Cisco Systems celebrated its 30-year anniversary on Thursday.
Under the guidance of John Chambers, one of the longest-sitting CEOs in the tech industry, Cisco has grown into a $US47 billion company with more than 71,000 employees.
But for most of that time, the famous then-husband-and-wife team who founded the company, Len Bosack and Sandy Lerner, have not been part of it, with no stake and no say. (They’re now divorced.)
This is a classic Silicon Valley tale of power struggle every bit as dramatic as the ousting of Steve Jobs or the founding of Facebook immortalised by the movie “The Social Network.”
Cisco’s tale was expertly told by a Cisco employee on Quora about a year ago. Here’s a quick summary.
In the early 1980’s Bosack and Lerner worked for Stanford University and couldn’t email each other from different buildings because the networks couldn’t talk to ach other. So they invented the tech that connected and translated one network to another, something called “the multi-protocol router.”
Cisco sold its first router in 1986 and by the end of 1987, the fledgling company had about $US1.5 million in sales. They needed cash to fund future growth and struck up a deal with the famed venture capitalist Don Valentine of Sequoia Capital who invested $US2 million.
Valentine almost immediately appointed as CEO a man named John Morgridge, who had previously run an early computer company called GRiD.
Lerner and Morgridge got off to a rocky start and their relationship went downhill from there.
In an interview from the 1990’s, Lerner recalled, “The first time I met John Morgridge he had already been hired,” and that the first thing he said to her was, “I hear that you’re everything that’s wrong with Cisco.”
They disagreed on how best to serve customers. Morgridge didn’t think the founders had a clue about sales.
“They were basically selling to their peer group, through word of mouth. The initial customer set started with the lunatic fringe — the kind of people who are way out on the leading edge,” he recounted to Forbes years later.
Eventually, the the board sided with Morgridge and ousted her. Her husband Bosack quit in solidarity and they immediately sold their two-thirds stake in Cisco for about $US170 million dollars.
That was a lot of money at the time, but had they held onto it for a few more years it would have been worth billions. Today, two-thirds of Cisco is worth about $US90 billion.
Years later, Bosack didn’t seem too choked up about selling, or even leaving, Cisco. In 1992 he told Forbes, “We had to ask ourselves the question, ‘Do we want to run a company or do we want to make money?’ For us, it was the latter,” says Bosack.
Lerner didn’t feel the same. “Len and I under-estimated our skills,” she told Forbes in 1992. “I certainly could have run that business. I had my hands on the reins.”
A couple of years ago, she recounted some hair-raising tales about sexism in the office to Businessweek, describing VCs as “old salesmen who never worked with women.” She described a meeting where a vice president announced that “he had just given his wife syphilis, and everybody laughed.”
Lerner has since gone on to lead an amazing life. Most people know she founded a cosmetics company bought a few years later by Moet-Hennessy Louis Vuitton.
But she’s also become a Jane Austen scholar, famous in those circles for two reasons. She wrote a book called “Second Impressions,” a historically accurate sequel to “Pride and Prejudice.” And she bought a 125-year lease to Chawton House, and began to restore it. That’s the estate owned by Austin’s brother where Jane lived and wrote.
Lerner also owns an organic farm and a tavern in Virgina, and founded the Women in Mathematical Sciences Initiative at Shenandoah University, among a long list of other post-Cisco achievements.
Bosack is retired and living in his home state of Pennsylvania, reports ResearchPedia. The two reportedly remained friends and the two still manage a charitable foundation together, that gives to animal welfare, education, and space exploration causes.
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