Cisco fired the woman who co-founded it. Then it hit $555 billion.
Sandy Lerner and her husband Len Bosack started Cisco in 1984 while they worked on Stanford's computer staff. They built routers, the boxes that pass data between networks, in their living room and paid with credit cards.
It took nearly 80 meetings with venture capitalists to find one who would fund them, The Motley Fool reported. Don Valentine of Sequoia Capital invested and became chairman. He hired an outsider, John Morgridge, to run the company.
Cisco went public in February 1990. Then, in Valentine's own telling, seven vice-presidents came to his office. Either he let the president fire Lerner, or all seven would quit.
Lerner was fired on August 28, 1990. Bosack resigned when he heard. The two sold all of their stock for $170 million.
In late March 2000 Cisco was briefly the most valuable company in the world, at $555 billion, the International Directory of Company Histories records.
"I certainly could have run that business," Lerner told Forbes in 1992.
AI-generated illustration with narration by an AI voice.
Lerner's later advice to founders, from the same interview as Valentine's account: get your own lawyer.
When an outside chief executive arrives, what authority does the builder keep?
What the captions say
- This is the story of how Cisco fired Sandy Lerner, the woman who co-founded it, in 1990, the same year the company went public.
- Back in 1984, Lerner and her husband Len Bosack worked on Stanford's computer staff. Bosack had found a way to connect two networks 500 yards apart.
- They tried to sell the technology to computer companies. None were interested. In the early days they built routers in their living room, on credit cards.
- It took nearly 80 meetings to find an investor. Don Valentine of the venture firm Sequoia Capital said yes, became chairman, and hired an outsider, John Morgridge, as president.
- By Lerner's account, when the two first met, Morgridge told her, "I hear that you're everything that's wrong with Cisco."
- In February 1990, Cisco went public. The market valued the company at $224 million.
- Then, as Valentine tells it, seven vice-presidents showed up in his office. Either he let the president fire Sandy Lerner, or all seven would quit.
- On August 28, 1990, Lerner was fired from the company she had started. Bosack heard the news and resigned.
- The two founders sold all of their stock for $170 million and retired from Cisco.
- Cisco went on without them. In late March 2000, less than ten years later, it was briefly the most valuable company in the world.
- Its market value was $555 billion.
- In 1992, Lerner told Forbes magazine, "Len and I under-estimated our skills. I certainly could have run that business."