Cisco

“And you know, we own 20% of NVIDIA. Think about that. I mean, you know, we own 10% of Google. And there's many others, you know. Apple. Are you kidding me? We were the first investor of Apple, in Apple. Cisco. We own a quarter of Cisco systems.”

“We sold our Cisco shares for cash for the total gain of ninety million. We owned a quarter of Cisco systems.”

“Our kind of firm belief at that point in time was, well, what's the best way to get them to understand that our networking equipment is simpler to use than their Cisco that they're about to buy? And the answer is get them to try it. And so what we do is we'd r…”

“And so Luke and Scott convinced me to put everything that I made in Ironport when we sold the Cisco into SpaceX.”

“Datadog was a much, much smaller company when AppDynamics was out there killing it. And Datadog today has, what, a 50, 60, seventy billion market cap. I don't even know. I haven't tracked it. That could have been AppDynamics.”

“And, you know, these, the Nvidia of the tech bubble is Cisco and it traded a hundred times forward earnings. And, you know, I think Nvidia is probably at a low teens, multiple of kind of low to mid teens, multiple of real earnings.”

“To back all this effort, we've actually created an open source project called Agency. And this, you know, became a Linux Foundation project with the backing of a few large formative members. Google, Oracle Red Hat were with us and Dell as well.”

“As complexity is growing, and as we, again, as I said before, we asymptotically start to progress towards something we can call superintelligence, It's going to be very heterogeneous, very different types of agents, different vendors, different clouds, differe…”

“Probably more than 80% of what we do needs to be open source because we actually believe in this importance of open and interoperable.”

“I'll never forget one of the first predictions was the Church of Latter-day Saints. And we predicted that they would buy five million dollars worth of networking and security from Cisco. And then we were right. And it was like, oh shit. Wow. Like they went fro…”

“Yeah, but we killed off that business. We went to zero. So it was basically, you know, they were paying that. It was a service. They were, that was services revenue. So it wasn't ARR. It wasn't subscription revenue. Everything I built in my past life had to be…”

“And as we were getting closer to the IPO, then that's when we had the offer a little bit of back and forth here and there, and then eventually we're like, okay, let's, let's take this one, because we weren't going to float at probably around, around two bill, …”

“We just basically, by then, sold a billion in TCP. You know, I don't remember the exact sort of, like, Revenue number, but we had sold a billion in DCV.”

“Cisco became an investor in the company and then eventually Cisco acquired the company. And today, all of what is called Cisco intelligence is run by your own.”

“The whole point of a stack is that it's abstracted. Like Cisco didn't get much say in what the websites were, even though it might all have been running on Cisco readers.”

“I mean, we just had our first product that we think we will be in the next two weeks, 100% written with AI.”

“We have 90,000 employees. 43,000 watched the stream.”

“Why are we not in business to consumer tech at Cisco? Right? Like why, why are we not going out and building things that are very, very B to C? Because I don't think we have a distribution channel that actually is within our DNA. I don't think that we've got p…”

“My perspective has always been that the absence of scale is way harder than scale.”

“And the thing that I learned about infrastructure is you don't always get the glory, but you always get the blame.”

“Timing trumps market, market trumps team, team trumps product, product trumps brand, brand trumps distribution. You don't have all six. You don't win.”

“When I got this new job to run all product for Cisco, there's zero chance I would have been able to do it if AI wasn't there. Because I didn't know anything about so many domains that we were in. And I had to get an accelerated, you know training course within…”

“The way to fix that problem is you got to build something from the ground up because WebEx architecture was not a video collaboration. It's more like a data collaboration.”

“If he knew that, very likely I would probably still be at Cisco, right, to build a solution, right?”

“After I left Cisco, I want to build new solution, but I want to build a consumer solution. I didn't want to build another business solution. Unfortunately, it's really hard to monetize.”

“In the traditional world, that was six hundred billion dollars of spend, and AWS was going after all of it. This was the biggest market in business IT ever, because previous markets were just the server market, or just Cisco was good in networking, EMC was goo…”

“So if you look at our industry, Cisco has a rack like ours where they have, you know, 10 different pieces of hardware. But majority of that was done through acquisition. So they bought their switching business called Crescendo in the nineties, et cetera, Merak…”

“What we understood what happened with all the companies in the last 2030 years that tried to compete with Cisco was that they then ended up selling that. Then the best companies actually start having success. Then they never go out and build the rest of the th…”

“One of the mistakes that I see it like first time early stage founders make is they're like, oh, I'm gonna go hire the like person from Cisco or something. You know, I don't know, like the big leagues and I'm gonna bring them into here. I have no idea what to …”

“And this conversation started three days before the IPO Cisco came in and said, you know, we'll, we'll pay you more than you. The price you will list. And we said, no, it's, we'll go IPO. Said, no, they came with another price, which is like, we'll pay you mor…”

“We just launched a new piece of silicon as well as a new chip and a system for scale across networking, where you might have two data centers that act as a logical data center that could be up to eight, 900 kilometers apart.”

“And so I also feel like the way that networking will evolve is Rather than it being a training infrastructure that then gets applied to inferencing, you might have inferencing native infrastructure that gets built over time.”

