In his commencement speech on Saturday, Steve Case, the co-founder of AOL and CEO of venture capital firm Revolution, exhorted the class of 2014 at Georgetown University's McDonough School of Business to pursue the American entrepreneurial spirit.

Case, who received an honorary doctorate before his commencement speech, told the bright-eyed undergraduates to "be bold, take risks, and let yourself fail."

"The key is to let your life unfold as a series of chapters. Keep learning, be curious, be flexible," Case said. He then revealed an important lesson that has made him successful, which he called "the three P's": people, passion, and perseverance. Case said you cannot be an entrepreneur without these three factors.

"Most businesses rise or fall not because of the product, but the people. At the end of the day, the team you build is the company you build," he said. "It may seem easier to do it by yourself. But your ultimate success or failure will largely be determined by how you galvanize others to work with you and stand by you."

Case made a distinction between being interested in something and having true passion. When he was 26, he started the company that would become AOL because he was passionate about the Internet, he said. At the time, only 3 percent of people in the U.S. were on the Internet. Without passion for getting people interested in being online, he wouldn't have been able to get through the early years and ramp up to millions of subscribers.

Getting through AOL's second decade--which brought 24 million people tot he service and saw the company become the most valuable in the world--required overcoming many difficult hurdles . "Perseverance isn't easy. It means pushing against currents that can be relentless--and sometimes exhausting. It also means you have to constantly parry away advice from people who think you should just throw in the towel," he said. "I'd encourage you to keep at it, because some of the best ideas and the most successful companies exist today only because somebody refused to give up. They refused to take no for an answer."

Today, Case said, the graduates will be working as the "third wave of the Internet breaks." The first wave, 30 years ago, was about building the Internet's infrastructure. The second wave, 15 years ago to today, was building applications on top of the Internet. "Now we're entering a third wave where we're integrating the Internet into everyday life. Whether it be the Internet of Things, or really reimagining and reinventing education and health care and transportation and energy," he said.

To take advantage of this era's opportunities, Case said, you'll need two more P's: policy and partnerships. "Policy will be important because you'll need to understand the evolving laws and regulations that make up the landscape you'll be operating in. Partnership will be a defining aspect of the third wave: You'll have to be great at establishing alliances. You won't be able to go at it alone. You have to go together."

In closing, Case said to remember that "entrepreneurship is the secret sauce to our economy." In the last three decades, startups created 40 million net new jobs in this country. 

"Remember, America itself was a startup. Two hundred and fifty years ago, America was just an idea. That idea, powered by people, passion, and perseverance and by good policy and strong partnerships, led us to forge a strong and stable democracy and enabled us to build the largest and most innovative economy in the world," Case said. "Our journey as a nation is not over and your journey is just beginning. The baton has been passed to you. We're all counting on you, the class of 2014, to help us move forward and help us write the next chapter in the story of our startup nation."