1 00:00:04,120 --> 00:00:07,160 Speaker 1: Get in touch with technology with tech Stuff from how 2 00:00:07,200 --> 00:00:13,960 Speaker 1: stuff works dot com. Hey there, and welcome to tech Stuff. 3 00:00:14,000 --> 00:00:17,320 Speaker 1: I am your host, Jonathan Strickland. I'm an executive producer 4 00:00:17,360 --> 00:00:20,160 Speaker 1: with how Stuff Works and I love all things tech, 5 00:00:20,960 --> 00:00:24,440 Speaker 1: and today we are going to do a listener request 6 00:00:24,640 --> 00:00:27,600 Speaker 1: tech Stuff. Listener Gauge asked that I do uh an 7 00:00:27,600 --> 00:00:31,400 Speaker 1: episode or two about a big, big company in technology. 8 00:00:31,760 --> 00:00:35,440 Speaker 1: Once upon a time it was the biggest company in technology. 9 00:00:35,520 --> 00:00:39,200 Speaker 1: That would be Cisco, also known as Cisco Systems. This 10 00:00:39,360 --> 00:00:42,919 Speaker 1: is a company that many of you probably have heard about, uh, 11 00:00:43,120 --> 00:00:45,360 Speaker 1: but maybe you don't know too much about it. The 12 00:00:45,400 --> 00:00:48,960 Speaker 1: company's mission statement is pretty humble all things considered. It 13 00:00:49,120 --> 00:00:53,599 Speaker 1: is quote shape the future of the Internet by creating 14 00:00:53,760 --> 00:00:59,080 Speaker 1: unprecedented value and opportunity for our customers, employees, investors, and 15 00:00:59,280 --> 00:01:03,320 Speaker 1: ecosystem partners end quote. So, you know, just shaping the 16 00:01:03,320 --> 00:01:06,600 Speaker 1: future of the Internet. As it turns out, Cisco and 17 00:01:06,640 --> 00:01:10,880 Speaker 1: the Internet are deeply connected. The the company would not 18 00:01:11,040 --> 00:01:15,800 Speaker 1: exist without network computers. That's the whole core of what 19 00:01:15,840 --> 00:01:19,760 Speaker 1: the company was about, especially from a hardware perspective. Early on, 20 00:01:20,319 --> 00:01:25,440 Speaker 1: So Cisco Systems, particularly back when it was called Cisco Systems, 21 00:01:26,000 --> 00:01:29,560 Speaker 1: really made its fortune through creating the equipment that serves 22 00:01:29,640 --> 00:01:34,040 Speaker 1: as the infrastructure for various computer networks, including the network 23 00:01:34,080 --> 00:01:37,800 Speaker 1: of networks we call the Internet. It's mainly a business 24 00:01:37,880 --> 00:01:41,959 Speaker 1: to business corporation, meaning its customers tend to be other 25 00:01:42,080 --> 00:01:45,280 Speaker 1: big businesses. It did kind of dip its toe in 26 00:01:45,360 --> 00:01:49,040 Speaker 1: the consumer market, where it sold some products meant for 27 00:01:49,160 --> 00:01:53,559 Speaker 1: the average person such as myself, but it doesn't really 28 00:01:53,600 --> 00:01:57,160 Speaker 1: do that anymore. However, Today the company employs more than 29 00:01:57,280 --> 00:02:01,160 Speaker 1: seventy thousand people and it generates more than forty eight 30 00:02:01,280 --> 00:02:05,160 Speaker 1: billion dollars in revenue. But that's not how it all started. 31 00:02:05,480 --> 00:02:10,519 Speaker 1: Way back in and actually, Cisco Systems origin story is 32 00:02:10,600 --> 00:02:15,760 Speaker 1: one that has over time been somewhat oversimplified and romanticized. 33 00:02:16,520 --> 00:02:19,880 Speaker 1: This should come as no surprise to anyone who has 34 00:02:19,919 --> 00:02:23,920 Speaker 1: ever followed any companies in the tech sphere, really any 35 00:02:23,919 --> 00:02:27,440 Speaker 1: company at all. A lot of companies oversimplify their origins 36 00:02:27,520 --> 00:02:30,680 Speaker 1: because the truth of the matter tends to get pretty 37 00:02:30,720 --> 00:02:35,639 Speaker 1: complicated and sometimes it requires a whole lot of explanation. Now, 38 00:02:35,680 --> 00:02:39,960 Speaker 1: a lot of Silicon Valley companies have a similar mythic 39 00:02:40,080 --> 00:02:44,400 Speaker 1: origin story. Typically, you hear stories about how young engineers 40 00:02:44,520 --> 00:02:49,040 Speaker 1: turned into entrepreneurs. Sometimes they're fresh out of college. Sometimes 41 00:02:49,280 --> 00:02:52,320 Speaker 1: they drop out of school in order to pursue a 42 00:02:52,400 --> 00:02:55,720 Speaker 1: business opportunity, and they're almost always seems to be a 43 00:02:55,720 --> 00:02:59,760 Speaker 1: garage involved in some pivotal part of the early business history, 44 00:03:00,400 --> 00:03:03,600 Speaker 1: and after some vague amount of time, the company's profile 45 00:03:03,639 --> 00:03:11,200 Speaker 1: skyrockets and the entrepreneurs become gazillionaires. See also Microsoft, Apple, Google, 46 00:03:11,520 --> 00:03:16,600 Speaker 1: et cetera. Cisco Systems origin, or at least the version 47 00:03:16,840 --> 00:03:20,120 Speaker 1: of the origin story that tends to be told, is 48 00:03:20,160 --> 00:03:24,480 Speaker 1: not that far off from that particular archetype. However, instead 49 00:03:24,480 --> 00:03:29,320 Speaker 1: of students, the founders were employees of Stanford University. They 50 00:03:29,360 --> 00:03:33,360 Speaker 1: were computer scientists who are managing various computer departments at Stanford. 51 00:03:34,000 --> 00:03:36,920 Speaker 1: In fact, at the time they were a husband and 52 00:03:37,040 --> 00:03:42,480 Speaker 1: wife team. They headed up different computer labs essentially at Stanford, 53 00:03:42,920 --> 00:03:45,640 Speaker 1: and instead of a garage, they operated outside of their 54 00:03:45,880 --> 00:03:48,720 Speaker 1: or in their living room in San Jose, California. That's 55 00:03:48,760 --> 00:03:53,119 Speaker 1: where Cisco Systems got its start, was in their living room. 56 00:03:53,160 --> 00:03:57,000 Speaker 1: They named their company after the sister city of San Francisco, 57 00:03:57,240 --> 00:04:00,520 Speaker 1: so Cisco Systems. Also, if you look at the logo, 58 00:04:00,800 --> 00:04:05,000 Speaker 1: it's these the lines of vertical dashes. Uh, those vertical 59 00:04:05,080 --> 00:04:09,720 Speaker 1: dashes are an abstract of the Golden gate Bridge. Now, 60 00:04:09,760 --> 00:04:13,840 Speaker 1: the simplified story of the origin of Cisco Systems has 61 00:04:13,880 --> 00:04:18,039 Speaker 1: two protagonists. There's Sandy Lerner, she was in charge of 62 00:04:18,080 --> 00:04:21,240 Speaker 1: the computers for the Graduate School of Business at Stanford, 63 00:04:21,640 --> 00:04:25,880 Speaker 1: and there was her then husband that they've since gotten divorced, 64 00:04:26,680 --> 00:04:31,200 Speaker 1: Leonard Bozak, who oversaw the computers in the computer science department. 