Leading Through Chaos: John Chambers on Tariffs, Cyber Threats, & the AI Supercycle

John Chambers: The day's environment with AI is moving at five times the speed and three times the impact of what the internet was. So I built every company, however, to go IPO.

Sriram Viswanathan: Okay.

John Chambers: And the best way to get acquired is to build it with the independence and capability that you could go IPO, and then the acquirer sees you build a company to last, not something that's gonna sell.

I'm done, right? And I leave and I don't care if it's successful afterwards.

John Chambers: Right then there was only one Steve Jobs, and I'm not in the same league obviously as him, uh, but he just knew what to build.

I know to go listen to customers and tell 'em, here's what I'm thinking about, or here's who I'm thinking of, inquire, or Here's what I'm thinking of investing, and they will tell me.

Sriram Viswanathan: Hi everyone. This is the Tech Surge Deep Tech podcast presented by. Celesta Capital. Each episode, we spotlight issues and voices at the intersection of emerging technologies, company building and venture investment. I am Sri Ramathan, founding managing partner at Celesta Capital. If you enjoy TechSurge, now is a perfect time to hit the like and subscribe button.

And while you're at it, you can leave us a review on your favorite podcast platform. If you're just discovering us, visit tech search podcast.com to sign up for our newsletter. And check out the archive of some very interesting past episodes today, we're incredibly privileged to be joined by none other than John Chambers.

John, as you are all of course aware of, is the former CEO and executive chairman of Cisco Systems where he led the company through. The most amazing explosive growth that one would've seen in the tech industry, growing the company from $70 million to nearly 50 billion during his tenure, and John made.

Uh, many, many acquisitions that really drove Cisco to be a powerhouse in networking. Overall, 180 acquisitions were completed during John's tenure, scaled them globally and really navigated Cisco through some of the most interesting transitions in the tech industry. Today, John spends a lot of his time in his family office and a firm that he started called JC two Ventures, investing in some of the most promising next generation technology companies and helping entrepreneurs scale.

Uh. Great businesses. In addition, John also spends a lot of time with leaders of various governments, India, and other parts in Europe. And John has been really a powerhouse as a thought leader on where the technology world is going. So John, I. It's a great pleasure to have you at this podcast, and I'm excited about this conversation.

John Chambers: Well, your introduction was so nice. I'll try not to disappoint and, uh, I need to keep a recording of that and share it with my wife, but it'll be fun today. And if the audience agrees with everything we've said, we will fail. We wanna challenge you all, make it a little bit uncomfortable, maybe even let you sweat a little bit about the excitement and the challenges going on in this environment.

‍Sriram Viswanathan: That's, that's, that's a great place to start. Okay. 'cause I think, you know, you have such a. Rich background of seeing not just the technology transitions Mm. But really being a driver of those transitions. Mm-hmm. And now you've taken on a different role. Mm-hmm. So we're gonna start at the end. Okay. Which is your current role.

Just mentoring and advising and inspiring entrepreneurs to build some great companies in JC two. Okay. So talk to us about JC two. What was the initial thesis and what, what were you trying to accomplish with through JC two?

John Chambers: Well, I knew when it was the right time. I. For me to leave Cisco. And every five years at Cisco, I'd sign up for five more.

And then one year when the board asked me, I said, I'm signing up for two to four more years. And they knew what that meant. And uh, I was ready for my next chapter. Uh, all of us, when we make transitions, we don't know for sure what's gonna beci us or not. And I had acquired 180 companies, you said, but also great internal development.

And then we built machines. We were number one out of. 18 product areas, number one and 12 of 'em. Number two and three, and number three and three. No company's ever done that before. And we used a combination of acquisitions, strategic partnerships, internal development for innovation. So I love that. Mm. And it wasn't an issue about doing good acquisitions and then say, we're done.

Now go report into the organization. We took those acquisitions and would scale 'em from our first one Creon do at 13, uh, uh, million dollar run rate. And I paid 92 million for it, and the market thought I'd lost it because that in 1993 Yep. Most m and a failed in high tech, but that was a $13 billion division for me.

Wow. When I left, uh, we had others like Meraki mm-hmm. That we paid an unreasonable price for it, people thought. Mm-hmm. And we had a hundred million dollars rent rate. 18 months later, it was, uh, $1.5 billion run rate. Could have paid whatever he want for it. But we got 'em in and then we grew 'em, and 40% of my leaders came through my acquisition.

So I developed people and that's what I love doing. Mm. And it, you know, and by the time you've been around it a lot, yeah. Uh, going through another board meeting isn't particularly exciting. Helping companies grow and scale even when their problems is what got me into JC two. Mm. And the two is my son. Yep.

