 From New York City, it's theCUBE, covering Welcome to the New Edge. Brought to you by Pensando Systems. Hey, welcome back, everybody. Jeff Frick here with theCUBE. We are high atop Goldman Sachs in downtown Manhattan, I think it's 43 floors. For a really special event, it's the Pensando launch. It's really called Welcome to the New Edge. And we talked about technology. We had some of the founders on, but these type of opportunities are really special to talk to some really senior leaders. And we're excited to have John Chambers back on, who as a historic CEO of Cisco for many, many years has left that as doing his own ventures. He's writing books, he's investing, and he happens to be chairman of the board of Pensando. So John, thanks for taking a few minutes with us. We are more than a few minutes. I think what we talked about today is a major industry change. And so to focus on that and focus about the implications will be a lot of fun. So let's jump into it. So one of the things you led with earlier today was kind of these 10 year cycles. And they're not exactly 10 years, but you outlined a series of them from Mainframe, many client server, everybody knows kind of the sequence. What do you think it is about the 10 year kind of cycle, besides the fact that it's easy and convenient for us to remember, that kind of paces these big disruptions? Well, I think it has to do with once a company takes off, they tend to dominate that segment of the industry for so long that even if a creative idea came up, they were just overpowering. And then toward the end of a 10 year cycle, they quit reinventing themselves. And we talked earlier about the innovators dilemma and the implications for it, or an architecture that was designed that suddenly can't go to the next level. So I think it's probably a combination of three or four different factors, including the original incumbent who broke the glass, disrupted others, not disrupting themselves. Right. But you also talked about a story where you had to shift focus based on some customer feedback. And you ran Cisco for a lot longer than 10 years. So how do you as a leader kind of keep your ears open to something that's a disruptive change? That's not your regular best customer and your regular best salesman asking for a little bit faster, a little bit cheaper, a little bit of more of the same versus the significant disruptive transformational shift. Well, this goes back to one of my most basic views in life is I think we learn more from our setbacks we were a part of, or even the missteps or mistakes, then you ever do your successes. Everybody loves to talk about successes and I'm no different there. But when you've watched a great state like West Virginia that was the chemical center of the world and the coal mining center of the world, 125,000 coal miners very well paid, 6,000 of the top engineers in the world, it was the Silicon Valley of the chemical industry and those just disappear. And because our state did not reinvent itself because the education system didn't change because we didn't distract, attract a new set of businesses in, we just kept doing the right thing too long, we got left behind. Then I went to Boston. It was the Silicon Valley of the world. You know, route 128 around Boston was symbolic with the Silicon Valley and 101 and 280 around it. And we had the top university at that time much like Stanford today, but MIT generating new companies. We had great companies, DEC, WANG, Data General, probably a million jobs in the area. And because we got stuck in a segment of the market, quit listening to our customers and missed the transitions, not only did we lose probably 1.2 million jobs on it, 100,000 out of DEC, 32,000 out of WANG, et cetera, we did not catch the next generation of technology changes. So I understand the implications if you don't disrupt yourself. But I also learned that if you're not regularly reinventing yourself, you get left behind as a leader. And one of my toughest competitors came up to you and said, John, I love the way you're reinventing Cisco and how you've done that multiple times. And then I turned and I said, that's why CEO's got to be in the job for more than four or five years. And he said, now we disagree again, which we usually did. And he said, most people can't reinvent themselves. And he said, I'm an example. I'm a pretty good CEO. He's actually a very good CEO. But he said, after I've been there three or four years, I've made the changes that I know I've got to go somewhere else. And he could see I didn't buy in. And then he said, how many of your top 100 people you've been happy with once you've been in the job for more than five years? I hesitated and I said, only one. And he's right, you've got to move people around. You've got to get people comfortable with disruption on it. And the hardest one to disrupt are the companies or the leaders have been most successful. And yet that's when you've got to think about disruption. Right. So to pivot on that a little bit in terms of kind of the government's role and job specifically, we're in this really strange period of time. We have record low unemployment, right? Tiny, tiny unemployment. And yet we see automation coming in aggressively with autonomous vehicles and this and that. And just to pick truck drivers as a category, everyone can clearly see that autonomous vehicles are going to knock them out in the not too distant future. That said, there's more demand for truck drivers today than there's ever been. And they can't fill the position. So from this weird thing where we're going to have a bunch of new jobs that are created by technology, we're going to have a bunch of old jobs that get displaced by technology. But those people aren't necessarily the same people that can leave the one and go to the other. So as you look