The Exchanges

Q And then I'm super sad for that. I absolutely love this episode, but final question. What's the most recently Publicly announced investment or acquisition, and why did you say yes and get so excited, Rob?

A So the two most recent deals on our side have been on the acquisition front, and they're both in collaboration, so there's a bit of a corollary there. The collaboration space, it's going through so much change, and that's both how we deal with customers, the whole customer journey, but also what you and I experience in the workplace and what the future of work Looks like. So the two latest acquisitions we made, one was a company called Cloud Cherry. They provide predictive analytics on top of the traditional contact center. So what you used to view as sort of a customer support experience that is moved to really the key touch point, how you deal with customers, not only from a support perspective, but how you may be able to sell to them, what journey brought them to that point to call the contact center. And Cloud Cherry provides all of those analytics. The second company we acquired was called Voiceia, also in the collaboration space, and this one brings AI and machine learning on top of the Cisco portfolio. So if we were doing this podcast over WebEx, what Voiceia would be able to do is it would actually transcribe in real time our entire conversation. It would send out meeting notes. It would flag action items That any of us agreed to, and it would integrate that into any workflow systems that you or I may be involved with. So it's designed to make these interactions, make t…

AI assessment note: “So the two latest acquisitions we made, one was a company called Cloud Cherry.”

Q Totally realistic opportunity here, you should be very excited for this one, but pricing is the next question, and as you said earlier, we're seeing these massively inflated prices for everything with the influx of capital that we've seen. Super interesting, given your 20 year history with Cisco, how do you assess your own price sensitivity today, and how much of a role does that actually play in the decision?

A Yeah, that's a great topic. Multiples today are the highest I've ever seen. And as we talked about at the beginning, you know, I've been around for a while, so I've seen a lot of different markets. But when you see these companies trading at 20 and 30 times sales, it's really unprecedented. And so I think that really raises the bar relative to the conviction that you have to have from an M&A perspective. You know, for us, evaluation is an input. And so, you know, we are mindful and believe today that, you know, valuations are, are extremely frothy, but the way that we view things is regardless of the absolute value, it's really about seeing a path that Cisco can create value in. And so if you're in a position that you can see an opportunity to add value, the fair multiple is actually less relevant. In fact, if I look at some of our most Strategic or financially successful acquisitions, moves like AppDynamics, moves like Meraki, they, in fact, were some of our highest multiple deals. And so the idea that a high multiple transaction should be avoided, you know, that itself sort of loses the point. It's really about the opportunity to create value.

AI assessment note: “the fair multiple is actually less relevant. In fact, if I look at some”

Q Totally realistic opportunity here, you should be very excited for this one, but pricing is the next question, and as you said earlier, we're seeing these massively inflated prices for everything with the influx of capital that we've seen. Super interesting, given your 20 year history with Cisco, how do you assess your own price sensitivity today, and how much of a role does that actually play in the decision?

A Yeah, that's a great topic. Multiples today are the highest I've ever seen. And as we talked about at the beginning, you know, I've been around for a while, so I've seen a lot of different markets. But when you see these companies trading at 20 and 30 times sales, it's really unprecedented. And so I think that really raises the bar relative to the conviction that you have to have from an M&A perspective. You know, for us, evaluation is an input. And so, you know, we are mindful and believe today that, you know, valuations are, are extremely frothy, but the way that we view things is regardless of the absolute value, it's really about seeing a path that Cisco can create value in. And so if you're in a position that you can see an opportunity to add value, the fair multiple is actually less relevant. In fact, if I look at some of our most Strategic or financially successful acquisitions, moves like AppDynamics, moves like Meraki, they, in fact, were some of our highest multiple deals. And so the idea that a high multiple transaction should be avoided, you know, that itself sort of loses the point. It's really about the opportunity to create value.

AI assessment note: “if you're in a position that you can see an opportunity to add value”

Q a part of there, Rob, before we move into the stories behind some of them in particular, final question is the actual decision-making process itself. For me, and I think probably for a lot of the ecosystem, it's quite opaque in terms of what it takes to actually get a deal over the line. So I'm interested, how does your acquisition decision-making process look for you and the team today?