I have, uh, partners in Shannon Pena, who's been with me for 19 years. Yvette Knu, who ran a $13, $13 billion division for me. Yep. In service providers and cable. Mm-hmm. And then my son, jc. Jc, he's the two. He's the two, yeah. John Chambers also who came out of uh, uh, best Buy, walmart.com, house, et cetera, in the startup world.

So. Blessed with a very small organization mm-hmm. But a supporting cast of a couple thousand that works together and I took the same philosophy. Mm-hmm. Number one or number two are don't compete the earlier You bet. As you do very well. And I know you've got over a hundred investments and I'm honored to be working together on some of them.

Thank you. Uh, we can always do more together. Of course, of course. Yeah. But, uh, the idea of what does it take for this to be the best in the industry category. Yeah. And don't invest unless they have the chance to get there. And then I developed that. Playbook, if you will, for what is my thesis when I do invest?

Mm-hmm. It's very simple. Is there a business market transition going on enabled by new technology? Mm-hmm. In the old terms, Amazon enabled by the internet. Right. In current terms, uh, the technology in terms of productivity and speed of change in every industry enabled by ai,

Sriram Viswanathan: that's a, that's a good, good, sure.

Good place to, you know, pause for a second. Okay. 'cause you made this reference to Amazon and even Cisco in the early days was very, uh, it, it started out in the market. Which was very narrow in a way, and it expanded into a pretty amazing company. Yes, it did. And Amazon, as we all know, I mean, it was a bookseller.

Yes. And now nobody thinks of Amazon as a bookseller. This is really the infrastructure.

John Chambers: I see what you mean. How do people identify when a transition's there? That's right. Nobody gets it. Exactly. And

Sriram Viswanathan: especially when you're dealing with in JC two, when you're looking at a small startup, you don't fully appreciate the the scale to which these companies can develop.

So is that a particular. Model that you have, that you Ah, okay. You look at,

John Chambers: right? Yes, I do. And to answer the question very specifically, yeah. When Jeff Bezos, uh, yeah. Uh, built Amazon, he started off with, here's the process and his major issue with his customers investors is, what is this thing called the internet?

Yeah. And he had a, I had actually explained the internet. Uh, and when you move very often, explaining. What the company does and how it's different. When I first started running Cisco, only 400 people. Yeah. I was getting complaints about my food trucks. Yeah. It was Cisco, the food distributor. Right. They didn't even know what Cisco did.

The internet wasn't even discussing. Yeah. So if you can identify these trends early and then have the vision to execute and grow on it, that's how you create Yeah. Great companies and you share the success. So my thesis on investing exactly where you're taking me. Uh, business marketing transition enabled by new technology, right?

The example Cisco with the internet. Amazon with the internet. Uh, in today's world, the big bets are in every industry, and it's all about AI and cybersecurity. So we invest in those. Mm-hmm. Second premise is. We invest in A CEO that she or he is really good on vision, strategy, execution, and has a clear view of where they want to go.

And they have a vision that could potentially make them the one or two in the industry. Yeah. And they wanna be coached. Right. And every CEO says, I wanna be coached. Most of 'em don't as you. That's right. So I very carefully select those who do. Then there was only one Steve Jobs. I'm not in the same league, obviously as him.

Mm-hmm. Uh, but he just knew what to build. Mm-hmm. I know to go listen to customers. Mm-hmm. Yeah. And tell 'em, here's what I'm thinking about, or here's what I'm thinking of, inquire, or Here's what I'm thinking of investing. And they will tell me. So almost every acquisition I did at Cisco, I can say, this was something from JPMC, or this is Bank of America.

Uh, or this is Cable Vision, or this is Comcast, uh, or this is at and t or Verizon that suggested it. And so I go to customers and say, you've got this company installed. What do you rethink of 'em? Are they differentiable, et cetera? Or if they're very early stage, I go to the customer and say, here's what we're trying to do.

Yeah. Is this even logical? Yeah.

Sriram Viswanathan: So do you, do you apply that model in every play that you do at G two?

John Chambers: It's in the book I signed for you today. Yeah. Uh, I'm dys So every book connecting the dots, uh, I have every chapter is summarized how a dyslexic thinks. Here's the material. Yeah. And I'll tell you what to think at the end.

So I used to think playbooks. Where bureaucracy even slow you down. Yeah. Using acquisitions. I could acquire a company I didn't know the name of on a Thursday night when I get the call from the CEO of Nasdaq and say, John, you're an idiot. And I said, I know Bob. What did I do now? Yeah. And he said, there's a company going down.

It's common knowledge. Your competitors are all over it and they're about to be bot and it's perfect for you. And I said, okay, who? And I had no idea who they were, so I was embarrassed a little bit, but you jumped on it. I did. Yeah. Uh, I said, gimme the guy's name. Yeah. I respected him. My business development lead, after I talked to the CEO was over at eight o'clock in the morning to meet with the ceo.