“Is, if you're just a rapper around Broadcom, Then you've got a monopoly that's gonna be a very predatory one. And so, one of the big reasons where Cisco is super relevant is you don't just have a Broadcom world with people just wrapping Broadcom, that their sy…”

“So, we've got 25,000 engineers. I'm hoping that we can get at least two or three X productivity within a very short amount of time within the next year.”

“Cisco still exists today, but has never traded at its historical valuation. And yet it's a multiples bigger than it was back then by earnings and by revenue.”

“Fast forward to late 20 12, and we'd scaled the business to about a hundred million in revenue. Cisco acquired the company for a little over 1.2 billion dollars”

“Yeah, the obvious one is we miss the cloud wave.”

“No one wins by playing catch up. Right? And so the asymmetry of coming at it from a different angle and being at least an order of magnitude better is something that you have to continue to keep pushing at and be the biggest skeptic. Because most people will t…”

“Don't delegate the storytelling to anyone in the company. You go do it yourself because you need one voice. And it doesn't mean that I'm the best presenter in the world. But if one person doesn't tell the end-to-end story who actually owns it, you start to fra…”

“For about a six, seven year period, we had just stopped innovating, and I just don't think it was that that productive for us, and then getting back out to innovation right now. For example, past 18 months, we've probably done more innovation than the previous…”

“One of the things that Cisco is really amazing at is it's a very compassionate culture. One of the things that Cisco is not that great at, because of the fact that it's a very compassionate culture, is we might not actually have very direct conversations somet…”

“I feel like we are probably 70% of the way there now at Cisco, where everyone originates by thinking about what's the product and how are we going to add value?”

“Like one of the best things we've done in the past five years is we've completely opened up to our competitors and like, for example, Microsoft Teams is a huge competitor for us. And we partnered with them and have them run on natively on our devices. Hundreds…”

“The thing you can count on legacy hotel brands for is service. Like if you're having an issue on the property, they will Typically go above and beyond to try to resolve it. The challenge is the actual interiors are for the most part falling apart. So they're n…”

“So we had one customer in, I think it was L'Oreal or I don't know, one of the cosmetics companies in American Express and Cisco, like different industries, and there was no way we could scale it because everybody had their own lingo, the way they thought about…”

“Cisco, you know, 2000 and we'll show it on the pod, but you know, they peaked at like a 120 PE. Right. And yeah, you know, if you look at the fall off that occurred in revenue and in EBITDA, you know, and then it had 70% compression in the priced earnings mult…”

“Cisco's revenue, a lot of it was funded through private-slash-credit investments into building out telecom infrastructure, right? When we look at NVIDIA's revenue sources, very little of it is private-slash-credit, right? And in some cases, yes, it's private-s…”

“I think if you look at the actual track record it, you know, this is probably, you know, unfortunately, a negative on, on the FTC environment, but it does seem hyper targeted at four or five companies. You know, Splunk was acquired for thirty billion dollars b…”

“It's nothing like the bubble we saw in the year, 2000. Cisco as a provider of the plumbing for the internet is the closest comparable. Cisco is trading at 200 times earnings. So I don't think we're in bubble territory in the world of technology yet. I think th…”

“Throughout the round B and C we raised money from Qualcomm and Mellanox and Nvidia and Micron and Seagate and Western Digital and Hewlett Packard and Cisco and Hitachi, and I probably forgot the bond.”

“There's a lot of AI hype, but if you look at companies like Nvidia, they're actually not that expensive on an earnings basis. Like it's not, we're not in bubble territory, you know, Cisco, 2000 timeframe.”

“Basically everything that I made from that acquisition, I just rolled it over into SpaceX.”

“And one of the things, so Cisco, which is probably the most stable, like monotonically increasing company in the industry a lot of the employees did something called exercise their option to convert them to capital gains. And when you do that, you're subject t…”

“Cisco got as expensive as I think it was a 130 forward times earnings. Right now NVIDIA is trading somewhere between 40, let's call it 40 times forward earnings.”

“Cisco, the business, compounded its earnings at something like 15% in the 15 to 20 years after the bubble burst. The stock got destroyed because it wasn't discounting 15 to 20% earnings per share growth. It ended up discounting like 40 to 50%.”

“In the case of Cisco, the earnings multiple more than tripled during that period of time. But in this case, because of the earnings growth of Nvidia, the earnings multiple has been flat despite the fact that the stock is up nearly 10 X.”

“You can't go all channel immediately. All the companies that sell predominantly through channel have a direct arm as well. Even Cisco, which I think is about 90% channel, has a direct team, and that's because you need to prove to the channel that this stuff wo…”

“So I think you can make the case that NVIDIA has a much better moat than Cisco.”

“One is that if you look at Nvidia's multiples, they're nowhere near where Cisco's were back then. So the market in 1999 and early 2000 was way more bubbly than it is now. So Nvidia's valuation is much more grounded in real revenue, real margins, real profit.”

“The Bangalore explosion didn't happen in one generation, right? Even when we were in college, I remember Texas Instruments built a major development center here, right? Cisco built a major development system. Analog Devices built a major development center in …”