A Happy to help provide some transparency behind that, and it really comes down to two topics. Think about it as the strategy part of the decision, which is we feel that this is the right bit, and then there's the governance side of things, which is Depending on the amount of risk that we need to take, depending on the amount of resources we need to put behind it, you know, who needs to sign off on that for us all to feel good about that move? So first, let's talk about the strategy. If you go back to what corp dev does, you know, one of those things that we do is we have a very tight partnership with the business units within Cisco. And when you look at these business units, these are often multi-billion dollar businesses, you know, security companies, Is a multi-billion dollar business within Cisco. And so if you're the GM of the security business, David Ulovich was the GM of Cisco security business at one point. If you're the GM, you actually have a degree of flexibility behind how you can accelerate your business. And going back to one of the things that makes Cisco unique, this idea of outside innovation being part of the strategy, it's fundamental to how we think about things. So it really starts with the GM. If the GM feels strongly that an acquisition can accelerate their business, and they have conviction around it, that is going to be really the first and the most impor…

AI assessment note: “it really comes down to two topics. Think about it as the strategy part”

Q Can I ask, you've seen so many different M&A processes, both internally at Cisco and externally in the market itself. Whether it be the integration side that we mentioned, whether it be the willingness to be mentally plastic or reinvent oneself, where do you see quite a few M&A practices, maybe execute on transactions, integrations, where do they execute wrong often in your mind?

A I think going back to the idea of having flexibility, I do think the reason that a number of acquisitions fail with other acquirers is taking a one size fits all type of approach. And we've had the benefit of just learning from our mistakes. You know, Cisco's done over 200 acquisitions, and we haven't done all those correctly, but I believe that we've learned from those mistakes so that we don't do it on the next one. So one of the things that I think also, uh, makes us unique is we've had so many at bats. We've had so many attempts to do things. And so if we're off doing our 211th acquisition, we probably bring a level of knowledge and experience into that that may be different from another acquirer that's doing its second or third acquisition. So learning from your mistakes is a big one. You know, the last thing I would call out, and we mentioned this earlier, is In addition to us being seen as a platform to accelerate an entrepreneur's vision, we also look to embrace the entrepreneur themselves once inside Cisco. And you mentioned David Ulovich at the beginning of our session here. For those that don't know about David, David Ulovich was the founder of OpenDNS. It was a cloud security company. Cisco had a partnership and an investment in the company very early on. That led to Cisco acquiring OpenDNS a few years later, and OpenDNS was a relatively small company. It was less t…

AI assessment note: “the reason that a number of acquisitions fail with other acquirers is taking a one size fits all”

Q Ok, so the favorite book and why, what must we be reading?

A Favorite book, you know, I think everybody throws out business books, so I'm not going to do that. I've got two kids, two years old and nine weeks old, so my pastime is usually sleep versus reading, but I have managed to read a few things. The book I've enjoyed most this year was Called the Poisonwood Bible by Barbara Kingsolver. And what I love about it, it's about a minister that relocates his family from the U.S. into the Belgian Congo in the 19 sixties. So completely crazy. What it reminds me of is first to do that, you have to have a ton of conviction. And you see that conviction through the minister and his dedication to what he is trying to achieve. But what's interesting is let's go back to the perspective comments. The perspective of how things played out were different, and the story is told through the lens of his wife and his four daughters, and each of them view the challenge that they went through in a different way, and I think that that brings together what we see, which is this idea of having conviction, an entrepreneur having conviction, but also having perspective around different opportunities, and this all played out in a very fascinating story in the Belgian Congo.

AI assessment note: “The book I've enjoyed most this year was Called the Poisonwood Bible”

Q Oh, trust me, mine's espresso martinis, which will have to be in round two for us, but I would love to start today with a little bit on you. So, did you grow up knowing that you wanted to lead corp dev practices for the world's leading tech companies, and how did you make your way into the world of corp dev with Cisco?

A It's a great question. You know, my story goes back to my undergrad days at Stanford. You know, I came out of a small town, and in the community that I grew up in, the medical profession was very well respected, so when I went to Stanford, I actually thought I wanted to be a doctor. Now, what happened is early in my days at Stanford, the internet boom happened, and Netscape actually went public when I was in my early years at the school, and so what I realized is technology is really where I wanted to be, and I was at the heart of it, being an In Silicon Valley. So I wanted to figure out my way into technology. I knew I wanted to do that from a business perspective, not an engineering one. So the past at that time, that kind of leads you down to either investment banking or consulting. I chose to go into investment banking. So that was my entry into the tech world. I was in investment banking in the Bay Area, first in San Francisco, then at Sandhill. I was working as an analyst at DLJ. I was actually Safra Katz's first Analyst. She is now the president over at Oracle, and what I saw from banking was it really cemented my love for technology, but at the same time, bankers, they're very transactional, and you don't really play any role in the strategy of the company. You don't share any ownership in terms of the results, and that left me wanting. That left me sort of understood. …

AI assessment note: “So I actually ended up sending my resume into resumes at cisco.com”

Q You mentioned that kind of having that plasticity. It's really interesting because it correlates to something that you've also said, which is you have to be willing to reinvent yourself. Again, relating back to that plasticity of not all situations being equal and kind of correlatory. What did you mean by this? You have to be willing to reinvent yourself specifically with regards to the M&A process.