He called me in an error and by noon I had an agreement for a $3 billion acquisition. Yeah. And we had it through both boards of directors in two days through the weekend, announced Monday morning. That's fantastic. That is process. Yeah. And I used to consider bureaucracy, but if. Innovation combined with a replicable pattern, that's when you move a tremendous speed.

Sriram Viswanathan: Well this is, this is important. Okay. 'cause I think, you know, as you are well aware, you and I got to know each other during your time when I was at Intel and I was doing a lot of stuff at Intel Capital and I worked with your team. Yes. Uh, you know, arguably Cisco did an amazing number of acquisitions.

Mm-hmm. And you could, you could sort of grade them all pretty high in terms of the effectiveness with which you were able to sort of integrate them into Cisco and grow. Yeah. Right. Yeah. You grew the pie fantastically. Yes. Not everybody was successful in that, right? Not everybody. As in other companies like, you know, maybe HP or Intel or others.

Yes. Why do you think that is?

John Chambers: Well, I think it goes back to when we first started to do the acquisitions. We looked in the market. Had never done acquisitions well in high tech, and you're not gonna be smarter than somebody else. If you don't do 'em differently, you're gonna get the same poor results. Right.

Even today, probably 90% of acquisitions are done in high tech disappoint. Yeah. So we said, what are we gonna do differently? Yeah. And so what we felt is, here are the golden rules on acquisitions. Yeah. You only do 'em if they're really strategic. Right. We do 'em for growth. Yeah. We don't do it for defensive reasons.

We're not turnaround a specialists. Yeah. Although we can unfortunately do that pretty well. Yeah. 'cause of practice. Some, some of 'em self-inflicted. Sure, sure. On me. Uh, and so we look for the growth and then oddly enough we look, do they have the capability one or two in a category and. Are the founders, basically the CEO, are they the same culture and values that we are at Cisco and all us.

That's a big deal. Yeah. And we walked, if they were not

Sriram Viswanathan: That's right.

John Chambers: We knew it would be hard. We developed a team that we pulled, not a whole acquisition team, but teams that would come from each functional group in Cisco and then go out, and then we even had the routine of how do you announce it? Yeah.

What are the press bring in prior appeal players from the acquisitions we acquired? Here's what it's gonna be like going through it. And then we had the track record, and then we had. 40% of my execs were from acquisitions, right? This is the attrition rate was. 4% on acquired company, post acqui,

Sriram Viswanathan: post acquisition, post acquisition percent.

John Chambers: And, and the company's acquisition is five. And you know the valley, of course, it is 15 to 20%, uh, uh, voluntary attrition. Yeah.

Sriram Viswanathan: This is, this is a, this is an important point to actually sort of double click on because you know, large companies in general, uh, either they grow organically or they're very swift in sort of doing inorganic stuff.

Yes. What do you think the startups that you are investing in today and advising, are you building them for an IPO? Are you really packaging them for, you know, really filling a gap to be acquired? Filling a gap in some of these large companies because you have this unique, you know, position in the industry.

I mean, a lot of us as VCs, I had a lot of

John Chambers: practice, well, not to mention, and mistakes,

Sriram Viswanathan: not to mention you, you actually had the ability to identify areas where you would be able to accelerate much faster Yes. Than your peer group. Through acquisitions You did that I could blow through my channels. You, you did an amazing job of that.

Thank you. So when you are building these small companies, do you, do you keep that as your main sort of north star as you're building these companies? Or do, are you trying to build them into organically grow?

John Chambers: Well, uh, first, just in complete transparency, you and I both know the vast majority of acquisitions that have a good ac I'm sorry, vast majority of startups that have a good exit will be acquired.

Acquired, yeah. And I think the numbers are like.

Sriram Viswanathan: Yeah,

John Chambers: 80%, 20%. Especially in the current environment. The current environment, it might be 90% and 10 because there's only been a few good IPOs. Ipo. Yeah, I was honored to be with BPO and Rubrik, which has had a tremendous run on it, uh, overall. Uh, so I built every company, however, to go, IPO.

Sriram Viswanathan: Okay.

John Chambers: And the best way to get acquired. Is to build it with the independence and capability that you could go IPO and then the acquirer sees you build a company to last, not something that's gonna sell. I'm done. Right. And I leave and I don't care if it's successful afterwards. Right. So it's the combination, uh, that I use.

Yeah. So.

Sriram Viswanathan: So let's also talk about management. Okay. Because you are, you are very, and I've seen you firsthand with, you know, we are in companies together. Yes. And I've seen you work very diligently regardless of the position that you have in those companies relative to, you know, the investment dollar that goes into those companies from you.

