AOL co-founder brings $100,000 tech contest to Pennsylvania

After a day in Pennsylvania, Steve Case's tour will move on to Columbus, Ohio; Michigan; Indiana and Wisconsin

In this Oct. 3, 2016, file photo, Steve Case, co-founder and former chairman and CEO of AOL Inc., poses in front of a Union Pacific locomotive as he kicks off his "Rise of the Rest" startup bus tour in Omaha, Neb. As part of his "Rise of the Rest" bus tour to invest in entrepreneurs and startup firms, Case plans to visit the south-central Pennsylvania cities of Harrisburg, Lancaster and York on Oct. 10, 2017, joined by venture capitalist J.D. Vance, author of the best-selling memoir "Hillbilly Elegy." (AP Photo/Nati Harnik, File)
In this Oct. 3, 2016 file photo, Steve Case, co-founder and former chairman and CEO of AOL Inc., poses in front of a Union Pacific locomotive as he kicks off his "Rise of the Rest" startup bus tour in Omaha, Neb. (AP Photo/Nati Harnik)

LANCASTER, Pa. (AP) – This worry motivates AOL co-founder Steve Case: America’s prosperity could be at risk if venture capital continues to flow to Silicon Valley and other elite tech hubs at the expense of the rest of the country.

An economic evangelist for America’s heartland, Case, 58, in recent years has been on a mission to redirect critical investment to innovators in places like Cincinnati, Des Moines and Albuquerque.

And for one day on Oct. 10, Case will turn his attention to Lancaster, when his Rise of the Rest bus tour will roll into the Pennsylvania town.

At a special public event, Case will listen to eight southcentral Pennsylvania entrepreneurs pitch their ideas. The best one gets a $100,000 investment from Case himself. Joining him will be J.D. Vance, a venture capitalist best known for his top-selling memoir “Hillbilly Elegy.”

Case that day will also visit Harrisburg and York.

REGIONAL PERSPECTIVE

The reason for hitting all three cities? Case said southcentral Pennsylvania could better compete with America’s big cities if business and other leaders in the multi-county region work together.

After a day in Lancaster, Case’s tour will move on to Ann Arbor, Michigan; Indianapolis, Indiana; Columbus, Ohio, and Green Bay, Wisconsin.

It’s his fourth year of boarding the bus and banging the drum for tech startups in what some refer to as “fly-over country.”

So far Case has been to 26 cities and invested more than $4 million in over 50 startups, all to encourage inventors and innovators in places where manufacturing and other industries are in decline.

Case worries that the increasing concentration of talent and capital in already thriving hubs on the coasts will only divide and weaken the nation.

“Right now, 75 percent of venture capital is going to three states: California, New York and Massachusetts,” Case said Monday in a phone interview as he was traveling to the Aspen Ideas Festival. “The other 47 states, including Pennsylvania, are fighting over 25 percent. We think that’s crazy.”

RUST BELT BLUES

Case said the eyes of many in Silicon Valley were opened when Donald Trump surged to victory with the votes of struggling blue-collar workers in rust-belt Ohio, Pennsylvania and Michigan.

“They feel left out and left behind by digitization and globalization,” Case said. He said he understands that the rise of robotics, driverless vehicles and other tech-driven disruption only increases worker anxiety.

But he’s betting, with his money, that discovering innovation in unlikely places will spur a turn-around, restore hope and dispel fear.

“It’s about ushering in the future,” he said.

Lisa Riggs, president of the Ecomic Development Co. of Lancaster County, who worked to bring Case’s tour to Lancaster, said the Rise of the Rest visit will shine a spotlight on a growing startup culture in Lancaster, better known for apple dumplings than whiz-bang apps.

“What’s really nice for us is it showcases that you don’t have to be a major metro market,” Riggs said. “You can have smaller, almost rural communities, that also have these sorts of innovators.”

She said the Lancaster area is home to health care, agriculture, energy and software development startups that could compete for the $100,000 prize.

INNOVATION CATALYST

Stephen Brawley is president and CEO of Ben Franklin Partners of Central & Northern Pennsylvania. In leading an organization that is a state initiative advising and providing seed investment to startups, Brawley said Rise of the Rest could be a catalyst for more innovation here.

“We know a lot of fantastic, world-class entrepreneurs here, and we’ve always had difficulty getting the larger world to recognize that,” he said.

Brawley said he concurs with Case’s insight that Lancaster, Harrisburg and York have to band together for success.

And he shares Case’s concern that America’s heartland faces a brain drain, in part because investors identify promising innovators in smaller cities and lure them to established tech hubs.

The key to keeping them in places like southcentral Pennsylvania is helping them scale up with staff and equipment that deepens their roots and allegiance to the community, he said.

Steve Fafel, the Lancaster-based director of business development for Ben Franklin, said Rise of the Rest hopes hundreds sign up for the competition. Those who don’t make the cut as finalists, he said, may still benefit from connections made through participating in the process.

READY TO ACT

So what kind of innovator will have a shot at the $100,000 prize?

Case said his or her idea must not only be different, interesting and marketable, there needs to be a team behind it ready to act.

“Thomas Edison said vision without execution is hallucination,” Case said. The winning entrepreneur will have an idea already getting traction with support from business and academic partners.

The location of the Oct. 10 event has yet to be determined, but public activities will begin at 3 p.m. with a discussion led by Case and Vance.

A pitch competition will follow from 4 to 6 p.m. The event wraps up with a networking party from 6 to 7:30 p.m.
___

Staff writer Chad Umble contributed to this report.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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