A So on the M&A side, I think it's constantly reevaluating how you do things. And the Meraki example is a great one. So if you double click on that, when we approached Meraki, What we found very quickly is they had a very unique culture, and part of that culture was having a significant talent and recruiting base in San Francisco. And to put that into perspective, Meraki had several years before that actually relocated. They were based in the South Bay of the Bay Area, and they moved their entire headquarters up to San Francisco. So they felt it was important. Now let me paint the other picture, which is what was happening from a Cisco point of view. At the time that we were looking to acquire Meraki, Cisco had just removed itself out of the consumer business, and as a result, we had actually shut down most of our San Francisco sites. So you can imagine the conversations we were having internally when we said, if we want to do Meraki, we have to commit to San Francisco for the long term, within a few quarters of us completely getting out of San Francisco. But people recognized that that was required in order to enter this part of the market. People recognize that cloud talent was really centered around San Francisco. And so we made that commitment. And so if you fast forward to today, you know, what was a few hundred people that came in as a result of Meraki has now grown to seve…

AI assessment note: “So on the M&A side, I think it's constantly reevaluating how you do things.”

Q Oh, trust me, mine's espresso martinis, which will have to be in round two for us, but I would love to start today with a little bit on you. So, did you grow up knowing that you wanted to lead corp dev practices for the world's leading tech companies, and how did you make your way into the world of corp dev with Cisco?

A It's a great question. You know, my story goes back to my undergrad days at Stanford. You know, I came out of a small town, and in the community that I grew up in, the medical profession was very well respected, so when I went to Stanford, I actually thought I wanted to be a doctor. Now, what happened is early in my days at Stanford, the internet boom happened, and Netscape actually went public when I was in my early years at the school, and so what I realized is technology is really where I wanted to be, and I was at the heart of it, being an In Silicon Valley. So I wanted to figure out my way into technology. I knew I wanted to do that from a business perspective, not an engineering one. So the past at that time, that kind of leads you down to either investment banking or consulting. I chose to go into investment banking. So that was my entry into the tech world. I was in investment banking in the Bay Area, first in San Francisco, then at Sandhill. I was working as an analyst at DLJ. I was actually Safra Katz's first Analyst. She is now the president over at Oracle, and what I saw from banking was it really cemented my love for technology, but at the same time, bankers, they're very transactional, and you don't really play any role in the strategy of the company. You don't share any ownership in terms of the results, and that left me wanting. That left me sort of understood. …

AI assessment note: “I actually ended up sending my resume into resumes at cisco.com”

Q I'd love to hear your thoughts. You mentioned distribution there, and it's one of my nerdy passion points. I'm terrified by the scaling customer acquisition costs that we're seeing today. Henry Ward from Carter said on the show recently that you have to own your own lines of distribution and all the best companies do. How important do you think it is to own your own lines of distribution fundamentally?

A I think it's important. So the, the corollary to what I just mentioned and being open to working with a large partner like a Cisco is I think you fundamentally need to control your own destiny to begin with. And so don't view a partner like Cisco as one that your execution depends on, but view it as something that can enhance what you're doing. And again, all of our best companies that we've either invested in or acquired are They had built very successful go-to markets on their own. Some of those were inside sales driven. Some of those were direct. Some of those had large channel components. Those are all things that Cisco also has that are focused on a certain scale, certain buying center. And so it's really an enhancement as opposed to the foundation that Cisco represents. And yes, a company needs to own its own distribution. And I consider that sort of fundamental to what you need to build as a founder or CEO.

AI assessment note: “yes, a company needs to own its own distribution.”

Q Final question for story time, I promise you, but we've also seen some large P entrance into heavy tech acquisitions where they didn't normally play. How do you see this new ancient into the market? And how do you kind of evaluate that maybe from a competitive landscape perspective?

