Rise of the Rest

A Message From SXSW: The Undiscovered Next Big Thing

Posted on by Case Foundation

For many years, SXSW has been the place to go to see the new thing, the new product, the new trend. Market leading products like Twitter took off when they launched at the annual Austin conference and hit shows like Game of Thrones and stars like Jay Z have flocked to Austin to join in the fun and be associated with the newest trends.

Each year as I head to SXSW, I can’t help but wonder what the “next big thing” might be that will have the conference abuzz. This year, it wasn’t a product and it wasn’t a personality. Instead, it was a powerful idea: double down on the secret sauce that has made America great by expanding the pool of entrepreneurs who are building great companies and bringing new innovations. And while the idea itself may seem simple, the potential for transformative impact is extraordinary. And for any investor, this idea represents a potential new source of innovation, talent and access to untapped markets.

This was my message and the message of the Case Foundation as we went to SXSW, but we didn’t expect to find similar sentiments echoing from the SXSW stage throughout the conference, in hallway conversations and at cocktail parties. And it was the central message in my fireside chat with Reena Ninan of CBS News. Like any “hot” issue, there is usually some arresting set of facts that serves to ignite passions. In this case, the data is so stark that it provides a great entrée for the topic more broadly. Consider this data on the state of venture capital investing in the United States:

At the same time, women owned firms are growing 5 times faster than the national average. And a growing body of data reports that both women-run firms and firms with diverse teams, outperform their counterparts. First Round Capital, for instance, reported when it separated out performance in its portfolio of companies, it found that female-led firms outperformed their counterparts by 60%. Traditional investing is starting to realize that perhaps diversifying leadership is a business imperative to boost performance, with the point driven home most clearly from State Street Global Advisors, with trillions of dollars of assets under management, State Street placed a bronze statue of a young girl staring down Wall Street’s bull, and matched it with a message that they will use their proxy power if needed to ensure those firms in their portfolio diversify leadership. Sure, investing in more women and people of color is a social justice issue, but it is also a powerful economic opportunity for investors and for our nation.

This was the topic of a Ted Talk I gave a few months ago and it was great to see the SXSW attendees engage so eagerly on this subject—from world-class investors looking for paths to these untapped segments, to reporters hearing from more diverse voices and perspectives on the panels they led, to entrepreneurs from these segments asking how they can find the funders who get this and are willing to listen to good ideas, no matter the gender, color of skin or geography.

And I was not alone at SXSW in talking about these issues.

  • Beth Comstock, Vice Chair of GE, spoke eloquently about the efforts GE was taking to look for great ideas in more diverse places and how they were building more flexible workplace rules so all could succeed at GE.
  • Aspect Ventures founding partner Theresia Gouw, BBG Ventures President and managing partner Susan Lyne, and Joyus founder/CEO and angel investor Sukhinder Singh Cassidy joined Fortune senior editor Kristen Bellstrom on a panel on Monday to talk about the lack of diversity in VC funding for women and share suggestions about steps to take to change the status quo.
  • Dan Lyons, a tech journalist, former Silicon Valley screenwriter and author of the New York Times best-seller, “Disrupted: My Misadventure in the Startup Bubble” spoke in his SXSW panel about how “bro culture” and bias were holding back the industry and how we had to change the way they thought about hiring and promoting to ensure our most actively funded companies did not become too insular.
  • And Case Foundation chairman (and my husband), Steve Case, talked about the “Rise of the Rest” initiative that he runs separately from the Foundation, spotlighting and funding entrepreneurs across America, from places between the coasts that investors often ignore, but where the vast majority of our Fortune 500 companies in America were started.

And the programing and general conversation around SXSW supported this yearning for more leadership and support for a wider community of innovators. At the National Geographic venue on 6th street, National Geographic Explorers who came from non-traditional backgrounds were greeted by thousands of SXSW attendees. These included Albert Yu-Min Lin, who spoke about maintaining his passion for exploration after losing a limb, and how those in the field have the responsibility to tell the stories and make a difference. David Lang, who is designing and building underwater robots that are being used by citizens to explore oceans, rivers and lakes in ways that have never been accessible to non-academic and government officials; and Erika Bergman, who leads Google Hangouts as she pilots her submarine so all can get the chance to see the discoveries she is making thousands of feet underwater. All of these Explorers leveraged their unique backgrounds and passions to explore in ways that were outside the norm, bringing new perspectives to their work and opening doors to citizen science that had previously been closed.

