Part IThe Story
Gerald Levin later said the seating was an accident. In the autumn of 1999, at the celebration in Tiananmen Square marking fifty years of the People's Republic of China, the chairman of Time Warner found himself placed "for some reason" directly in front of Steve Case and his wife. Levin had arranged for the entire Time Warner board to meet in China that week. There were parades, there was hoopla, there was a state dinner at the Hall of the People. What stayed with him was none of it. "This next thing that registered on me," he told The New York Times a decade afterward, "was that they seem to have a very sweet relationship and I liked that, and we had some fun, joked around."
Case remembered the same evening differently. He remembered the functions and the board members of a company he already wanted, and he talked to "various Time Warner board members." He did not think he had any direct conversation with Jerry about a merger "until probably a month later."
So there are two accounts of one night. In Levin's, a man in his sixties turns in his seat and notices a marriage. In Case's, a man of forty-one works the room around the other man's directors. Both accounts are probably true, and the distance between them holds most of what follows. Within about a hundred days of that parade the two men would announce the largest merger in American business history, valued at roughly $350 billion. Within three years Case would be gone as chairman. Within ten, the separated companies would be worth about one-seventh of what they were worth the day the deal was announced, and the man who now ran Time Warner would call it "the biggest mistake in corporate history."
Case had built his company on the idea that people want to be near other people. The thing that broke it, by his own later account, was people.
By the Numbers
The Arc of America Online
$70MAOL's market value the day it went public in 1992, after raising $10 million
50%Share of all CDs manufactured worldwide that at one point carried an AOL logo
26.7MAOL users at the 2002 peak
55%Stake in AOL Time Warner held by AOL shareholders
$99BAOL Time Warner's 2002 loss, then the largest ever reported by a company
$1.5BPrice Bending Spoons paid for AOL in January 2026
78Cities where the Rise of the Rest Seed Fund has invested, across 35 states
A Week Behind the Mainland
Television arrived in Honolulu by airplane. In the 1970s, when Case was growing up, the satellite technology could not yet beam network shows across the Pacific, so the tapes were shipped over and aired a week late. "If you had a friend on the mainland," he recalled, "you could find out what's going to happen on the television show this week, because it already happened in the television show there last week." He tells it as a joke, and then he stops treating it as one: "it's a little bit, you know, kind of off the beaten path."
His family had been in Hawaii for more than a century. His father, Daniel H. Case, was a lawyer and the founding partner of Case Lombardi & Pettit. His mother, Carol, taught elementary school. There were four children. Steve went to Punahou, the private school that later also produced Barack Obama, graduated in 1976, and attended Central Union Church. Decades afterward he gave Punahou $10 million to build a junior high school named for his parents. The gift is an act of filial piety, and it is also a man's name returned, in concrete, to the place he left.
He left for Williams College in Williamstown, Massachusetts, about as far from Honolulu as an American can go without a passport. He studied political science. As a senior, in 1979 and 1980, he started reading about videotex and teletext, about Minitel in France and Prestel in Britain, about early experiments in sending text into living rooms. Then he read Alvin Toffler's The Third Wave, the futurist's prophecy of an "electronic cottage," and he was, in his words, "smitten. I was mesmerized."
There was nowhere to take the feeling. He graduated in 1980, when there were no internet companies to work for and venture capitalists were not "backing, you know, 21-year-olds coming out of college." So he did what ambitious, unconnected young men of his era did and went to learn marketing at large companies. He spent two years as an assistant brand manager at Procter & Gamble in Cincinnati, then moved in 1982 to Pizza Hut in Wichita, Kansas, as manager of new pizza marketing. Cincinnati, then Wichita. The route reads like an itinerary of the places his later fund would call "surprising." At the time it looked like a detour.
A boy who watched the mainland a week late grew up to sell the mainland, instantly, to people who felt behind. That reading may be too neat. Case himself draws the line, though. His Hawaiian childhood and his years building a company in the Virginia suburbs, he says, are "part of the reason I'm so passionate about trying to, you know, create more opportunity for more people and more places."
The Cartridge and the Crash
In January 1983 his older brother made an introduction. Dan Case was an investment banker, the more conventional of the two, and he connected Steve to William von Meister, chief executive of a company called Control Video Corporation.
Von Meister was an ideas man of the restless kind. He had first proposed selling music on demand over phone lines and pitched it to Warner Communications. Warner said no. He then built GameLine, a modem disguised as an Atari 2600 cartridge. A subscriber paid $49.95 for the device and a $15 setup fee. The cartridge dialed out over the telephone line, and for $1 a game you could download a title. The phone disconnected. The game stayed in GameLine's Master Module, playable until you turned off the console or downloaded another game. Case later described it as being "almost like having an in-home arcade, like a Netflix for video" games.
He was hired as a marketing consultant. The product came to market just as the Atari business collapsed. "Retailers didn't want any new products," Case recalled, "and suddenly, things were looking pretty, pretty, pretty desperate."
Some history is needed to see the irony. Atari belonged to Warner Communications, which had bought it in 1976, enjoyed several good years, and then took heavy losses in the video game crash of 1983. So the company that rejected von Meister's music idea also owned the console whose collapse nearly killed his game idea. Seventeen years later, the young marketer stranded by that wreck would buy what Warner had become.
Control Video was near bankruptcy by May 1983. One of its investors, Frank Caufield, brought in a West Point friend named Jim Kimsey as a manufacturing consultant. Kimsey was older than Case by a generation, an Army man put in charge of salvaging the company. Marc Seriff was the programmer, a builder of systems who would become chief technology officer and, in the company's own record, a co-founder. In early 1985 von Meister left. That May, Kimsey founded Quantum Computer Services from what remained, with himself as CEO and Seriff running the technology. Case became vice president of marketing.
Case describes the founding modestly: "two of the people I met there, Jim Kimsey, and Marc Seriff, and I co-founded America Online in 1985." He also describes the conditions. "Back then, only 3% of people were online, and those 3% were only on an hour a week." The internet itself was restricted to government agencies and universities. "Actually, it was illegal for businesses or consumers to be on the Internet in 1985," he said. So Quantum built a parallel world: its own email, its own servers, its own rooms, on the assumption that someday the walls would come down.
The first room it built was for owners of the Commodore 64. Quantum Link, called Q-Link, went online in November 1985. It ran on software licensed from PlayNet, a company founded in 1983 by Howard Goldberg and Dave Panzl. Unlike rival services, Q-Link used the home computer's own processing power instead of treating it as a dumb terminal. In May 1988 Quantum launched AppleLink Personal Edition with Apple. That August came PC Link for IBM-compatibles, built in a joint venture with Tandy. Apple and Quantum parted in October 1989, and the service took a new, patriotic name: America Online.
