Rise of the Rest bus tour cultivates support for startups
MEMPHIS, Tenn. (AP) — America Online co-founder Steve Case brought Memphis business leaders a simple message last Tuesday: Believe.
As in, believe in — and invest in — startup companies and their ideas. It might be the next AOL, FedEx, Holiday Inn, AutoZone or the next big thing.
Case and a band of venture capitalists rolled into Tennessee on a tour designed to help startups get over a hump that AOL cleared in the 1980s: non-believers.
“I know when I got started with America Online, over 30 years ago, nobody understood the internet,” Case said. “Most people looked at us quizzically and skeptically, like, ‘Who would ever sit down and type a message to somebody when they could just pick up the phone and call somebody?’”
After an initial public offering in 1992, ”(AOL) ended up being the best performing stock of the decade, but when we started nobody believed in us. You have to believe in the long term. You have to believe in this idea,” Case said.
The occasion was the Rise of the Rest bus tour, a five-day, four-state effort by Case’s Revolution venture fund to gin up support for startups in the nation’s heartland, which has received a tiny sliver of investment compared to West and East coasts.
Case spoke to a who’s who of Memphis business leaders at The Kitchen at Shelby Farms, first stop on the tour, where entrepreneur Kimbal Musk, brother of Tesla co-founder and SpaceX founder Elon Musk, hosted the group.
The audience included FedEx founder Frederick W. Smith, his son, FedEx executive and Greater Memphis Chamber chairman Richard Smith, AutoZone founder J.R. “Pitt” Hyde III, Memphis and Shelby County mayors and a long list of CEOs.
The Rise of the Rest bus arrived in Memphis from Dallas Monday night and was scheduled to be in Birmingham, Alabama, on Wednesday, Chattanooga on Thursday and Louisville, Kentucky, on Friday. The tour has visited 35 cities in four years.
Case said startups are a demonstrated economic engine, but financial support hasn’t been shared across the country and among diverse populations.
Case said 75 percent of venture capital went to three states last year: 50 percent to California and 25 percent split between New York and Massachusetts. Tennessee received less than 1 percent.
Also, 90 percent of venture capital in the U.S. went to men and less than 1 percent went to African-Americans, he said.
“Even though this is a great entrepreneurial nation, the reality is it does matter where you live, it does matter what you look like, and it does matter who you know,” Case said.
Rise of the Rest is an attempt to change the mindset that innovation flows only from the coasts, Case said.
“We’re really kind of trying to shine a spotlight on great entrepreneurs building great companies outside of the traditional entrepreneurial hubs,” Case said.
Case’s mission to boost startups struck a chord with Memphis Mayor Jim Strickland.
“I’m glad y’all are here to give us a shot and a boost,” Strickland said.
Strickland said the city particularly wants to see growth in African-American-owned businesses, which receive less than 1 percent of business receipts in Memphis and Shelby County.
“That is not a sustainable model for the future of this city,” Strickland said.
The tour’s Memphis itinerary included Agricenter International, the Stax Museum of American Soul Music, Crosstown Concourse, ServiceMaster Center and Clayborn Temple. Eight Memphis startups made pitches Tuesday evening to become the company selected for a $100,000 investment by Revolution’s Rise of the Rest Seed Fund.
The competition was won by Soundways, which describes itself as a provider of “the next generation of audio solutions for music and audio recording, streaming, video gaming, consumer electronics and automotive markets.” Gebre Waddell is chief executive officer and co-founder with Connor Reviere.
At Agricenter, the group looked at agribusiness startups under the umbrella of AgLaunch, a joint effort of Memphis Bioworks Foundation and Tennessee Department of Agriculture. Case said agriculture has traditionally been an early adopter of technology, with driverless tractors tilling fields long before autonomous vehicles showed up on highways.
AgLaunch startups include Rabbit Tractors, which is developing remote-controlled tractors the size of pickup trucks to perform farm tasks more efficiently and with less environmental impact than oversized implements. Another company, Rantizo is developing drones that take over the function of crop dusters.
Agricenter director of research Bruce Kirksey welcomed the attention to startups brought by Rise of the Rest, and the potential for Agricenter to incubate more companies. “All companies need to have some kind of research,” he said. “You can’t go out and sell something without backing it up.”
Information from: The Commercial Appeal, http://www.commercialappeal.com