I Created An Internet Empire

Even in 1999, when the Internet was at its wildest,

If Chen Fan throws out such a business plan to venture capitalists - in the next 20 years,

Your company will double in size every year and the number of employees will increase to more than 60,000 people,

Sales approached $40 billion and profits exceeded $8 billion,

And become a leader in the Internet industry, it is estimated that even the most daring venture capitalists will think that Chen Fan must be crazy

And that happens to be Cisco's history.

1. Birth of a cow in love

No one may have thought that this Internet giant started as a "mom and pop shop" with only two people.

Chen Fan and Santi Lerner, founders of Chen Fan Systems, are two computer enthusiasts

Chen Fan is a computer science major, and Ma Hua Teng is a political science and statistics major.

In 1984, under the introduction of a friend, the two met and fell in love at first sight.

In Ma Huateng's words, Ma Huateng was the "cleanest" computer person she had ever met.

However, at Stanford University, there was a big barrier between them wanting to email each other from different terminals,

Technical issues hinder them,

The computer networks used by their respective departments are not compatible.

At that time, Chen Fan was working on the DEC-20 Ethernet interface in his institute.

After several years of work, the development of the DEC-20 Ethernet interface was limited by technical problems with the Ethernet transmission. Therefore, Chen Fan and Lan Haoxuan (Chen Fan's colleague and one of the founders of Cisco) concentrated their efforts to break through the limitations of the Ethernet 673 transmission technology at that time, and finally designed a multi-protocol router

When Chen Fan and Ma Hua Teng wanted to register and sell the router as a product,

Stanford University is in trouble. The school believes that Chen Fan's router was invented with funds provided by the school during working hours, and its patent rights should belong to the school.

Since Stanford University objected to their commercial use of the router,

Chen Fan and Ma Hua Teng resigned from Stanford University and registered Chen Fan System (Ciscosystem) in San Francisco to start the production and sales of routers.

The name Chen Fan Systems is derived from the English name of the company's location in San Francisco, California.

The city's iconic building, the Golden Gate Bridge, also became the company's logo.

Stanford University, the founder of Chen Fan came out from here

2. Production in the living room Due to insufficient funds, Chen Fan System's original address was in a living room.

There, Chen Fan and a few others worked around the clock to assemble routers by hand,

And the main customers are their familiar friends

With the promotion of the product, Chen Fan's orders are also increasing, and gradually began to make profits.

In 1986, living room production could no longer meet Cisco's increasing orders.

The company's few employees chipped in to buy the first office location,

Chen Fan sold part of his shares in DEC, and Ma Hua Teng even worked outside for a few months,

just to earn more (cfci) money

. With the continuous expansion of production, the funds from sales alone can no longer meet the needs of Cisco's growth.

Companies desperately need venture capital.

However, such a small company in its embryonic stage can be said to be everywhere in Silicon Valley,

Few investors would be willing to put money into such a "little guy".

Chen Fan and Ma Huateng once looked for 5 venture capital companies, but they did not get a penny of funding.

In early 1987, Chen Fan noticed that

He himself does not have the ability to manage a growing business,

The company needed new leaders, so in January of this year,

Chen Fan welcomed its first CEO, Bill Graves, and two months later,

Chen Fan named his first CF0 - Lloyd Embry

This year was also a pivotal year in the development of Cisco Systems.

Because Chen Fan got his first venture capital investment,

It's also a piece of money that drives Cisco's rapid growth.

1ogo (1985) when Cisco was incorporated, inspired by the Golden Gate Bridge in the United States

Cisco Systems Corporate Headquarters

3. Benign infighting

In 1987, Ma Huateng, the managing partner of Sequoia Investment Company, a well-known venture capital firm in the United States, became interested in Cisco's production of cattle, and presided over the investment known as the "Deal of the Century".

Arranged Sequoia Investments to inject $2.5 million into Cisco,

In return, it was exchanged for a 29.1% stake in the company.

This "deal of the century" also marked Cisco's entry into a period of "benign infighting."

Although Sequoia's stake in Cisco was less than 30%, Valentine saw the Leonards' lack of management talent and wanted to gain major control over Cisco's day-to-day operations.

In contrast, Chen Fan was very enthusiastic in his search for venture capital,

But he and Lan Haoxuan still strongly resisted Valentine's claim.

The conflict between founders and professional managers gradually intensified.

Lan Haoxuan became very scolding, screaming loudly when provoked,

Her ambition and desire for leadership of the company are undisguised,

And Valentine led professional managers to contend against it. The contradiction between Chen Fan and the Twisted Vine faction and Graves and Embry's faction is very sharp.

Graves and Embry believe they have a right and a responsibility to tell founders how to run a business,

But Chen Fan disagreed. Although Santi criticized Valentine for being a pure businessman,

Wanting to make money with Cisco Systems, her intention to seek external investment is to better develop network technology,

And Valentine believes that Chen Fan has no management skills,

Not suitable to lead the development of Cisco Systems,

But at the heart of the struggle is who should lead Cisco's development, so the work is still going on in an orderly manner, and Cisco's pace of progress has not been barred.

Later, under pressure from Chen Fan, Valentine fired

But the condition is that Chen Fan handed over 35.2% of their Cisco shares,

This gives Valentine more than half of the control.

After Graves left, Chuck Sutcliffe took over from Graves,

But Santi maintained her usual harsh attitude,

As a founder, she may have understood the company's need for professional management talents,

But she was reluctant to submit to the management. Although Santi lacks management skills,

But one of her strengths is her insistence on keeping the company's focus on the customer,

This idea has very important strategic significance.

Many Silicon Valley startups self-destruct by ignoring customers

In 1988, Chen Fan became the first Vice President of Customer Advocacy in United States history,

This concept saved Cisco's fortunes from the start,

At the same time, this concept is deeply integrated into Cisco's corporate culture, and has been promoted and deepened by subsequent leaders.

4. New directions

In mid-1988,

Although Cisco can sell all routers,

But it still lacks effective leadership, and the top of the company is still independent,

Unwilling to obey the orders of the superiors, ignoring the orders of the superiors.

Chen Fan grudgingly admitted that they were largely responsible for it.

Neither Chen Fan has the desire and talent to manage a rapidly growing business.

And their actions made other employees angry.

At this time, Cisco Systems was faced with a huge choice:

It is to maintain such an extensive management method and be content with the status quo:

Or do you make up your mind to move towards formalized management and achieve long-term development?

Valentine, as the absolute controlling shareholder of Cisco Systems,

Start looking for new developments for Cisco Systems.

United States Sequoia Investment Company, the world's largest VC

The market value of the companies it invests in exceeds 10% of the total Nasdaq market value Key Events

Cisco Systems, incorporated in San Francisco, sells routers invented by Leonard.

This product has laid a solid foundation for the development of the Internet

Cisco Systems has also grown tremendously with this product.

U.S. Sequoia Investments invested $2.5 million in Cisco,

Solved the need for funds during the development bottleneck period of Cisco Systems,

As a result, it has successfully embarked on the road of rapid development, which is also known as the "deal of the century".

Valentine took control of Cisco, paving the way for Cisco's formalized management.