Finally, this call for a wider pool of innovators was echoed by Vice President Biden as he made an impassioned plea at SXSW to support cancer research. He called on SXSW attendees to use their diverse skills and backgrounds to participate in cancer research, trials and to lend their minds and access to improve detection, prevention and treatment of cancer. In calling on more innovative thinking and engaging more diverse participants, Vice President Biden said “If we did nothing more than break down the silos preventing greater collaboration because of the way the system has been built up—not intentionally—over the last 50 years, we can extend the life of a lot of people with cancer.”

While SXSW is often known for opening our eyes to new products, this year’s SXSW was a venue where the message was clear: the next undiscovered big thing is people and the innovations that those not traditionally in the mainstream can bring to the table. Frankly, it was a breath of fresh air and we, at the Case Foundation, stand ready to keep the momentum started at SXSW going so we can see real change in the faces and ideas of the innovators who power the next generation of ideas.

Powering Entrepreneurship with Inclusion

Posted on by Case Foundation

At the Case Foundation, we believe that entrepreneurship is powerful driver of innovation, economic growth, job creation, and solutions to big, intractable problems at a global and local scale. But as we look at the increasing inequality – economic and digital divides – we have begun to explore how to tap into the fuller entrepreneurial potential of communities and countries – all backgrounds and all locations. We’ve also begun to explore the notion of catalyzing a movement in inclusive entrepreneurship built upon the theory of change that diversity breeds innovation and innovation breeds business (financial and social) success. There are a lot of ways to define “inclusive” entrepreneurship. To us, it means getting beyond those who traditionally have easier access to entrepreneurship and thinking about how to lift up—women- and minority-owned businesses, businesses that are funding good jobs for the community, and social enterprises that are committed to financial and social returns.

As part of our exploration phase, the Case Foundation team, led by our CEO Jean Case, returned to New Orleans to dive deeper into the entrepreneurship ecosystem there. Through our work with the collective impact organization, Forward Cities, we have been fortunate enough to meet entrepreneurs and ecosystem builders in New Orleans, Durham, Detroit and Cleveland who are committed to utilizing entrepreneurship to build their economies. Our team has spent the past six months listening and learning about the concept of Inclusive Entrepreneurship and we have emerged from this period of exploration even more convinced of the power of inclusion.

Our time in New Orleans was spent learning about the rebuilding of the city as we approach the 10-year anniversary of Hurricane Katrina and meeting with on-the-ground ecosystem builders who are using the power of inclusivity to create thriving entrepreneurship communities.

We want to extend a warm thank you to our partners on the ground in New Orleans who shared their approaches to inclusive entrepreneurship and walked us through their city and their work while we were there. Accelerators like PowerMoves and Propeller, along with ecosystem builders like Greater New Orleans, Inc., and advocates like former New Orleans Councilmember Kristin Gisleson Palmer have seen the value in democratizing entrepreneurship and are actively creating a more inclusive New Orleans.Photo May 08, 11 09 39 AM

And we ended our visit with a full house at NoBic, as part of the Rise of the Rest road trip, featuring the importance of diversity and inclusion in rebuilding and growing New Orleans through entrepreneurship. Jean Case led a dynamic conversation with star innovator Beth Galante and ecosystem builders Earl Robinson and Tim Williamson. It is leaders like these who are breaking down barriers and bringing the power of inclusivity to the forefront of the New Orleans entrepreneurship landscape.

And how wonderful to see the power of inclusive entrepreneurship pay off, with PowerMoves-backed entrepreneur Crystal McDonald and her company GoToInterview, win the Rise of the Rest pitch competition and a $100,000 investment.

Screen Shot 2015-06-15 at 1.54.15 PM

The conversation on diversity and inclusion continues to grow. It is clear that if we want to build up our cities and grow our economies, we need to follow in New Orleans’ footsteps and level the playing field to bring more people to the table and maximize the full potential of local, national and global talent to building the companies that are going to change the world.

Can Startups Save the American Dream?

Posted on by Case Foundation

Last year, I traveled more than 1,800 miles to witness first-hand the role that entrepreneurs are playing in reviving local economies and driving innovation in cities throughout the heart of America. I’m thrilled to see that the rest is certainly rising in places like Pittsburgh, which is taking advantage of its Steel City roots to usher in a new era of engineering and robotics innovation, or Cincinnati capitalizing on the iconic brands that call the city home to build the next generation of consumer companies. Or in Nashville, where startups are capitalizing on the city’s health care heritage to create new kinds of digital health and wellness companies, or St. Louis, which is emerging as a hub of innovation for agtech (agricultural technologies) and bioscience. But at a time when the opportunity gap is growing and the divisions in communities seem to be widening, we can’t forget that entrepreneurs can – and must – also play a role in creating pathways for all, and in helping to rebuild America’s shrinking middle class.

