Steve Case, the cofounder of America Online, the investment firm Revolution, and its offshoot seed-stage arm Rise of the Rest, has a new book out called Rise of the Rest: How Entrepreneurs in Surprising Places are Building the New American Dream. In it, Case argues that Covid was a “shake the globe” moment for entrepreneurship, and that power will never again reside as it once did in cities like San Francisco and New York and Boston.
We spoke earlier today with Case about the book; we also chatted with him about the mentality of coastal investors, whether he harbors any political aspirations, and the status of his relationship with Ohio Senate candidate J.D. Vance, who worked closely with Case at one point (they appeared together at our TechCrunch Disrupt event in 2018).
Case also talked up a number of his bets, which have, perhaps to the surprise of skeptics, taken off since he began investing across the country. He relatedly suggested that one major piece of advice that he tries to impart when speaking with founders is the art of storytelling itself. (A powerful narrative can go a long way, particularly when you’re out of the sightline of some of the most powerful investors in the country.)
More from our conversation follows. These excerpts have been edited for length and clarity. (You can hear the longer conversation here.)
TC: You’ve been on a mission dating back to 2014 to bring more attention to founders around the country, traveling something like 11,000 miles across 33 cities. With Covid fading away, are you back on the road now or have you bookended that chapter?
SC: It [that national tour] came out of some effort a little over 10 years ago; I was asked by President Obama to chair an initiative called Startup America Partnership. And that got me focused on regional entrepreneurship and this imbalance that we’ve talked about before in terms of how 75% of venture capital dollars [were] going to just three states. And the more we visited cities, the more cities we wanted to visit. We did obviously have to stop when the pandemic hit and we have not yet restarted in terms of physical tours. But we are spending a lot of time traveling around the country. The Rise of the Rest team, which is now about a dozen people, has visited dozens of cities over the last six months.
Chris Olsen of Drive Capital in Columbus, Ohio told us a few weeks ago that though his firm had laid the groundwork for more VCs to come to the area, the opposite happened post Covid, that they’ve retreated back to the coasts. Are you seeing the same thing?
[I think] while some may hunker down in a more difficult environment and focus more on their existing investments, I do believe we hit a tipping point during the pandemic, and that will result in an acceleration of more capital flowing to more cities and more entrepreneurs in those cities.
Most people in most parts of the country, if they wanted to be part of the innovation economy, they felt they had to leave where they were to go to the coast. That started slowing over the last five years and picked up in terms of people relocating during the pandemic, [which] ended up being kind of a shake-the-snow-globe moment for society, and also for a lot of families. They kind of reassessed how they want to live and work and where they want to live and work, and that likely will result in a permanent, dynamic.
Where has Rise of the Rest invested the most dollars?
We have through our rides made 200 investments in 100 different cities, so it’s fairly broad. And we’re seeing momentum in many, many cities. Indianapolis is an example of a city that most people don’t really know what’s happening there [and one of the reasons is a] tentpole company that’s there, ExactTarget. It was acquired [in 2013] by Salesforce for $2.5 billion and, at the time, had 1,000 employees. Now Salesforce has 2000 employees in Annapolis, and [it’s] the second-largest Salesforce office outside of San Francisco, and the founder of that company and many of the early employees of that company have gone on to start new companies.
We also have seen interest in places like Richmond, Virginia; we backed a company called TemperPack that focuses on sustainable packaging. They actually started in New York City but decided to move to Richmond to build out their manufacturing capabilities, and they’ve gone on to raise $140 million in a round led by Goldman Sachs. We backed [online farmland investment company] AcreTrader whose founder, Carter Malloy, was in San Francisco decided to move to Arkansas to get the close to where the farmers are. We invested in Chattanooga in a company called Freightwaves that’s focused on building a Bloomberg data platform for the trucking and logistics industry.
Have you had any exits?
One of our seed companies, [Kentucky-based] AppHarvest, went public about a year ago [via a SPAC]. About a year ago, another company based in the D.C. area, FiscalNote went public last [via SPAC]. There’s another company out of Kansas City called Backlotcars that was acquired with a pretty significant exit company.
I think we’ve seen [the portfolio] get to seven unicorns so far, so it really bodes well for what’s happening in these places.
How does one go into business with you?
For the Rise of the Rest fund, we’ve invested with over 300 different regional venture capitalists. They lead the rounds [and] they take the board seat, because of the velocity of investments we were making. We play more of a role of connecting these entrepreneurs and connecting these investors to build essentially a Rise of the Rest network.