Kimsey promoted Case to executive vice president in 1987 and began grooming him. Case became chief executive in 1991, when Kimsey retired, and chairman in 1995. When the American Academy of Achievement gave Case its Golden Plate Award in 1999, the presenter was Jim Kimsey.
The Killer App Was Other People
The established online services of the 1980s each had a theory of what people wanted from a modem. Prodigy, funded by IBM and Sears, bet on shopping. CompuServe, based in Columbus, Ohio, and well established among technical users, was an information utility and charged by the minute, with rates that varied by modem speed and extra charges for premium services. Each theory made sense if you assumed the customer was there to retrieve something.
Case assumed the customer was lonely. He believed the "killer app" was community: people interacting with other people. AOL focused from the start on chat rooms, forums, and messaging, and it marketed itself to people who were unfamiliar with computers and slightly afraid of them. The strategy was summarized in four plain adjectives: affordable, easy to use, useful, and fun.
Fun is the word that gets overlooked. Case personally championed the company's early games. One was Habitat, the graphical chat world built with Lucasfilm's games division in 1986. Another was Club Caribe in 1989. There was QuantumLink Serial, Tracy Reed's 1988 interactive fiction, the first of its kind online, and Quantum Space, a fully automated play-by-mail game. In 1991 came Neverwinter Nights, the original Dungeons & Dragons title and the first massively multiplayer role-playing game to depict its adventure in graphics rather than text. The education ventures were just as earnest: the Teacher Pager homework service in 1990, Kids Only Online in 1991, a Library of Congress exhibit in 1991, and the first parental controls. AOL was trying to become a town, with a school, an arcade, and a church social all on the same street.
Towns need people to keep order, and here the story starts to cast a shadow. AOL recruited volunteers it called community leaders to run its chat rooms and forums. Since the company charged by the hour and chat was among its biggest sources of hours, giving free access to moderators made chat cheap to run and unusually profitable. By 1996 there were 33,000 community leaders. Until that year, as much as 90 percent of AOL's content was created or overseen by them. Volunteers applied, trained, served probation, committed three to four hours a week, filled out timecards, and signed nondisclosure agreements.
Then flat-rate pricing arrived, hourly billing disappeared, and the economics of moderation reversed. By 1999 the program had shrunk to just over 15,000. That May, two former volunteers sued under the Fair Labor Standards Act. On July 22, AOL ended its youth corps of 350 underage community leaders. The Department of Labor opened an investigation and reached no conclusions. The program ended in June 2005, and in 2010 AOL settled for $15 million. A 2009 paper in the International Journal of Cultural Studies described it as an early example of "co-production," a polite academic term for what is now called user-generated content. The town had been built partly by people who thought they were neighbors and later decided they had been employees.
Carpet Bombing
The early math of America Online was simple. During the early 1990s, the average subscription lasted about twenty-five months and produced about $350 in revenue. Any marketing dollar that brought in a customer for less than that was a good one. The ads said: Try America Online FREE.
Jan Brandt, the chief marketing officer, turned the arithmetic into a doctrine her colleagues called "carpet bombing." Beginning around 1993, AOL sent free trial disks through every channel it could find: floppies first, then CD-ROMs, tucked into magazines, mailed to houses, stacked in places that had never stocked software. At one point half of all CDs manufactured anywhere on earth carried an AOL logo. PC World complained, with self-incrimination, that "you couldn't open a magazine (PC World included) or your mailbox without an AOL disk falling out of it." It later named the disks the most annoying tech product. When a reporter asked Case years afterward what the campaign had cost, his answer became the headline: "A lot!"
There was resistance. In August 2001 two IT workers started a website called No More AOL CDs, aiming to collect a million disks and return them to the company. When the project shut down in August 2007 they had gathered an estimated 410,176. The figure is pitiful as protest and impressive as an indicator of scale. They collected less than half their target, and those 410,176 disks were only the ones people bothered to send back.
The flood had a second effect, which the old internet never forgave. In September 1993 AOL gave its members access to Usenet, the decentralized discussion system that had been the province of academics and engineers. Usenet had long absorbed one annual wave of newcomers, college freshmen who arrived each September and learned the customs within a few weeks. AOL's newcomers never stopped arriving. The veterans named the new condition the Eternal September. AOL hid at least one newsgroup, alt.aol-sucks, from its standard list view, and in the alternate view it relabeled the group "Flames and complaints about America Online."
In the ordinary sense the old guard was right: the newcomers did not know the rules. In Case's sense they were also the point of the whole enterprise. Q-Link was shut down on October 21, 1994. By then the service had passed one million subscribers. It would go on to pass GEnie, Prodigy (which for years had accepted AOL's advertising), and finally CompuServe. In 1997, about half of American homes with internet access went online through AOL.
Busy Signals
AOL went public in 1992, the first internet company to do so, at a moment when, in Case's words, "basically, nobody knew or cared what we were doing." The offering raised $10 million and valued the company at $70 million. The company had been operating for nearly a decade and had a couple hundred thousand customers. "A couple of times, we almost, you know, hit the wall, had to go through some layoffs," he said. He has since compressed that decade into the line he repeats most often, a sentence that is both consolation and warning: "Sometimes revolutions happen in evolutionary ways."
The evolution sped up suddenly. In February 1991 AOL launched for DOS PCs with a GeoWorks interface, and a Windows 3.0 version followed the next year. In November 1994 it bought Booklink to give members a web browser. In 1996 it replaced Booklink with a browser based on Microsoft's Internet Explorer, reportedly in exchange for a place inside Windows, the most valuable shelf in computing. In 1995 the company was based at 8619 Westwood Center Drive in Tysons Corner, Virginia. By mid-1996 it was out of space and moved to 22000 AOL Way in Dulles. The address was a statement of permanence about a business that had nearly died twice.
Then it nearly drowned. In August 1996 AOL went down completely for nineteen hours, taking more than six million people offline. That fall, as internet providers began offering unlimited access, AOL gave in, even though, by the company's own internal logic, it would lose money doing so. In December 1996 the hourly fee became a flat $19.95 a month. Members logged in and stayed. The modems in Dulles couldn't keep up, and customers heard busy signals instead of the screech and hiss of a connection. Many canceled. AOL produced a commercial in which its chief executive told the country, in effect, that the company was working day and night to fix it.