A Great question. I think we're in the middle of it. So it's an evolving picture. If I thought about it from the perspective of founders, entrepreneurs, investors, It's a good thing, because I think it provides more potential exit options for technology companies, and I think that's good for the business, and I'm supportive of that, because anything that's good for the business is going to drive more innovation. That's great for us. That's great for our customers. If I think about it from the competitive point of view, we are seeing PE firms get more and more involved in technology companies that had profiles that they normally wouldn't go after, and Because of the sheer amount of capital that's out there, being willing to pay multiples and valuations that also are unprecedented from a PE perspective. So I do see them more often. I would say it's still the minority of situations that Cisco's involved with. And again, Cisco, when we look at an opportunity, have some very powerful levers that we can bring to the table. From a go-to-market perspective, From a product portfolio perspective. In reality, those are things that a financial investor, a PE, they can't match. And so if it's something that really hits those levers, I think Cisco is always going to be able to create more value in the opportunity than a financial PE may. To pay more than us is a different story, and I think th…

AI assessment note: “If I think about it from the competitive point of view, we are seeing PE”

Q You mentioned that kind of having that plasticity. It's really interesting because it correlates to something that you've also said, which is you have to be willing to reinvent yourself. Again, relating back to that plasticity of not all situations being equal and kind of correlatory. What did you mean by this? You have to be willing to reinvent yourself specifically with regards to the M&A process.

A So on the M&A side, I think it's constantly reevaluating how you do things. And the Meraki example is a great one. So if you double click on that, when we approached Meraki, What we found very quickly is they had a very unique culture, and part of that culture was having a significant talent and recruiting base in San Francisco. And to put that into perspective, Meraki had several years before that actually relocated. They were based in the South Bay of the Bay Area, and they moved their entire headquarters up to San Francisco. So they felt it was important. Now let me paint the other picture, which is what was happening from a Cisco point of view. At the time that we were looking to acquire Meraki, Cisco had just removed itself out of the consumer business, and as a result, we had actually shut down most of our San Francisco sites. So you can imagine the conversations we were having internally when we said, if we want to do Meraki, we have to commit to San Francisco for the long term, within a few quarters of us completely getting out of San Francisco. But people recognized that that was required in order to enter this part of the market. People recognize that cloud talent was really centered around San Francisco. And so we made that commitment. And so if you fast forward to today, you know, what was a few hundred people that came in as a result of Meraki has now grown to seve…

AI assessment note: “on the M&A side, I think it's constantly reevaluating how you do things.”

Q do have to ask though, because it was a long time ago. It was over two decades ago. So in terms of your mindset, having seen the The financial markets go through the dot com, 2008. I'm fascinated to hear your thoughts. Josh at first round said seeing the bust made him more conservative. How did seeing the booms and bust impact your investing mindset? Do you think today, Rob?

A Yes. You know, whether it's about investments or M&A, it's really about bringing, I think, that perspective to bear. So today, everybody assumes the world is what we've seen for the past decade, and it's been a boom over the past decade. You know, what investor really hasn't done well over this time, but we lived through the 2002 1001 period. We've gone through the 2008 period. And so, you know, when I tend to think about an opportunity, whether it's a investment, whether it's an acquisition, I asked myself the types of questions of, you know, how's this business model going to stand up when capital perhaps doesn't flow so freely? How's a CEO who may be Great. And raw rock times going to perform during really challenging time. And look, if you look at the multiples that are going on today, these growth companies are trading at 20, 30 times sales. And those used to be P multiples in our business. So I think you have to have the perspective, which is, you know, I think a great company today may still be a great company over the long term, but it requires a quick payback. If it's something that you just don't have the runway to get to during the tough times, then things can get ugly pretty fast. And I think we're seeing headlines today in the markets of some big companies, some big unicorns that are facing those challenges right now.

AI assessment note: “when I tend to think about an opportunity... I asked myself the types of questions”

Q do have to ask though, because it was a long time ago. It was over two decades ago. So in terms of your mindset, having seen the The financial markets go through the dot com, 2008. I'm fascinated to hear your thoughts. Josh at first round said seeing the bust made him more conservative. How did seeing the booms and bust impact your investing mindset? Do you think today, Rob?