Do you fund these venture firms as a limited partner?
We did some of that early on, but because we’ve co-invested now with over 300 of them, we were getting a lot of requests to be investors in those funds, and we decided to back off on that because we wanted to build the broadest possible network.
At the very same time that people are moving back to their home towns or other more affordable places, the political landscape is changing in dramatic ways that some are sure to find off-putting. Abortion bans are so divisive.
Historically, cities were competing to get companies to move. Now they’re competing to get people to move. And everybody will have a different set of criteria that they prioritize. Maybe they move for family reasons, or cost of living reasons, or because there’s industry expertise in an area that you want to build on, or [it could tie to] lifestyle choices like biking or skiing. With some states, taxes make it more attractive.
I do think people will factor in some of these social issues, including the recent Dobbs ruling, and take a step back, and I think people making these decisions– whether it be local and state leaders or others in the community, even the media — should be thinking about and being aware [of this issue]. I think we want to avoid hyper partisanship in the country. We have enough issues that divide the country; we want to avoid a sort of entrepreneurial culture war.
As someone who has run an international business and probably been under pressure yourself to be political, do you think companies should take a stance on social issues?
I think every CEO has to decide, and some [of that] depends on which issues they want to weigh in on and which issues they think are most important to their key constituents, whether it be their employees or their customers or others. But [some of why people move to certain places will tie] to what the mayors and governors and politicians do. But some of it also will be what the entrepreneurs and the CEOs of the big companies decide to do.
I’m curious about your relationship with JD Vance. He managed the Rise of the Rest fund at the outset. What is your current relationship with him and what do you think of some of the positions that he has taken?
JD joined us probably four or five years ago, right after he came out with the Hillbilly Elegy book. Part of the reason for that is his wife Usha was going to be working in the Supreme Court as a clerk there for a year in Washington, DC, and we’re headquartered in Washington, DC. So he really helped launch the first Rise of the Rest fund. But after they were in DC for a year, they decided to move to Ohio, and he continued in a role for another maybe six months or so but ultimately decided he wanted to launch his own fund, which he did in Cincinnati.
I have not talked to him since he announced last year that he was running for Senate and I’ve not supported that campaign. Frankly, I’ve been surprised by some of the things he has said, which are, by his own admission, inconsistent with some of the positions he took several years ago.
Do you have any ambitions to become a politician? You have that beloved CEO thing going for you
I appreciate you saying that, but part of the reason I think I’ve been successful on policy, including even a decade ago, working on the JOBS Act — the Jumpstart Our Business Startups Act — and more recently, some of the work around regional hubs is because I’m not political. When we’re traveling around, we invite Democrats and Republicans to join us on the bus and everything we’re doing is trying to make innovation, make entrepreneurship, make startups, and make job creation a nonpartisan issue.
Mozilla acquires the team behind Pulse, an automated status updater for Slack
Firefox developer Mozilla is making a rare foray into the world of mergers and acquisitions, with news that it has snapped up recently-shuttered California-based productivity startup Pulse.
Terms of the deal haven’t been disclosed, but the deal is tantamount to an “acqui-hire,” with Mozilla looking to deploy the Pulse team across an array of machine learning (ML) projects.
“We’re acquiring Pulse for the incredible team they have built,” Mozilla chief product officer Steve Teixeira told TechCrunch. “As we look to continue to improve user experiences across all of our products, ML will be a core part of that.”
Feel the pulse
Founded out of Menlo Park in 2019, Pulse in its initial guise was a “virtual office” platform called Loop Team, but after honing the idea for a couple of years it pivoted and rebranded last November. Pulse, essentially, was an automated status-updating tool that used signals based on pre-configured integrations and preferences set by the user.
For example, users could synchronize Pulse with their calendar and Slack, setting rules to stipulate what their status and corresponding emoji should be based on keywords in their calendar event title. If their schedule for a particular time says “hair appointment” from 12-1pm, then the person’s Slack status update might display a scissors emoji alongside the word “haircut.” Or, it might say “birthday” alongside a cake emoji if that’s what is in their calendar.
But Pulse sported myriad integrations with business tools that brought similar functionality. For example, users could link Pulse with Zoom, so that whenever they start a video meeting, a telephone emoji automatically displays in their Slack status to tell people they are unavailable.