65 00:04:31,680 --> 00:04:35,880 Speaker 1: Now back, as the story goes, the two were frustrated 66 00:04:35,920 --> 00:04:39,080 Speaker 1: that despite working for the same university and having offices 67 00:04:39,080 --> 00:04:42,440 Speaker 1: five yards apart from each other, they could not send 68 00:04:42,640 --> 00:04:47,040 Speaker 1: emails to each other. Their respective accounts were on different 69 00:04:47,080 --> 00:04:51,400 Speaker 1: computer networks and there was no intercommunication channel between those 70 00:04:51,440 --> 00:04:54,840 Speaker 1: two networks. The Business school had its network, the computer 71 00:04:54,960 --> 00:04:58,359 Speaker 1: science division had its network, and the two were kind 72 00:04:58,360 --> 00:05:03,040 Speaker 1: of autonomous and step brit entities. Then, as the story goes, 73 00:05:03,120 --> 00:05:06,520 Speaker 1: the two decided to create a multi protocol router to 74 00:05:06,600 --> 00:05:09,880 Speaker 1: connect the two systems together and allow this couple to 75 00:05:09,920 --> 00:05:13,000 Speaker 1: communicate via email. And then they saw how useful their 76 00:05:13,000 --> 00:05:16,239 Speaker 1: technology was and decided that they should turn it into 77 00:05:16,279 --> 00:05:19,800 Speaker 1: a product, asking Stanford to do so. Stanford said that 78 00:05:19,839 --> 00:05:23,040 Speaker 1: they they the the university could not really do that. 79 00:05:23,120 --> 00:05:26,159 Speaker 1: So then they decided to launch their own company called Cisco, 80 00:05:26,240 --> 00:05:29,640 Speaker 1: and the rest is history. But again that's an oversimplification. 81 00:05:30,200 --> 00:05:33,200 Speaker 1: The reality is that a lot of different people were 82 00:05:33,240 --> 00:05:36,919 Speaker 1: working on a solution to this problem of facilitating communication 83 00:05:36,960 --> 00:05:41,440 Speaker 1: between disparate computer and networks. But before I detail that history, 84 00:05:41,600 --> 00:05:43,560 Speaker 1: I thought it might be helpful to talk about what 85 00:05:43,760 --> 00:05:48,400 Speaker 1: the heck a multi protocol router is, why are they necessary? 86 00:05:48,600 --> 00:05:51,400 Speaker 1: And that means that we need to define a few 87 00:05:51,480 --> 00:05:56,800 Speaker 1: different terms like land when, and explain the purposes of 88 00:05:56,839 --> 00:06:00,360 Speaker 1: protocols in general and what a multi protocol technology does 89 00:06:00,480 --> 00:06:05,000 Speaker 1: in particular. So first of all, let's talk about lands. 90 00:06:05,000 --> 00:06:08,400 Speaker 1: So a land L a N is a local area network. 91 00:06:08,920 --> 00:06:12,080 Speaker 1: This is a computer network that covers a limited area. 92 00:06:12,400 --> 00:06:14,880 Speaker 1: It could be a single home. You could have a 93 00:06:14,920 --> 00:06:16,760 Speaker 1: local area network set up in your home, and you 94 00:06:17,080 --> 00:06:18,880 Speaker 1: may very well have this. If you have a router 95 00:06:19,520 --> 00:06:22,520 Speaker 1: connected to a modem in your home, then you have 96 00:06:22,560 --> 00:06:25,560 Speaker 1: a local area network. It could also be an office, 97 00:06:25,720 --> 00:06:28,000 Speaker 1: it could be an office building, it could be a 98 00:06:28,080 --> 00:06:31,960 Speaker 1: university campus. So the scale of a local area network 99 00:06:32,000 --> 00:06:35,440 Speaker 1: can get quite large, but it's still confined to a 100 00:06:35,480 --> 00:06:40,400 Speaker 1: geographic region. So let's say your office has a local 101 00:06:40,440 --> 00:06:43,719 Speaker 1: area network and your office purchased all the equipment to 102 00:06:43,880 --> 00:06:48,600 Speaker 1: run and maintain this network. So while some other companies 103 00:06:48,720 --> 00:06:53,680 Speaker 1: made the actual uh the components of the infrastructure, the 104 00:06:53,720 --> 00:06:57,080 Speaker 1: infrastructure is owned by your company because they bought those 105 00:06:57,080 --> 00:07:00,560 Speaker 1: products and then installed them. So there's no connect ativity 106 00:07:00,600 --> 00:07:03,479 Speaker 1: to any other network, So you don't have a channel 107 00:07:03,520 --> 00:07:06,760 Speaker 1: out to the Internet. This is all self contained. Anyone 108 00:07:06,800 --> 00:07:10,440 Speaker 1: who connects to that network and they have privileges on 109 00:07:10,520 --> 00:07:13,560 Speaker 1: that network, they have the ability to communicate with others 110 00:07:13,800 --> 00:07:16,760 Speaker 1: on that same network, or they can store and retrieve 111 00:07:16,840 --> 00:07:19,880 Speaker 1: files on the network whatever system has been set up. 112 00:07:21,000 --> 00:07:24,440 Speaker 1: But that's the extent of the reach on that local 113 00:07:24,480 --> 00:07:28,080 Speaker 1: area network. And these technologies really begin to emerge in 114 00:07:28,120 --> 00:07:32,800 Speaker 1: the early nineteen seventies, particularly with the invention of Ethernet 115 00:07:32,960 --> 00:07:35,520 Speaker 1: out of Xerox Park. I'll talk a little bit more 116 00:07:35,560 --> 00:07:38,880 Speaker 1: about that in a in a second. A WHEN or 117 00:07:39,120 --> 00:07:42,640 Speaker 1: w a N is a wide area network. These networks 118 00:07:42,680 --> 00:07:46,040 Speaker 1: cover larger geographic regions and also tend to rely upon 119 00:07:46,120 --> 00:07:51,800 Speaker 1: telecommunications circuits that are owned by some other entity. So 120 00:07:52,120 --> 00:07:58,040 Speaker 1: there's some company that owns the actual infrastructure that a 121 00:07:58,080 --> 00:08:02,760 Speaker 1: wide area network is relying upon. Typically it doesn't have 122 00:08:02,840 --> 00:08:06,000 Speaker 1: to be that case, but that's typically what happens. So 123 00:08:06,200 --> 00:08:08,200 Speaker 1: that means there has to be some sort of agreement 124 00:08:08,480 --> 00:08:13,320 Speaker 1: between the administrators of the wide area network and the 125 00:08:13,320 --> 00:08:17,160 Speaker 1: companies that actually own the infrastructure, the actual fiber and 126 00:08:17,200 --> 00:08:21,080 Speaker 1: the switches that the network relies upon. A wide area 127 00:08:21,120 --> 00:08:25,720 Speaker 1: network might connect numerous local area networks together, which allows 128 00:08:25,760 --> 00:08:29,400 Speaker 1: for a channel of communication between those local area networks. 129 00:08:29,400 --> 00:08:32,760 Speaker 1: But that's easier said than done because back in the 130 00:08:32,880 --> 00:08:36,440 Speaker 1: early early days when everyone was trying to start creating 131 00:08:36,520 --> 00:08:39,320 Speaker 1: local area networks, there were a lot of different companies 132 00:08:39,320 --> 00:08:42,760 Speaker 1: that were developing their own proprietary approaches to creating these 133 00:08:42,840 --> 00:08:46,959 Speaker 1: local area networks, with their own proprietary hardware and software 134 00:08:47,360 --> 00:08:51,920 Speaker 1: and their own protocols. So if you like analogies, like 135 00:08:52,000 --> 00:08:54,679 Speaker 1: I do because it was an English lit major, just 136 00:08:54,760 --> 00:08:57,920 Speaker 1: imagine again that you are in a big office building, 137 00:08:58,240 --> 00:09:02,959 Speaker 1: and each floor of that office building has an office 138 00:09:03,000 --> 00:09:06,880 Speaker 1: where people speak a single language and only that language. 139 00:09:07,280 --> 00:09:10,920 Speaker 1: And let's say that the first floor is all French speakers, 140 00:09:11,280 --> 00:09:13,920 Speaker 1: the second floor is all German speakers, the third floor 141 00:09:14,000 --> 00:09:17,679 Speaker 1: is all Finnish speakers, the fourth is Swahili, and the 142 00:09:17,679 --> 00:09:20,960 Speaker 1: fifth is English. People within a single office have no 143 00:09:21,040 --> 00:09:23,800 Speaker 1: problem communicating with each other. Right, if you're one of 144 00:09:23,800 --> 00:09:26,600 Speaker 1: the people who speaks English and you're on the fifth floor, 145 00:09:26,760 --> 00:09:28,760 Speaker 1: you can speak to everyone else on the fifth floor. 