Guest Experience | July 2015 | By Nicole Duncan

Q&A: Steve Case

The cofounder and former CEO of AOL talks about the food-tech crossover and how innovators are changing the industry for the better.
AOL founder and investor Steve Case bets on upstart fast casuals like Sweetgreen.
Investor and AOL founder Steve Case, second from left, poses with Sweetgreen founders Jonathan Neman, Nicolas Jammet, and Nate Ru (from left). Case counts Sweetgreen among the investments in his portfolio at Revolution LLC. Sweetgreen

Perhaps best known for cofounding America Online (AOL) and later serving as its CEO, Steve Case has now turned his attention to foodservice. Like many tech innovators, he sees great potential to “disrupt” the system through technology and a tech mindset.

Case serves as chairman and CEO of the investment firm, Revolution LLC, which he also cofounded. Washington, D.C.-based fast casual Sweetgreen, nonprofit Revolution Health, and mobile ordering platform OrderUp are among the food-related brands in Revolution’s portfolio. A tireless entrepreneur, Case also started the philanthropic Case Foundation with his wife Jean and serves as chair of UP Global, which fosters entrepreneurship.

Case spoke with QSR’s Nicole Duncan about what the intersection of food and technology might look like for both sides.

In recent years, food concepts seem reminiscent of tech startups. As someone with experience in both spaces, how do you see the gap between the tech and food worlds being bridged?

I think it's a natural evolution because I think technology is starting to—and the Internet specifically—impact more aspects of our lives. And the way I think of it is, we've been through two waves of the Internet and a third wave's about to break. The first wave, which companies like AOL were a part of—call it 1985 to 2000—was just building the Internet, building the awareness of the Internet, getting people connected to the Internet. It seems crazy now because we take it for granted, but when we started AOL 30 years ago, only 3 percent of people were online, so it really was a challenge to get everybody connected. But that was sort of the first 15 years.

The last 15 years—the second wave—has been building on top of the Internet. It's really been apps and services and things like Twitter or Snapchat; because the Internet existed, they were basically products, apps, and services that were building on top of the Internet. That's really dominated the last wave. I think the third wave is going to be about integrating technology, and particularly the Internet, into every aspect of our lives and, in the process, challenging and disrupting big sectors of the economy. That includes things like energy and transportation and healthcare and education, but also includes food, which is globally a $5 trillion market. Our sense is technology will reshape how every aspect of food, with the production of it, the distribution of it, the consumption of it evolving with technology being a driver, as well as some demographic trends and some lifestyle trends that are favoring different options.

Are you seeing people who have been traditionally in the food space meet technologists halfway more than ever before?

Yeah, I think that's fair. I think in some respects now, because of the ubiquity of the Internet, every company needs to be a tech company. With these first two waves, tech was its own sector. Now tech is starting to impact other sectors, including food.

With Sweetgreen, there are really two, maybe three, big trends that were driving them. One was the whole fast-casual segment starting to disrupt the fast-food segment, which we thought would continue over the next 10–20 years. The second was a push for healthier options that some have called "real food." And the third is the convenience that's made possible by technology, including smartphones. My bet is within three years, the majority of Sweetgreen orders will be done on smartphones and people will order as they're walking to the restaurant. When they walk in, they'll be recognized, and billing information is stored so they'll be able to be out of there quickly if that's their purpose. If they want to go have the experience of standing in line and getting their food and eating there, obviously that will still be there and be appealing to a lot of people, but technology does enable convenience for the consumer.

Technology also enables them to manage—in terms of the healthier food side of things—the supply chain, so they can work with local farms and create this farm-to-table, seasonal kitchen experience that would have been difficult, if not impossible, to do 10 years ago. It's not just the technology people see, like their smartphones and the convenience that's possible there, but it’s also how technology is really the underlying platform to allow some of these concepts to really take off.

A lot of people like you who come from the tech sector have a different mindset when approaching business. What kind of mindset or skills do you think are meeting a need in food that wasn't even realized before?

I think it requires a balance, a meeting of the minds, and a partnership mentality. I think technology is again an enabler for innovation, but there are other aspects that are important as well. In the case of the [quick-service] space, obviously the food is the main event. Technology is increasingly important, but people aren't eating the technology; they're eating the food. You've got to have the quality of food, you've got to have the right kind of operational focus, and you've got to have the right real estate.

There are a lot of aspects to it that are important and will continue to be important. If people bring too much of a tech-centric focus to this, they'll miss out. Technology is a new enabler that will drive and accelerate some of these trends around real food, some of these trends around convenience—particularly for this growing, younger demographic, what some call Millennials, who are tending to be a little more foodie oriented, a little more adventurous in terms of their eating, a little more experiential in terms of what they're looking for, and driven by convenience and having grown up as sort of digital natives. They're very comfortable with technology and expect things to work in a certain kind of way. You've got to use technology as an enabler for broader innovation, whether it be on the food side or the convenience/delivery side, as opposed to thinking that suddenly you just sprinkle some magical technology pixie dust and you can independently do it.

Related to that, I think it's going to require more partnerships between people who understand the restaurant industry and people who understand technology. If you don't have both, I think you're going to have an iffy challenge in the future, and in many cases it's going to require partnerships between technology companies and major companies in the restaurant space as opposed to everybody going it alone. I think strategic partnerships will be more important in this space.

We've also invested in companies like Revolution Foods, which started eight, nine years ago by two moms to create healthier school lunches, and that's already scaled over $100 million of businesses on the school side. They then launched to the consumer product side. How they use technology to then manage that whole process of getting the right ingredients from the right places and then delivering them to the right schools in the right kind of way, and now also delivering consumer products to Safeway and others—technology enables that.

We also invested in a company called OrderUp; it's in the delivery business, particularly in the second-, third-tier cities. The major cities like New York, Boston, etc., have GrubHub and providers like that, but they generally are not available in the medium-sized, smaller cities. So OrderUp is focused on that, using technology. But again, they had to partner with restaurants in different regions to be able to create the complete consumer experience.


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