That commercial is perhaps the purest artifact of Case's first career: a marketing man with no theatrical gift standing in front of a camera to apologize to millions of strangers for their enthusiasm. Within three years the user base reached ten million.
After that the purchases arrived in quick succession. In February 1998 AOL acquired CompuServe's consumer service through WorldCom, absorbing the Columbus information utility it had once been measured against. In November 1998 it announced a $4.2 billion deal for Netscape, which closed in March 1999. In December 1999 it bought MapQuest for $1.1 billion. AOL Instant Messenger had launched in 1997, and at its peak, billions of messages moved daily across AIM and AOL's chat properties. In 1999, at its highest, AOL was valued at $222 billion. Case remembers the climb in the plain figures of a man who still seems surprised by them: from $70 million to "$160 billion," and from a small company to 10,000 employees.
"I recognized as the company was scaling," he said, "I as the leader or as the CEO, needed to constantly rethink what my job should be." He was building the team for the business he would have in two years rather than the one he had. The next business he wanted was larger than anything AOL could become on its own.
Philosophy and Values at the Rihga Royal
Robert W. Pittman, AOL's president, was a former media executive who described 1999 as the year the world accepted the thesis "that everybody was going to be on the Internet." By his account, the question inside AOL became: "O.K., what's the big dream, what's the big idea, what do we need to do now?" The company hired Salomon Smith Barney and its top media banker, Eduardo Mestre, to help it spend its expensive stock. "We were actually deep in discussions with eBay to buy eBay," Pittman said, "had a little bit of discussion with Larry Probst over at Electronic Arts, and Steve had an idea that we should merge with Time Warner and me and a couple other people said there's no chance that's ever going to happen and I sort of paid no attention to it."
Pittman's assumption was reasonable. Time Warner was the world's largest media company, assembled over decades through Steve Ross's Warner Communications, the 1990 merger with Time Inc., and the 1996 acquisition of Ted Turner's broadcasting empire. It owned Warner Bros., HBO, CNN, Time, Warner Music, and cable systems carrying high-speed lines into millions of homes. Its chief executive was a philosopher of a sort. Gerald Levin quoted the Bible and Camus, had stopped wearing ties once a music company moved into his building, and had lost his son Jonathan to murder in 1997. He had been searching for a digital future for years. Gordon Crawford of Capital Research, Time Warner's largest institutional shareholder, had pushed him toward Yahoo's Jerry Yang. Over 1999 those talks grew from a partial stake to a full merger, and then in late fall Yang ended them.
Case's strategic argument was clean, as his arguments generally were. AOL dominated dial-up, but dial-up was narrowband and the future was broadband, and the best road to broadband ran through cable. As the internet sped up it would carry richer media, and AOL had none to carry. Time Warner had the content and the cables but, in Case's assessment, "didn't really have a viable path to digital." There was a third reason that Case discussed less often but stated clearly: "We recognize there was some value in diversification. Our stock had run up quite significantly." In plainer terms, AOL held a currency that might not last and wanted to exchange it for something that would.
He called Levin. Levin followed his "traditional script and quasi-legal background" and said Time Warner was not for sale. Case kept pressing. "Within the first minute or two of my little pitch," Case said, "I said, 'I'd be willing to step aside as CEO to allow you to be CEO of the combined company because I believe in this idea.'"
They met for dinner and wine at the Rihga Royal, a hotel in Midtown Manhattan, and talked for several hours. "The idea was not to talk about any transactional detail but to talk about philosophy and values," Levin recalled. "I took away the fact that he had good values, which was important to me, that his company was a real company." Case remembered talking about "how the company together might have a broader impact on society." One of them wanted proof the other's company was real. The other wanted to change society. Each left believing he had heard what he came for.
The deal was settled at a dinner in early January at Case's house in McLean, Virginia. It was presented as a merger of equals, but it was an acquisition. AOL shareholders would own 55 percent and Time Warner's 45, even though Time Warner had far more assets and revenue. The board would be split evenly. Levin would be chief executive and Case chairman. Lawyers spent a weekend on due diligence in two Manhattan law offices. Remarkably, nothing leaked. Most executives learned of the deal hours before the announcement on January 10, 2000.
Don Logan, who ran Time Inc. and was admired inside the company as a steady earner, said: "Dumbest idea I had ever heard in my life." Ted Leonsis, an AOL division president, said: "I was one of the loudest advocates for not doing the deal." Timothy Boggs, Time Warner's head of government relations, would have to sell it to regulators around the world. He felt "real regret and dread." He loved Time Warner as a company "with a vision and a set of values" and saw AOL as "much more opportunistic." Boggs later became an associate rector at an Episcopal parish in Washington. Logan later bought a minor-league baseball team in Birmingham, Alabama. Leonsis went on to own the Washington Capitals and Wizards. Each man found his own way out of corporate life, and each is worth remembering.
— Don Logan, then head of Time Inc., on learning of the AOL–Time Warner mergerDumbest idea I had ever heard in my life.
Few people outside the company agreed with Logan. Nina Munk, who later wrote the definitive account, Fools Rush In, said The Wall Street Journal ran "19 or 20 separate articles" on the deal and that the word "transformative" appeared again and again. Mestre remembered coverage that read "as if it was the second coming of the Messiah... it brought tears to your eyes." Tim Armstrong, then an executive at an upstart called Google, read the news on the steps of a church on the Upper West Side and "thought the world had changed." Nine years later he would be running AOL.
Then there is the detail of the clothes. At the press conference, Levin, representing analog media, wore no tie. Case, the internet founder, wore a suit. "It wasn't planned," Levin said, but it was "a refreshing symbol," and he admitted he was "on an emotional high." Case remembered the day as "bittersweet." He said: "This is a historic moment in which new media has truly come of age." Years later he explained the bitterness: "I recognized that my role was going to change." The younger man had dressed to join the establishment, and the older man had dressed as if leaving it. The press photograph of the two of them embracing later appeared on the cover of Munk's book.
Species Inherently at War
Regulators took a year. Robert Pitofsky, chairman of the Federal Trade Commission, called it the most significant media case before the commission since CBS bought the New York Yankees in 1964. "Our economists at the time said this deal doesn't make economic sense," he said. "I didn't see it that way." The European Commission cleared it on October 11, 2000, the FTC on December 14, and the FCC on January 11, 2001, the same day the merger closed.
