Synopsis: Technology has been moving at break-neck speed during the past 30 years, with the invention and adoption of the personal computer and the internet in the first wave, and more sophisticated hardware, software, cell phones and apps in the second wave. Our guest, an internet pioneer himself, discusses the third wave of technology that will take all of these innovations one step further – integrating them into our world in ways that will bring them more fully into our educational systems, healthcare, work and our every day lives.
Host: Gary Price. Guest: Steve Case, co-founder of America Online, investor & entrepreneur, author of The Third Wave: An entrepreneur’s vision of the future.
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The Third Wave: Tech Innovations and the Way We’ll Use Them
Gary Price: Technology is moving so fast these days. You see a new tech company being formed or new apps created every week and it’s not easy keeping up with what’s going on. All of this invention is helping us move to the next big thing, but it’s not what’s really exciting about our digital world. It’s what’s on the horizon – an entirely new way of using what’s been created that’s exciting many in the tech world. One of these people is an old hand at inventing new products and fostering groundbreaking ideas. He’s Steve Case, entrepreneur, investor and co-founder of America Online – the first ever internet IPO. He’s written a book about what’s to come in our increasingly digital world titled, The Third Wave: An entrepreneur’s vision of the future. Case says that the first two “waves” of technological innovation laid the groundwork for the future.
Steve Case: The first wave really was building the internet and building the on-ramp to the internet and building awareness of the internet which, of course, now we take for granted. But when we started AOL in 1985 only three percent of people were online, and they were only online one hour a week. So it took a decade before most people saw the benefit of getting online and it required us to work hard to get the cost of services down, and modems built in the PCs, a bunch of different things. That really was that first wave, just building the internet, getting everybody connected. The second wave has been the last 10 or 15 years, has been building on top of the internet. So it’s the apps and services that we all use – Facebook and Twitter and things like that. It’s really been about the software, it’s been about the app because the infrastructure’s built in the first wave, the focus of the innovators in the second wave was building these apps and services and that’s going to lead the way into the third wave which is just now breaking.
Price: That third wave is going to be concerned with how we use the internet for everything – from healthcare, to education to the way we grow and distribute the food we eat. Case says that instead of just 20-somethings creating apps or websites, it’s going to be a more integrated group of people and institutions that will be spearheading this innovation.
Case: In the third wave it’s going to require more partnership between the small companies, the start-ups, and the bigger companies because some of these sectors really need that in order to really get the scale and traction that you need. It’s not just about creating an app and dropping it in the App Store and hoping it goes viral. And it’s also going to need to have more intersection, more cooperation, more dialogue with government because most of the sectors that are going to be changing in this third wave are regulated. And people may complain about the regulations but the reality is there’s going to be some rules around food safety, there’s going to be some rules around drug safety, there’s going to be some rules around privacy, a lot of things are going to be important in the third wave so it’s not just about the entrepreneurs or the engineers. In the third wave it’s really about everybody kind of working together and driving collaborations that really can take this third wave to the next level.
Price: The individuals who create new products will need engineering and computer skills, just as they do today. But Case says that there will be a lot more opportunities for others with very different backgrounds to get the third wave technology off the ground and into our lives.
Case: One of those is the ability to establish partnerships. For example, if you really want to revolutionize healthcare, it’s not just about the software it’s how do you get it deployed in hospitals? That means how do you partner with hospitals so they want to work with you and embrace what you’re trying to do? Similarly, you really want to revolutionize learning for kids, I think you’ve got to work with the teachers, you’ve got to work with the schools and it may be a little harder to get your way in there but if you can, then you can have a broader impact. So the skill around partnership will become much more important. It’s about relationships and building trust and figuring out ways to work together. And then the skill around dealing with regulations and government. I know it’s frustrating to hear for a lot of entrepreneurs who don’t really want to have to deal with that, but I think people in our society want the government to protect them from certain things and the sectors that are going to get disrupted in the third wave are the kind of things that have regulations.
Price: Case has been traveling around the country listening to entrepreneurs with ideas about integrating technology and the internet more fully in our lives. His “Rise of the Rest Road Trip” is looking for ideas not only from Silicon Valley and the East Coast tech corridor, but from the middle of the country as well. It’s here that he sees a great deal of the innovation coming from.
Case: I’m really bullish on regional entrepreneurship. I think Silicon Valley will continue to be important in the third wave, Boston and Cambridge, some of those places, New York City will continue to be important. But I think people will be surprised that the great companies led by great entrepreneurs all across the country, and I’ve been doing these bus tours for the last year, it’s been called “Rise of the Rest Road Trips.” We visited a couple dozen cities, you know, 4,000 miles on the bus, and great cities like Detroit and Pittsburgh, and Nashville and New Orleans and Madison and Des Moines and Minneapolis and Kansas City, St. Louis. These are great cities that are creating great entrepreneurial eco-systems, great, great kind of start-up scene. Some of the most interesting, innovative companies in the third wave will be coming in these middle-of-the-country places, what some kind of call “fly-over” country is actually going to be ground zero for some of the innovation in the third wave. And the reason for that is some of the biggest companies that are really the leaders in these third wave sectors like healthcare and education are in the middle of the country, and having partnerships with them will make sense.