A Yes. You know, whether it's about investments or M&A, it's really about bringing, I think, that perspective to bear. So today, everybody assumes the world is what we've seen for the past decade, and it's been a boom over the past decade. You know, what investor really hasn't done well over this time, but we lived through the 2002 1001 period. We've gone through the 2008 period. And so, you know, when I tend to think about an opportunity, whether it's a investment, whether it's an acquisition, I asked myself the types of questions of, you know, how's this business model going to stand up when capital perhaps doesn't flow so freely? How's a CEO who may be Great. And raw rock times going to perform during really challenging time. And look, if you look at the multiples that are going on today, these growth companies are trading at 20, 30 times sales. And those used to be P multiples in our business. So I think you have to have the perspective, which is, you know, I think a great company today may still be a great company over the long term, but it requires a quick payback. If it's something that you just don't have the runway to get to during the tough times, then things can get ugly pretty fast. And I think we're seeing headlines today in the markets of some big companies, some big unicorns that are facing those challenges right now.

AI assessment note: “I asked myself the types of questions of, you know, how's this business model”

Q I'm really interested to double click on that. How much of a role does capital efficiency play for you in your investment or acquisition mindset when evaluating potential opportunities to engage with?

A Well, when we think of capital efficiency, I think that just points to the attractiveness of a particular business model, and it plays into one of our key tenants, which is, one, on one side, we are going to look at valuations, and as we mentioned, valuations are very high today, but the real question that Cisco asks itself is, can we actually create additional value in the business? And so, what are those levers? That could be being a great distribution channel, That could be making the product much more attractive by making it part of our architecture. That essentially takes whatever existing model a company may have and say, we can improve the operating model in these ways. So, you know, someone that may be on the cusp of profitability, maybe it accelerates that within Cisco because we can get there much more efficiently. A company that is maybe growing at For us, the capital efficiency piece, I would say that's an input because it informs what the business model is operating at today, and that leads to the questions of what may Cisco be able to do with it if it's inside our business.

AI assessment note: “For us, the capital efficiency piece, I would say that's an input”

Q In terms of the trust that you have and the relationship building and Skills that you place at the core. You also said how an entrepreneur is embraced is often what matters most to them. Talk to me from the 20 years experience and many kind of integration processes that you've been through. What was the right way and process to embrace and integrate entrepreneurs themselves?

A Great question. When we look at what has made our acquisition successful, I think the first part has been, did we pick the right company? But the second half of that is, did we do the right Thing for the business once it was in Cisco. And so that's so critical to acquisition success. And there's a couple of different elements on it. First, I would say it starts with the people. When we think about acquisitions, it's all about the people and people can walk in and out of the door at any point in time. And so how do you create an environment that people are motivated, excited to actually push everything to the next level and to stay with Cisco in order to do that? That discussion really starts at the founder, the CEO, the entrepreneur level, and this idea of having a shared vision. So if a founder sees Cisco as a platform to accelerate their vision, we can actually take what they're trying to do and turbocharge it. And that becomes one of our biggest strengths as an acquirer is I want to see an entrepreneur pursue its vision. I just want to get their Three, four, five times, 10 times faster than maybe they would have been able to do on their own. And that's an extremely exciting, extremely compelling view for the entrepreneur. So that's where it starts with. Now, the second piece is, okay, what do you do with the company itself when you bring it inside of Cisco? And I think what …

AI assessment note: “That discussion really starts at the founder, the CEO, the entrepreneur level, and this idea of having a shared vision.”

Q I'd love to hear your thoughts. You mentioned distribution there, and it's one of my nerdy passion points. I'm terrified by the scaling customer acquisition costs that we're seeing today. Henry Ward from Carter said on the show recently that you have to own your own lines of distribution and all the best companies do. How important do you think it is to own your own lines of distribution fundamentally?

A I think it's important. So the, the corollary to what I just mentioned and being open to working with a large partner like a Cisco is I think you fundamentally need to control your own destiny to begin with. And so don't view a partner like Cisco as one that your execution depends on, but view it as something that can enhance what you're doing. And again, all of our best companies that we've either invested in or acquired are They had built very successful go-to markets on their own. Some of those were inside sales driven. Some of those were direct. Some of those had large channel components. Those are all things that Cisco also has that are focused on a certain scale, certain buying center. And so it's really an enhancement as opposed to the foundation that Cisco represents. And yes, a company needs to own its own distribution. And I consider that sort of fundamental to what you need to build as a founder or CEO.

AI assessment note: “I think it's important... you fundamentally need to control your own destiny to begin with.”