By then the bubble had already started to deflate. In May 2000 the dot-com market began to break, and online advertising slowed. Broadband moved faster than anyone expected. AOL's dial-up franchise, which was the reason for the whole deal, began to look less like a bridge to the future and more like a toll booth on an old road. Pittman had promised that putting "a catalyst" into Time Warner would give the old company the growth of an internet company. His vision added up to 130 million subscription relationships. The divisions he wanted to catalyze, as the company's own history puts it, were "independent fiefs that rarely cooperated" even with each other. A new incentive plan replaced division bonuses with options tied to the combined stock, so Time Warner's division heads were now paid partly on AOL's performance, and they resented it.
"I remember saying at a vital board meeting where we approved this, that life was going to be different going forward because they're very different cultures," said Richard Parsons, Time Warner's president. "But I have to tell you, I underestimated how different." Leonsis asked a pointed question: if AOL was the crown jewel, why were its best people moving to New York?
In the summer of 2001 a Washington Post reporter named Alec Klein got an anonymous call about a mid-level AOL executive who had been suspended. The caller said little and hung up. Klein worked through a chain of people who each knew nothing but suggested three more names, and eventually he reached a man whose first words were, "How did you find me?" It was the tipster. From him Klein built a network of sources with secret documents showing that AOL had improperly inflated its advertising revenue. His stories, published in 2002, led to investigations by the Securities and Exchange Commission and the Justice Department. The company paid fines and restated earnings. Klein's book, Stealing Time, became the prosecution's account of the merger, as Munk's became its tragedy.
Levin was the first to break. After September 11 he wanted to cancel the October 3 board meeting. "Most people, particularly the AOL people, said business has to go forward," he recalled, "and I was just emotional." At a Wall Street presentation, someone asked about the margin deterioration from post-9/11 spending, and Levin "really emotionally went after the person asking the question, got up and walked out." He said the attacks had reopened his son's death, from which he had never achieved "any resolution." He announced his retirement in December 2001. He later ran a holistic healing center in Santa Monica.
Some time after a Ted Turner outburst at a board meeting, Case had called each director to push for Levin's removal. Parsons and others rebuffed him. When Levin left, Pittman, his strongest supporter and the presumed heir, was passed over, and Parsons became chief executive. Pittman resigned after July 4, 2002, exhausted and nearly hospitalized. His duties were divided between two Time Warner veterans who had opposed the merger: Jeffrey Bewkes of HBO and Don Logan. Logan, who had called it the dumbest idea he'd ever heard, now oversaw America Online and set about removing Pittman's allies.
In 2002 AOL Time Warner reported a $99 billion loss after a goodwill write-off, the largest any company had ever reported. AOL's stock value fell from $226 billion to about $20 billion. Ted Turner, the largest individual shareholder, lost about $8 billion, roughly 80 percent of his net worth, and later his job. "The Time Warner-AOL merger should pass into history like the Vietnam War and the Iraq and Afghanistan wars," he said. "I almost didn't do this interview because I didn't want to dig it up again." Turner even checked whether he was the biggest loser of all time and decided he probably wasn't, because Bill Gates had lost more on paper. "I was in the top three or four of all time."
In June 2002, in the middle of all this, Dan Case died of brain cancer at forty-four. He was the brother who had made the first introduction. The record says nothing about how Steve took it, and this account will not guess. It notes only that the Case Foundation later funded Accelerate Brain Cancer Cure, an organization built to apply an entrepreneurial, venture-capital approach to finding a cure.
Bewkes is remembered for telling Case in a meeting: "The only division that's not performing is yours. Every one of us is growing, making the numbers. The only problem in this construct is AOL." Crawford, the shareholder who had steered Levin toward Yahoo, now organized dissent against the chairman. In January 2003 Case announced he would not stand for re-election. That year the company removed "AOL" from its name, and its stock ticker changed back from AOL to TWX.
— Steve Case, reflecting on his resignation as chairman of AOL Time WarnerFor whatever reason, right or wrong, I had become kind of a magnet for a lot of anger and frustration, particularly with the Time Warner employees and also with shareholders.
He stayed on the board for nearly three more years and resigned on October 31, 2005. Weeks later he published his view in the press: "It's now my view that it would be best to 'undo' the merger by splitting Time Warner into several independent companies and allowing AOL to set off on its own path." The man who had made the deal was now publicly calling for it to be unwound.
The participants still disagree about why it failed. Bewkes says culture was never the issue: AOL simply had the same unsolvable business problems as "Yahoo, MSN, Lycos or I.A.C." Levin says the deal was "undone by the Internet itself," by "the rolling thunder of the Internet" that "started actually to eat its own." Case says: "It was a good idea, but the execution of it wasn't what it needed to be, and I accept responsibility for that." Parsons gave the bleakest account: "They were like different species, and in fact, they were species that were inherently at war."
What the Company Became Without Him
The town Case built continued without him, and it did not age well.
In August 2005 AOL paid New York State $1.25 million and agreed to stop requiring customer service representatives to meet "save" quotas for retaining subscribers who called to cancel. Representatives had been earning bonuses worth tens of thousands of dollars for talking people out of leaving. On June 13, 2006, a thirty-year-old named Vincent Ferrari posted a recording of his own cancellation call. He had switched to broadband years earlier. The AOL representative refused to cancel unless Ferrari explained why hours were still being logged on the account, and then asked to speak to his father, in whose name the account had been opened. CNBC aired it. A CNBC reporter who then tried to cancel an account was hung up on and needed more than forty-five minutes. In July the entire retention manual appeared online. In August, Time Warner shut down the retention centers. A company founded on bringing people in had become known for refusing to let them leave.
In April 2006 the name "America Online" was officially retired. In December 2006 AOL closed its last call center in the United States, a move industry observers described as "taking the America out of America Online." In 2007 the headquarters moved from Dulles to 770 Broadway in New York, followed by roughly 2,000 layoffs, about 40 percent of the workforce. In 2008 AOL paid $850 million for the social network Bebo and sold it two years later for an amount believed to be around $10 million. Members were moved from AOL Hometown profiles to Bebo, then to something called Lifestream, and when Lifestream closed in 2017 they were given a month to save their photos.
AOL was spun off from Time Warner in 2009 under Tim Armstrong, who bought the Huffington Post for $315 million, sold 800 patents to Microsoft for $1.056 billion, and in 2015 sold the company to Verizon for $4.4 billion. Verizon combined it with Yahoo into Oath, which became Verizon Media, which Apollo bought in 2021. AIM shut down on December 15, 2017. The chat rooms, the original product, closed in December 2020. In 2015 more than two million people still paid for AOL dial-up. By 2021 the figure was a few thousand. The service ended on September 30, 2025, and NBC's headline read: "With a final screech, AOL's dial-up service goes silent."
