It’s been well over five years since John Chambers stepped down as the CEO of Cisco Systems, a company he took from being a relatively unknown router company to the de facto standard in all things enterprise networking, security and collaboration. I recall sitting down with him at his last Cisco Live conference in San Diego, congratulating him on his iconic career and wishing him well in retirement.
Chambers was quick to correct me. He wasn’t retiring; he was on to the next thing. Cisco had a new leader in CEO Chuck Robbins, and Chambers was looking to make an impact on the world in different ways. Anyone that has ever met Chambers would say that the man has a passion for making a difference and using technology to change the world. He predicted that Cisco and the network would change the way we “work, live, learn and play,” and it most certainly did. The internet, built primarily on Cisco-built gear, democratized the world and created opportunities where none had previously existed.
So, what’s Mr. Chambers been up to? Recently, he joined me on my latest ZKast video interview done in partnership with eWEEK eSPEAKS. Highlights are below:
Chambers still has a passion to change the world
- Post-Cisco, Chambers has moved his career and created his own venture fund, JC2 Ventures.
- When Chambers ran Cisco, his ideal target for acquisition was about 125 employees with about 100 being engineers. He saw this as the ideal size for investing. In the VC arena, these would be late series A or series B.
- JC2 Ventures focuses on early-stage companies. In total, there are 20 in his portfolio.
- Through his investment in these companies, Chambers hopes to change the world one more time.
- Chambers has a passion for the early stage because he believes startups are where the future lies. He told me “almost all job creation will come from small-to-medium businesses getting bigger, i.e. startups.” This means startups will move at a much faster pace than large companies.
- The average growth for his portfolio is about 50% per year and headcount growth at about 40%, which meets the job-creation goal that he has.
Catching market transitions leads to market leadership
- As long as I’ve known Chambers, his favorite two work expressions are a) “market transition,” because catching those can help companies break away from its competitors; and b) “look around the corner,” because this requires the ability to see what’s next.
- The easiest way to do this is to listen to customers and hear what they need. Not all successful executives do this, which is why so many big companies eventually fail.
- Chambers is still speaking to many business and government leaders and is excited about a number of technologies.
Artificial intelligence is pervasive across the JC2 Ventures portfolio
- The technology Chambers is most excited about is artificial intelligence. AI will be bigger than the internet in having a societal and business impact. He has several companies in that area, such as Uniphore and ASAPP and indirectly Sprinklr and Pindrop.
- The impact of AI will in all parts of our lives – from self-driving cars to the ability for doctors to diagnose people’s health-care issues faster.
- The hottest area of AI is currently in customer service and in sales and marketing. Chambers told me that if you “follow the money” (his favorite three-word expression), you can predict where adoption will be indicating AI will have its biggest impact in those areas.
- While there is a tremendous amount of concern of AI usurping jobs, this will be a replay of the internet, where AI will create far more jobs than it takes out of the labor pool.
- AI needs to be thought of as an architecture (Chambers favorite one-word expression) where voice, video and data AI is done from the same platform. Uniphore recently acquired Emotion Research Labs to add video AI to its already strong voice and data capabilities. This parallels Cisco’s AVVID architecture where Cisco’s ability to deliver voice, video and data on a single network put the company in a market-leading position.
Cybersecurity is and will remain red hot
- Cybersecurity is also very hot. He has eight companies in those areas that do everything from securing mobile phones to preventing the SolarWinds type of attack. One of the companies he’s excited about is Virsec.
- The rise in digital has created more security risk. It’s not just government agencies or financial service firms. It’s integrated into our supply chain, which impacts every company and every person.
- Without the right security, everything is at risk including getting heat and electricity into people’s homes as well as banking accounts.
- We still don’t know the full impact of SolarWinds but it’s likely in the trillions of dollars.
- Cybersecurity is now a top concern for board rooms and CEOs.
- Threat actors are now using AI to launch attacks. Manual security methods will no longer work.
5G will live up to the current hype and drive more edge computing
- The impact of 5G will be significant over the long term.
- It is more hype now because the payback might take a few years.
- Look at the impact on the network to see why we need 5G. There were 1,000 devices connected to the internet when Cisco was founded in the early ‘90s, and now there are 18 billion. This will be 500 billion definitely in 10 years–maybe only five years.
- Many of those devices will be connected at the edge.
- 5Gs ability to connect those devices and connect applications to data at the end will open up new opportunities and revenue streams.
- JC2 Ventures has invested in an edge-computing company called Pensando, founded by the “MPLS” (Mario Mazzola, Prem Jain, Luca Cafiero and Soni Jiandani) team that created $8 billion in products at Cisco.
SPACs will prove to be a growing investment vehicle
- While the goal for most VCs is to have their companies go through the IPO process, Chambers sees the SPAC (special-purpose acquisition company) as a viable path to becoming a public company. The IPO process takes a long time and is a good vehicle for average investors.
- In the next 18 to 24 months, Chambers expects 4 to 5 of the JC2 companies to go through the SPAC process.
- This will give the companies access to extra money faster that can be invested in sales, marketing, engineering and help scale faster.
- Chambers does predict there to be more “breaks and failures” but that the benefits outweigh the risks.
It’s fair to say that through his work as the leader of Cisco, Chambers changed the world. There are few things we do today that do not involve the internet. At Cisco he made some big bets, including predicting voice would be free, which resulted in significant scorn from the telecom industry. Despite that, he stuck to what he knew would be true because of his willingness to listen to customers.
Today, he runs a successful venture firm, JC2 Ventures, and while the companies he influences have changed, the mission and passion have not. The world is becoming more digital, and this will change every aspect of our lives. John Chambers continues to be a key part of that evolution.
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