at that challenge, and I know you work with a lot of government leaders, how should they be thinking about taking on this challenge? Well, I think you're going to take it on very squarely. And let's use the US as an example and then our parallel, what France is doing and what India is doing that is actually much more creative than what we are. From countries you wouldn't have anticipated. In the US, we know that 50% of the Fortune 500 will probably not exist in 10 years, 12 at the most. We know that the large companies will not incrementally hire people over this next decade. And they've often been one of the best sources of hiring because of AI and automation will change that. So it's not just a question of being skilled in one area and moved to another. Those jobs would disappear within the companies. If we don't have new jobs in startups and if we don't have the startups running at about three to four times the current volumes, we've got a real problem looking out five to 10 years. And the startups, where we think we're doing a good job, the IPUs are third to half of what they were two decades ago. And so if you need 25 million jobs over this next decade and your startups are at a level more like they were in the 90s, that's gonna be a challenge. And so I think we've gotta think from the government perspective of how we become a startup nation again, how we think about long-term job creation, how we think about job creation, not taking money out of one bucket and give it to another. People want a real job. They wanna have a meaningful job. We gotta change our K through 12 education system, which is broken. We've gotta change our university system to generate the jobs for where people are going. And then we've gotta retrain people. That is very doable if you go at it with a total plan and approach it from a skill perspective. That was lacking. And one of the disappointing things in the debate last night, and while I'm a Republican, I really want who's gonna really lead us well, both at the presidential level, but also with the Senate and the House, is there was a complete lack of any vision on what the country should look like 10 years from now and how we're gonna create 25 million jobs and how we're gonna create 10 million more that are gonna be displaced and how we're going to re-educate people for it. It was a lot of finger-pointing and transactional, but no overall plan. Modi did the reverse in India and actually Macron in all places in France where they looked at GDP growth, job creation, startups, education changes, et cetera, and they executed to an overall approach. So I'm looking for our government really to change the approach and to really say how are we gonna generate jobs and how are we gonna deal with the issues that are coming at us? And it's a combination of all the above. Yeah. The shift goes a little bit about the education system and you're very involved and you talked about MIT. Obviously, I think Stanford and Cal are such big drivers of innovation in the Bay Area because smart people go there and they don't leave. And then there's a lot of good buzz now happening in Atlanta as an investment, really piggybacking on Georgia Tech, which also creates a lot of great engineers. You know, as you look at education, I'm gonna go through K through 12, but more higher education, how do you see that evolving in today's world? It's super expensive, there's tremendous debt for the kids coming out, it doesn't necessarily train them for the new jobs. How do you see kind of the role of higher education and that evolving into kind of this new world in which we're headed? Well, the good news and bad news about when I look at successful startups around the world, they're always centered around a innovative university. And it isn't just about the raw horsepower of the kids, it starts with the CEO of the university, the president of the university, their curriculum, their entrepreneurial approach, do they knock down the barriers across the various groups from engineering to business to law, et cetera, and are they thinking out a box? And if you watch, there is a huge missing piece between Georgia Tech, more of an exception, it's still not running at the level they need to, and the Northeast around Boston and New York and Silicon Valley, the rest of the country's being left behind. So I'm looking for universities to completely redo their curriculum. I'm looking for it really breaking down the silos within the groups and focusing on outcomes. And much like Steve Case has done a very good job on focusing about the Rust Belt and how do you do startups, I'm going to learn from what I saw in France at Polytechnique and the IITs in India and what occurred in Stanford and MIT used to occur is you've got to get the universities to be the core. That's where the kids want to stay close to and we've got to generate a whole different curriculum if you will in the universities, including continuous learning for their graduates to be able to come back virtually and say, how do I learn about rescuing myself? Yeah, the current model is just not the right model for going forward. K through 12 is hopelessly broken. And the universities, while we're still better than anywhere else in the world, we're still teaching and some of the teachers and some of the books are what I could have used in college. So we got to rethink the whole curriculum. Disrupt. Disrupt. So shifting gears a little bit, you've played with lots of companies in your CEO role. You guys did a ton of M&A, you're very famous for the successful M&A that you did over a number of years. But in an investor role, J2 now you're looking at a more early stage and you said you made a number of investments, which is exciting. So as you evaluate opportunities, A, in teams that come to pitch to you, B, what are the key