In January 2026 the Italian company Bending Spoons bought AOL for about $1.5 billion. Its chief executive, Luca Ferrari, cited thirty million active users, a reminder that the community had never fully left. The next month the new owner laid off 108 people connected to the company's office in Reston, Virginia, close to where the busy signals first sounded.
Revolution, in Evolutionary Ways
"Rather than start a company again," Case said of the period after AOL, "I thought I'd start an investment firm that could back the next generation of entrepreneurs." In April 2005 he founded Revolution LLC in Washington with Donn Davis and Tige Savage. Among the co-founders, he notes, was Ron Klain, who later became President Biden's chief of staff. For years it was funded only with his own money.
The first large bet was the most Case-like in its ambition. Revolution Health Group, also launched in April 2005, set out to reform American health care through the consumer internet. After acquisitions and disappointing results, it merged with Waterfront Media in October 2008. That was a failure, and he moved on.
The bets that worked looked small at first. Revolution backed Zipcar, LivingSocial, and Exclusive Resorts, early examples of what would later be called the sharing economy. Zipcar went public in April 2011 at a valuation above $1 billion and was bought by Avis Budget Group in January 2013. American Express bought Revolution Money in 2009 for $300 million. Towers Watson bought Extend Health for $435 million in May 2012. Morningstar bought HelloWallet in May 2014.
In 2011 the firm took outside capital for the first time, launching the $450 million Revolution Growth fund. Case's partner in it was Ted Leonsis, the man who had been "one of the loudest advocates for not doing the deal." The record has no comment on this. The fact speaks for itself. Revolution Growth became the first institutional investor in Sweetgreen and later backed DraftKings, Clear, Tempus, Bigcommerce, Custom Ink, Optoro, and others. Revolution Ventures followed in 2013 under Savage and David Golden, writing checks under $10 million.
Over the same period Case developed a theory of what his first company had been for. His 2016 book borrowed its title from the Toffler book that had captivated him at Williams: The Third Wave: An Entrepreneur's Vision of the Future. It reached the New York Times bestseller list. In his account, the first wave was AOL's: getting everyone connected, building the on-ramps. The second wave was Google and Facebook building software on top of that connection. The third wave would be "when the Internet meets the real world": health, food, education, money, transportation. Those sectors are regulated, which makes policy central and favors investors who understand Washington.
Washington had always been an odd base for a technology company. Case says AOL ended up there by accident, because Control Video happened to be in Northern Virginia. "There was no venture capital, you know, there," he recalled. Over time he came to treat the location as an advantage. He pushed for the JOBS Act, signed on April 5, 2012, which updated securities rules dating from 1933 ("this wasn't just pre-Internet, this is pre-television"), legalized equity crowdfunding, and eased the path to an IPO for young companies. He served on President Obama's jobs council with Sheryl Sandberg and John Doerr. He is credited with helping pass Opportunity Zones in the 2017 Tax Cuts and Jobs Act, which he called a "game changer." He has argued for years for a Startup Visa, so far without success.
His politics are hard to categorize. He describes himself as an independent and prefers to work quietly with both parties. He broke that pattern to endorse Hillary Clinton in 2016, citing immigration, then met with President Trump in 2017 and later welcomed Trump's stated support for green cards for graduates. In 2017 he hired J.D. Vance to help with Revolution's work outside the coastal hubs. In November 2024 he wrote that broad access to entrepreneurship was something he knew "vice-president-elect JD Vance cares about." The man who once wanted to connect everyone to everyone appears unwilling to treat any group as off-limits.
The Big Red Bus
The idea began with a statistic Case found "surprising, almost shocking." About 75 percent of American venture capital over the preceding decade had gone to three states, California, New York, and Massachusetts, and within those states mostly to three cities. He was chairing the Startup America Partnership for the Obama White House, traveling the country to promote regional entrepreneurship, and he kept meeting founders who believed they had to move to the coasts to be taken seriously.
So he bought a bus, a big red one. Starting about a decade ago, Rise of the Rest tours went to forty-four cities. The first tour stopped in Detroit and Pittsburgh. Case tells the Detroit story as a parable. A hundred years ago Detroit was the Silicon Valley of its day, the center of the hot technology. "Hundred years ago, Silicon Valley was fruit orchards." Detroit then lost 60 percent of its population, and the year before the bus arrived, the city went bankrupt. By the time Revolution was backing Shinola and StockX, Detroit was recovering. Pittsburgh, once the steel capital, had reinvented itself around Carnegie Mellon, robotics, and companies like Duolingo.
The bus was a stage prop, and Case acknowledges it: "Americana road trip bus dynamics." It also had a practical function. He calls it "a rolling, convening platform." Mayors, senators, university presidents, and corporate executives rode with local founders and with investors brought in from the coasts, along with reporters. In each city, about a hundred startups applied to pitch, eight to ten were chosen, and each had about three minutes on stage. Revolution hired a professional pitch coach to work with every finalist beforehand, an idea borrowed from Google for Startups. "Whether they win or not," Case said, "we're trying to help them be positioned for success." Most investors judge pitches. Case pays someone to improve them first.
In 2017 the effort became the Rise of the Rest Seed Fund, and Case did something characteristic: he made it a network. Its limited partners included Jeff Bezos, Howard Schultz, Tory Burch, Sara Blakely, John Doerr, Jim Breyer, Henry Kravis, David Rubenstein, Ray Dalio, and members of the Walton family. Barry Ritholtz called the group "a murderers' row." By 2022, Revolution had made 200 investments in Rise of the Rest cities across 100 places, and the seed fund reached seventy-eight cities in thirty-five states. The examples Case gives are deliberately unglamorous. TemperPack makes sustainable packaging in Richmond. FreightWaves is building a data platform for trucking in Chattanooga. 120Water tests drinking water in Indianapolis. Catalyte in Baltimore uses software to find people with an undiscovered aptitude for coding, including a former UPS driver whom "nobody, when he was growing up, told him he could be a coder." AcreTrader, a farmland investment platform, sits in Fayetteville, Arkansas, because its founder decided to leave San Francisco and "be where the farmers are."
In September 2022 he published the field report: The Rise of the Rest: How Entrepreneurs in Surprising Places Are Building the New American Dream. "I just felt compelled to write this book," he said. Its central historical argument concerns the first wave, his own. IBM's PC operations were in Boca Raton. CompuServe was in Columbus. Hayes, the modem maker, was in Atlanta. Sprint was in Kansas City, Dell in Austin, and Microsoft began in Albuquerque. AOL was in Tysons Corner. "That first wave of innovation of the Internet was regionally distributed," he said. "It was only the second wave when it became about software, that Silicon Valley rose to prominence."