Q Final question for story time, I promise you, but we've also seen some large P entrance into heavy tech acquisitions where they didn't normally play. How do you see this new ancient into the market? And how do you kind of evaluate that maybe from a competitive landscape perspective?

A Great question. I think we're in the middle of it. So it's an evolving picture. If I thought about it from the perspective of founders, entrepreneurs, investors, It's a good thing, because I think it provides more potential exit options for technology companies, and I think that's good for the business, and I'm supportive of that, because anything that's good for the business is going to drive more innovation. That's great for us. That's great for our customers. If I think about it from the competitive point of view, we are seeing PE firms get more and more involved in technology companies that had profiles that they normally wouldn't go after, and Because of the sheer amount of capital that's out there, being willing to pay multiples and valuations that also are unprecedented from a PE perspective. So I do see them more often. I would say it's still the minority of situations that Cisco's involved with. And again, Cisco, when we look at an opportunity, have some very powerful levers that we can bring to the table. From a go-to-market perspective, From a product portfolio perspective. In reality, those are things that a financial investor, a PE, they can't match. And so if it's something that really hits those levers, I think Cisco is always going to be able to create more value in the opportunity than a financial PE may. To pay more than us is a different story, and I think th…

AI assessment note: “If I think about it from the competitive point of view, we are seeing PE”

Q Tell me, what would you most like to change about the world of tech investing and our ecosystem maybe, Rob?

A You know, when I, when I think about changing the world of tech investing, I would probably say, I would love to see entrepreneurs get the best advice when it matters. And I think the way that boards are structured today Entrepreneurs are often surrounded by venture investors, perhaps very successful venture investors, that may have motivations that somewhat differ from that of the entrepreneur, but the entrepreneur may be going through it for the first time. The VC may have done this 10, 20, 30 times before. And so, while a venture capitalist may say, look, it's worth pushing all boundaries in order to get that billion dollar outcome at some point down the road, Maybe for the entrepreneur, it's his or her first company. And maybe that person owns 30, 40, 50% of that business today. And maybe it can be a life-changing experience for that entrepreneur to have a hundred million dollar outcome today versus see how things play out three, four, five years down the road. And so I'm not suggesting that they're getting bad advice. I'm just suggesting that I think it's important to, again, have that perspective from all constituents. From your investors, from your independent board members, from perhaps other entrepreneurs that have been through that journey. And the decision of what you do needs to be a very personal one. And that is where only your perspective is going to actually det…

AI assessment note: “I would love to see entrepreneurs get the best advice when it matters.”

Q Can I ask, you've seen so many different M&A processes, both internally at Cisco and externally in the market itself. Whether it be the integration side that we mentioned, whether it be the willingness to be mentally plastic or reinvent oneself, where do you see quite a few M&A practices, maybe execute on transactions, integrations, where do they execute wrong often in your mind?

A I think going back to the idea of having flexibility, I do think the reason that a number of acquisitions fail with other acquirers is taking a one size fits all type of approach. And we've had the benefit of just learning from our mistakes. You know, Cisco's done over 200 acquisitions, and we haven't done all those correctly, but I believe that we've learned from those mistakes so that we don't do it on the next one. So one of the things that I think also, uh, makes us unique is we've had so many at bats. We've had so many attempts to do things. And so if we're off doing our 211th acquisition, we probably bring a level of knowledge and experience into that that may be different from another acquirer that's doing its second or third acquisition. So learning from your mistakes is a big one. You know, the last thing I would call out, and we mentioned this earlier, is In addition to us being seen as a platform to accelerate an entrepreneur's vision, we also look to embrace the entrepreneur themselves once inside Cisco. And you mentioned David Ulovich at the beginning of our session here. For those that don't know about David, David Ulovich was the founder of OpenDNS. It was a cloud security company. Cisco had a partnership and an investment in the company very early on. That led to Cisco acquiring OpenDNS a few years later, and OpenDNS was a relatively small company. It was less t…

AI assessment note: “number of acquisitions fail with other acquirers is taking a one size fits all”

Q So I do love that relationship first mindset. I think it's so important to be human centric really and non-transactional. I guess my question there is obviously heard Paul Graham before say don't talk to corp dev. How do you respond and think about that? And then what advice would you give to Founders on building that relationship with potential corp dev teams?