Yes. You, you have this. Incredible capacity to engage with the CEO and provide the advice and mentorship. I mean, do you, I mean, do you do that across the board with all of your companies? I mean, do you choose a few where there's some problem areas where you identify they will benefit from your involvement?

I mean, how do you, what is the filter? How do you decide? Because you know, we all have. N you know, limited time. Yes. And I'm sure there's lots of

John Chambers: demands on your time. Uhhuh. How do you engage? Uh, well part of it's the selection process, right? I don't think I would enjoy coaching. The CEOI don't invest. And

Sriram Viswanathan: if they don't listen, also, you probably stop it, right?

John Chambers: I stop right, uh, on it. But I think it goes back to, uh, and the way that you presented it, my job is really to help grow and scale the company. Yeah. And make the CEO successful, so the one we share most recently. Parkour. Yeah. Mahesh. My job is for Mahesh to be very successful. Sure. I enjoy coaching him. He wants to be coached.

Yeah. And so the ability to talk about culture and many people get the strategy and vision. Yeah. And the technologists people don't understand. Yeah. Culture is a key variable. Yeah. People think it's all about engineering, and yet I. The reason I wanted at Cisco, my sales organization was the best in the world and they were unbeatable.

You combine it with great engineering products, with great sales, and go to market with great customer service number one. In the industry, you are unbeatable. So what has changed? Uh. What has changed? Speed and impact. Yeah. The day's environment with AI is moving at five times the speed and three times the impact of what the internet was, which at the internet I said moved at three times the speed.

Yeah, the two biggest waves. Ever in technology was the internet. And when I said it's gonna change the way the world works, lives learns and plays. Yeah. And we'll go build an architecture to go after. People said, what is architecture? Right? And you move around zeros and ones. Yeah. Why is it gonna change my life?

Yep. We all see it occur. AI is gonna be dramatically bigger. So once again, there's a major underlying, huge technology revolution or error coming in. Uh, what's different speed and impact? What's different? It would be about survival. Uh, what's similar that companies who really didn't adjust to the internet.

Didn't really prosper after that. Yeah. Probably 40% of the Fortune 500 disappeared. Yeah. In the next decade, uh, it's probably gonna be 60% plus according to players like McKenzie this time, uh, when it hit, and I thought this was gonna be a very good, uh, air and I'm pretty good at my projections. Mm-hmm.

Mm-hmm. And, uh, but when the first day, when the terrorists were announced Yeah. And I watched the stock market. I knew there was a very good probability we're gonna go into recession. Yeah. And so that night and all day to the next day, I went to every CEO outlined. How do you manage through this transition?

Don't overreact or run to react, but it's probably gonna be a huge transition. And we built it into the system and we built our playbook. For not only how do you manage expenses, but also how do you put more opportunities into your pipeline because sales cycles are gonna stretch out. Mm-hmm. They're gonna be customers who freeze on it.

So if you ever get more in the pipeline, you're not even gonna hit the numbers you are already involved for. Mm-hmm. And so I start with the CEO, we go through it, we agree upon it. I meet with the CROs, and I do that. I've met with two of 'em already today talking about how you're going to increase your pipeline by 25%.

Mm-hmm. And they first look at you like John. Yeah. If I could have done that, I would've already done it. That's right. Then I say, you're gonna have to think differently. What are the verticals they're gonna be most receptive to this? What are the customer needs? They're gonna exist stronger with our customers because of what just occurred within it and what new markets might open up for you.

What strategic partnerships could you work with? With a Zoom, for example, or with a major technology partner like Gig or with a key country like Saudi Arabia or with the US India relationship? Mm. And we walk through this. Then I agreed that I'd meet with their management teams and then with each of the company, all hands meetings.

Mm. And you outline that playbook that we have there. Mm. The five to seven things you during, during crisis plan. One is your most likely scenario, which I think unfortunately is gonna be tough. Mm-hmm. Uh, plan two is your pessimistic one, which means it could be very tough and last longer. We think plan three, it will be a short term phenomena that terrorists will have.

Mm-hmm. Uh, the effects that. The administration hopes that they will and you'll come back even stronger because I think some would argue

Sriram Viswanathan: yes. That all the things that Washington is doing and Trump is doing right now yeah. Is really targeted towards China and everything else that he's doing across, you know, whether it's Canada or Mexico or anybody else, is just a means to get the main thing, the main price, which is solving.

The Chinese problem. Would you agree with that statement or do you think it's a more much broader than that?

John Chambers: I think it's much broader, uh, on it, and I'm not gonna comments one way or the another. Sure, sure. I've, I've learned a long time ago in politics, you praise in public. Yeah. And if you have something that's critical, you do that in private.

Yeah. And I'm honored to be, as you alluded to earlier, prime Minister Modi, he calls me his global ambassador That's right. Uh, for it. And so I get very close to government leaders and business leaders. I think there was an underlying trend that the trade with the US had not been treated fairly, whether it's Europe, where a Hardy Davidson bike costs $77,000 there and it costs 38,000 here.

Yeah. You have to keep a level playing field, and it's the US' problem that we didn't. Encourage that to occur earlier. Then once leaders make a decision to go, I don't waste any cycles about. Sure. Do I agree, disagree. Tell me how it plays out. Yeah. And how do we adjust in it? I do think it will break the global supply chain, uh, and I think you'll see a lot more, uh, ecosystem supply chains.

Sure. Uh, in terms of the implication, I think that is in motion, as you probably know. I was the first CEO in high tech to invest big in China, right. In 1995. Right. And, uh, uh, can lead the Chinese Ximen and the team delivered on every commitment they made to me. And, uh, Cisco was their infrastructure across China, et cetera on it.

Uh, and you also

Sriram Viswanathan: expanded pretty big in India.

John Chambers: Oh yes. Right. And oddly enough, I was the first company to Reannounce the second world headquarters in India. Right. And move, I think we were at one point, our peak was about. 32 senior VPs and EVPs in NDA itself and building on it. Mm-hmm. But the transition was in China the first.

12, 15 years went very well. Mm-hmm. Then the leadership came in and took China in a different direction, a win lose versus the us. Mm. At that time, I personally pulled away from China. Mm. Uh, I doubled down in India where I'd already made big bets. Mm. And really bet on the future from that side and bet on India becoming the largest GDP in the world, which I called before anybody else did, and they will.

Yeah. And I had honored to do that in front of Prime Minister Modi and Right. Secretary of state of the US when he was here on his visit, uh, two times ago. Hmm. So I bet on trends and directions in terms of the overall approach. Hmm. Uh, I personally believe the whole world benefits by having shared.

Interchange and fair trade. Mm. So long term, I hope that comes back into vogue and own direction, but focusing on what I control and influence. Yeah. Countries on betting biggest oil. And guess what? Those are the ones that are gonna grow the fastest. India's gonna be the fastest growing economy in the world.

Mm-hmm. Barr and Miss Execution and probably number one, may even grow six to 7% this year. Yeah. Uh, Gulf States. Saudi Arabia, UAE Yeah. Et cetera. Uh, a great place to invest and they're using technology in a big way. And then the third one that I think is gonna have a good economy in spite of the current bumps, will be the, the us.

Yeah. So I'm placing the majority of my bets in those three key geographies. So you are

Sriram Viswanathan: investing in India and in, uh, US and in the Middle East, or, yes. Okay. In

John Chambers: the Middle East most recently. Okay. I've, I've known the Middle East for many years. Yes. I worked across Jordan Israel. Sure. Uh, know the Crown Prince reasonably well.

Yeah. Many of the leaders in Saudi Arabia were ex Cisco people. Right. That I developed. That's, and I build relationships for life. So when you see we friends for life, you can't divorce me, you're stuck with it. I, it, it's, it's an honor. It's an honor. Yeah. And so I love thinking through this and say, how do you play it?

Yeah. Then certain industries and every one of the companies I get doing. Three to five things they're gonna do differently.

Mm-hmm.

John Chambers: So a company like now

Sriram Viswanathan: Yeah. That

John Chambers: is changing the next generation of the internet. Yeah. They are building out huge in Saudi Arabia. Yeah. They're moving their capability.

That's network as a service on an AI base that is insanely. Secure. Yeah. And it's autonomous. It requires no people IE no operating expenses. Right. That used to be 50% of the cost of a network. Right. What Pen College is doing. Yeah. He's focused on the geographies, we said. Yeah.

Sriram Viswanathan: But especially in the Gulf. Is it also your objective as you invest in companies in the us uh, or in the Middle East and India?

Is it your objective to try and find opportunities for them in other geographies? And if so, how are you going about it? Because I know that in India you have this US India strategic partnership. Yes. Forum that you are a very active participant chairman of chairman of that for eight years. So what is the objective of that forum and how does that actually translate to, I.

Some of these companies actually getting into this, those programs. Oh, great. Got it.

John Chambers: I got it. I got it. So I've been on trends. Yeah. And I am pretty good on pattern recognition. Yeah. I'm dyslexic, so I have to go Sha I have to go A, B, Z. Sure. I can't go A, B, C if I read something very long. Yeah. Notes or something, I'll get lost.

Yeah. So I've learned how to recognize patterns. Yeah. And then interpret it. Take a weakness. And dyslexia is a weakness. Make it a strength on being able to do it. So when I see a trend, I jump on it. Jump on it, yeah. Trend on China. Bet on it before others did. Sure. Trend on the internet jumped on it before others did.