Seen this way, the Rise of the Rest is less a new idea than an attempt to restore the geography in which Case first succeeded. He spent his twenties bringing the country online from outside the center. In 2000 he bet everything on joining the center, the towers of Manhattan and the most powerful media company in the world, and the center rejected him. In 2007 his old company moved to 770 Broadway. He stayed in Washington and went out on the road.
Fifty-Seven Thousand Acres and a Cartridge
He has also returned, in a substantial way, to the place he left. Case controls about 57,400 acres in Hawaii, including the 35,170-acre Grove Farm on Kauai and a controlling stake in Maui Land & Pineapple, which reached 62.8 percent in 2010. That makes him the second-largest billionaire landowner in the state. The Grove Farm acquisition was highly controversial and led to years of litigation by the farm's previous owners. A local newspaper described the family as "a house divided." Grove Farm leases land for sustainable development. The boy who waited a week for the mainland's television now owns much of the islands, and that, too, is complicated.
He chairs the Case Foundation, which he and Jean started in 1997. Jean is its chief executive and from 2016 to 2025 chaired the National Geographic Society. In 2010 they joined the Giving Pledge, after initial hesitation about being "that public." In 2011 he became a Citizen Regent of the Smithsonian Institution, and in 2020 he became chair. He first saw the Smithsonian when he came to Washington at eighteen. He has pushed it toward what he calls the Virtual Smithsonian: "rather than just assume that you're going to fly to Washington, DC... we want to come to you." The idea is to put a national museum in every home and classroom, which is very close to the AOL pitch for the Library of Congress exhibit in 1991.
Asked what he knows now that he wishes he had known in 1985, he answers carefully. Partnerships come first. Then: "At the end of the day, it all comes down to people." Then he addresses the merger directly, without being asked: "We didn't have the people side right. We didn't have the right people focused on the right priorities, working together in the right way." He and Jean, he says, love an African proverb: if you want to go quickly, go alone; if you want to go far, go together. It is a fitting creed for a man whose most famous partnership started when a stranger turned around at a parade, noticed a marriage, and liked what he saw.
The first introduction was also a family matter. In January 1983 Dan Case, the older brother and the banker, connected Steve with a man selling video games over phone lines. The device was a gray cartridge that pushed into an Atari and dialed out. For a dollar it pulled a game down the line, the phone disconnected, and the game stayed inside the machine, playable until someone turned off the console or asked for another.
Part IIThe Playbook
Steve Case's career has two clear acts with a disaster between them, and each has something to teach. The first act is a study in building mass-market adoption for a technology nobody yet trusted. The middle is the most-cited cautionary tale in modern dealmaking. The second act is a deliberate bet against the geographic consensus of the venture industry. The principles below come from all three. They are meant to be useful and should not be read as hero worship. Several are lessons Case learned at great cost, and a few are lessons his company learned at its customers' expense.
The principles
- 1.Sell the room, not the machine.
- 2.Price acquisition against lifetime value, then flood the zone.
- 3.Let users build the product, and pay them honestly for it.
- 4.Budget for the slog decade.
- 5.When you adopt the market's pricing, build for the flood it brings.
- 6.Spend inflated currency on durable assets, but price the integration.
- 7.A merger is a people decision wearing a strategy costume.
- 8.Know when you have become the obstacle.
- 9.Locate where the rules are written.
- 10.Treat the periphery as an inefficiency, not a charity.
- 11.Convene before you fund.
- 12.Hire your loudest critic.
Principle 1
Sell the room, not the machine
In the 1980s every online service had to answer one question: why would an ordinary person connect a computer to a phone line? Prodigy, backed by IBM and Sears, said to shop. CompuServe said to retrieve information, billed by the minute. Case said the reason was to meet other people. He believed the "killer app" was community, and he marketed AOL to people who were "unfamiliar with computers," the opposite of CompuServe's technical audience.
This positioning made AOL's growth self-reinforcing in a way its rivals could not match. Shopping and information get only slightly better as more users join. A chat room becomes much more valuable with every person who enters. The games Case championed (Habitat, Neverwinter Nights, QuantumLink Serial) were not side projects. They were reasons to come back and find the same people again.
The lesson goes beyond "build a social network." When a technology is new and frightening, people adopt it for a familiar human reason and not for the technical capability. Case sold friendship, homework help, and parental controls, and the modem came along with them.
A
Three Theories of Going Online
How the leading online services of the late 1980s and early 1990s answered the question 'why connect?'
| Service | Core promise | Target user | Pricing posture |
|---|---|---|---|
| Prodigy (IBM and Sears) | Shopping | Households as buyers | Subscription |
| CompuServe (Columbus, Ohio) | Information utility | Technical community | Per-minute, varying by modem speed, premium surcharges |
| America Online (Northern Virginia) | Community | People unfamiliar with computers | Hourly, then flat $19.95/month from December 1996 |
Tactic: Before launching a new technology, write one sentence describing the human need it serves without naming the technology, and build your marketing on that sentence.
Principle 2
Price acquisition against lifetime value, then flood the zone
The carpet-bombing campaign looked reckless and was in fact disciplined. In the early 1990s an AOL subscriber stayed about twenty-five months and paid about $350. That number set a clear ceiling on what AOL could spend to get someone to try the service. Once the ceiling was known, the right volume of disks was as many as could be produced profitably. At one point that was half of all the CDs in the world.
Case's own summary of the cost was "A lot!" That was the point. A free trial lowered the commitment to almost nothing, and the community made people stay. Rivals who thought of the disks as waste were judging the cost of each disk instead of the value of each subscriber.
The campaign also had real costs that a modern operator should take seriously. It caused environmental criticism, a protest that collected 410,176 returned disks, and a reputation as the most annoying product in tech. Aggressive distribution works as long as the brand can absorb the annoyance. AOL's could for a decade, until broadband removed the reason to tolerate it.
Tactic: Calculate customer lifetime value and churn before setting a marketing budget, and when the math supports it, spend at a volume competitors consider irrational.
Principle 3
Let users build the product, and pay them honestly for it
AOL's community leader program was a brilliant idea and a cautionary one. In 1996, 33,000 volunteers ran chat rooms and forums in exchange for free access. Up to 90 percent of AOL's content was created or overseen by them. Because chat was billed hourly and moderation cost the company almost nothing, chat became one of AOL's most profitable services.
