He is driven, but not by some inner hurt or buried longing. Citizen Case may understand the wired age the way the cinematic Citizen Kane grasped the potential of the tabloid newspaper, but inquiring reporters are not likely to find any Rosebud buried in his past. He has not been forged by adversity; he does not so much face down the naysayers as shrug them off. His modest and low-key father, a corporate lawyer in Honolulu, takes no credit for his son’s success. “It wasn’t us,” he told NEWSWEEK. “We merely supported him.” Case has no overarching philosophy, save a banal mantra: “To change people’s lives.”
What Case, 41, has in abundance is self-confidence. He doesn’t show off because he doesn’t need to. He appears to always know where he wants to go, and how to get there. He was able to see, before others, a global medium that would change the way people live, learn and work. He did not discover the promise of the interconnected world by trial and error or a painful process of self-discovery. He seems guided by a gyroscope, an internal compass. His story is a lesson in what a very smart man with a simple vision can do–if he isn’t thrown off by fads and mockery and the usual demands of vanity and ego.
Case’s early experiments and hobbies foreshadow his later accomplishments in almost eerie detail. His family is part of the old white Anglo establishment of Honolulu. He grew up sure of his place in an upscale but unpretentious neighborhood, near an exclusive private school he attended where the students were allowed to go barefoot. He was raised to believe that “self-worth does not get measured by toys,” said his brother, Dan, a multimillionaire who drives an eight-year-old car. “Our parents didn’t teach it; they modeled it.” Dan was the outgoing one, the crowd pleaser who went on from Princeton to become a Rhodes scholar and a rich venture capitalist. Steve was quieter, more inner-directed. He was also the entrepreneur. As boys, Dan and Steve started their own company, Case Enterprises (they referred to their rooms as “offices”). Steve recalled their brotherly synergy: “I’d come up with the idea,” said Steve, who would sometimes awaken his brother in the middle of the night with an inspiration. One idea: the “Budget Booster,” a circular that pitched corporate ads on one side of the page and their own ventures on the other. Dan provided the start-up funds. “Even if it was five bucks to start some business, I never had any money,” said Steve. “So Dan would give me five bucks and suddenly own 50 percent of my idea.”
Case Enterprises’ main “business” was essentially a marketing scheme based on a paper route. Steve used his access to the neighbors’ homes to peddle everything from seeds to watches to personalized Christmas cards. Learning to type in the seventh grade, Steve sent away for anything he could get free, thus getting himself on mailing lists for records, consumer-product samples and other geegaws. His family recalled that he was eager to be first to the mailbox every day. (Steve, you’ve got mail!)
At Williams College in Massachusetts, Case kept on marketing: limos from the campus to the airport, fruit baskets, rock-concert tickets. Case wasn’t flamboyant, although he sang in a rock band a few times before small audiences. In the library he studied trade publications like Advertising Age–and saw, clearly for the first time, the future.
While his classmates pondered Shakespeare and played beer pong, Case began reading about the nascent cable-TV business. To learn more, he got a job selling cable door to door one summer in Hawaii. In his cover letters for a full-time job after college, he stated his vision succinctly: “Innovations in telecommunications (especially two-way cable systems) will result in our television sets (big screen, of course!) becoming an information line, newspaper, school, computer, referendum machines, and catalog.” One application went to Time Inc.’s new cable entertainment company, HBO. The boss of HBO at the time was Gerald Levin. Case was rejected for the job. The year was 1980.
His first jobs taught him how to get close to the consumer, and that technology is a means, not an end. For Procter & Gamble, he developed a towelette with hair conditioner based on new technology the company had developed. It flopped in early testing because people didn’t want it. As “manager of new pizzas” at Pizza Hut, he experimented with gimmicks like stuffed and folded slices. and often set off on trips around the country for inspiration from the “real world.” The biggest lesson he learned was to keep things simple and predictable. He bought his first computer in 1982, a clunky Kaypro, which he thought was too difficult to use (Case had done poorly in a computer class at Williams). No matter: through his modem, he discovered the then sparsely traveled online world.
Here was the gateway to market to the masses. Through his brother’s venture- capital connections, he entered the fledgling online business in the early ’80s, surviving various shakeouts until, by 1991, he was president of America Online. His path was precarious but revealing. Case was forever sneered at by the digerati of Silicon Valley for being too low tech, even a little cheesy. But Case didn’t care about being cool. He wasn’t interested in the latest technological wrinkle. He wanted his system to be simple, so that anyone could use it. While his bigger and seemingly more powerful competitors like CompuServe, owned by H&R Block, and Prodigy, backed by Sears and IBM, fell by the wayside, AOL plunged ahead. Case discovered that his customers were most interested in chatting–usually about sex, it turns out–but in any case they cared more about easy access to each other than mastering the latest techie tricks.
Case understood his own limitations, as well as the wants of his customers. Jim Kimsey, an early mentor and former chairman of AOL, recalled that when AOL went public in 1992, Case was warned by the investment bankers that he lacked the schmoozing skills to be a good front man. Swallowing his ego, Case stepped aside as CEO and gave the job to Kimsey. Case is regarded as a bit of a stiff by reporters and other industry executives. (Case can be “as cold as Spock on a bad day,” said one business rival.) By his employees, however, he is seen as imperturbable and intensely loyal. Turnover among top managers at AOL has been comparatively low.
Case’s team needed to have faith in the mid-’90s, when the company was racked by crises and experts routinely wrote it off. Overextended in its effort to reach the masses, the company suffered technical glitches and charges that it was using sleazy marketing practices. Prosecutors in 39 states threatened to sue AOL for questionable billing methods. Responding to intense price competition from cheaper Internet services, the company replaced its hourly fees with a flat-rate pricing scheme. But executives underestimated demand, and overeager surfers couldn’t log on, enraging consumers. As his corporate woes mounted, Case began to show rare signs of human weakness. His 11-year marriage broke up, and he remarried an AOL vice president who had shed her spouse at about the same time. His new wife, Jean, is forceful and outspoken, in contrast to the mild-mannered and private Case.
Case does not forget that bicoastal elitists predicted the demise of AOL. He can remind reporters of their wrongheaded predictions from long ago. But he does so without rancor. These days he has loosened up a bit. He is becoming a big-time philanthropist, already giving away nearly $200 million of his fortune (an estimated $1.4 billion). He has become a statesman of the Wired World, explaining the interconnected future to the lawmakers who will regulate it. When need be, he can pose. Last week he clowned for photographers in the AOL company store, draping a good-humored Gerald Levin with AOL sweatshirts, hats and Windbreakers, laughingly recalling HBO had once turned him down for a job. Earlier, in an interview with News-week, he indulged in rare introspection. “I’m probably not as introverted as people think,” he said. “And I don’t resent the attention as much as people think.” Case keeps a “zone of privacy,” he said. “I like the fact that I might go to the White House or be on the ‘Today’ show but then go with my kids to a movie at a shopping center and for the most part be unrecognized. The ability to have a normal life is actually what I’m trying to preserve.” Trying to shuttle him between interviews and public appearances, his office tried to arrange a car and driver for him last week. No thanks, said Case. He preferred to drive himself.