Pulse had flown largely under the radar since it started rolling out to a small group of users last December, but the company had apparently garnered some fairly big-name customers, including Netflix and 1Password, with monthly premium plans starting at around $3 per user.
The company was among TechCrunch’s Battlefield 200 startups at TC Disrupt in October, and TechCrunch interviewed Pulse cofounder and CEO Raj Singh at the event for a potential future startup profile piece. Singh said at the time that it was planning to raise a seed round of funding early in the new year, something that obviously won’t be happening now. When quizzed on whether Pulse was more like a feature that the big tech platforms could just build themselves, rather than a sustainable business in its own right, Singh was adamant that Pulse could thrive as a standalone product. While he acknowledged that companies such as Microsoft or Google might well want to develop a similar automated status update tool for their own products, they were less incentivised to make it work well as an integrated feature that plays ball with various third-party tools.
Pulse was all about communicating things to colleagues around the world passively, regardless of what tools they were using or what timezone they’re in. This is particularly important with remote work becoming the norm, and Pulse was looking to find its niche at a time when workplace culture is rapidly changing.
“A lot of people actually want to update their status, but it’s tedious,” Singh told TechCrunch in October. “But there’s hundreds of signals, and the thing we realised was status is not just ‘availability’, it’s actually a way to communicate empathy.”
While Pulse did have plans to expand beyond Slack into other workplace communication tools including Microsoft Teams and Google Workspace, the company abruptly announced in late October that it was shutting down. In an email distributed to customers at the time, the company attributed this to “market conditions,” noting that it was finding it difficult to raise fresh capital — but it did confirm that it had found a buyer, the identity of which was unknown until today. Singh also said in the email that there was a chance that the buyer could resurrect Pulse in some form, but there is little indication that Mozilla has such a plan on its radar.
To the casual observer, Slack was probably the obvious contender to acquire Pulse. For starters, there is the fact that Pulse had been focused exclusively on Slack status updates. But on top of that, Singh had previously founded a smart calendar app called Tempo AI which he sold to Salesforce for an undisclosed sum in 2015.
Singh then joined Salesforce to help with the initial transition of Tempo AI’s technology into Salesforce’s Inbox app. And as we now know, Salesforce went on to acquire Slack in 2020, so with Singh’s connections to Salesforce and his product’s close alignment with Slack, there seemed like only one possible suitor here.
Alas, Slack hasn’t acquired Pulse — the Mozilla Corporation has. It is something of a surprise, if for no other reason than Mozilla isn’t renowned for its M&A endeavors, though it is starting to ramp up its investment efforts after launching its first venture capital fund last month. But its only known acquisition to date was back in 2017, when it snapped up Pocket, a popular read-it-later web-clipping service that Mozilla had already integrated into its Firefox browser two years previous.
As a side point, Pulse itself had been on something of an acquisition spree this year, buying rival status updating service Holopod back in January, followed by audio-based communications platform Commons in March. Then in May, news emerged that Pulse had acquired team communication startup Lounge.
“Our strategy [with M&A] is pretty straightforward — we look for opportunities to bring on talent and technology that helps us improve experiences for our customers,” Teixeira said. “With Pulse, this is about supplementing the skillsets we have here already as a way to speed up our development efforts. We have a high bar for any acquisition, but if we find teams and technologies with incredible talent that share our mission and vision for the future of the internet, we are absolutely open to pursuing a transaction.”
As it happens, Pocket may be an early beneficiary of the Pulse acquisition. While Mozilla ultimately plans to deploy the Pulse team across various projects, Teixeira says that an early focus will be on using ML to improve personalization in Pocket, which presumably means in the form of content recommendations.
It’s worth noting that Mozilla has dabbled with ML a fair bit in the past, including experimental projects inside Firefox that recommend content to users, as well as tracking prices across myriad online stores. The company is also leveraging ML across various voice and speech projects.
“We see opportunity to use ML in virtually all of our products, including Firefox, as a foundation for improving the experience for all of our customers,” Teixeira said.
Mozilla hasn’t revealed how much it’s doling out for the startup, but Pulse had only raised around $4.7 million in pre-seed funding according to Crunchbase data, and given its difficulties in raising fresh capital, it’s safe to assume that Mozilla hasn’t broken the bank here.