146 00:09:28,960 --> 00:09:31,640 Speaker 1: They can understand you, you can understand them, because you're 147 00:09:31,640 --> 00:09:36,200 Speaker 1: all communicating within that same language. However, communication between offices 148 00:09:36,559 --> 00:09:39,960 Speaker 1: is much more challenging because the inhabitants of those different 149 00:09:40,000 --> 00:09:44,559 Speaker 1: offices speak different languages and they do not speak other ones. 150 00:09:45,200 --> 00:09:48,480 Speaker 1: This is where protocols come in. So a communications protocol 151 00:09:48,920 --> 00:09:53,120 Speaker 1: is similar to a language, but a communications protocol is 152 00:09:53,120 --> 00:09:56,120 Speaker 1: really a set of rules that computer systems have to 153 00:09:56,200 --> 00:10:00,040 Speaker 1: follow in order to send and receive data right to 154 00:10:00,120 --> 00:10:03,720 Speaker 1: send data to other computers and received data from other 155 00:10:03,800 --> 00:10:07,199 Speaker 1: computers or other devices that are connected to the network. 156 00:10:07,240 --> 00:10:10,240 Speaker 1: It's not just computer systems. It could be things like 157 00:10:10,480 --> 00:10:13,440 Speaker 1: handheld devices, or it could be printers, could be lots 158 00:10:13,440 --> 00:10:17,719 Speaker 1: of different stuff. These protocols dictate the form or syntax 159 00:10:17,920 --> 00:10:20,400 Speaker 1: that the data has to take in order for it 160 00:10:20,440 --> 00:10:23,920 Speaker 1: to transmit across this network, and there are also rules 161 00:10:23,920 --> 00:10:26,880 Speaker 1: that govern what to do in case and error occurs. 162 00:10:26,880 --> 00:10:29,360 Speaker 1: How do you recover data in that in that instance, 163 00:10:29,800 --> 00:10:32,600 Speaker 1: or how do you synchronize data between different components on 164 00:10:32,640 --> 00:10:36,240 Speaker 1: the network. And these protocols often will depend both upon 165 00:10:36,440 --> 00:10:40,760 Speaker 1: hardware and software, and because you have different companies creating 166 00:10:40,800 --> 00:10:43,760 Speaker 1: these different local area networks, it could mean you have 167 00:10:43,880 --> 00:10:48,120 Speaker 1: different incompatible protocols that are making up all these rules. So, 168 00:10:48,200 --> 00:10:51,120 Speaker 1: again going back to that office building analogy, think of 169 00:10:51,160 --> 00:10:54,680 Speaker 1: each office floor not as having people who speak different 170 00:10:54,720 --> 00:10:58,240 Speaker 1: languages on every floor, but different computer networks that are 171 00:10:58,280 --> 00:11:03,840 Speaker 1: working on a different prietary protocol in each floor. That 172 00:11:03,880 --> 00:11:08,079 Speaker 1: means that computer systems on a single floor can communicate 173 00:11:08,120 --> 00:11:10,720 Speaker 1: with each other easily because they're following the same set 174 00:11:10,720 --> 00:11:15,560 Speaker 1: of rules, but computer systems on different floors can't communicate 175 00:11:15,600 --> 00:11:18,720 Speaker 1: easily they are each following a different set of rules, 176 00:11:18,800 --> 00:11:23,800 Speaker 1: so you have this disconnect. This is where the concept 177 00:11:23,920 --> 00:11:27,920 Speaker 1: of multi protocol infrastructure comes in. In the case of Cisco, 178 00:11:28,120 --> 00:11:31,480 Speaker 1: it was a multi protocol router. Now, a router is 179 00:11:31,520 --> 00:11:35,440 Speaker 1: a device that sits between networks. It's kind of a 180 00:11:35,480 --> 00:11:39,160 Speaker 1: connecting point. Sometimes we call them gateways, although for a 181 00:11:39,160 --> 00:11:43,120 Speaker 1: while there was a differentiation between router and gateway. Today 182 00:11:43,280 --> 00:11:46,080 Speaker 1: they are largely one and the same. But these are 183 00:11:47,080 --> 00:11:50,600 Speaker 1: connecting points between one network and another network. It could 184 00:11:50,640 --> 00:11:53,000 Speaker 1: be two local area networks, so you could have a 185 00:11:53,080 --> 00:11:57,400 Speaker 1: router between those two. It could be a router between 186 00:11:57,400 --> 00:12:00,000 Speaker 1: a local area network and a wide area network, include 187 00:12:00,000 --> 00:12:03,480 Speaker 1: being a local area network and the Internet. So your 188 00:12:03,520 --> 00:12:07,080 Speaker 1: typical home router sits between a residential networks such as 189 00:12:07,120 --> 00:12:09,960 Speaker 1: one that covers one household. Let's say that it's your 190 00:12:10,000 --> 00:12:13,640 Speaker 1: personal router, and it sits between that and the Internet 191 00:12:13,679 --> 00:12:17,120 Speaker 1: at large. Routers direct traffic on the Internet, so when 192 00:12:17,160 --> 00:12:19,640 Speaker 1: data flies across the Internet, it does so in packets. 193 00:12:19,679 --> 00:12:22,160 Speaker 1: I've talked about data packets many many times. I won't 194 00:12:22,160 --> 00:12:25,000 Speaker 1: go into it here, but packets can hop from one 195 00:12:25,080 --> 00:12:28,080 Speaker 1: router to another until they arrive at their intended destination. 196 00:12:28,360 --> 00:12:30,920 Speaker 1: At different packets from the same file can travel very 197 00:12:30,960 --> 00:12:35,160 Speaker 1: different pathways to get to that destination. Multi protocol routers, 198 00:12:35,200 --> 00:12:37,960 Speaker 1: as the name suggests, are able to communicate through more 199 00:12:38,000 --> 00:12:41,839 Speaker 1: than one set of rules, so they're kind of like interpreters, right. 200 00:12:41,880 --> 00:12:44,760 Speaker 1: They can kind of interpret in one language and translate 201 00:12:44,840 --> 00:12:48,120 Speaker 1: it into another language, So they can accept data following 202 00:12:48,160 --> 00:12:50,640 Speaker 1: one set of protocols and send it in a different 203 00:12:50,720 --> 00:12:54,959 Speaker 1: set acceptable to the recipient and vice versa. So if 204 00:12:54,960 --> 00:12:57,559 Speaker 1: you have two local area networks and a multi protocol 205 00:12:57,640 --> 00:13:01,120 Speaker 1: router in between the two, it can accept data from 206 00:13:01,240 --> 00:13:04,280 Speaker 1: network number one and then translate it into a form 207 00:13:04,360 --> 00:13:09,000 Speaker 1: that network number two can facilitate. So it's an important 208 00:13:09,080 --> 00:13:13,240 Speaker 1: component if you want to have communication between networks. So 209 00:13:13,320 --> 00:13:17,120 Speaker 1: now we recognize that computer networks communicate through various protocols, 210 00:13:17,240 --> 00:13:19,760 Speaker 1: and that those protocols can be different from one another, 211 00:13:20,080 --> 00:13:24,040 Speaker 1: especially in the early days of networks, and that necessitates 212 00:13:24,120 --> 00:13:27,760 Speaker 1: some sort of component between the networks to facilitate communication. 