask if they could pay us to promote the tour (and go along for the ride as a “media partner”). We have strict rules here about allowing companies to pay for reporters’ travel, or paying us to cover events, so our initial response was a flat no. But the more we heard about the tour the more keen we were to see what happens when the co-founder of AOL lands in Detroit to investigate entrepreneurship. So, perhaps to the irritation of our ad team, we told Case to keep his sponsorship money: We’d pay our own way to cover the event, and report what we see, honestly and independently.
I’ll certainly be approaching the tour with a healthy dose of skepticism. With a few notable exceptions, most of the big technology companies we see still start in the Valley. There’s reason to dig into Case’s claim that these “emerging entrepreneurial ecosystems [will] play a critical role in rebuilding the American economy and creating new middle class jobs.”
That said, I’ve spent the last year closely following startups in the Valley and it’s clear that the West Coast doesn’t have all the answers, so I hope he’s right. Certainly, I’m excited to see what’s going on in the rest of the country.
Fittingly the tour is called the “Rise of the Rest,” after Case’s moniker for the entrepreneurship happening in other parts of the country. The former AOL exec has made the “rest” of American startups his focus for almost ten years, since starting the Revolution VC firm in 2005. Ninety percent of Revolution’s investments in the last decade have been in startups outside Northern California.
“As part of our investment philosophy, even though Silicon Valley is the well-stocked lake, there’s a lot of people fishing in that lake. Sometimes there’s even overfishing, which leads to frothy valuations. If we go to these other regions, yes they’re not lakes they’re ponds, but there’s also a lot fewer people fishing. It creates investment opportunities because of supply and demand,” Case says.
If the benefit of “the rest” of America is a lack of competition for prime investments, why on earth is Case spending so much money to draw attention to it?
“Even if we’re aggressive, we’re only doing ten to twelve investments a year and we want to make sure other people are also investing in these regions,” Case says. “In the long term everyone benefits from that approach.”