So when the University of Virginia approached me to help answer the question, “Can Startups Save the American Dream?” I jumped at the opportunity. While we’ve known for some time that young companies are responsible for a majority of new jobs created in the past several decades, less is known about the role that startups can play in creating jobs specifically for the middle class. Over the past several months, I, along with fellow co-chair Carly Fiorina and a dozen entrepreneurs, policy experts, thought leaders and journalists, have served on a commission organized by the Milstein Symposium at UVA’s Miller Center to explore innovative, yet practical, ideas on how to create and sustain middle-class jobs through entrepreneurship.

I’ve long said that entrepreneurs are the secret sauce of America – building not only iconic companies but entire industries. Historically, entrepreneurship hasn’t always been about the next big exit, but rather about creating pathways to the middle class and attaining the American Dream. And entrepreneurs must again be at the heart of rebuilding the American economy. There are many encouraging signs: as a nation we have created more than 10.9 million jobs over the last 57 months (the longest streak of private-sector job growth on record); the stock market is at an all-time high with the Dow Jones above 18,000 points; our high-school graduation rates are the highest they have ever been and more students are earning post secondary degrees than ever before; and policy reforms like the American Jumpstarting Our Business Startups (JOBS) Act, which creates better access to capital and incentivizes investment in young companies, were implemented.

At the same time, the income gap continues to widen, and not enough people are feeling the impact of the economic rebound. Too many people are still without jobs. And some of the data show a troubling slowdown in both new company starts and the rate at which young companies are creating new jobs. A 2014 study by Brookings shows that businesses are closing at a higher rate than being created for the first time in 30 years of data. This decline in business dynamism is happening universally across all U.S. regions. Kauffman research on entrepreneurial activity found that the rate of business creation declined from .30 percent of adults in 2012 to .28 percent of adults in 2013 continuing the downward trend from 2011.

It is with this backdrop that our Milstein Commission worked to develop recommendations for new ways to boost America’s entrepreneurial energy and provide new pathways for creating middle class jobs. We’re thrilled to unveil the following five recommendations in a new report out this morning:

Unlock Capital for Main Street Entrepreneurs

Programs like the Community Reinvestment Act and increased Community Development Financial Institution Investments (CDFIs) can provide access to critical sources of capital that entrepreneurs need to launch, sustain or scale their operations.

Accelerate impact investing through program-related investments (PRIs)

Impact investing can help transform and advance the middle-class through contributions to innovations in areas such as healthcare, energy and education, all important for middle-class households. Expanding awareness and accessibility of PRIs capital pools can encourage more impact investing among foundations and mainstream investors.

Build a Regulatory Roadmap

Starting and maintaining a business can be overwhelming with numerous rules and regulations to navigate. A “Regulatory Roadmap” can help entrepreneurs navigate the landscape and encourage regulators to streamline their processes.

Empower the next generation of entrepreneurial leaders

Many children have an entrepreneurial spirit to tackle the world’s problems and think outside the box, but by the time they go through school, all those instincts change. Creating a national competition for students at the K-12 level can help to energize students’ interest and expose them to entrepreneurial thinking and the possibility of taking the path to becoming an entrepreneur.

Equip civic leaders to build entrepreneurial ecosystems

Creating an “Ecosytem-in-a-Box” will give community and civic leaders the tools and knowledge to foster a thriving entrepreneurial community and boost their local economies.

It’s also important to note what we mean when we talk entrepreneurship. When you say the word “startup,” what comes to mind for many are technology and Internet companies. Tech companies have indeed been the source of invaluable innovation and job creation, but have also in some cases been job destroyers. The young companies that will rebuild our middle class will be those that focus on creating real jobs, not just on creating monetary value. Take Revolution Foods, for example – as a result of its mission to provide healthy school lunches, the company has created nearly two thousand middle class jobs in cities across the country.

Later this morning, Carly and I will join our fellow commissioners and Steve Clemons from The Atlantic at the Halcyon House to discuss these recommendations with a group of stakeholders from the government, corporate, nonprofit and entrepreneurial communities. We hope you’ll join us online via the livestream at: 10:30am via.

Our hope is to spark not just a dialogue, but collaborative action in moving these ideas forward as we seek to accelerate entrepreneurship and as a result create more onramps to achieve the American Dream. And, we need more spaces like the Midtown Global Market that I visited in Minneapolis, which empowers aspiring low income and immigrant entrepreneurs to start their own businesses – enabling people like Enrique, the owner of La Loma Tamales in the Global Market, to build what could be the next Chipotle. I encourage you to read the report HERE, share your thoughts with us #FutureofEnt and join us in taking action.

Build Your BE FEARLESS Style On ReadBeFearless.com