What Mozilla is getting for its money is six people, including Pulse’s three founders Raj Singh, Jag Srawan, and Rolf Rando, each bringing significant engineering, ML, and product execution experience to Mozilla’s ML efforts. Singh actually created his previous startup Tempo AI as a project inside SRI International, the Stanford research institute responsible for Siri. He rejoined SRI as executive in residence (EIR) after leaving Salesforce, remaining there until founding Pulse (then Loop Team) nearly four years ago.
“In building Pulse, we enabled a variety of machine learning experiences to make distributed teams feel more connected,” Singh noted. “Finding ways to use AI and machine learning to simplify tasks for users is our passion.”
Here’s your chance to show off your expertise at TechCrunch’s founder summit
Do you have what it takes to present at TechCrunch Early Stage on April 20 in Boston, Massachusetts? We’re looking for trendsetting, game-changing, later-stage startup founders and ecosystem experts — of every stripe — to apply for the opportunity to share their hard-won expertise at our annual founder summit.
An entrepreneurial bootcamp experience, TC Early Stage connects people in the beginning or early stages of their startup journey with top industry experts for hands-on training. Presenting at this event is an opportunity to align yourself with TechCrunch and position yourself as a thought leader for hundreds of early-stage entrepreneurs. Apply here now.
You have until January 6 to submit an application outlining the content you’d like to present. TechCrunch will vet each application and select the top contenders to participate in an Audience Choice voting round where TechCrunch readers will choose the sessions they want to see most at TC Early Stage.
Our call for outstanding content is officially open, and here are the important dates to keep in mind:
- Application deadline: January 6
- Notify Audience Choice participants: January 23
- Voting period: January 30 through February 17
- Notify winners: By February 22
If you can deliver content that elicits this kind of attendee feedback, we want to hear from you.
“Early Stage offered a great variety of sessions and speakers — top investors, founders and credible subject-matter experts — who gave unique insights based on personal experience. You get great mentorship through attending the Early Stage sessions. It’s like a mini masterclass in entrepreneurship.” — Ashley Barrington, founder, MarketPearl
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Amplio helps companies find components when supply chain breaks down
When Covid shut down much of the world down in 2020, it ended up wreaking havoc on the supply chain. Suddenly companies built for just-in-time production couldn’t find parts they needed to build their products.
Even as Covid subsided, the supply chain woes continued. Veterans of supply management like the founder of startup Amplio watched, and figured there had to be a better way to guard against these kinds of disruptions in the future using software to find parts wherever they were.
Amplio launched last year with that goal in mind, and today the startup announced a $6 million seed to build a system to help track parts shortages. Trey Closson, CEO and co-founder at Amplio says his company’s goal is to build more resilience into the electronic components supply chain.
“We help our customers understand the components that are at highest risk of leading to material shortages, and then we connect our customers to alternative sources of supply to mitigate those shortages,” Closson told TechCrunch.
He knows what he’s talking about. He spent his entire career in supply chain management, and he’s seen firsthand how disruptions can have a negative impact on a business’s ability to function. He blames “Just-in-time production” techniques for the problems we are seeing today.
“The supply chains have been designed for 30 or 40 years to optimize for cost and for the best case scenario, but the reality is that we don’t live in a world of best case scenarios. We live in a world of constant disruptions,” he said.
“The way that our platform works is that we’re connected to our customers’ systems of record or their ERP solutions, and we take in in their bill of materials and their operational data, and then combine that with external datasets to be able to show the customer their ability to source their particular components over the next six to 18 months,” he said.
What’s more, in cases where the customer isn’t able to source the components, customers can go to the Amplio marketplace to find suppliers or other manufacturers who might have surplus inventory they are trying to sell.
Closson’s most recent job was working at Koch Industries, leading international supply chain for Georgia Pacific, where he was on the front line of the Covid-induced toilet paper shortages. But he decided to focus his startup on electronic components.
“So while supply chain resilience is really critical across the market, we want to focus on the electronics industry, because it has such a tremendous impact on the global economy,” he said. He conceived of and incubated the company as part of a program run by Koch and High Alpha Innovation, the program launched by former Exact Target execs to help startups with enterprise-focused ideas.
The company currently has 6 employees, but plans to expand with the funding (which closed in May). He says as he grows the company, diversity and inclusion is a core building block. “Diversity is one of the core principles for our hiring and in decision making processes. So just from a selfish standpoint, diverse organizations make better decisions and have more creative ideas, and are ultimately more successful,” he said.
Today’s round was led by Construct Capital with participation from Slow Ventures, High Alpha Capital, Flexport Ventures, Alpaca Venture Capital and various industry angels.
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