Case is the billionaire founding CEO of AOL and the head of
Washington, DC-based venture-capital firm Revolution.
- In 2000, AOL bought Time Warner for $165 billion, making it
the largest merger in history at the time.
- Case left in 2005, correctly predicting it was an
- He said that the experience taught him that “vision without
execution is hallucination.”
AOL’s founding CEO Steve Case embraced Time Warner head Jerry
Levin and raised his fist in triumph at the press conference
marking the $165 merger of their two companies in January, 2000.
It was the largest merger deal in history, resulting in the
world’s largest media conglomerate.
Two months later, the dot-com bubble burst, and AOL Time Warner’s
valuation came crashing down, setting the context for years of
clashes between the two companies’ cultures and ambitions. Case
left the board in 2005, writing
an editorial in the Washington Post shortly after his
departure declaring the merger — which ultimately fell apart in
2009 — a failure.
But Case was far from done, and he dedicated himself to his
Washington, DC-based venture capital firm Revolution. And for the
last five years, he’s been touring the United States and
investing millions of dollars in emerging startup markets through
of the Rest” initiative.
In a recent interview for Business Insider’s podcast, “This
is Success,” Case said the failure of AOL Time Warner taught him
an important lesson he’s mindful of today.
He says it can be summed up in a saying he likes: “Vision without
execution is hallucination.”
Case was the lead architect of the deal, and he still believes
the assets were there to make it work. “Having a good idea is
important, but being able to execute the idea is even more
important, and that comes down to people and priorities, and we
were unable with the combined AOL Time Warner company to get that
side of it right,” he said.
He also explained that while the dot-com crash was devastating
for internet companies, a bigger problem was the culture clash
between the two companies, where AOL’s side found Time Warner to
be too old-fashioned, essentially, and Time Warner’s side found
AOL to be a threat to their businesses. It did not help that even
though Case was chairman and Levin CEO of the conglomerate, there
was an incorrect but prevailing view that Case was calling all
the shots, further making Time Warner executives suspicious.
“So it really came down to trust, and kind of there was not a
common vision that the team embraced and was aligned around,”
Case said. “I had seen the success of AOL really was having that
clear vision, and having a team that was kind of very aligned on,
and passionate about it.”
Today, Case’s Rise of the Rest project entails building up
startup scenes outside of the existing capitals for
entrepreneurs: Silicon Valley, New York, and Boston. It’s a bet
he’s making based on his vision for the next era of internet
companies, which he believes will transform industries outside of
tech and require partnerships with both established firms and
regulators. It’s a project based on a deep network of investors,
industry leaders, politicians, and entrepreneurs throughout the
Case said the AOL Time Warner experience has made him savvier at
building these relationships. “I’ve spent a lot of time talking
to Democrats and Republicans, and trying to build relationships,
trying to build good will, trying to build trust, so there is
more of a willingness to at least listen, and perhaps buy into
things,” he said.
Listen to the full episode and subscribe to “This Is
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