AOL founder Steve Case says Silicon Valley's dominance is coming to an end
Bill Pugliano / Getty Images
"Last year 75% of VC went into 3 states, California, New York, and Massachusetts, and that's not going to be the case 10 years from now," Case told Business Insider in an interview at Vanity Fair's New Enterprise Summit, where he is speaking.
The reason: it's no longer enough for a young tech company to specialize in software alone. To thrive, tech startups need to partner with a wide range of companies with specific expertise in the areas they want to conquer, he believes.
"This next wave of entrepreneurship, what I call the third wave, is going to require more partnerships," Case said. "The Facebook-Snapchat-Twitter wave is basically about the software and virally spreading it. But if you're trying to impact health care, education, food, energy, transportation, smart cities, driverless cars, they're all going to require partnerships."
Those partnerships are more likely to happen in cities with companies that already compete in these industries. As cities to watch, Case pointed out:
- Omaha and Lincoln, Nebraska, and St. Louis, Missouri, for farming and agriculture tech. "St Louis is particularly interesting because Monsanto is there, it's now in the process of doing a big merger, I'll bet you there'll be dozens of people, maybe hundreds of people, who leave and do some startup thing, and St Louis will be a hive of activity around ag tech."
- Albuquerque for water technology. "They have some national labs there, Sandia and Los Alamos, so some of the technology transfer [will be] coming out of those labs."
- New Orleans for educational tech. "They restarted their school system post-Katrina it's all charter schools, so much more open to innovation. It's attracted a lot of young people, Teach for America people in particular. Some stayed and are now opening up companies that are focused on improving learning in K-12."
- Pittsburgh for self-driving cars, thanks to Uber. "Uber started in San Francisco, but they're kind of betting their future on Pittsburgh. Partly because of Carnegie Mellon, partly because Pittsburgh is the steel capital - making stuff, that's part of their legacy and culture and history."
He also pointed to the example of Florida-based virtual reality startup Magic Leap, which has raised more than $1 billion in venture capital, as an example of how big tech companies no longer need to be started in traditional tech hubs like Silicon Valley.
"The conventional wisdom was you could never build an engineering-centric company in Ft. Lauderdale, Florida, you had to do it in Silicon Valley, or maybe you could do it in Boston. They've proven that wrong," he said. "Talent is ready to move, capital is ready to flow, we just need more of these tentpole breakout stories that will help accelerate."
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas