book.chapter Initial years: 1984-1987

Sandy Lerner and Len Bosack's romance began at Stanford University in 1977, where their vastly different academic paths crossed; Lerner was an economics major at the Business School, and Bosack was deeply involved in computer science. During this era, the challenge of enabling disparate computer networks to communicate was significant. Despite the existence of the ARPAnet, only specific, costly terminals could access it, limiting connectivity options. Driven by the need for inter-network communication, Bosack and Lerner, along with a few colleagues, embarked on a project to develop a more accessible solution. They innovated by creating data bridges and, eventually, routers that facilitated data exchange between distinct networks without relying on the ARPAnet. Their efforts led to the establishment of an unofficial network across Stanford, powered by routers and servers they set up, using software developed by friends. This network allowed incompatible systems to share data seamlessly. When their proposal to officially develop routers was rejected by Stanford, Lerner and Bosack resigned from their positions and founded "cisco Systems" in late 1984, starting with a small operation in their home. Their dedication was evident as they and their team worked tirelessly, often exceeding 100 hours a week, to build the company from the ground up. By 1986, cisco Systems had moved to an office in Menlo Park and was thriving, with profits exceeding $250,000 a month, despite having no formal sales or marketing strategy. The company's growth attracted the attention of venture capitalists, and in 1987, Sequoia Capital invested $2.5 million for a 30-percent stake. This investment coincided with the commercial opening of the ARPANet, significantly boosting demand for Cisco's routers. Cisco's timely market entry and the essential nature of its products led to unprecedented demand, making it a standout success story in the tech industry.