A It's interesting. You know, Paul has been wildly successful over at YC, and certainly, you know, I, I can't read a lot behind his statement, and a lot of what he's done, I think, has been focused on some of these wildly successful consumer startups. What I can offer is a perspective in being in the business, really from an enterprise point of view, and in all the years I've spent at Here at Cisco, working with startups, investing in startups, making them successful within Cisco, I think what you find is what is often key, it has to start with a great product. So if you don't have a great product, you don't have a great technology, it doesn't matter. But one of the hardest things to do is to get scale distribution or scale to go to market. So that really becomes a key driver. And so if you ignore that because you don't see A Cisco as a potential partner or investor or potentially a future acquirer. What you're doing is you're really prematurely closing the door on what may be the biggest potential accelerator for your business. And I've seen it on many occasions. So when I look at just the partnerships or investments or acquisitions that I've been involved with, Meraki, OpenDNS, AppDynamics, Investments like Cohesity, Turbonomic, all of those relationships, they actually began with corporate development. And when those relationships began, those companies often were doing tens o…

AI assessment note: “What you're doing is you're really prematurely closing the door on what may be”

Q What is the most challenging element of your role with Cisco to stay, Rob?

A I think the most challenging role is really what Cisco is in the middle of a transformation on itself, which is we're moving from an on-premise hardware company to one that's about embracing the cloud and embracing software. And if you look at companies that have been able to make that transition, most people have failed. However, We believe and we're confident that Cisco is actually going to make that transition. And I think M&A is going to be a big part of it because when you think of acquisitions like in AppDynamics, it really helps bring that capability, bring and accelerate that software, that subscription, that cloud focus. It allows us to go to our customer and be even more relevant as they think about this journey to the cloud. And so I'm proud to be part of that journey. And I think M&A is going to continue to be a big role relative to helping us achieve it.

AI assessment note: “moving from an on-premise hardware company to one that's about embracing the cloud”

Q You mentioned there about what it means to be inside the Cisco business and kind of how you think about that as a, as a practice in itself. How do you think this is maybe similar to others around you? And then on the flip side, how is it maybe different to others?

A I think when you look at Cisco, and it really starts with the motto that I talked to my team about it, and really the bar that we set relative to our ultimate impact. And that comes down to the question, which is, I think the best measure for success or corp dev is, have we been able to get the company to accomplish something that left to its own wouldn't have been possible? So that's a high level mission statement, but how does that actually break down? And I think there are There are probably three components of that to speak about. You know, first, one of the things that I think makes Cisco unique, it starts with the cultural mindset. You find a lot of companies are very insular, which is they think they can do everything themselves. And one of the things that I think has made Cisco so different, and this goes back 30 years ago, is that we recognized that the broader market, the VC ecosystem, It's really a great source of innovation. And so our choice has been, let's not hide from it. Let's not pretend that we can do everything ourselves. Let's figure out how we can leverage what's happening on the outside to actually accelerate our business. And the first step towards that is by investing in that ecosystem, because that's really the first way that we show up in the outside market. The second piece I would call out is when we think about corporate development, it's a strateg…

AI assessment note: “one of the things that I think makes Cisco unique, it starts with the cultural mindset.”

Q You mentioned there about what it means to be inside the Cisco business and kind of how you think about that as a, as a practice in itself. How do you think this is maybe similar to others around you? And then on the flip side, how is it maybe different to others?

A I think when you look at Cisco, and it really starts with the motto that I talked to my team about it, and really the bar that we set relative to our ultimate impact. And that comes down to the question, which is, I think the best measure for success or corp dev is, have we been able to get the company to accomplish something that left to its own wouldn't have been possible? So that's a high level mission statement, but how does that actually break down? And I think there are There are probably three components of that to speak about. You know, first, one of the things that I think makes Cisco unique, it starts with the cultural mindset. You find a lot of companies are very insular, which is they think they can do everything themselves. And one of the things that I think has made Cisco so different, and this goes back 30 years ago, is that we recognized that the broader market, the VC ecosystem, It's really a great source of innovation. And so our choice has been, let's not hide from it. Let's not pretend that we can do everything ourselves. Let's figure out how we can leverage what's happening on the outside to actually accelerate our business. And the first step towards that is by investing in that ecosystem, because that's really the first way that we show up in the outside market. The second piece I would call out is when we think about corporate development, it's a strateg…

AI assessment note: “one of the things that I think makes Cisco unique, it starts with the cultural mindset”

Q balance, but I do have to ask in terms of kind of investing in the ecosystem that let's start with that because I do want to dive into the process itself. How do you like to really get to know startups that you could potentially acquire or work with? And how do you know to do that from maybe the grassroots from a starting point in terms of sourcing? Sure.