things you look for? Go in the sequence, you raised them. First in my prior world, I was really happy to do 180 acquisitions. In my current world, I'm reversed. I want them to go IPO because you add 76% of your headcount after an IPO or after you become a unicorn. When companies are bought, including what I bought in my prior role, their headcount growth was pretty well done. We'd add engineers after that, it would blow them through our sales channels, services, finance, et cetera. So I wanna see many more of these companies go public and this goes back to a national agenda about getting IPOs, not back to where they were during the 90s when it was almost two to three times what you've seen over the last decade, but probably double even that number of the 90s to generate the jobs we want. So I'm very interested now about companies go on public in direction. To the second part of your question, what do I look for in startups and why, if I can bridge it to, am I so faired up about Pensano? If I look for my startups and it's like I do acquisitions, I develop a playbook, I run that playbook faster and faster. It's how I do digitization of countries, et cetera. And so for a area that I'm gonna invest in and bet on, first thing I look at is there a market, technology transition and business model transition occurring at the same time. In other words, Amazon 15 years ago is an example. The second thing I look at is the CEO and ideally the whole founding team, but it's usually just the CEO. The third thing I look for is what do the customers really say about them? There's only one Steve Jobs and it took him seven years. So I go to the customers and say, what do you really think of this company? Fourth thing I look for is how close to an inflection point are they? The fifth thing I look for is what they have in their ecosystem. Are they partnering, things of that type? So if I were to look at Pensana, which is really the topic about can they bring to the market the new edge in a way that will be a market leading force for a whole decade through an ecosystem of partners that will change business dramatically and perhaps become the next major tech icon, it's how will you do that? Their vision in terms of market transitions and business transitions are 100% right. We've talked about it, 5G, IoT, internet of things going from 15 billion devices to 500 billion devices in probably seven years. And with the movement to the edge, the business models will also change. And this is where democratization of the cloud and people are able to share that power where every technology company becomes a business, becomes a, every business company becomes a technology company. The other thing I look at is the team. This is a team of six people. Myself being a part of it, the things like one. That is so unusual. If you're lucky, you get a CEO and maybe a founder or co-founder. This team, you've got six people who've worked together for over 20 years who think alike. The customers, you heard the discussions today. And we've not talked to a single cloud player, a single enterprise company, a single service provider or major technology company who doesn't say, this is very unique. Let's talk about how we work together on it. The inflection point, it's now. You saw that today. Nobody told them this young man's game, obviously. They got the 20-something mixed up. No, actually, we're redefining 20-something. But it does say age is more perspective on how you think. Right, right. And Shimon Perez, who passed away, unfortunately, two years ago, was a very good friend. He basically said, you've got to all your life, think like a teenager. And to really think and dream out of box. And he did it remarkably well. So I think leaders, whether they're 20-something or 20-some years of experience of working together, you've got to think that way. So I'm curious your take on how this has evolved because there was data and there was compute. And networking brought those two things together and you were at the heart of that. Now it's getting so much more complex with edge to get your take on edge. But also, more importantly, the exponential growth. You talked about going from however many millions of devices that were connected to the billions of devices that are connected now. How do you stay? How do you help yourself think along exponential curves? Because that is not easy and it's not human. But you have to if you're going to try to get ahead of that next wave. Completely agree. And this is not just for me. How do I do it? I'm sharing it more that other people can learn and think about it perhaps the same way. The first thing is it's always good to think of the positive. You can change the world. Here are the positive things. But I've also seen the negatives we talked about earlier. If you don't think that way, if you don't think that way is a leader of your company, a leader of your country, or the leader of a venture group, you're going to get left behind and the implications for it are really bad. The second is you've got to say how do you catch and get a replicable playbook. The neat thing about what we're talking about, whether it's by country in France or India or the US, we've got replicable playbooks. We know what to run. The third element is you've got to have the courage to get outside of your comfort zone. And I love change when it happens to you. I don't like it when it happens to me and I know that. So I've got to get people around me who push me outside my comfort zone on that. And then you've got to be able to dream and think like that teenager we talked about before. But that's what we were just with a group of customers who were at this event. And they were asking, how do we get this innovation into our company? How do we get the ability to innovate through not just strategic partnerships