Price: One of the places that Case says the third wave of technology can help is in healthcare. Often doctors are inundated with data about a patient through tests and medical history, but rely a great deal on “gut” instinct in making diagnoses. He says that precision is the key here, and making all that information usable can help prevent mistakes in the future.
Case: I think having smarter, more precise approaches that think about healthcare, think about learning I think are very important. Right now, if you do get cancer and you go to a hospital like MD Anderson for a second opinion, they’ll report that 25% of the time they overrule the first opinion, which is crazy. It suggests there’s too much about gut instinct and not enough about the data. So I think using data to be more precise in terms of diagnoses, more precise in terms of what exactly the intervention should be I think is very important. Figuring out ways to package that in a way that really is understandable and accessible to people is important as well.
Price: When it comes to education, Case says that nobody knows more about teaching than teachers, and these are the people who will be innovating and creating a better educational system for future generations. During their road trip to Des Moines, Case listened to a pitch from a teacher who created a product called “Pear Deck”.
Case: Which was started by a former teacher who, after having been in the classroom, really understood some of the challenges around trying to engage different students in a more personalized kind of way, and really had a better sense of which kids are struggling and which kids need a little bit more intervention. And so he designed some software to do that but it’s not just about the technology it’s how it gets integrated in the classroom that makes it more accessible for the student and more helpful and more precise for the teachers. We’re seeing that kind of innovation all over the country in these “Rise of the Rest” cities.
Price: When Case helped found AOL 30 or so years ago, being an entrepreneur was a lot tougher in some ways than it is now. He says that the third wave economy has made it easier for ideas to get off the ground due to the technology and the need for newer, better ways of using it.
Case: There’s much more of a startup culture now than there was 30 years ago was coming out of college in the early 80s. You know there really wasn’t an option to kind of do a start-up, and now there is. So that’s a good thing. And the other good thing is that it’s now easier to raise capital to get started. The congress passed some legislation a few years ago called “The Jobs Act,” they created something called “crowd funding” as a way to use the internet to raise money for your idea. So I think there’s more of a culture around start-ups that makes it easier, there’s more capital. It’s still hard for entrepreneurs to raise capital but it’s easier than it was 30 years ago. The technologies are more developed so it’s easier to kind of build on top of the first wave or build on top of the second wave.
Price: There is a downside to it though, and that’s the amount of competition out there for those dollars – wherever they come from. Case says that sometimes it’s hard to get noticed in a sea of entrepreneurs, but those who do have good ideas and get them off the ground can look forward to really making their mark in the future.
Case: That’s why I think more entrepreneurs are going to start looking, not just at the second wave app opportunities, but these third wave “change education” or “change health” or “change food” or “change energy” or “change transportation” or “change financial services” opportunities, which are a little harder to get going and do require more perseverance, they require more partnerships, they require more engagement and policy, what I call in the book the “three Ps,” but have the opportunity if you do break through, to build pretty significant companies that could be valuable, but also have significant positive impact on millions of people’s lives.
Price: The third wave will also make significant, positive changes in who is on the bandwagon of change. During the first two waves, Case says entrepreneurs were mostly young, college-educated white males. The third wave, however, will usher in an age of increased diversity.
Case: People closest to the problem probably will have the best insights in terms of how to fix the problems. So that’s why some of the most innovative things in education are coming from teachers that are saying, “Hey, there’s a better way forward.” And similarly in other sectors you’re seeing people that are really living the problem and understanding the problem that are trying to create the company that can fix that problem, that can usher in a better way. And I think one of the great things about the third wave is I think we’ll see a more inclusive and diverse mix of entrepreneurs. The second wave has been dominated by relatively young people who have, generally have, engineering backgrounds, generally men, generally white men to be honest. And the third wave I think will be a much more diverse mix of entrepreneurs both in terms of place – this “Rise of the Rest” dynamic is going to be very important so it’s not just about, you know, California or Massachusetts – and you’ll see a much broader mix of entrepreneurs. Women, right now, only have go 10% of venture capital goes to women, which is crazy because that doesn’t reflect the distribution of great ideas. People of color don’t get the same opportunities so I think in this third wave there are going to be a much broader and diverse mix of entrepreneurs; much broader and diverse mix of ages and, just in general a much broader mix of perspectives that really are going to take on some of the important aspects of our lives.
Price: So there’s room at the table for everyone with creative ideas, experience and a new perspective on the way we live our lives. To learn more about the road trip Steve Case has been on listening to pitches from entrepreneurs, log onto RiseofRest.com. To learn more about his book, The Third Wave, you can visit that site at ThirdWaveBook.com. And for more information about all of our guests, log onto our site at viewpointsonline.net. You can find archives of past programs there and on iTunes and Stitcher. I’m Gary Price.