213 00:13:28,280 --> 00:13:31,839 Speaker 1: But back in this wasn't something you could just pick 214 00:13:31,920 --> 00:13:34,800 Speaker 1: up off the shelf yet, at least not until Cisco 215 00:13:34,920 --> 00:13:37,120 Speaker 1: came into being. People had to suss out how it 216 00:13:37,160 --> 00:13:40,320 Speaker 1: would work. So the story of Cisco's origins are tied 217 00:13:40,360 --> 00:13:43,719 Speaker 1: together with that process. When we come back, we'll look 218 00:13:43,760 --> 00:13:46,520 Speaker 1: at the people and events that led to Cisco becoming 219 00:13:46,520 --> 00:13:50,480 Speaker 1: a company. But first let's take a quick break to 220 00:13:50,600 --> 00:14:01,760 Speaker 1: thank our sponsor. Before Cisco was launched in nineteen eighty four, 221 00:14:01,840 --> 00:14:04,280 Speaker 1: a few years of work went into the development of 222 00:14:04,320 --> 00:14:07,200 Speaker 1: the technology that would give the company it's real start, 223 00:14:07,800 --> 00:14:11,200 Speaker 1: and while Lerner and Bozak were involved, so were a 224 00:14:11,200 --> 00:14:15,280 Speaker 1: lot of other people. First, Stanford's connection to the Internet, 225 00:14:15,559 --> 00:14:19,240 Speaker 1: both figuratively and literally, stretches back to before there was 226 00:14:19,520 --> 00:14:23,840 Speaker 1: an internet, way back in nineteen sixty nine, Stanford was 227 00:14:23,880 --> 00:14:28,760 Speaker 1: the site of one of the four original Interface Message processors. 228 00:14:29,120 --> 00:14:31,800 Speaker 1: Those were special mini computers that were part of the 229 00:14:31,840 --> 00:14:35,520 Speaker 1: experimental ARPA Net. That was the computer network that would 230 00:14:35,560 --> 00:14:38,640 Speaker 1: serve as a stepping stone toward the development of the Internet. 231 00:14:38,680 --> 00:14:40,960 Speaker 1: A lot of the protocols that would be used on 232 00:14:40,960 --> 00:14:44,600 Speaker 1: the Internet were developed for the Arpanet first. The other 233 00:14:44,680 --> 00:14:47,880 Speaker 1: three imps. By the way, those are the the interface 234 00:14:47,920 --> 00:14:51,760 Speaker 1: message processors. The other three were at the University of California, 235 00:14:51,800 --> 00:14:55,440 Speaker 1: Los Angeles, the University of California Santa Barbara, and the 236 00:14:55,520 --> 00:14:59,600 Speaker 1: University of Utah. Back around late nineteen eighty or early 237 00:14:59,680 --> 00:15:04,000 Speaker 1: nineteen eighty one, Stanford received some Alto workstations from the 238 00:15:04,160 --> 00:15:09,000 Speaker 1: Xerox Palo Alto Research Center better known as Xerox Park. 239 00:15:09,840 --> 00:15:12,680 Speaker 1: If you listen to my episodes about Xerox, you might 240 00:15:12,720 --> 00:15:15,760 Speaker 1: remember the Alto. It was the computer system that would 241 00:15:15,760 --> 00:15:19,360 Speaker 1: inspire Steve Jobs to return to Apple and push for 242 00:15:19,400 --> 00:15:23,160 Speaker 1: the Macintosh and the Lisa systems to incorporate a graphic 243 00:15:23,280 --> 00:15:27,200 Speaker 1: user interface or gooey. It was bigger than a computer 244 00:15:27,240 --> 00:15:29,920 Speaker 1: desktop would be these days, but smaller than a lot 245 00:15:30,000 --> 00:15:33,440 Speaker 1: of other mini computer systems. Xerox only reduced a couple 246 00:15:33,480 --> 00:15:36,560 Speaker 1: of thousand of these machines. Mostly they used them internally 247 00:15:36,720 --> 00:15:40,200 Speaker 1: at Xerox, but they did distribute around five hundred of 248 00:15:40,200 --> 00:15:44,400 Speaker 1: them to various universities and research facilities, including Stanford and 249 00:15:44,440 --> 00:15:47,520 Speaker 1: The Alto was pretty cool, especially since Xerox first started 250 00:15:47,520 --> 00:15:50,480 Speaker 1: producing them in the early nineteen seventies, more than a 251 00:15:50,600 --> 00:15:54,440 Speaker 1: decade before we would see gooey based computers in the 252 00:15:54,480 --> 00:15:58,160 Speaker 1: consumer marketplace, stuff like the Macintosh and then later still 253 00:15:58,480 --> 00:16:03,040 Speaker 1: the Microsoft Windows operating system. But the technology that really 254 00:16:03,080 --> 00:16:07,560 Speaker 1: got computer scientists excited that was incorporated into the Alto 255 00:16:07,880 --> 00:16:11,880 Speaker 1: was ethernet. I mentioned it earlier while Bob Metcalf over 256 00:16:11,960 --> 00:16:16,360 Speaker 1: at Xerox, pioneered ethernet development in nineteen seventy three. Over 257 00:16:16,440 --> 00:16:19,040 Speaker 1: at Park he was working on a way to connect 258 00:16:19,080 --> 00:16:23,080 Speaker 1: auto computers to printers initially, and he developed a networking 259 00:16:23,120 --> 00:16:25,960 Speaker 1: platform and cabling system in order to do so. See, 260 00:16:26,360 --> 00:16:30,160 Speaker 1: printers were really, really expensive, so it didn't make a 261 00:16:30,160 --> 00:16:32,200 Speaker 1: whole lot of sense to get a printer for every 262 00:16:32,240 --> 00:16:35,080 Speaker 1: single computer system. It made more sense to set up 263 00:16:35,120 --> 00:16:38,680 Speaker 1: a system where multiple computers could share the printer as 264 00:16:38,720 --> 00:16:41,560 Speaker 1: an asset. After all, you're not sending jobs to the 265 00:16:41,600 --> 00:16:45,440 Speaker 1: printer all the time, so most of the time the 266 00:16:45,480 --> 00:16:47,680 Speaker 1: printer would just sit idle, which mean it wasn't a 267 00:16:47,760 --> 00:16:51,720 Speaker 1: very efficient use of technology. By allowing multiple computers to 268 00:16:51,760 --> 00:16:55,400 Speaker 1: share the single printer and meant that you have you 269 00:16:55,440 --> 00:16:58,560 Speaker 1: have boosted the efficiency of the printer. It's in operation 270 00:16:58,640 --> 00:17:02,400 Speaker 1: more frequently and it's not just sitting there. So it 271 00:17:02,520 --> 00:17:05,960 Speaker 1: was an interesting approach to this problem, not just connecting 272 00:17:05,960 --> 00:17:09,040 Speaker 1: a computer to a printer, but a way of making 273 00:17:09,040 --> 00:17:14,040 Speaker 1: a printer a more effective asset for the team at large. 274 00:17:14,240 --> 00:17:17,359 Speaker 1: So he developed the networking platform and the cabling system 275 00:17:17,400 --> 00:17:19,760 Speaker 1: in order to do this, and he designed the standards 276 00:17:19,760 --> 00:17:23,879 Speaker 1: that would guide communication across the cable. The Ethernet standard 277 00:17:24,320 --> 00:17:26,440 Speaker 1: either NEET made it easier to create a system in 278 00:17:26,520 --> 00:17:29,960 Speaker 1: which computers and other devices like printers could communicate with 279 00:17:30,000 --> 00:17:34,200 Speaker 1: each other. But how would you connect disparate networks, particularly 280 00:17:34,280 --> 00:17:38,280 Speaker 1: ones that relied on other protocols besides the Ethernet standard. 