Speed Review: The Third Wave

Speed Review: The Third Wave

Speed Review: The Third Wave

An Entrepreneur's Vision of the Future

by Steve Case

One of America’s most accomplished entrepreneurs—a pioneer who made the Internet part of everyday life and orchestrated the largest merger in the history of business—shares a roadmap for how anyone can succeed in a world of rapidly changing technology.


Surfing the Next Third Wave

If the title of AOL founder Steve Case’s book, The Third Wave, sounds eerily familiar, it is no accident. Case remembers reading futurist Alvin Toffler’s book of the same name in college and wanted to be part of Toffler’s “electronic global village.” And he was. The term AOL seems very old-school today — and Case explains what happened further in the book — but there was a time when the company he founded, based on the concept of provided services via the Internet, was a pillar of the information age — or more specifically what he calls the “First Wave” of the information age.

The First Wave of the Internet, writes Case, “was about building the infrastructure and foundation for an online world.” It was led by companies such as Cisco, Sprint, HP, Sun Microsystems, Microsoft, Apple, IBM and AOL, who created the hardware, software and networks that connected people to the Internet and to each other.

Once everyone was online, the Second Wave kicked in. We are still in this Second Wave, the era of the information age, when companies, Case explains, built “on top” of the Internet. Think Google, eBay, Amazon, Twitter and even the iPhone.

We are, however, on the cusp of a Third Wave of the Internet, writes Case, in which the Internet becomes a “ubiquitous force in the world” connected to everything we do. The Internet will be part and parcel of all the facets of our lives, including our healthcare and education systems, and even what we eat. As Case puts it eloquently, the Third Wave “is the era in which products will require the Internet, even if the Internet doesn’t define them. It is the era when the term “Internet-enabled” will start to sound as ludicrous as the term “electricity-enabled,” as if either were notable differentiators.”

First-Wave Issues

Society often advances in linear fashion so that the present era moves forward from the past, and the future moves forward from the present. In some ways, however, the Third Wave represents a return to the world of the First Wave — not in outcomes but in means. In other words, success in the Third Wave will depend in large part on the success factors of the First Wave, including a heavy reliance on collaboration and partnership, careful attention to policy and the courage to scale high barriers to entry.

Building the infrastructure in the First Wave was capital-intensive, and the same investment partnerships will be required to redraw a nation’s healthcare system or other components of our society. The Second Wave was different; it was the era when billion dollar companies could be built by a few tech-savvy friends with a computer and a good idea (example: make it easier to search the Internet). The barriers to entry were low, as were the required up-front investment. There still may be some best-selling apps on the horizon, but good luck launching another Twitter or Facebook from your dorm room.

One of the domains in which Third-Wave entrepreneurs must be fluent, Case writes, is in government policy. Case has little patience with Silicon Valley techies who see government simply as an impediment to their creativity. He notes, rightly, that government investment laid the foundation for the Internet. And he notes, again rightly, that legislation enabled most of us to even access the Internet — it was once illegal for non-official personnel to access the network. Al Gore sponsored the legislation that allowed consumers to use what had been reserved “for official use only.” (And no, Gore never said he “invented” the Internet.)

At the same time, Case recognizes the challenge of dealing with slow-moving government bureaucracies. The bottom line for Case is that the government is not the enemy of Internet entrepreneurs, but it can be an infuriating friend.

The Third Wave is an interesting combination of manifesto and memoir. Case covers in detail his history and the history of AOL, including the disastrous Time Warner-AOL merger that in essence pulled the plug on the company. Today, Case is a venture capitalist focused on Internet opportunities.

One hopes that the Third Wave not only brings the world forward as he describes, through technology and innovation, but that the moderation, optimism and championing of collaboration rather than witch-hunting that fill his book also triumphs in the years before us.

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