A Conversation with John Chambers, Former Chairman & CEO of Cisco & CEO of JC2 Ventures.

A Conversation with John Chambers, Former Chairman & CEO of Cisco & CEO of JC2 Ventures.

John Chambers is an extraordinary leader. During his 25 years at Cisco, he took the business profitably from $1 billion, to over $49 billion in annual revenues. Not only is this one if the internet-era’s greatest success stories, but one which built much of the infrastructure of the modern internet.

Today John Chambers is the founder and CEO of JC2 Ventures. Chambers focuses on helping disruptive start-ups from around the world build and scale, while also promoting the broader development of start-up nations and a start-up world. He invests in companies across categories and geographies that are leading market transitions, such as ASAPP, Aspire Food Group, Balbix, Bloom Energy, Cloudleaf, Denim, Lilac, OpenGov, ParkourSC, Pensando, Pindrop, Privoro, Quantum Metric, Rubrik, SAFE Security, SparkCognition, Sprinklr, Uniphore, and Virsec. Prior to founding JC2 Ventures in 2018, Chambers spent 25+ years with Cisco, serving as CEO, Chairman and Executive Chairman. He currently holds the title of Chairman Emeritus with the organization. With countless lessons learned during his tenure at Cisco and working with startups, Chambers wrote Connecting the Dots: Lessons for Leadership in a Startup World in 2018, sharing his management, leadership, and business principles.

Chambers is also the Chairman of the US-India Strategic Partnership Forum (USISPF) and Global Ambassador of the French Tech, as appointed by President Emmanuel Macron of France.

In this interview I speak to John Chambers, Former Chairman & CEO of Cisco & CEO of JC2 Ventures. John shares his learnings on leading one of the internet-era’s greatest growth journeys, how to spot market transitions and opportunities, his reflections on leading hundreds of acquisitions & investments, and what it takes to lead a scaling, global business.

Q: How did you develop a skill for spotting transitions and opportunities?

[John Chambers]: Growing up in West Virginia, we were at the forefront economically— the chemical and coal mining center of the world. However, due to an inability to adapt to changing market dynamics and transitions, our position plummeted to the bottom ranks among the US states. That’s a story I’ll touch upon later, perhaps during this interview or at another time.

I firmly believe that education levels the playing field in life. My passion for learning kept me in college for almost a decade, during which I acquired a slew of degrees. Following my academic journey, I joined IBM. It was an eye-opening experience to witness a tech giant like IBM lose its prime position because they clung to their mainframe product line for too long. Their former glory from 30, 40, 50 years ago has eluded them ever since.

Subsequently, at Wang Computers, I had the privilege of working closely with Dr. Wang, arguably the most brilliant scientist I’ve ever met. Despite his groundbreaking invention of embedded memory, the company struggled because of its reluctance to shift from being a hardware company to recognizing its potential in software. We failed to pivot to the internet and server-based architectures.

These experiences have taught me to anticipate and navigate market transitions. I’ve always believed in aligning business model changes with new technology. That’s where I place my bets. My strategy is grounded in past observations of both triumphs and missteps. I firmly advocate the idea of reinventing oneself every 5 years.

To inform my decisions, I lean heavily on customer feedback. My dyslexic thinking, which can be both a challenge and a boon, plays a crucial role. Dyslexics, like me, often possess above-average intelligence, but we grapple with sequential thinking. Instead of thinking linearly from A to B to C to D, we jump from A to B to Z. Over time, I’ve learned to turn a perceived “weakness” into a strength.

Lastly, I urge everyone to channel their inner teenager. Think back to those fearless days brimming with creativity and ambition. As we age, societal rewards for ‘playing it safe’ can stifle our innovative spirit. So, I believe it’s essential to combine foundational thinking, the A-to-Z leap, and a teenage sense of fearlessness and innovation for success.

Q: How did you build a business that grew resiliently and consistently against competition?

[John Chambers]: …the educational foundation I received genuinely set me up well for my professional journey. During my time, the United States was in a strong position when it came to primary through secondary school education. Our universities were globally recognized as elite, with a staggering 90% of Americans believing in the significance of education for our nation’s advancement. But as we are all aware, current sentiments about our educational system aren’t as positive, which deeply concerns me. We must re-emphasize education to ensure our youth have a fighting chance in this evolving market, irrespective of whether they pursue higher degrees.

Understanding and capitalizing on market transitions and having the courage to leap, often via acquisitions, has been my approach. I often opted for a more direct route: consulting my customers. As a B2B person, I’d approach leading retailers, like Walmart, to gain insights on potential investments or acquisitions. Institutions like JP Morgan Chase, Bank of America, or Home Depot were invaluable in providing feedback. Cultivating close relationships and truly listening laid the groundwork for my swift decision-making.

Your audience needs to grasp the power of a replicable playbook, Vikas. In the beginning, I mistook the playbook concept as bureaucratic sluggishness, but I quickly realized that you move faster with replication. It enabled me to execute quickly. There was a time I could finalize an acquisition of a $3 billion company within days, from hearing about it on a Thursday to announcing it publicly on a Sunday. Such speed is a testament to the value of a replicable process.

I urge everyone to consider this: How can you refine and expedite your playbook, whether it’s about launching new products, acquisitions, or redefining company strategies?

Q: How did you approach acquisitions to create a higher success rate?

[John Chambers]: Committing to major, complex endeavors that have a high chance of failure, means that it’s crucial to determine what you might do differently and understand the patterns that lead to success.

Firstly, when it comes to acquisitions, many people jump straight to analyzing the financial returns. I approach it differently. I start by asking: How will our customers benefit from this acquisition?

Then, I evaluate whether the acquisition holds significant value for the long-term success of my company. Given the inherent complexities and the considerable failure rate you highlighted, if it isn’t material, it’s usually not worth the effort.

Next, I’m keen on understanding the motivations of the other company’s CEO. Are they viewing the acquisition as a strategic move, or are they merely trying to offload a problem they can’t solve?

Interestingly, and as counterintuitive as it might sound, I tend to shy away from companies that don’t share a similar cultural ethos. Even if an acquisition seems financially sound, if there’s a stark cultural mismatch— especially if they aren’t customer-driven, ethically aligned, or open to taking risks— I’d usually reconsider. It’s not just about shareholders; it’s about the broader community: the acquired company, partners, customers, and employees.

In the tech sphere, Vikas, when you acquire a company, you’re seldom buying the present product (which would naturally come at a premium). Instead, you’re investing in their future innovations. This means retaining talent is paramount. If you can’t keep the people, especially the leadership, the acquisition might not live up to its potential.

Lastly, echoing our earlier discussion, the integration process must be replicable. Decisive actions, clear communication about the changes, and a strategy to reward desired outcomes are pivotal components of this process.

Q: How did you develop your leadership approach in terms of selling outcomes vs. products

[John Chambers]: In swiftly evolving markets, particularly as businesses “cross the chasm”—a concept I greatly admire—it’s pivotal to clarify the desired outcome. As the business landscape transitioned from early innovators to early majority adopters in the ’90s, while many were focused on selling routers and switches, I envisioned a more transformative goal: changing the way the world works, learns, lives, and plays via the internet. I remember even facing pushback from my marketing team on this perspective. But my focus was on the broader outcome these technologies could bring about for organizations. And it wasn’t long before this vision was widely embraced. Renowned investors like Fidelity began to use internet strategy as a litmus test for potential investments.

Selling outcomes translates to selling business benefits, which in turn provides the financial justification for the technology investment. During the prolonged economic growth that spanned nearly 12 years before the recent hiccups, there was a general understanding of how technology could be harnessed, leading many to merely sell products. But as challenges arose—budgetary constraints, economic setbacks, and more—clients sought clarity on the tangible outcomes a technology could deliver. They wanted to understand the impact, the benefits, and how swiftly they could be realized.

To me, the guiding principle, especially during uncertain times like these, is clear: we must sell outcomes, driven by technology, rather than just selling products.

[Vikas: do you apply the same approach to how you invest in startups & scale-ups?]

[John Chambers]: Absolutely, but let’s clear something up. While our successes undoubtedly shape us, how we respond to setbacks or failures can be even more defining. To be a strong leader and to helm a successful company, it’s crucial to navigate both. When I evaluate companies for investment, I’m not just looking for one dimension of success. If they’re focused on selling outcomes, it’s a sign that they’re sufficiently advanced in their journey. However, if they have a stellar product that customers leverage for positive outcomes, that’s valuable as well. In such cases, I see it as my role to guide them on selling outcomes.

Our competitors often spoke about “competitive moats” or what sets us apart. For me, selling outcomes was a key differentiator. I recall a conversation with some of the top engineering CEO leaders, my competitors. One of them echoed a sentiment I had heard before: they believed the best product would always win. But my experience demonstrated something different. With a dedicated salesforce, stellar customer support, and solid products, you could capture a staggering 70% market share. The core philosophy? Deliver tangible outcomes for your customers. Our commitment to this approach was reflected in our unmatched customer loyalty. We were consistently top-ranked for customer satisfaction across the tech industry for over a decade during my tenure as CEO.

The dynamism of this industry is exhilarating, with the goalposts constantly shifting. Occasionally, startups get it right out of the gate, and others require some guidance. If a startup doesn’t adapt after receiving feedback a few times, I’ve learned it’s often more productive to redirect my energy and time to the next promising venture.

Q: What is the role of mentorship in success?

[John Chambers]: During my tenure at Cisco, we undertook 180 acquisitions, and I’m proud to say our success rate was high. Central to this achievement was our emphasis on outcomes from the very inception. When we partnered with a startup, we aimed to integrate our shared vision into the DNA of the partnership, defining clear outcomes for our collective customer base. This clear sense of purpose, understanding why both sides chose this path and how to drive it through, was critical.

Fast forward to today, I’ve invested in 20 companies, spanning various domains from AI to cybersecurity to supply chain capabilities – many of which are currently pivoting towards AI. When they’re asked about the value I bring, they invariably talk about the guidance I offer in areas like, managing growth, build culture, recruitment, and forging strategic partnerships. My experience, both from successes and mishaps, has been instrumental. When they hit roadblocks, my role is often to bring calmness and perspective, sharing lessons from the past and offering alternate paths.

Earning a reputation in this space means startups really listen and listen carefully. While they value my financial investment, most of them would argue that my contributions are foremost about helping them realize their goals, addressing challenges, and sculpting and selling their vision. The investor tag, often, is just a footnote.

As highlighted in your opening remarks, my journey has been quite different. I’ve navigated multiple generations of IT products, watching many rise to prominence and then falter due to their reluctance to evolve. And while I’ve managed numerous acquisitions, some with resounding success and others with lessons to learn, it’s often easier to teach something you’ve done yourself.

Many professionals who’ve tasted significant success in large enterprises often struggle with the rapid-paced challenges of a fledgling startup. At Cisco, I encountered a major hurdle perhaps quarterly, sometimes even just once a year. In contrast, my startups present a new challenge nearly every week. This dynamism, this state of perpetual motion, resonates with my personality. I genuinely revel in concurrently managing multiple tasks, akin to playing 20 chess games simultaneously and strategizing every move.

Q: How can countries create the right ecosystem for technology companies to thrive?

[John Chambers]: The internet enabled me to gain a foothold in every major country, irrespective of its government structure. This was true whether it was in Europe, the Middle East, Asia, or Latin America. I established credibility and fostered collaboration everywhere I went.

Now, if you examine today’s trends, you’ll realize that most large companies won’t increase their headcount over the next two decades, largely due to enhanced productivity and the leaps in AI. This implies that the bulk of job growth will stem from startups and their subsequent expansion. So, the challenge becomes identifying the next major market transition and tapping into it.

In Europe, for instance, I initially assumed the UK would be the ideal partner. However, their political landscape was shifting rapidly. Germany, under Merkel, felt they could navigate their tech trajectory independently. Then I turned to France, somewhat as a last resort. Contrary to my expectations, I found a government leaning towards socialism but profoundly open to innovation. This paved the way for collaboration, especially under President Macron’s leadership. Remarkably, France transformed from one of the least favorable to the most favorable European startup hubs.

Similarly, in India, Prime Minister Modi envisions a digital future. I had the privilege to introduce him in Washington ahead of his state visit, recognizing his efforts towards building a robust, inclusive economy.

Then there’s my home state, West Virginia. From being renowned for chemicals and coal, we’re reinventing ourselves. West Virginia University, for example, has 54 startups, which I support philanthropically. We’ve attracted projects worth billions to the state in just a few years – a phenomenal change for a population of merely 2.5 million.

Crucially, we’re revamping the academic curriculum to ensure students are better positioned for future employment. There’s an urgent need for universities to adapt faster, to consider students’ financial sacrifices and potential long-term earnings.

In essence, while I might be a dreamer, I have a track record of making many of those dreams a reality.

[Vikas: And how about university clusters?]

[John Chambers]: If you observe closely, startups predominantly emerge around universities that foster the right atmosphere. Stanford stands out in this regard. While MIT once held its ground with high-tech, it now excels mainly in biotech, having lost its edge in the former. The 14 IITs in India are exemplary in this area. At Polytechnic, where I began lecturing seven years ago, the shift is evident. Initially, their graduates predominantly ventured into government or large corporations. Now, a majority are inclined towards startups.

This shift is intrinsically tied to the principles of capitalism. Funding and rapid progress are possible when there’s an underlying focus on tangible outcomes, such as business growth and cash flow.

Now, pivoting to philanthropy, the perspective changes. It’s about melding societal good with sustainable success. This philosophy is something I emphasize to my startups. At Cisco, our track record speaks volumes. In regions where we led in corporate social responsibility, we invariably dominated market share. The correlation is no accident. Once you grasp this dynamic, you can replicate and scale the approach. The crux is to align societal betterment with business benefits. Lose sight of this balance, and both the company and its vision can falter.

Q: I have one more question about resilience. Because you worked at such a phenomenal pace for such a long time building such scale, one question I had for you as a leader, how did you build and manage the resilience you need for actually operating at that level, that consistency, for that long? Because that’s something that a lot of people simply do not understand the pressure of.

[John Chambers]: Yes. Part of it is because early on with dyslexia, my parents helped me but mainly a teacher by the name of Miss Anderson – before dyslexia was understood – helped me learn how to take it from a weakness and make it into a strength. In the 2nd and 3rd grade I really struggled with reading and my teachers did not think I’d go to college. I could make whatever grades I wanted in math but couldn’t make an A in English no matter where I was in terms of direction. Once you realize that resilience, then you move forward. I learned if you’re not resilient, your company doesn’t survive, and you must reinvent yourself. Everybody says they like change, we really don’t. The other part is because I’m a salesperson. As a salesperson, you often get many no’s, so you have to be resilient or you don’t survive. But it’s also a little bit of my inner personality. My parents taught me to deal with the world the way it is, not the way you wish it was. So, when I get knocked down, I first understand why I got knocked down before I get back up. I address it, and then I move forward accordingly. So, resiliency in leadership is a very important trait, true of countries, true of universities, etc. But most CEOs, to be very candid, aren’t as resilient, and that’s why they don’t reinvent themselves. That’s why the average life expectancy of a CEO in a company is only 5 or 6 years. And I’ve had many CEOs say to me, “John you’re resilient but you reinvent yourself. Most of us do not, and that’s why many would rather change companies after 4-5 years in terms of what they do going forward.” So, it’s having taken a weakness and made it a strength. I still make lots of mistakes and I love learning from them. I’m a Shimon Perez fan, he taught me think like a teenager in terms of the approach, and most of the time I’m very resilient in teaching others.

Q: What do you hope your legacy will be?

[John Chambers]: While I’m sure you’ve heard a myriad of great responses from those you’ve interviewed, my answer might surprise you. To be honest, legacy has never been important to me. I’ve consistently chosen to focus on what comes next rather than dwelling on the past. Take that milestone event – graduation. I didn’t attend my high school, college, law school, or MBA graduation ceremonies. By then, I had already moved on to my next chapter.

My driving force has always been to make a difference and change the world. When I commit to something, it’s with all the energy I’ve got and a zeal to be either the first or the second best. Some might say I’m fiercely competitive, and they’re not wrong. But I have no intention of changing that aspect of my personality.

If there’s any “legacy” I yearn for, it’s to empower the next generation with the knowledge and tools to innovate further. I envision a more inclusive society in terms of wealth and opportunities. I want startups to proliferate not just in hubs like Massachusetts or California but also in states like Texas and West Virginia, and even beyond, in regions throughout Europe.

Having played a pivotal role in shaping the internet’s landscape and now doing the same with startups is exhilarating. But if you ask what I’d want my lasting impact to be or how others can honor my journey, I’d simply say: pass the torch. Guide and inspire the next generation. Maybe that’s unexpected, but personal accolades or financial gains have never been my primary motivators. To me, they’re just markers of progress. What truly matters is the outcome and the broader impact.


Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.

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