The arrangement depended on a pricing model. When flat rates replaced hourly billing, free access lost its value, the program shrank to around 15,000, and volunteers began to see the timecards, quotas, and nondisclosure agreements for what they were. The 1999 lawsuit, the end of the 350-member youth corps, and the $15 million settlement in 2010 were the bill for a decade of labor that had been called something else.
Every company built on user contributions, whether moderators, reviewers, creators, or open-source maintainers, faces the same issue. Contributors give their time because of prestige, access, and belonging. When the company starts treating that contribution like employment, contributors eventually notice.
Tactic: For any community program that does real work for your business, set the boundary between volunteer and worker in writing, with legal review, before growth makes the question expensive.
Principle 4
Budget for the slog decade
AOL operated for nearly ten years before most people cared about it. When it went public in 1992 it raised $10 million at a $70 million valuation with a couple hundred thousand customers. "The first decade was hard and slow," Case said. "The second decade, really, things really took off." He sees the same pattern in Rise of the Rest: about ten years of being laughed at, followed by the first signs of momentum, such as 1,400 new regional venture firms and a 600 percent increase in capital flowing to non-coastal cities.
His summary, "revolutions happen in evolutionary ways," is less a slogan than a planning principle. Founders working on structural changes, like mass internet adoption or geographic redistribution of capital, should expect the first decade to show little visible progress and should organize capital, morale, and personal life around that expectation. Case's warning is aimed at the "overnight success" story: "two steps forward, one step back, a lot of near-death experiences."
The opposite risk is real too. AOL's long struggle was followed by explosive growth, and the explosive growth came with a market valuation that encouraged its worst decision. A slog decade can build patience. A boom decade can wipe it out.
Tactic: For any initiative meant to change behavior at scale, plan finances and team commitments around ten years, and set intermediate milestones that measure learning, not just revenue.
Principle 5
When you adopt the market's pricing, build for the flood it brings
In late 1996 flat-rate internet providers forced AOL's hand. The company switched to $19.95 a month for unlimited use, even though the change threatened its economics. Users responded by staying online longer, the modems in Dulles were overwhelmed, busy signals became a national joke, and members canceled. Months earlier a nineteen-hour outage had knocked six million people offline. The chief executive had to apologize in a television ad.
Two lessons follow. First, the pricing move was correct. AOL reached ten million users within three years, and staying on hourly billing while competitors went flat would have been fatal. Second, the pricing decision was also a capacity decision, and AOL treated it as only a pricing decision. Unlimited pricing changes usage patterns as well as revenue per user.
Case's personal presence in that commercial is also worth noticing. When the product fails publicly at mass scale, people want to see a human being take responsibility. He would face that again in 2003, at much higher stakes.
Tactic: Before any pricing change that removes friction, model the behavioral surge in usage and secure the infrastructure first.
Principle 6
Spend inflated currency on durable assets, but price the integration
From the perspective of AOL's shareholders, the Time Warner deal can be defended in a way that is often forgotten. AOL's stock "had run up quite significantly," Case said, and he saw "value in diversification." AOL used shares at a bubble valuation to buy 55 percent of a company with "far more assets and revenues": film libraries, cable systems, magazines, music. When the bubble burst, AOL's former shareholders owned a large share of real assets instead of a large share of a collapsing dial-up business.
The deal failed because it was also meant to be an operating combination, and nobody priced in the cost of making the parts work together. Pittman's idea of putting "a catalyst" into Time Warner assumed the divisions would cooperate. The FTC's own economists said "this deal doesn't make economic sense," and their objection went to that second half of the plan. Integration meant converting independent fiefdoms into a coordinated whole, and that cost had no line in the financial model.
A buyer with overpriced stock should swap it for durable assets. But the buyer should then decide whether to integrate those assets or simply hold them, because integration costs are high and often underestimated.
T
The Merger, From Parade to Exit
Key dates in the life of AOL Time Warner and Case's role in it.
1999
At a Tiananmen Square celebration, Gerald Levin is seated in front of Steve and Jean Case. Case calls a month later; Levin initially declines.
2000
January 10: merger announced, 55% to AOL shareholders. May: dot-com bubble begins to burst. December 14: FTC clears the deal.
2001
January 11: FCC approval; merger closes. December: Levin announces his retirement.
2002
Record $99 billion loss. Pittman resigns as COO after July 4. Dan Case dies in June. Alec Klein's accounting stories trigger SEC and DOJ probes.
2003
January: Case says he will not stand for re-election as chairman. "AOL" is dropped from the corporate name.
2005
October 31: Case resigns from the board; he later writes that the merger should be "undone."
2009
Time Warner spins AOL off as an independent company.
Tactic: When acquiring with richly valued equity, model two scenarios separately, "own the assets" and "integrate the assets," and do not let the second inflate the price of the first.
Principle 7
A merger is a people decision wearing a strategy costume
The merger began with Levin noticing that the Cases had "a very sweet relationship." The key meeting at the Rihga Royal was explicitly "not to talk about any transactional detail but to talk about philosophy and values." Two chief executives assessed each other's character and found each other admirable. Neither assessed whether the 90,000 people under them could work together.
Parsons warned the board that the cultures were different and later admitted he had "underestimated how different." The incentive plan made it worse. Time Warner's division heads, now paid partly on combined results, blamed AOL for missed targets. Bewkes argued culture was never the issue, and his view deserves weight: AOL's business problems were the same ones Yahoo and Lycos faced. Even so, cultural conflict turned a business problem into a political one. After the accounting scandal, AOL had no allies left inside the company.
Case's own conclusion, years later, was blunt: "We didn't have the people side right." Founders tend to underestimate this because they experience a company through a small leadership team. A merger is experienced by everyone else.
Tactic: Before signing any combination, interview the second and third layers of leadership on both sides about how they would work together, and treat their answers as seriously as the financial diligence.
Principle 8
Know when you have become the obstacle
Case offered to step aside as CEO in the first minutes of his pitch to Levin. Three years later he stepped aside again, as chairman, in different circumstances. "I had become kind of a magnet for a lot of anger and frustration," he said, and "the best thing I could do was step aside and get out of the way." He did not come to that conclusion on his own; Gordon Crawford was organizing shareholder opposition. But he stated it publicly, accepted responsibility for the poor execution, and stayed on the board long enough to argue for unwinding the deal.
Few founders recognize, in time, that they have become a symbol of a failure regardless of how much they personally caused it. A symbol cannot lead the people who resent it. Case's earlier failed attempt to remove Levin shows the other side: he was still fighting inside the company after he had lost the support he needed.
