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Case ’80 in FT

Nice aticle in the Financial Times on Steve Case ’80, former chairman of Time Warner.

Though it is hard to tell, I also suspect he is happy. He has emerged from AOL with no visible scars and a lot of money. Now he does what he loves best and is thinking up businesses to start. As well as the holiday-homes company, of which he owns 80 per cent, he has a $100m pineapple business in Hawaii and big plans to tear up the US health market. He says he doesn’t work terribly hard, and at the elderly age of 46 has finally taken up golf.

All good Ephs wish Case nothing but success in his future endeavors. The merger of his AOL with Time Warner saved the shareholders of AOL literally billions of dollars. (The shareholders of Time Warner fared less well.)

The headline in The New York Times said it all: “Steve Case, Genius”. This is going back a bit – back to those happy days in 2000 when Steve Case had just pulled off the biggest corporate deal ever by merging AOL, the company he founded in 1985, with the mighty Time Warner.

In the three years that followed, the story shifted to “Steve Case, Idiot”, as the two companies failed to gel, the stockmarket value fell 70 per cent and press, shareholders and colleagues queued up to give Mr Case a lashing.

When he was forced to resign in 2003, one journalist, writing an obituary of his remarkable career, put the question: Steve Case – brilliant visionary or fumbling clod? His most unedifying verdict was: pass.

Two years on, and the man who faces me across a table shows no sign of being either brilliant visionary or fumbling clod. Instead, he is a caricature of a certain sort of clean and tidy American with an unlined, round face and a neat crop of brown hair that looks as if someone has drawn it on to his head with a felt-tipped pen. Blue blazer, blue shirt, conservative tie. Mr Normal, in fact.

“Hi,” he says in a neutral sort of way and waits for the first question.

As I don’t feel I know him well enough to ask outright if he’s a BV or an FC, I inquire about his new business. On the table sits the largest brochure I have ever seen. This is Exclusive Resorts, “the most unique private club on earth”. For a joining fee of $385,000 (�207,000), you can rent some seriously swanky holiday houses for around $7,000 a week. Farewell to the hassle of owning your own second homes, and hello to what the brochure calls “awesome beachfront, convenient ski-in, ski-out, challenging golf and relaxing spas …”

It all sounds very nice, but I wonder why Mr Case is bothering. He doesn’t need to make any more money: according to Forbes magazine, he has $800m already.

“I now think: I’m 46, what do I do next? Well, I will spend my time on the things I enjoy doing, as opposed to the things I enjoy less; things I enjoy doing that have the potential to become significant companies. I like to enter a new market, a new area that resonates with consumers, gives consumers more choice, that has the potential to have a disruptive, transformative effect on an industry. This has already created ripples in the hospitality real estate market.”

He talks fluently, and yet what comes out sounds odd. It is as if he is reciting something he learnt earlier, rattling off great passages of prose. You only realise quite how impenetrable it is when you write it down.

Yes, but why not just take it easy, I ask. Why not do nothing? “Curiosity,” he says, flatly. And then adds, “Passion.” His hands move, but his eyes don’t. His lips don’t part enough to show his teeth.

How many second homes does he have himself, I ask.

“I’d rather not get into that,” he says, adding that two of them are on the market, which will allow him, along with his second wife and five children, to spend more time in the Exclusive Resorts houses.

With no prompting, he suddenly declares: “What I’ve thought about, reflecting on the last 20 years, was that the Airwell adventure was terrific.”

Airwell? For a minute I flounder. Then I realise he is saying AOL.

“Not every single chapter. In retrospect, I liked the first 10 years more than the second 10 years. I like building companies and figuring out how to reach consumers. That’s the bit I enjoy. When AOL was growing rapidly, I didn’t enjoy it as much. I reflected, maybe I’m more of a builder than a manager. I’m more of an attacker than a defender.”

So which parts of running a big company was he bad at? “I think I was still good at setting the overall direction and making sure that people were passionate about it,” he says, not quite answering the question. “I did a pretty good job, post-merger, but personally, running a company with 90,000 people, I don’t like it.”

So what doesn’t he like: the bureaucracy, the shareholders, the need to work with the Time Warner guys? “It’s not any one thing. I was just a bit more disconnected from the day-to-day.”

Last month, he gave an interview in which he appeared to admit fault for the merger, but when I mention this, he shakes his head. “I didn’t really say that. It’s not that surprising in retrospect that people were angry when it was not working well, because the merger was my idea. And I was the chairman of the company! I was the guy to blame.”

This sounded fair enough. But he then expands on the logic of the merger. “It didn’t work out quite the way I would have liked,” he notes. “But fundamentally, the idea was sound.” And then, as an afterthought: “There were some integration issues . . .” Which is putting it mildly.

How did he feel on the day he wrote his letter of resignation? Relieved? Sad to be leaving the company he had founded? Angry at being a scapegoat? He shrugged. “I felt it was the right thing for the company, and for me. Time to move on.”

But surely dealing with the media flak must have been a nightmare. Mr Case looks at me, brown eyes unblinking. “No. I think I take this in my stride,” he says evenly.

So he lost no sleep over it at all? Not one wink? No, he says. Looking at Steve Case’s impassive face, one is inclined to believe him. “I don’t mean to make light of it. But it’s business. It was harder when my brother died a few years ago of brain cancer. That was hard.”

Since the death of his elder brother, Dan, Mr Case has poured much time and money into health charities, and is now eyeing the US health (or “wellness”, as he calls it) industry as one that could do with what he calls “disruptive transformation”.

The Case brothers started out in business together as children in Hawaii selling garden seeds, lemonade and anything that could be turned into money. If there is such a thing as a born entrepreneur, it is Steve. What does this take? “You have to see around corners. You have to be a magnet for talent. But ultimately it comes down to people – if you can motivate them, and make them passionate.”

This is textbook stuff, and doesn’t provide the clue to whatever it is Mr Case has. I suspect there is some vision in there, as well as monumental determination, single-mindedness and a very, very thick skin.

Though it is hard to tell, I also suspect he is happy. He has emerged from AOL with no visible scars and a lot of money. Now he does what he loves best and is thinking up businesses to start. As well as the holiday-homes company, of which he owns 80 per cent, he has a $100m pineapple business in Hawaii and big plans to tear up the US health market. He says he doesn’t work terribly hard, and at the elderly age of 46 has finally taken up golf. “Everyone plays golf, but with five kids and AOL, I didn’t have time. Finally last summer my wife and I started to take lessons.”

Is he any good? “I don’t think Tiger Woods has anything to fear.” It is a joke, and although not all that funny, I laugh uproariously. He laughs too and his face changes. Suddenly he is an ordinary person.

So, I ask, what does he think – Steve Case: brilliant visionary or fumbling clod? Fair question, he says, but doesn’t answer. I ask again. “A little of both. Hopefully more of the former than the latter.”

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