Part 1: A Conversation with Steve Case | Part 2: New Entrepreneurs for a New Economy

Steve Case: Innovation Dispersion and Sector Trends

• Venture Capital Dispersion: 75% of venture capital last year flowed into only three states (California, New York, Massachusetts), while the remaining 47 states received only ~1% each; Case predicts a shift over the next decade as capital disperses to states like Ohio, Pennsylvania, and Michigan.
• Talent "Boomerang": A meaningful minority of tech professionals and entrepreneurs who relocated to coastal hubs are choosing to return to the Midwest permanently, accelerating entrepreneurship outside traditional hubs.
• Third Wave of the Internet: Case defines the current era as the "Third Wave," where the internet integrates with everyday life (healthcare, food, agriculture), creating a strategic advantage for companies located in the middle of the country where domain expertise and key partners reside.
• Regional Investment Success: Case cites "Freightways" in Chattanooga as an example of a company requiring local presence for industry-specific partnerships (trucking) rather than Silicon Valley or New York.
• Accelerated Sectors: The pandemic acted as a tipping point for e-commerce, telehealth, and mobile gaming; Case notes that regulatory relaxations in telehealth are likely to remain permanent due to proven efficacy and convenience.
• Remote Work Viability: Case acknowledges that while physical proximity aids early-stage culture, remote models (exemplified by WordPress) are viable for scaling, and his "Rise of the Rest" seed fund has made 150 investments across 70 cities over the last year.
• SPAC Market Outlook: Case characterizes the current moment as "peak SPAC," driven by retail investor interest and the success of portfolio companies like DraftKings; he predicts a future "flight to quality" where sponsor economics will shift to reward long-term company performance rather than just deal completion.
• Political Neutrality: Revolution maintains a bipartisan approach to policy, citing past collaborations with Presidents Trump, Obama, Bush, and Clinton, while emphasizing that policy and regulation will play an increasingly critical role in the "Third Wave" sectors.
• Diversity Gaps: Less than 10% of venture capital went to women and less than 1% to Black founders last year; Revolution launched a "Rise to Rest" virtual tour to partner with over 100 VCs to support Black founders.

Panel Discussion: Operational Shifts and Strategic Pivots

• Thrive Market (Nick Green):

  • Growth Metrics: Paid members surged from 700,000 to nearly 1 million in four months; the company hired 400 fulfillment staff in ten weeks.
  • Customer Retention: Unlike one-time pandemic shoppers, Thrive's paid membership model attracted cohorts that remain more engaged post-pandemic, indicating a permanent shift in online grocery adoption.
  • Operational Model: The company is moving toward a "dynamic" workplace, rejecting both 100% remote and 100% on-site models in favor of using offices for necessary collaboration while maintaining remote flexibility.
  • Culture Management: Green emphasizes that remote culture must be "deliberate" rather than organic, utilizing daily standups and weekly all-hands to maintain connection and mitigate burnout.
  • Exit Strategy: Thrive is not currently pursuing an IPO or SPAC, despite receiving "multiple calls every single day," citing a desire to reach profitability first; the company projects profitability next year.

• AirAsia Digital (Irene):

  • Revenue Pivot: AirAsia Digital has begun generating more revenue than the airline's passenger operations, shifting the company's focus from a pure airline to a "travel and lifestyle ecosystem" (fintech, logistics, platform).
  • Asset Repurposing: The company is leveraging its 560 million passenger database to build fintech (digital banking for travelers) and logistics businesses, aiming to serve underserved markets in Southeast Asia.
  • Future Vision: Digital services are viewed as the long-term future, with the goal of increasing cost efficiency for the airline operations while scaling higher-margin fintech and logistics vertically.
  • Employee Well-being: Acknowledging a 12-hour workday intensity during the pivot, the company relies on a dedicated "culture department" and community groups to prevent burnout and maintain team morale.

• Early Stage Investing (Jeanette - B2B Fund, Berlin):

  • Deal Velocity: Investment decision timelines have compressed from weeks to 2–3 days due to virtual interactions, leading to increased competition for rounds and higher valuations in the European market.
  • Due Diligence: VCs are developing new methods to assess company culture and management dynamics virtually, focusing on how leaders interact in remote settings and how they manage talent acquisition globally.
  • Investment Thesis: A permanent shift is expected in sectors like healthcare, grocery, and B2B tech (supply chain, sustainability), while sectors like education are predicted to revert to pre-pandemic norms.
  • Technology Impact: The rapid adoption of technology by legacy industries has created a "huge white space" for B2B tech startups that can productize culture and automate solutions for leaner, faster operations.

• Mubadala (Ibrahim Ajami):

  • Resilience: Contrary to the "Black Swan" pessimism, the pandemic accelerated technology adoption across healthcare, fintech, and transportation, validating the long-term investment thesis in these sectors.
  • Strategic Pivots: Portfolio companies have demonstrated agility; for example, Color Genomics pivoted from population health to leading COVID testing, and a parking infrastructure investment was reimagined as a logistics hub solution.
  • Investor Role: The firm emphasizes being a "stable, long-term partner" during shocks, noting that founders now prioritize investors who offer continuity over short-term gains.
  • SPAC Interest: Mubadala is exploring SPACs as a potential exit vehicle but prioritizes supporting founders through the investment cycle rather than rushing an exit.

Common Themes and Strategic Conclusions

• Permanence of Remote Work: All panelists agree that while travel will resume, the operational shift to remote/hybrid work is permanent, necessitating new tools for productivity, mental health monitoring, and culture building.
• Speed of Capital Allocation: The compression of deal timelines has forced VCs to refine their investment hypotheses, making it easier to say "no" quickly to non-core opportunities while accelerating commitment to high-conviction bets.
• Digital Transformation of Legacy Industries: Large established companies (AirAsia, retail, banking) are accelerating their digital pivots faster than expected, creating opportunities for B2B startups to provide productized, automated solutions.
• Small Business Revolution: Technology is being leveraged to democratize access for small businesses (e.g., Geo in India, TikTok's small business tools), allowing them to compete with larger entities using data and digital marketing previously reserved for giants.
• Sustainability Filters: Thrive Market and other firms are using rigorous sustainability and health criteria (non-GMO, organic, regenerative) to filter out transient pandemic trends (e.g., hand sanitizer) from long-term investment strategies.