Yeah. Ai, which people could not spell. Yeah. Nine years ago I had six and 80 AI companies before people even spelled it, started it right when I saw. Things between in, uh, China and the US start to pull apart. Mm. I doubled down on India. Mm. And with my startups, I encouraged 'em all, not even to go into China.

Right. I didn't feel there'd be a level of playing field. Mm. It was a win-lose mentality by the Chinese leadership. Mm. Hopefully that will change over time. Mm. So the key takeaway here. Identify those patterns. Yeah. Move with the speed on it. Yeah. And with the US India strategic partnership form, we felt we could change the economies of both countries, the lives of citizens, and in both countries, the environment, the startup mentality.

So it wasn't about trade organizations working together. Sure. It was changing the world. Yeah. With two, two countries working together, India has, as you know, 1.2 million engineers graduate per year. US has 60,000. Right. It was a natural alignment, win-win, not a labor arbitrage, but the creativity is now coming from India as much as it is the US Yeah.

17% of the IPOs last year out of India. Right. Fastest growing area on it. Right. But together we could change everything. Yeah. And what got announced with President Biden and uh, prime Minister Modi. Right, and the visit of a strategic partnership, we outlined that. Seven years before with interestingly not Prime Minister Modi.

Hmm. And I felt at that time he would be a great leader for India. Sure. But I also said he's gonna be on a global stage far beyond what people realize. Right. And lead India to the benefit of its. Uh, citizens where they'll have the highest standard living increase and can lead fastest growing GDP. Yeah.

But the two countries working together at startups, at big companies, at dealing with issues such as covid in a very unique way. Sure. Dealing with issues in terms of how do we lead an AI together faster than the un Khalid Yeah. We changed the world and that's what's happening

Sriram Viswanathan: there. That's, that's great.

So let's just, let's just. Spend a little bit more time on ai. Okay. 'cause I think there are two areas. If I have sort of looked at your, your portfolio in JC two, uh, AI is a big thrust. It feels like. Yes. Cybersecurity is a, is a big passion of yours. I know. Yes. So let's just start with cybersecurity first.

Okay. What do you think the state of the play is today in cybersecurity? What are some of the challenges?

John Chambers: Okay.

Sriram Viswanathan: That industry that, you know, large industries and countries are facing in cybersecurity. Yes. And what are some of the innovative solutions coming about it?

John Chambers: So, uh, when you look at transitions occurring, uh, the bad guys go wherever the money is.

Yeah. And so, uh, if the transitions are to networks and then networks with ai, that's where the bad guys, rogue nation states, uh, organized crime, uh, individuals will go and focus. And so as AI allows you to move with tremendous speed. It also allows the guy bad guys to move with tremendous speed. Sure. And to misuse systems because access is universal.

John Chambers: Everybody has access, everybody access to the

Sriram Viswanathan: same tools, same, you know, technologies and all of that,

John Chambers: right? Yes. And instead of developing a product as you and my startups used to do in two years, yeah. Our good startups develop it in a weekend or a month. And instead of taking, uh, two years to develop and a year to get five to seven references, they get five to seven references in their first.

Quarter outta the box. Yeah. And instead of taking five years to get to a 5 million run rate, we hit it in 18 months. Yeah. Speed of change in terms of the direction matters in a very, very big way. So it's that mentality and that speed that really is, is different this time through. Yeah. And I look for in my startups and help 'em navigate through that.

Yeah. Now they're gonna be train wrecks. Yeah. Oh yeah. Yeah. Uh, at first I did all my investments were AI early. Yeah. And cybersecurity is separate. Yeah. Now I have non cybersecurity companies. Yeah. All of whom use AI extensively. I see. And all my companies, not just the six who were AI originally. Yeah.

Everyone has converted to an AI foundation, not for just developing the products, but on sales, productivity, uh, et cetera, with the goal of growing productivity, seven to 10%. Per year ongoing, not just in r and d. Yeah. So then they come together and the best case that would bringing it together would be maybe two that I can give you.

Yeah. You're familiar with the deep fakes going on? Yes. Uh, first in voice, the Biden, uh issues, the Trump issues, et cetera. Yeah. And now a voice video, a company called Pin Drop. Yeah. That I saw what was going. And VJ, who heads up this brilliant young man, he moved into deep fakes. In three months, and he is the world leader by far.

You, uh, it doesn't matter which broadcast the Wall Street Journal, CNN, uh, on at Fox, uh, BBC, et cetera, use them as the gold standard and how they solve an issue. For example, in the speech, I have a really unique accent, hard to emulate, right?

Mm-hmm.

John Chambers: If I were to show you a video, and I will after we're through here mm of somebody who created on me Mm.

With my words as a deep fake, as a deep fake. I couldn't tell the difference. Yeah. So they used AI to do this with tremendous speed and I mean, even the words they selected my eye movement, my twitches, little bit missing hair. Yeah, yeah. Et cetera. It was perfect. Uh, they solved that and usually I. Three seconds.