A When we get involved in a particular Situation. You know, our initial motivation is really about the relationship. When we are calling on a company, our motivation, if it's an investment, is not driven by our desire to eventually acquire the company. And I know that's often a fear of corporate development. In general, I would say our team, we're very intellectually curious. We want to stay on top of the market. We want to make our portfolio companies successful and find ways that that can help accelerate the The businesses that Cisco's in. And what you realize is that those goals are actually not mutually exclusive. It can certainly play out on different levels. So when we invest in a company, we do that because we believe we have an opportunity to invest in a best in class company in a market that we find interesting. And perhaps there's an opportunity for a tight partnership with Cisco that may play out over the next two quarters. That may play over the next three years. I think going in with the right set of shared expectations between us and our founders and entrepreneurs is where it starts and recognizing that those relationships and those partnerships can take a lot of different directions over the course of that time.

AI assessment note: “our initial motivation is really about the relationship”

Q balance, but I do have to ask in terms of kind of investing in the ecosystem that let's start with that because I do want to dive into the process itself. How do you like to really get to know startups that you could potentially acquire or work with? And how do you know to do that from maybe the grassroots from a starting point in terms of sourcing? Sure.

A When we get involved in a particular Situation. You know, our initial motivation is really about the relationship. When we are calling on a company, our motivation, if it's an investment, is not driven by our desire to eventually acquire the company. And I know that's often a fear of corporate development. In general, I would say our team, we're very intellectually curious. We want to stay on top of the market. We want to make our portfolio companies successful and find ways that that can help accelerate the The businesses that Cisco's in. And what you realize is that those goals are actually not mutually exclusive. It can certainly play out on different levels. So when we invest in a company, we do that because we believe we have an opportunity to invest in a best in class company in a market that we find interesting. And perhaps there's an opportunity for a tight partnership with Cisco that may play out over the next two quarters. That may play over the next three years. I think going in with the right set of shared expectations between us and our founders and entrepreneurs is where it starts and recognizing that those relationships and those partnerships can take a lot of different directions over the course of that time.

AI assessment note: “our initial motivation is really about the relationship.”

Q Can I ask, how do you protect that relationship with VeloCloud when you acquire an alternative provider? Is there an upset from them in terms of a lack of loyalty, maybe? Or is there also kind of conflicts of interest problems in terms of investing in one and acquiring another?

A It's a great question. I think this all comes down to how you handle things. People realize that things change. Strategies change. Startups have to pivot. Markets change. How you show up, how you handle The relationship when those occur is what is key. And I think that's one of the things that's been one of Cisco's biggest strengths is, you know, we've been out there doing investments and acquisitions for three decades now. And so people have got to see us in every type of situation, in negotiations, in acquisitions that haven't worked, in investments that have done well, in handling situations like the one with VeloCloud. And so how you handle things is really important. And I think if you treat people fairly, then that is really the reputation that you live off of, and I believe that's what has made OrbDev successful within Cisco, is that we've been able to rely on that reputation from a very positive perspective to continue to engage entrepreneurs and founders, because I do think we have a trusted view in that community, and that's something that we want to maintain.

AI assessment note: “handling situations like the one with VeloCloud. And so how you handle things is really important.”

Q Can I ask, how do you protect that relationship with VeloCloud when you acquire an alternative provider? Is there an upset from them in terms of a lack of loyalty, maybe? Or is there also kind of conflicts of interest problems in terms of investing in one and acquiring another?

A It's a great question. I think this all comes down to how you handle things. People realize that things change. Strategies change. Startups have to pivot. Markets change. How you show up, how you handle The relationship when those occur is what is key. And I think that's one of the things that's been one of Cisco's biggest strengths is, you know, we've been out there doing investments and acquisitions for three decades now. And so people have got to see us in every type of situation, in negotiations, in acquisitions that haven't worked, in investments that have done well, in handling situations like the one with VeloCloud. And so how you handle things is really important. And I think if you treat people fairly, then that is really the reputation that you live off of, and I believe that's what has made OrbDev successful within Cisco, is that we've been able to rely on that reputation from a very positive perspective to continue to engage entrepreneurs and founders, because I do think we have a trusted view in that community, and that's something that we want to maintain.

AI assessment note: “I think if you treat people fairly, then that is really the reputation”