281 00:17:38,880 --> 00:17:41,720 Speaker 1: The director of Computer Facilities at Stanford at the time, 282 00:17:42,080 --> 00:17:46,080 Speaker 1: Ralph Goren, made a general request. He said, I kind 283 00:17:46,080 --> 00:17:49,560 Speaker 1: of want some form of technology that could serve as 284 00:17:49,600 --> 00:17:53,639 Speaker 1: something like a network extension cord to create networks between 285 00:17:53,640 --> 00:17:56,640 Speaker 1: computers that are more distant from one another. So while 286 00:17:56,640 --> 00:18:00,960 Speaker 1: we're pretty good at linking computers that are fairly close 287 00:18:01,000 --> 00:18:03,679 Speaker 1: to each other, I went a way to extend that 288 00:18:04,000 --> 00:18:07,399 Speaker 1: to beyond just the computers that are all within the 289 00:18:07,440 --> 00:18:10,760 Speaker 1: same room or same building. A group of Stanford computer 290 00:18:10,840 --> 00:18:15,280 Speaker 1: scientists tackled this problem, actually pretty big group, and there 291 00:18:15,280 --> 00:18:18,199 Speaker 1: were some that were contributing hardware. There were some who 292 00:18:18,240 --> 00:18:21,399 Speaker 1: were creating software for this, and they were all working 293 00:18:21,400 --> 00:18:24,240 Speaker 1: to try and make a thing possible. One of those 294 00:18:24,280 --> 00:18:28,399 Speaker 1: people was Andy Bechtelsheim, who would later go on to 295 00:18:28,480 --> 00:18:33,840 Speaker 1: found a little company called Sun micro Systems, and he 296 00:18:33,960 --> 00:18:37,760 Speaker 1: developed the computer board that would sit inside this router. 297 00:18:38,320 --> 00:18:42,480 Speaker 1: William Yeager, who was a research engineer, wrote the software 298 00:18:42,560 --> 00:18:46,120 Speaker 1: for the multi protocol router. He had previously found success 299 00:18:46,160 --> 00:18:49,680 Speaker 1: in networking machines between the medical center computers and the 300 00:18:49,720 --> 00:18:53,359 Speaker 1: computer science department, so this was sort of taking that 301 00:18:54,040 --> 00:18:57,359 Speaker 1: approach and then making it more flexible to allow for 302 00:18:57,520 --> 00:19:01,000 Speaker 1: even more types of local area works to communicate with 303 00:19:01,040 --> 00:19:04,600 Speaker 1: one another. Now. I didn't find a full list of 304 00:19:04,720 --> 00:19:07,679 Speaker 1: all the people who contributed to working on this multi 305 00:19:07,680 --> 00:19:11,000 Speaker 1: protocol router. I suspect more than a dozen people made 306 00:19:11,080 --> 00:19:14,480 Speaker 1: some sort of contribution throughout the whole process, because this 307 00:19:14,600 --> 00:19:16,919 Speaker 1: was not something that was, you know, a couple of 308 00:19:16,960 --> 00:19:20,040 Speaker 1: weeks in the works. This was a project that lasted 309 00:19:20,160 --> 00:19:22,600 Speaker 1: quite some time as people began to develop hardware and 310 00:19:22,680 --> 00:19:25,920 Speaker 1: software for it, tested out, tweak it, make changes, make 311 00:19:25,920 --> 00:19:29,960 Speaker 1: another addition, and it was definitely a collaborative effort. The 312 00:19:30,000 --> 00:19:34,120 Speaker 1: result was what the computer scientists called the blue box. 313 00:19:34,840 --> 00:19:37,359 Speaker 1: The blue box, it's because the device was inside a 314 00:19:37,359 --> 00:19:40,679 Speaker 1: blue case. Goren would later say that while he asked 315 00:19:40,680 --> 00:19:43,480 Speaker 1: for an extension cord, what he actually got was more 316 00:19:43,600 --> 00:19:46,600 Speaker 1: like a power outlet strip. It was much more versatile 317 00:19:46,720 --> 00:19:49,679 Speaker 1: than a simple long distance connection between two different lands. 318 00:19:49,960 --> 00:19:52,600 Speaker 1: It was a device that could allow for communication across 319 00:19:52,800 --> 00:19:58,040 Speaker 1: lots of different networks and Yeager software, while being fairly unsophisticated. 320 00:19:58,080 --> 00:20:01,760 Speaker 1: According to one Stay and Ford employee who would later 321 00:20:01,800 --> 00:20:06,119 Speaker 1: go on to work for Cisco, it was incredibly adaptable, 322 00:20:06,320 --> 00:20:11,639 Speaker 1: so maybe not terribly you know, seamless or sophisticated, but 323 00:20:12,040 --> 00:20:15,880 Speaker 1: easy to tweak so that you could incorporate different protocols. 324 00:20:16,560 --> 00:20:21,280 Speaker 1: Bozak and a learner founded Cisco Systems in December four 325 00:20:21,320 --> 00:20:24,160 Speaker 1: with the intent to market these routers for the burgeoning 326 00:20:24,200 --> 00:20:28,560 Speaker 1: network industry, as well as networking cards for computers. They 327 00:20:28,560 --> 00:20:32,439 Speaker 1: didn't get started right away. Stanford officials decided in nineteen 328 00:20:33,040 --> 00:20:36,880 Speaker 1: to undertake a comprehensive networking project to connect the various 329 00:20:36,960 --> 00:20:40,520 Speaker 1: networks across campus together, and as part of that initiative, 330 00:20:40,760 --> 00:20:43,800 Speaker 1: the officials wanted the project to rely solely upon the 331 00:20:43,840 --> 00:20:47,119 Speaker 1: Internet Protocol as a communications protocol. So, in other words, 332 00:20:47,440 --> 00:20:52,159 Speaker 1: simplify matters by settling on one standard for protocols and 333 00:20:52,240 --> 00:20:56,080 Speaker 1: not allow anything else. This is it turns out, is foreshadowing, 334 00:20:56,160 --> 00:21:00,000 Speaker 1: but we'll get to that later. Bozak and an engineer 335 00:21:00,080 --> 00:21:03,080 Speaker 1: named Kirk low Feed approached Yeager and asked him for 336 00:21:03,200 --> 00:21:06,440 Speaker 1: his software. They said, can we get your software for 337 00:21:06,840 --> 00:21:10,560 Speaker 1: multi protocol routers and they planned on modifying that for 338 00:21:10,600 --> 00:21:16,160 Speaker 1: the new Stanford project whether solely Internet protocol as the 339 00:21:16,160 --> 00:21:19,800 Speaker 1: communications protocol in question. So Yeager agreed, He handed over 340 00:21:19,800 --> 00:21:23,359 Speaker 1: his software, and Bozak and lo Feed made changes to 341 00:21:23,400 --> 00:21:25,640 Speaker 1: that software. They stripped it of its ability to route 342 00:21:25,640 --> 00:21:28,000 Speaker 1: other communication protocols because that was not part of the 343 00:21:28,000 --> 00:21:32,160 Speaker 1: Stanford project, and they enhanced the Internet capabilities of the device, 344 00:21:32,560 --> 00:21:34,960 Speaker 1: And in other words, they did make substantive changes to 345 00:21:34,960 --> 00:21:38,400 Speaker 1: the technology as part of the Stanford project. But apparently, 346 00:21:38,440 --> 00:21:41,960 Speaker 1: according to Yeager, they did not reveal that they had 347 00:21:42,000 --> 00:21:45,160 Speaker 1: also gone through the process of incorporating a new company 348 00:21:45,200 --> 00:21:48,960 Speaker 1: and that Bozak had an outstanding request to Stanford to 349 00:21:49,040 --> 00:21:52,080 Speaker 1: allow this new company to sell a version of this 350 00:21:52,200 --> 00:21:56,920 Speaker 1: blue box router. Stanford is a non profit university, and 351 00:21:56,960 --> 00:22:00,000 Speaker 1: as such they could not legally enter into the manufact 352 00:22:00,080 --> 00:22:04,960 Speaker 1: during business, but the router had undeniable utility. However, the 353 00:22:05,080 --> 00:22:08,040 Speaker 1: university did not see eye to eye with Bozak and Learner, 354 00:22:08,080 --> 00:22:11,760 Speaker 1: and they said no way san Jose. But that didn't 355 00:22:11,760 --> 00:22:15,240 Speaker 1: stop Bozak and Learner from building routers and network cards 356 00:22:15,280 --> 00:22:17,920 Speaker 1: out of their home in San Jose and selling them 357 00:22:17,960 --> 