I see your voice has 8,000 samples in it. Yeah. If you have five seconds, that's 40,000 samples. With ai, you can hit a 99.5% accuracy in 10 seconds. Is this human or machine and is it another? That's where AI solves the problem. AI created it also. So

Sriram Viswanathan: it's, it's interesting because invariably the, the, uh, the tool that is used for all of these cybersecurity, you know, uh, incursions Yeah.

Are exactly the same tools people are using to prevent them also. Yes. Which is, you know, this is great. Now I want to ask you a question related to that, uh, because this requires. Tremendous coordination between various countries and you know, because there's a trust adjudication that some people are starting to talk about in terms of ai.

Yes. What is your thought on, you know, I think Eric Schmidt has a book about it with, uh, Greg Muy on something called, uh, you know, the Trust Adjudicator, uh, protocol. Yeah. Which is to ensure that when. When countries are dealing with, you know, global sort of security threats mm-hmm. They have a shared view on how to address it.

Yes. And sharing of information between countries and all of that to address this problem. Yeah. On cybersecurity. Yes. Is, is that an area that you think has some potential or what are some of the challenges? I think it has

John Chambers: lots of potential and first, I, I know Eric very well and that matter what he's done again and again and Craig, the same thing, uh, on it.

And I think they're right in terms of ideally what will occur. Yeah. However, AI is gonna move so rapidly that if this takes very long for groups to get an agreement on something, yeah. Each country will move on their own. Yeah. And I think it's a blended version. Do I think there are elements of AI that ought to have boundaries and guidelines and regulation?

Yes. Yep. But only ones that are logical if you make it. Illogical or too difficult to implement or by the time you get regulation out, which often happens in tech, the issue you're trying to solve is already gone. Sure. Uh, then you'll find that nation states who move on their own will move with a faster speed.

Sriram Viswanathan: Sure. But is it fair to say then that your, I. You are not a proponent of a sort of a, you know, ITU like global, uh, a GI AI coordination, uh,

John Chambers: capability, or I'm a a, I'm a believer in some structure that will allow that to occur. Yeah, to outline what it is I. And to do in today's environment, especially with what's going with tariffs.

Sure. It's very difficult. It's very hard to do. Yeah. But I think if you get your basic guidelines and adhere to it, this is where I also want to give a compliment to most of the high tech companies. They've said, this is an area that we've gotta have responsibility into. Sure. And most of 'em are trying Yeah.

To drive it through in terms of the approach. I hope that continues. Yeah. In terms of the speed,

Sriram Viswanathan: this is great. Um, this is, you know, it's such a, it's fun, isn't it? It's

John Chambers: fantastic. You and I have seen the movie, except this. Five times faster.

Sriram Viswanathan: It's, it's five times faster. And I think one of the things that we're also observing is that, as you rightly point out the, the scale difference between what happens in Palo Alto and what happens in Bangalore, you know, that has just, you know, significantly reduced in terms of the timeframe it takes.

Yes. For someone in Bangalore to sort of do exactly what's happening here. Yes. And so it's become a, you know, it's almost like a level playing field. Once everybody's connected. Yeah. When everybody has the access to the same tools, innovation can happen much faster. And that's what we're seeing

John Chambers: it is. And but again, I like the parallel you just drove.

Uh, about about 50% of my startups have end in diaspora as the CEO. Is that right? That wasn't by design. But when you have 1.2 million. I know engineers per year and 60,000 here, uh, that mixture can sunny create powerhouses with tremendous speed. And if you can combine the best of both countries in a environment where you trust intellectual property protection with democracies, with countries to get along.

President Trump and Prime Minister Mojo will get along famously. Mm. They'll work through their issues very quickly and they'll say, how do both countries lead in terms of the direction? But if I were betting on a combination that will shape the future of the world around technology, it's gonna be India combined with the us.

Yeah. It'll be hard to keep up with. Yeah. And I think both countries have a view. Let's also do what's right for the world. Yeah. But let's do it together first.

Sriram Viswanathan: Yeah. Whenever I, and I've known you John for a, a long time, observe I'm a dreamer. I made that you, you are an eternal optimist and it almost feels like it's hard to not buy into your vision when somebody sits down and listens to you talk.

Yes. And you have this, you know, just incredible passion to sort of communicate. Yes. Your belief in the optimism of what can occur. Yes. But all of us have our own, you know, doubts at times. Sure. And, you know, globally and, you know, things change and some of our companies fail. What are you worried about in the current

John Chambers: environment?

Uh, great, great question. Uh, let me start with a little bit bigger picture. Come very specifically down. Uh, my best engineers at Cisco used to really tease me hard. Yeah. Uh, they said, John, you understand you're very good at strategy and vision. Yeah. And when they gimme that compliment, I said, what's gonna come next?