Tactic: Every year, ask a trusted outsider whether your presence makes it harder for your organization to move forward, and decide in advance what answer would make you step down.
Principle 9
Locate where the rules are written
Case moved to Northern Virginia because of a failing game company. He stayed and eventually built an investment firm a few blocks from the White House because he came to see policy as a strategic asset. In 1985 it was illegal for consumers to use the internet. Getting the rules right for e-commerce and child safety took years of the company's attention.
His third-wave thesis turns that experience into an investment strategy. Health, food, education, finance, and transportation are regulated, so changes in the rules create opportunities. He cites Medicare Advantage, recent climate legislation, and the Supreme Court decision that sped up DraftKings' growth. His own advocacy (the JOBS Act, Opportunity Zones, the Startup Visa) is the active version of the same idea: not only anticipating rule changes, but helping write them, in a bipartisan way.
The broader lesson is that in regulated markets, knowing the people who make the rules is a source of returns, and it builds up over decades much as product knowledge does.
Tactic: If your market is regulated, assign someone senior to track and shape policy as a core function, and map which pending rule changes would create or destroy your opportunity.
Principle 10
Treat the periphery as an inefficiency, not a charity
The Rise of the Rest is often described as civic idealism, and it is partly that. Case frames it, however, as an investment opportunity. If 75 percent of venture capital goes to three states, then good companies elsewhere are underpriced and underfunded. Mailchimp is his clearest example. It was based in Atlanta, bootstrapped because it could not raise venture money, and sold for $12 billion. AcreTrader located in Fayetteville because that is where its customers, the farmers, were.
He also offers a structural argument for why location now matters. Third-wave companies need partners such as the Mayo Clinic, the Cleveland Clinic, Johns Hopkins, MD Anderson, and the large trucking companies in Chattanooga, and being physically near those partners helps. Remote work during the pandemic, he says, sent experienced people back to their home cities, where they joined or founded startups.
This is a deliberately contrarian bet supported by data. The fund recruited some of the most respected names in American capital as limited partners specifically to prove the returns, on the reasoning that strong returns, more than appeals to fairness, are what move capital.
R
Revolution's Three Stages of Capital
How Case's firm backs entrepreneurs from seed to scale, with a dual focus on policy and place.
| Vehicle | Stage | Launched | Representative bets |
|---|---|---|---|
| Rise of the Rest Seed Fund | Seed | 2017 | Companies in 78 cities across 35 states; LPs include Bezos, Schultz, Blakely, Dalio |
| Revolution Ventures | Venture | 2013 | Early-stage checks under $10M: Framebridge, PolicyGenius, BenchPrep |
| Revolution Growth | Growth | 2011 ($450M) | Sweetgreen, DraftKings, Clear, Tempus, Bigcommerce |
| Revolution Health Group | Risk | 2005 | Disappointing results; merged with Waterfront Media in 2008 |
Tactic: Look for markets where capital is concentrated much more than talent, and invest where the price of talent and the attention of competitors are both low.
Principle 11
Convene before you fund
The red bus is easy to dismiss as a publicity stunt. Case uses it as infrastructure. Mayors, senators, university presidents, corporate executives, local founders, coastal investors, and journalists all ride together. Each city's pitch competition draws about a hundred applicants, and Revolution pays a coach to help eight to ten finalists improve before they go on stage. The return comes in the form of relationships that persist after the bus leaves and pitches that get stronger for every future investor meeting.
This is AOL's founding idea applied to venture capital. The early AOL bet was that connecting people creates value faster than providing content. Rise of the Rest bets that connecting a city's dispersed participants creates a startup ecosystem faster than writing checks alone. "If you want to go far, you must go together," as the proverb Case often quotes puts it.
The pitch coach is the detail worth copying. Most investors evaluate founders as they are. Case improves them first, which increases the value of the whole deal flow and builds goodwill that no term sheet can buy.
Tactic: Before entering a new market as an investor or operator, host a gathering that connects its fragmented participants, and invest in their skills before you invest in their companies.
Principle 12
Hire your loudest critic
In January 2000, Ted Leonsis was "one of the loudest advocates for not doing the deal." In 2011 he was Case's partner in launching the $450 million Revolution Growth fund. The record does not explain why. It shows only that the man who had been right about the biggest decision of Case's life became his partner in the next one.
This matters because the failure of AOL Time Warner was a failure of internal dissent. Logan, Leonsis, and Boggs all objected and were all informed hours before the announcement. The FTC's economists objected and were overruled. A small circle working fast and secretly enough that "news of the deal did not leak" also had no one positioned to stop it.
A leader who partners with the person who opposed him, or hires the person most likely to tell him he is wrong, is building into the organization the check that was missing in January 2000.
Tactic: For your next major decision, name the most credible person likely to oppose it, bring them in before it is final, and give them a real role in what follows.
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Part IIIQuotes and Maxims
In their words
— Steve Case, on the arc of building AOL, Masters in Business, 2022Sometimes revolutions happen in evolutionary ways. It's not an overnight success. There's a slog before finally you build some momentum.
— Steve Case, on the AOL–Time Warner merger, The New York Times, 2010It was a good idea, but the execution of it wasn't what it needed to be, and I accept responsibility for that.
— Steve Case, on what he wishes he had known in 1985, Masters in Business, 2022At the end of the day, it all comes down to people... Entrepreneurship is a team sport.
— Steve Case, on choosing hard problems, Masters in Business, 2022If somebody says it can't be done, I'd say, "Okay. Well, you know, game on."
— Richard Parsons, Time Warner president and later CEO, The New York Times, 2010They were like different species, and in fact, they were species that were inherently at war.
Maxims
- Sell the reason, not the device. New technology spreads when it serves an old human need, and community was the killer app.
- Let lifetime value set your nerve. Once you know what a customer is worth, spending at a level others call reckless becomes ordinary arithmetic.
- Name the labor you depend on. A community that builds your product will eventually ask what it is owed, so answer before a court does.
- Expect the first decade to be quiet. Revolutions happen in evolutionary ways, and patience is a budget line, not a mood.
- Pricing changes behavior. Removing friction is right only if you are ready for the surge it causes.
- Separate owning from integrating. Inflated stock can buy durable assets, but integration has its own steep cost.
- Diligence the people, not just the principals. Two chief executives trusting each other is not a merger plan.
- Step aside when you become the symbol. A leader who embodies a failure cannot lead the people who resent it.
- Build where the rules are written, and where capital isn't. Policy and geography are the two edges most investors ignore.
- Bring in your critics. The person who opposed your worst decision may be the best partner for your next one.
