Yahoo Finance Today's tech leaders are too arrogant, former Cisco CEO says
Former Cisco CEO and Godfather of Silicon Valley John Chambers thinks the many of tech leaders of today need to humble up.
“I worry about our industry — it’s a tug-of-war between overconfidence, bordering on arrogance, among some of the leaders,” Chambers, who led Cisco as CEO from 1995 to 2015, told Yahoo Finance. “It’s hard to get that arrogance out of them.”
Can you blame the 22-year-old coder fresh from Stanford who just landed a $250,000-a-year (excluding options) job for living that puffed-out chest life? Or how about the 40-year-old tech billionaire who only thinks about their own company’s stock going higher.
The reason why such a bubblicious mindset continues to sweep the Valley is obvious: money, money, and more money. A heady $57.5 billion was invested across 4,000 venture capital deals in the first half of this year, according to Pitchbook data. That puts VC deal-making on track to outpace the decade high hit in 2017 by the end of the fourth quarter, says Pitchbook.
VC investors also continue to rake in profits for their early bets. Exit value remains “robust,” notes Pitchbook, with more than $29 billion realized this year.
Meantime, tech behemoths Amazon and Apple both crossed the trillion-dollar valuation levels in 2018. The popular FANG stocks (Facebook, Amazon, Netflix and Google/Alphabet) have averaged a 35% return year-to-date despite what was nosebleed valuations coming into 2018.
If that type of money-making doesn’t bring on a sense of invincibility, nothing will.
As for Chambers, he has found a practical way to address tech leader arrogance. He refuses to be part of it during his mini-retirement from Corporate America. The ageless and energetic Chambers, 68, founded and is leading a venture capital firm (backed by his own money) called JC 2 Ventures, based in Palo Alto. Along with his marketing whiz son (also John Chambers), JC 2 Ventures is investing in early-stage companies ranging from a drone maker to a startup that sells snacks made with crickets.
Chambers, author of the new book “Connecting the Dots,” serves as a mentor to those tech-minded upstarts trying to change the game. The JC2 Ventures portfolio consists of 12 companies. Chambers told Yahoo Finance he is a month or so away from revealing his next bet.
Says Chambers: “For the companies I select, if they are arrogant I don’t touch it. I have developed a criteria. If the CEO doesn’t want to be coached, if they don’t know what they don’t know, and truly if the chemistry is off, I don’t touch them.”
Brian Sozzi is editor at large at Yahoo Finance. Follow him at @briansozzi.
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