with other large companies or partnerships or startups, but how do we build that internally? It comes down to the leader has to create that image and that approach. Modi's done it for 1.3 billion people in India, a vision of the future on GDP growth, a digital country, startups, et cetera. If they can do it for 1.3 billion, tell me why the US cannot do it and why even small states here can't do it. Shift gears a little bit. A lot of black eyes in Silicon Valley right now. It's a lot of negativity going on, a lot of problems with privacy and trading data for currency. And it's been a rough road. You're way into tech for good. And as you said, you can use the technology for good, you can use technology for bad. What are some things you're doing on the tech for good side? Because I don't think it gets the spotlight that it probably should because it doesn't sell papers. Well, actually the press has been pretty good. We just need to do it more on scale. Going back to the Cisco days, we never had any major issues with governments even though there was a Snowden issue. There were a lot of implications about the power of the internet because we work with governments and citizens to say what are the legitimate needs so that everybody benefits from this. And where the things that we might have considered doing that governments felt strongly about or the citizens wouldn't prosper from, we just didn't do it. And we work with Democrats and Republicans alike and 90% of our nation believe tech was for good. But we worked hard on that. And today I think you've got to have more companies doing this and then what we're doing uniquely in JC2 is we're already partnering with France on Tech is for Good and I'm Macron's global tech ambassador and we focus about job creation and inclusive, not just in Paris or around station F, but throughout all of the various regions in the country. Same thing with in India, across 26 different states with Modi on how do you drive it through. And then if we can do it in France or India, why can't we do it in each state in the US partnering with West Virginia with a very creative president of the university there, West Virginia University with the Democrats and Republicans in their national Senate, but also within the governor and the speaker of the house and the president of the Senate within West Virginia and really saying we're gonna change it together and getting a model that you can then cookie cut across the US if you change the curriculum to your earlier comments if you begin to focus on outcomes not being an expert in one area which is lawful not to have a job 10 years later. So I'm a dreamer within that but I think you owe an obligation to giving back and I think they're all within our grasp and I think you can do both together. I think at JC2 we can create a billion dollar company with less than 10 people. I think you can change the world and also make a very good profit and technology companies have to get back to that. You got to create more jobs than you destroy and you can't be destroying jobs and then telling other people how to live their lives and what their politics should be. That just doesn't work in terms of the environment. Well, John, again, thanks for your time. Give you last word on kind of what happened here today. I mean, you're here, Antonio Neary was here we're at the headquarters of Goldman, a flagship launch customer. For the people that weren't here today why should they be paying attention? Well, if we've got this market transition right both technology and business model the next transition will be everything goes to the edge and as every company or every government or every person has to be both good in their quote area of expertise or they're vertical they're in they've got to also be good in technology. What happened today was a level into the playing field as it relates to cloud in terms of everyone should have choice democratization but also an architecture that allows people to really change their business models as everything moves to the edge where 75% of all transactions all data will be had and it might even be higher than that. Secondly, you saw an historic first never has anybody ever emerged from stealth after only two and a half years existing as a company with this type of powerhouse behind them and you saw all the players where you have a customer Goldman Sachs in one of the most leading edge areas of industry change which is obviously finance leading as the customer who's driven our direction from the very beginning and a company like NetApp that understood the implication on storage from two and a half years ago and drove our direction from the very beginning a company like HP Enterprises who understood this could go across their whole company in terms of the implications and the unique opportunity to really change and focus on how do they evolve their company to provide their customer experience in a very unique way? How do you really begin to think about Equinex in terms of how they changed entirety from a service provider perspective what they have to do in terms of the direction and capability and then Lightspeed one of the most creative venture capital that really understands this transition saying I wanna be a part of this including being on the board and changing the world one more time. So what happened today if we're right I think this was the beginning of a major inflection point as everything moves to the edge and how ecosystem players with Pensano at the heart of that ecosystem can take on the giants but also really use this technology to give everybody choice and how they really make a difference in the future as well as perhaps give back to society. Love it. Thank John. My pleasure. Appreciate it. John, I'm Jeff. You're watching theCUBE. Thanks for watching. We'll see you next time.