‘Dream bigger:’ That’s marching order from ex-Cisco CEO to entrepreneurs at Startup Summit

RESEARCH TRIANGLE PARK – During an economic downturn or a crisis such as the COVID pandemic, former Cisco CEO and chair John Chambers told the virtual Startup Summit, “You have to be visible. Don’t hide.”

Chambers, who led Cisco as CEO from 1995 until 2015 and remained chair until 2017, grew the company from $70 million in revenue to a $40 billion run rate by 2007. Since then he has invested in startups, coaches 18, and acts as a mentor to 100. Chambers spoke at the virtual Startup Summit moderated by CoFounders Capital’s David Gardner.

While this may be the first major crisis for most startups, Chambers said, “This is my sixth financial crisis and my third pandemic. Normally you have a problem about every five years.”

How do you handle crisis management?

“You take a look at your company,” Chambers said. You try to eliminate self-inflicted problems, how much of the crisis is market-driven, and ask what are the 3, 5, or 7 programs you’re going to run to get you through this. “You do cash preservation around your employees, around your portfolio. Cut once, deeper than you think needed, not repeatedly,” he advised.

John Chambers at the virtual Startup Summit. Photo copyright Capitol Broadcasting Co., ARR.

“Then look at the metrics that guide success in customer relationships and with employees. Most of the companies I coach have already done crisis management, Downturn 101, and now they’re doing the Silcon Valley two-step” Paint a picture of what the company will look like coming out of this, he said.

Chambers noted that many tech companies, particularly the larger ones, “Grew and eliminated competition. Technology will be the foundation of every industry going forward, so tech companies will have a major advantage.”

Chambers said what he looks for when evaluating a startup is one that addresses a market in business transition via technology, like Amazon and retail sales. He looks for founders who are “wicked smart,” and then the customers. But he warned, “You can’t be the tenth company in a category, even if you’re growing,” he added. And the going may not always be an easy ride.

“Disrupt or be disrupted,” Chambers wrote in his book, “Connect the Dots,” and repeated the advice during the Summit. Cisco, for instance, invented “telepresence” way back in 1996, but didn’t change and then Zoom came in and now has a valuation similar to Cisco’s.”

(The Summit was broadcast via Zoom.)

John Chambers speaks at the virtual Startup Summit. Photo copyright Capitol Broadcasting Co. ARR.

“IBM,” where Chambers had his first job in sales, “was the mainframe kingdom of the world” until smaller home and office computers came along.

“Every startup I know has a problem every week. The good news is I’ve usually seen ever movie and made every mistake. You’re never going to have a great company without a set-back and near-death experience.”

You handle that by turning a weakness into a strength, Chambers said. “I’m dyslexic. I couldn’t read. I used to be a terrible public speaker, and now I love it. I took a weakness and made it a strength.”

The result of all his experience, he said, is that: “I’m a customer fanatic. Everything you do should be customer-driven. I listen to customers and they tell me what to do. Base the whole company on customer satisfaction.”

Then, during a downturn, he said, “Upsell your existing customers and get new ones.”

A CEO’s job includes “Vision, Strategy, and culture,” Chambers noted. “You may not like the culture of a Microsoft or a Cisco, but they all have strong cultures.”

Chambers estimated the length of the current pandemic crisis at 3 to 5 quarters, “But it could last two years,” he warned. Wild cards include the possibility of getting a vaccine or therapeutic drugs that lessen its impact. “I think there is a 70-percent chance we’ll see a vaccine in the end of September or October time-frame. One or two show promise.”

In addition to how companies can survive and thrive in a pandemic, Chambers said, “I’m worried we’re forgetting how to dream. We need three times more startups.” So he said, “Dream bigger.”