00:22:22,880 Speaker 1: by late night or by some accounts, early What's more, 358 00:22:23,400 --> 00:22:26,040 Speaker 1: other members of the staff of Stanford got all head 359 00:22:26,119 --> 00:22:29,679 Speaker 1: up because of the couple and some of the stuff 360 00:22:29,720 --> 00:22:32,639 Speaker 1: they were doing. First, it seemed pretty clear that at 361 00:22:32,680 --> 00:22:36,560 Speaker 1: least some of the development for Cisco's router product happened 362 00:22:36,600 --> 00:22:40,359 Speaker 1: on Stanford's time when Bozak and law Feed and Learner 363 00:22:40,400 --> 00:22:43,480 Speaker 1: were supposed to be working for the university. The Learner, 364 00:22:43,520 --> 00:22:46,760 Speaker 1: by the way, would leave Stanford first before anyone else 365 00:22:46,800 --> 00:22:50,520 Speaker 1: would second, and more to the point the Cisco router 366 00:22:50,720 --> 00:22:54,119 Speaker 1: appeared to contain work that came from other members of 367 00:22:54,119 --> 00:22:59,040 Speaker 1: Stanford's computer science community, as did the network cards. Nick Vezad, 368 00:22:59,440 --> 00:23:01,840 Speaker 1: who worked with Yeager, claimed that there was no real 369 00:23:01,960 --> 00:23:05,280 Speaker 1: difference between the router Cisco sold and the ones that 370 00:23:05,359 --> 00:23:09,480 Speaker 1: Stanford was using on their own systems, and that there 371 00:23:09,560 --> 00:23:13,680 Speaker 1: might have been some theft if you're if you're being 372 00:23:13,800 --> 00:23:17,400 Speaker 1: really you know, stickler for it. There were those who 373 00:23:17,600 --> 00:23:22,080 Speaker 1: essentially were accusing Bozak and Learner of stealing intellectual property 374 00:23:22,119 --> 00:23:25,280 Speaker 1: that belonged to other people without compensating them for it. 375 00:23:25,840 --> 00:23:29,399 Speaker 1: Bozak and Learner said that they had taken the technologies 376 00:23:29,440 --> 00:23:32,960 Speaker 1: and they had made substantial changes to them, and also 377 00:23:33,119 --> 00:23:37,840 Speaker 1: Stanford was not going to sell them. Stanford wasn't going 378 00:23:37,840 --> 00:23:40,040 Speaker 1: to get into the manufacturing business. It couldn't as a 379 00:23:40,040 --> 00:23:45,600 Speaker 1: nonprofit utility or university, I should say, so they did 380 00:23:45,640 --> 00:23:47,680 Speaker 1: what they had to do in order to actually make 381 00:23:47,680 --> 00:23:51,000 Speaker 1: it a working product. Meanwhile, Bozak was still working for 382 00:23:51,040 --> 00:23:54,760 Speaker 1: Stanford at that time. By early he was given the 383 00:23:54,840 --> 00:23:58,280 Speaker 1: choice to either work for Stanford or just work for Cisco, 384 00:23:58,440 --> 00:24:00,399 Speaker 1: but he could not do both of the same time, 385 00:24:01,200 --> 00:24:04,240 Speaker 1: and he was also accused of operating Cisco during his 386 00:24:04,280 --> 00:24:07,320 Speaker 1: hours of working at Stanford, and therefore Cisco's routers were 387 00:24:07,359 --> 00:24:11,840 Speaker 1: being made at the university's expense. So this was a 388 00:24:11,840 --> 00:24:16,879 Speaker 1: pretty tough accusation, and on July eleven, Len Bozak and 389 00:24:16,960 --> 00:24:20,320 Speaker 1: Kirklawfeed both resigned from Stanford. Learner, as I had said, 390 00:24:20,480 --> 00:24:23,800 Speaker 1: had already left the university at that point. Cisco also 391 00:24:23,920 --> 00:24:28,439 Speaker 1: hired on two other Stanford employees, Greg Satz, who joined 392 00:24:28,520 --> 00:24:33,360 Speaker 1: Cisco as a programmer, and Richard Troyano, who would oversee sales. 393 00:24:33,640 --> 00:24:39,600 Speaker 1: So this group of former Stanford employees start Cisco Systems. Now. Eventually, 394 00:24:39,640 --> 00:24:42,560 Speaker 1: Stanford and Cisco would come to a settlement agreement to 395 00:24:42,600 --> 00:24:46,960 Speaker 1: resolve the problem that Stanford technology was incorporated into Cisco's router. 396 00:24:47,480 --> 00:24:50,600 Speaker 1: The university chose the settlement as the best option out 397 00:24:50,600 --> 00:24:54,199 Speaker 1: of a bunch of not totally awesome choices. So the 398 00:24:54,240 --> 00:24:56,919 Speaker 1: other choices they essentially had was they could pursue a 399 00:24:56,960 --> 00:25:00,399 Speaker 1: court case, which ultimately might have stopped sis sco, but 400 00:25:00,440 --> 00:25:03,679 Speaker 1: it wouldn't accomplish much else, or or they could have 401 00:25:03,720 --> 00:25:06,240 Speaker 1: done nothing at all and just allowed Cisco to operate 402 00:25:06,400 --> 00:25:10,760 Speaker 1: and not even objected. The settlement saw Cisco pay Stanford 403 00:25:10,760 --> 00:25:14,200 Speaker 1: about twenty thousand dollars in cash, with another hundred fifty 404 00:25:14,280 --> 00:25:18,359 Speaker 1: thousand dollars promised in royalty fees from Cisco sales, and 405 00:25:18,480 --> 00:25:21,840 Speaker 1: also in agreement to sell routers to Stanford a discounted 406 00:25:21,920 --> 00:25:28,280 Speaker 1: rate and to provide essentially free I T support less Earnest, 407 00:25:28,320 --> 00:25:31,800 Speaker 1: who was Bozak's former supervisor, alleged that Bozak had also 408 00:25:31,920 --> 00:25:35,439 Speaker 1: done business with Xerox using some of Stanford's technology in 409 00:25:35,520 --> 00:25:39,000 Speaker 1: networking boards. That charge also didn't go so far as 410 00:25:39,000 --> 00:25:41,880 Speaker 1: a court case. Cisco would settle out of court for 411 00:25:41,960 --> 00:25:46,040 Speaker 1: a seven thousand dollar cash settlement and two routers. Those 412 00:25:46,160 --> 00:25:50,600 Speaker 1: routers each cost about four thousand dollars, So Cisco's origins 413 00:25:50,640 --> 00:25:53,280 Speaker 1: were somewhat troubled. Now, when we come back, we'll take 414 00:25:53,280 --> 00:25:55,280 Speaker 1: a closer look at the co founders and then talk 415 00:25:55,320 --> 00:25:57,479 Speaker 1: a little bit more about what the company did in 416 00:25:57,520 --> 00:26:01,119 Speaker 1: its early years. But first, let's take another quick break 417 00:26:01,359 --> 00:26:11,880 Speaker 1: to thank our sponsors. Al Right, Well, here's a closer 418 00:26:11,920 --> 00:26:15,639 Speaker 1: look at the co founders of Cisco Systems. Leonard Bozak 419 00:26:15,760 --> 00:26:19,280 Speaker 1: was born in nineteen fifty two in Pennsylvania and graduated 420 00:26:19,280 --> 00:26:22,679 Speaker 1: from the University of Pennsylvania in nineteen seventy three, he 421 00:26:22,760 --> 00:26:27,000 Speaker 1: became a hardware engineer at Digital Equipment Corporation, better known 422 00:26:27,040 --> 00:26:29,480 Speaker 1: as d e C. D e C would later be 423 00:26:29,560 --> 00:26:32,240 Speaker 1: acquired by Comback in nineteen ninety eight. By the way, 424 00:26:32,800 --> 00:26:36,600 Speaker 1: in the late nineteen seventies, Bozak was accepted into Stanford 425 00:26:36,680 --> 00:26:40,359 Speaker 1: University and studied computer science. He met Sandy Lerner sometime 426 00:26:40,400 --> 00:26:44,360 Speaker 1: around nineteen seventy seven while both were pursuing postgraduate studies 427 00:26:44,720 --> 00:26:47,320 Speaker 1: and both of them were working on the mini computers 428 00:26:47,440 --> 00:26:50,800 Speaker 1: in Stanford's labs, and he became a staff engineer at 429 00:26:50,840 --> 00:26:57,160 Speaker 1: Stanford around nineteen eighty one. Sandy Lerner grew up in California. 