What is the, but, uh, and they say, but you know, execution and operations are for professionals. Sure. And uh, at first they were doing teasing, but then I really got it. You've gotta be able to do both together to be effective. Yeah. So it is how do you execute? Yeah. And implement. So the US India Strategic Partnership Forum by KGI and Pharma.

They coordinate with a team of 32 people. Sure. Bringing this vision to life in terms of what can be done here and how do you drive it through. So you've gotta have extra execution and operational teams who do this well. Mm-hmm. And so that's what I worry about. Whether it's the two countries working together, or each country.

I'm gonna be at France and Veva Tech. Uh, I'm uh, uh, president Macron's. French high tech ambassador. He's gone from the worst place in Europe to do a startup to the best, as you've watched on it, and not played a small role in that and deeply honored forward. You see where there's a country policy on AI and direction way ahead of time.

How do you change? What do I worry about the most? Two things. The speed of AI productivity. If you believe and I do, is gonna be three times the impact. Mm-hmm. Of the internet. In the internet. The speed of change was dramatic. Did we destroy a lot of jobs or modify how the people did jobs? Mm-hmm. Yes we did.

But candidly, it grew the industry overall pipe overall pipes so big. Yeah. We not only could keep up with it, we increased the standard of living. Right. This time it's gonna be even faster in areas like call Center, where a company like UNIFOR is an example. They can get 30% productivity per year for the next five years.

And so it would destroy a lot of jobs and you've either gotta create additional things for those people to do in the companies or change the education system. Yeah. I think you've gotta do both. So what I worry is, will we retrain those of us, uh, in the industry to how to use AI in your new roles and we, we be able to really drive through the changes, uh, in a way that absorbs the jobs that displacement will occur on.

And I worry if we don't, we're gonna leave a lot of people behind. Yeah, that's my number one worry.

Sriram Viswanathan: If you could be a founder today, what would be the problem that you would solve or, or work on? Oh, it's

John Chambers: very simple, I think by using AI with a integral part of security. Yeah, so this is in essence what I'm doing, embedded into it.

You can change the lives of so many people in every industry, so different than the internet or other technology transitions. Every industry moves at the same time. Are we gonna solve cancer? Oh yeah. Yeah. Are we gonna be able to address rare diseases? There's no research going into by the use of big data.

Oh yeah. Are we gonna be able to drive productivity at seven to 10% per year in every country who company that survives? And you know what that means on profitability? Yeah. Which means stock price. Yeah. Oh yeah. If you execute. Yeah. So I think solving the problem and. Tremendous productivity and making the world a better place where you do good, but you also get the results is key.

Cisco was number one in, uh, customer satisfaction. Uh, for the 15 years I was there. Uh, we were also number one in corporate social responsibility giving back. Interesting enough, every country I was number one in corporate social responsibility. I had number one market share. That's fantastic. I think they go together.

Sriram Viswanathan: They, they go together. Last question. Sure. What's the most underrated trait that you think a tech leader has or a startup entrepreneur has, and you have such a, such a wealth of interactions with various entrepreneurs and CEOs. What is the one underrated trait that, uh, CEOs have?

John Chambers: Gotcha. I'll hit three.

Number one, most CEOs who are really good at planning, developing a playbook. Yeah. They're the exception. Yeah. And I think those that get it have a huge advantage. Uh, I think the number two unrated, uh, underestimated trait is culture and humility. Ajay Banga, uh, of course our CEO of now the World Bank.

World Bank, he said, great leaders are humble. Yeah. Uh, and I think it's important to remember that. And I guess the last trade is great leaders who know how to dream. Yeah. Earlier part of the conversation, but then can execute.

Sriram Viswanathan: Yeah. Fascinating. John, you are just a wealth of, uh, of uh, expertise and knowledge and advice Many of us can take on and a lot of the startup.

Uh, CEOs and entrepreneurs that you're investing in advising, they are really super lucky to have you in their meds. So

John Chambers: well tell 'em that and we need to do more deals together. That's

Sriram Viswanathan: for absolutely, for sure. So John, thank you so much for being on this podcast. I truly enjoyed it and I call you one of my dear friends and I hope we'll do more stuff together.

John Chambers: We will be friends for life. You can't divorce me.

Sriram Viswanathan: Thank you,

John Chambers: John. Thank you very much. Lemme know what your audience thinks. Thank you.

Sriram Viswanathan: Thank you for tuning in to the Tech Surge Podcast from Celesta Capital. If you enjoy this episode, feel free to share it, subscribe or leave us a review on your favorite podcast platform. We'll be back every two weeks with more insights and discussions of all things deep tech. Bye for now.