Early days of Cisco Len Bosack & Sandy Lerner PT 1

there's this myth that silicon valley companies are always started in garages but there are other options the biggest company in the networking business for example was started in a living room in this house where len bozak and sandy lerner used to live they were stanford academics but they were in different departments on different computer networks and unable to send email messages like did you feed the cat so they invented a way of networking networks with things called routers the company they started in 1983 cisco systems today does 10 billion dollars a year in business routers created great wealth for the cisco founders sandy lerner and her former husband len bozak their story is a classic nerd saga that started by accident and ended in a boardroom drama that many company founders have experienced to their cost was it your your love of computers and networking that drew you two together or he had great legs or what you know i'll just have to tell you something that's so bizarre you'll just have to assume that it's true len's mother had done this miraculous job and when i actually knew how to bathe and eat with silverware and i was absolutely enchanted you know he used to take whisk and like wash his collars and cuffs which was way more than i ever did and i just i just didn't think that a more perfect man could exist let's meet len bozak and find out about his work ethic sincerity begins at a little over 100 hours a week you can probably get to 110 on a sustained basis but it's hard you have to get down to eating once a day and showering every other day things of that sort to really get your life organized to work 110 hours a week and the and and the level that follows sincerity what do we call that commitment len was a brilliant network technologist here he is hard at work in a snapshot from sandy's cisco scrapbook it was do-it-yourself networking if you wanted it you had better do it yourself because no one else was going to do it for you couldn't buy it we basically pulled wire through manholes we pulled wire through dishes sewer pipe we built a lot of things by ourselves i mean it was very very much at that point a guerrilla action we had no money and we certainly didn't have any official sanction in the end i guess the university was kind of allowed not to like it but they did get a network out of it the stanford campus was 16 square miles in 1984 its 5 000 computers were grouped in their own networks in separate buildings like islands they needed causeways or bridges to connect them into a campus-wide network we first built some bridges and then we built some crude routers and we built better routers and that solved for stanford the same sort of problem that it solved ten years earlier for arpa how to use a computer anywhere you wanted on the digital highway packets are blasting this way and that going from network to network on the way to their ultimate destinations at every point where one network is linked to another there's a box called a router think of a router as a traffic cop like the copper router does three things it stops traffic it starts traffic and it gives directions so routers keep local packets from leaving their own network and clogging the internet internet packets they let go through and even give them directions to the next router what routers don't do is eat donuts or give tickets once len and sandy had solved stanford's networking problem they saw an opportunity to offer the solution to other users but stanford didn't want to do it and so we kind of really tried to get them to license the technology to these other universities and they just were not going to do it and so with tears in our eyes we took our five dollars up to this you know secretary of state's office in san francisco and made cisco systems and took it anyway so how did you go about it well in the same tradition that uh anyone else in the gulch does uh you go out and buy a bunch of parts and try and make the stuff and uh then go sell it and solve the problems that come up that are built out len and sandy's dedication wasn't in question this archival gem from 1989 may be a little low on production values but it shows just how single-minded these two were in part the result of some fairly unsophisticated all right well that's very interesting that wasn't the wealthy marketing department bombing the cisco premises that was a genuine san francisco earthquake not even an earthquake could divert their attention from the glorious business of routers and bridges so the cisco headquarters was their house the technology was well borrowed from stanford and their operating budget was plastic you sort of uh spend against your credit cards and hope the checks come in from your customers fast enough to meet your expenditures how did you decide how much to charge for your or your products we guessed now how big a business could you build on your credit cards about a half a million dollars a month one bedroom was uh the lab another bedroom was uh office space and when it was time to build and test something well that was the living room we financed the company on credit cards we returned down by 70 or 80 venture capitalists yeah it was it was pretty touch and go there's a downside to vc involvement for all that money they expect to own most of the company to sit on the board to tell you whom to hire to generally question the competence of the founder to run the company it can end in tears don valentine was venture capitalist number 77 and his previous investments show that he understood the potential of this business we knew from the experiences at apple and had three come that the world was going to be connected at that point i think we were cisco was doing i think a quarter million maybe maybe 350 000 a month without a professional sales staff and without an official conventionally recognized marketing campaign so it wasn't a bad business just right then and so i think just for the novelty of it uh the folks at sequoia listen to us we ended up taking money from don valentine in sequoyah capital who's a very savvy player and len and i were not and i think that's probably about the best way to to put that don does just what he does he has a formula and he executes against it and that doesn't make him a good or a bad guy just what he is the commitment we jointly made to each other is that we at sequoia would do a number of things we'd provide the financing we would find and recruit management and we would help create a management process none of which existed in the company when we arrived sandy and i agreed to a forfeiture contract a type of indentured servitude where if we didn't do what the company asked they would have the right to repurchase the shares that we actually already owned we ended

Channel: davesshindig

Views: 27,338

Keywords: David, Bradford, Stewart, Brand, Vennevar, Bush, Steve, Case, Vint, Cerf, Jim, Clark, Bernie, Cosell, Crocker, John, Doerr, Larry, Ellison, James, Gosling, Frank, Heart, Jobs, Bill, Joy, Bob, Kahn, Vinod, Khosla, Eric, Schmidt, Len, Kleinrock, Sandy, Lerner, J.C.R., Licklider, Drew, Major, McAfee, Scott, McNealy, Metcalfe, Ted, Nelson, Ivan, Sutherland, Taylor, Severo, Ornstein, Jonathan, Postel, Howard, Rheingold, Roberts, Jon, Shirley, Ray, Tomlinson, Dave, Walden, Jane, Austen, SETI, Institute

Id: mhz24AR3nIc

Length: 7min 49sec (469 seconds)

Published: Fri Oct 05 2012