430 00:26:57,240 --> 00:26:59,359 Speaker 1: She was born in nineteen fifty five, and she was 431 00:26:59,400 --> 00:27:03,040 Speaker 1: mostly raised by two of her aunts. Her parents divorced 432 00:27:03,080 --> 00:27:04,960 Speaker 1: when she was four years old, and she ended up 433 00:27:05,000 --> 00:27:07,000 Speaker 1: living with her aunts mostly when she was growing up. 434 00:27:07,160 --> 00:27:09,720 Speaker 1: She grew up partly on a cattle ranch and even 435 00:27:09,760 --> 00:27:13,000 Speaker 1: started making money raising and selling cattle. She bought her 436 00:27:13,000 --> 00:27:16,320 Speaker 1: first steer when she was just nine years old, and 437 00:27:16,400 --> 00:27:18,480 Speaker 1: she sold it for a profit when she was eleven. 438 00:27:18,960 --> 00:27:21,200 Speaker 1: In fact, her cattle business would end up funding her 439 00:27:21,240 --> 00:27:25,320 Speaker 1: college tuition. She got an undergraduate degree in political science 440 00:27:25,320 --> 00:27:29,240 Speaker 1: at California State University. Then she pursued a master's degree 441 00:27:29,359 --> 00:27:33,800 Speaker 1: in econometrics at Claremont College. She joined Stanford's program for 442 00:27:33,840 --> 00:27:36,760 Speaker 1: Statistics and Computer Science, and that's where she met Bozak, 443 00:27:36,840 --> 00:27:40,520 Speaker 1: and the two were married in nineteen eighty. They found 444 00:27:40,520 --> 00:27:43,959 Speaker 1: success very early on in their business venture once they 445 00:27:44,040 --> 00:27:47,240 Speaker 1: left Stanford and focused on Cisco. Within the first month 446 00:27:47,280 --> 00:27:49,840 Speaker 1: of operating, they had landed more than two hundred thousand 447 00:27:49,880 --> 00:27:53,320 Speaker 1: dollars worth of contracts. Now, I should say that's a 448 00:27:53,320 --> 00:27:56,800 Speaker 1: contract for two hundred thousand dollars or contracts worth two 449 00:27:56,880 --> 00:27:59,360 Speaker 1: hundred thousand dollars. That didn't mean that they earned two 450 00:27:59,400 --> 00:28:01,760 Speaker 1: hundred dollars in the first month. They still had to 451 00:28:01,800 --> 00:28:05,960 Speaker 1: deliver upon the promise of that contract in order to 452 00:28:06,000 --> 00:28:09,520 Speaker 1: get that payment. Learner would later tell Forbes that quote 453 00:28:09,560 --> 00:28:12,520 Speaker 1: we suspected that Procter and Gamble in Des Moines was 454 00:28:12,560 --> 00:28:14,359 Speaker 1: going to want to talk to Proctor and Gamble in 455 00:28:14,400 --> 00:28:17,640 Speaker 1: San Francisco end quote, meaning she could see a business 456 00:28:17,640 --> 00:28:21,399 Speaker 1: case for the networking products right away. She said, these 457 00:28:21,520 --> 00:28:24,640 Speaker 1: are going to be components that every large business and 458 00:28:24,760 --> 00:28:29,200 Speaker 1: ultimately middle sized businesses and maybe even small businesses down 459 00:28:29,240 --> 00:28:33,159 Speaker 1: the road. Will all need, but that would require the 460 00:28:33,200 --> 00:28:35,919 Speaker 1: business to scale up. They couldn't just work out of 461 00:28:36,000 --> 00:28:37,680 Speaker 1: their living room. They were never going to be able 462 00:28:37,720 --> 00:28:41,000 Speaker 1: to meet the demand and they would always be behind 463 00:28:41,320 --> 00:28:44,080 Speaker 1: if they didn't scale up. That would require more capital 464 00:28:44,120 --> 00:28:47,320 Speaker 1: than what they had at their disposal. Bozak and Learner 465 00:28:47,360 --> 00:28:49,760 Speaker 1: had already maxed out their credit cards. They also took 466 00:28:49,760 --> 00:28:52,360 Speaker 1: out another mortgage on their home, and they did this 467 00:28:52,440 --> 00:28:54,440 Speaker 1: all to keep the business afloat while they tried to 468 00:28:54,480 --> 00:28:58,080 Speaker 1: deliver upon those contracts. Learner had also taken a job 469 00:28:58,120 --> 00:29:02,400 Speaker 1: as a manager for the Research Computing Systems group over 470 00:29:02,480 --> 00:29:06,840 Speaker 1: at Schlumburger Computer Aided Systems Laboratory, and it was clearly 471 00:29:06,960 --> 00:29:08,960 Speaker 1: just not going to be enough. They started to look 472 00:29:09,000 --> 00:29:13,320 Speaker 1: around for investors. Originally it didn't go so well. Bozak 473 00:29:13,360 --> 00:29:16,000 Speaker 1: would later say, quote, we must have talked to eighty 474 00:29:16,160 --> 00:29:19,239 Speaker 1: or ninety different venture firms. We got turned down by 475 00:29:19,280 --> 00:29:23,120 Speaker 1: just about every one end quote. In January, the co 476 00:29:23,200 --> 00:29:26,920 Speaker 1: founders decided to hire on William Graves as president and 477 00:29:27,000 --> 00:29:31,240 Speaker 1: chief executive officer. Graves it previously were for Bell Aerospace 478 00:29:31,320 --> 00:29:36,040 Speaker 1: Textron where his job was I don't know, it says 479 00:29:36,080 --> 00:29:42,480 Speaker 1: classified on LinkedIn. I don't have classification. Back in six 480 00:29:42,840 --> 00:29:45,720 Speaker 1: Cisco's revenue was a hundred twenty nine thousand dollars, which 481 00:29:45,760 --> 00:29:49,080 Speaker 1: sounds not bad. Nine thousand dollars now, that's revenue for 482 00:29:49,120 --> 00:29:53,440 Speaker 1: the whole company, and the two were able to well, 483 00:29:53,520 --> 00:29:56,560 Speaker 1: really more than two. The five virginal employees were able 484 00:29:56,560 --> 00:29:58,520 Speaker 1: to land contracts that were worth more than a hundred 485 00:29:58,560 --> 00:30:02,200 Speaker 1: twenty nine dollars, but delivering upon those contracts was a challenge, 486 00:30:02,680 --> 00:30:05,800 Speaker 1: and once you took the expenses for the company into account, 487 00:30:06,200 --> 00:30:09,080 Speaker 1: they were essentially kind of breaking even, and the following 488 00:30:09,200 --> 00:30:12,280 Speaker 1: year saw some improvement. By the end of Cisco's fiscal 489 00:30:12,360 --> 00:30:15,280 Speaker 1: year in nineteen eighty seven, by the way Cisco's fiscal 490 00:30:15,400 --> 00:30:19,720 Speaker 1: years end in July, Cisco would achieve revenues of one 491 00:30:19,840 --> 00:30:22,640 Speaker 1: and a half million dollars with a ten percent net 492 00:30:22,680 --> 00:30:25,240 Speaker 1: income before taxes, which meant the company was able to 493 00:30:25,280 --> 00:30:28,360 Speaker 1: make enough money to stay afloat while looking for an investor. 494 00:30:28,400 --> 00:30:32,000 Speaker 1: They didn't have to take out even more loans. Sequoia 495 00:30:32,120 --> 00:30:36,520 Speaker 1: Capital and Investment Firm eventually stepped up to invest in 496 00:30:36,560 --> 00:30:39,760 Speaker 1: the company, but Donald Valentine, who was the backer at Sequoia, 497 00:30:40,280 --> 00:30:42,880 Speaker 1: he was ready to invest in late nineteen eight seven, 498 00:30:42,880 --> 00:30:45,800 Speaker 1: but felt that Larner and Bozak lacked the experience to 499 00:30:45,800 --> 00:30:48,960 Speaker 1: grow a company and lead it effectively, and apparently he 500 00:30:49,160 --> 00:30:52,840 Speaker 1: felt that Graves just didn't cut it either, so he 501 00:30:52,920 --> 00:30:57,240 Speaker 1: insisted in n on installing a new chief executive officer 502 00:30:57,320 --> 00:31:00,160 Speaker 1: to take the reins and lead the company. After ast 503 00:31:00,200 --> 00:31:04,920 Speaker 1: installing an interim president. Valentine ultimately chose John Mortgaridge in 504 00:31:05,040 --> 00:31:09,160 Speaker 1: October nine. Sequoia would also get a thirty two percent 505 00:31:09,240 --> 00:31:13,040 Speaker 1: ownership of the company, and in return, Cisco would get 506 00:31:13,080 --> 00:31:16,360 Speaker 1: two and a half million dollars in investment capital. Bozak 507 00:31:16,440 --> 00:31:19,680 Speaker 1: and Learner would retain thirty percent ownership of the company, 508 00:31:19,840 --> 00:31:23,800 Speaker 1: which would vest over the course of four years. Mortgridge 509 00:31:23,880 --> 00:31:27,640 Speaker 1: was an NBA graduate from Stanford, but he graduated in 510 00:31:27,720 --> 00:31:31,560 Speaker 1: nineteen fifty seven, so he preceded Bozak and Learner's time 511 00:31:31,560 --> 00:31:33,520 Speaker 1: at Stanford by a couple of decades. They did not 512 00:31:33,600 --> 00:31:37,200 Speaker 1: cross over. He had worked for Honeywell Information Systems and 513 00:31:37,240 --> 00:31:39,800 Speaker 1: then later on he was the chief operating officer of 514 00:31:39,800 --> 00:31:43,160 Speaker 1: a company called Grid Systems. According to Learner, the first 515 00:31:43,160 --> 00:31:45,840 Speaker 1: time she met Mortgadge, he had already been hired on 516 00:31:45,960 --> 00:31:49,520 Speaker 1: to be CEO of Cisco. So there was a little 517 00:31:49,560 --> 00:31:54,440 Speaker 1: bit of acrimony between the co founders and John Mortgadge 518 00:31:54,480 --> 00:31:58,320 Speaker 1: because they didn't really have any say and who was 519 00:31:58,360 --> 00:32:01,720 Speaker 1: going to lead the company they had founded. But if 520 00:32:01,760 --> 00:32:03,720 Speaker 1: they didn't go along with this, they wouldn't get the 521 00:32:03,720 --> 00:32:06,160 Speaker 1: investment money they would need in order to scale up. 522 00:32:06,920 --> 00:32:09,480 Speaker 1: At the end of the fiscal year Night, which was 523 00:32:09,600 --> 00:32:12,600 Speaker 1: just a few months before Mortgage was officially installed as 524 00:32:12,640 --> 00:32:16,160 Speaker 1: president and CEO, Cisco was on the upswing with five 525 00:32:16,160 --> 00:32:19,240 Speaker 1: and a half million dollars in sales. Mortgage would take 526 00:32:19,240 --> 00:32:22,080 Speaker 1: the company even higher, and Valentine would end up becoming 527 00:32:22,080 --> 00:32:25,600 Speaker 1: the chairman of the board of directors. This, however, did 528 00:32:25,640 --> 00:32:28,400 Speaker 1: not mean everything was going smoothly at Cisco. So while 529 00:32:28,480 --> 00:32:32,040 Speaker 1: Cisco continued to create network infrastructure hardware for clients, the 530 00:32:32,120 --> 00:32:35,720 Speaker 1: co founders were clashing with their new management. In February, 531 00:32:36,600 --> 00:32:39,400 Speaker 1: Cisco held its initial public offering or i p O. 532 00:32:39,640 --> 00:32:41,640 Speaker 1: This is when a company goes from being a privately 533 00:32:41,640 --> 00:32:46,040 Speaker 1: held company to a publicly traded company. According to invest Opdia, 534 00:32:46,320 --> 00:32:49,479 Speaker 1: a one thousand dollar investment would have netted you fifty 535 00:32:49,520 --> 00:32:53,440 Speaker 1: five point five five shares of Cisco stock, which by 536 00:32:53,560 --> 00:32:56,120 Speaker 1: my math means the stock price must have been somewhere 537 00:32:56,120 --> 00:32:58,840 Speaker 1: around eighteen dollars per share. By the end of the 538 00:32:58,880 --> 00:33:01,600 Speaker 1: first day of trading, the share price had risen twenty 539 00:33:01,640 --> 00:33:05,600 Speaker 1: four percent and the company's valuation was was estimated to 540 00:33:05,640 --> 00:33:10,040 Speaker 1: be two twenty four million dollars. The company found much 541 00:33:10,040 --> 00:33:13,320 Speaker 1: of his success early on in overseas markets. It was 542 00:33:13,320 --> 00:33:17,160 Speaker 1: selling network infrastructure hardware to tons of clients. Things were 543 00:33:17,160 --> 00:33:20,560 Speaker 1: going great, except that the co founders were still not 544 00:33:20,680 --> 00:33:23,040 Speaker 1: really happy with the way the company was being led. 545 00:33:23,400 --> 00:33:28,880 Speaker 1: In August, Sandy Lerner, co founder of Cisco, was fired 546 00:33:29,000 --> 00:33:32,160 Speaker 1: from her job, and in a show of solidarity, Lynn 547 00:33:32,160 --> 00:33:35,160 Speaker 1: Bozak resigned from the company as well. The co founders 548 00:33:35,440 --> 00:33:38,160 Speaker 1: had left, and they sold off their shares in the 549 00:33:38,200 --> 00:33:44,240 Speaker 1: company for around a hundred seventy million dollars. Their marriage, unfortunately, 550 00:33:44,320 --> 00:33:47,080 Speaker 1: had taken some hard bumps along the way. They had 551 00:33:47,080 --> 00:33:49,360 Speaker 1: been working endlessly on the company, and they found that 552 00:33:49,400 --> 00:33:52,280 Speaker 1: they were no longer really working well as a married couple, 553 00:33:52,600 --> 00:33:54,960 Speaker 1: and so in the ninet nineties the two would divorce. 554 00:33:55,520 --> 00:33:58,960 Speaker 1: Sandy Lerner would go on to fund several other ventures, 555 00:33:59,120 --> 00:34:03,080 Speaker 1: including the Urban Decay cosmetics line that was her project. 556 00:34:03,280 --> 00:34:07,160 Speaker 1: She also headed some philanthropic efforts. Bozac would go on 557 00:34:07,280 --> 00:34:10,600 Speaker 1: to found a company technology company called x k l 558 00:34:10,960 --> 00:34:14,960 Speaker 1: l C. In Now. In the next episode, I'm going 559 00:34:15,040 --> 00:34:17,880 Speaker 1: to cover more of Cisco's history, how it grew to 560 00:34:17,960 --> 00:34:20,600 Speaker 1: be the most valuable company in the world, and how 561 00:34:20,640 --> 00:34:23,520 Speaker 1: it lost more than three quarters of that value as 562 00:34:23,560 --> 00:34:26,640 Speaker 1: a result of the dot com bubble burst, and then 563 00:34:26,719 --> 00:34:29,960 Speaker 1: how it was able to recover after the wake of 564 00:34:30,000 --> 00:34:33,080 Speaker 1: the bubble bursting. That will be in the next episode. 565 00:34:33,120 --> 00:34:35,960 Speaker 1: If you guys have any suggestions for future episodes of 566 00:34:35,960 --> 00:34:39,000 Speaker 1: tech Stuff, like Gauge did, send me an email. The 567 00:34:39,040 --> 00:34:42,080 Speaker 1: address is tech Stuff at how stuff Works dot com, 568 00:34:42,200 --> 00:34:43,960 Speaker 1: or you can drop me a line on Facebook or 569 00:34:43,960 --> 00:34:46,360 Speaker 1: Twitter to hand over both of those is tech Stuff 570 00:34:46,520 --> 00:34:49,640 Speaker 1: H s W. Don't forget. You can follow us on 571 00:34:49,719 --> 00:34:53,600 Speaker 1: Instagram and I will talk to you again really soon 572 00:34:59,520 --> 00:35:01,960 Speaker 1: for more on this and thousands of other topics because 573 00:35:02,000 --> 00:35:12,800 Speaker 1: at how stuff Works dot com. M