From Herding Cattle to Silicon Valley: Sandra Lerner
The name Sandra Lerner was completely unfamiliar to me until about a month ago. From the moment I first heard about the founder of Cisco, however, her name started appearing everywhere, in different contexts and unrelated situations. I started to dig a bit deeper into her story and discovered a fascinating tale of determination; a woman who paid a very heavy price for her success and never let it slow her down, who channeled outrage and frustration into methods that made her successful. This is her story.
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At the age of nine years old, Sandra Lerner bought a bull. She raised it and sold it two years later at a price that enabled her to buy two more. By the age of 18, she owned a pasture with 30 bulls that enabled her to pay her way through college.
Sandra Lerner is an ambitious entrepreneur who has never let a “no” get in her way. Quite the opposite, in fact. You might recognize her name from Cisco, the tech giant that she founded together with her then-husband, Leonard Bosack. Cisco lay the groundwork for the routers we all recognize and use today, but Lerner has led numerous other ventures over the years.
She is a feminist, an activist, and a philanthropist. A remarkable woman whose current net worth is estimated at 200 million dollars.
From Love Story to Dot-Com Bubble
The story of Cisco, one of the largest communications and networking conglomerates in the world, begins with a love story between two employees at Stanford University in California. Lerner and her husband worked in different departments and struggled to send each other emails, as each department had its own computer network. They decided to find a solution to the problem; and Cisco was born. Starting out from their living room, the company soon began to produce routers in their guest room, with no external funding. When the money ran out, they mortgaged their house. It was only after two years and 77 rejection letters from companies and venture capital funds that they received their first financing, worth 2.5 million USD. The rest is history. Cisco’s rise was meteoric — within four years the company had already gone public and was listed on the NASDAQ.
In 1990, Bosack and Lerner appointed one of the investors in the company as a CEO and became entangled in a legal dispute as a consequence. The contract had been drafted by the investor’s lawyer, who had not included a clause to protect Lerner’s position and control. After the contract was signed, Lerner was fired from the company she had founded, and her husband immediately quit in solidarity. On the plus side, they sold their shares for 170 million USD. On the minus side, that was also a trigger that led to their divorce. As the saying goes, you need to know who to divorce, and it seems that Lerner did.
From Routers to Mouse-Colored Lipsticks <<How to Disrupt a Traditional Sector
Sandra had always possessed finely tuned business skills, and despite her personal and business struggles, it didn’t take long for her to identify another business opportunity. When her friend and future business partner, Patricia Holmes, visited her at home and created a new color from a chance blend of raspberry and black, Sandra saw an interesting opportunity to disrupt a complacent cosmetics industry that primarily offered palettes in shades of pink, red and beige. She used some of her profits from Cisco to launch Urban Decay, together with Holmes.
‘There is not enough pink in the world to make me look like [former US model, blonde and pale-skinned] Christie Brinkley’, Lerner said in an interview when asked what attracted the woman who had founded a tech giant to cosmetics.
Urban Decay was a challenge to an industry that Lerner and Holmes perceived as banal and overly traditional. They launched a line of lipstick and nail polish in a range of colors inspired by the urban landscape and given ׳delightful׳ names such as Roach, Smog, Rust, Acid Rain and more. In 2000, Moët Hennessy Louis Vuitton purchased the brand from them, and years later it was purchased once more, this time for an estimated 350 million USD, by L’Oréal, who still owns it today.
The Anger Games
Lerner has always had her finger in many pies, from the unique cosmetics company she founded to other initiatives she established and remains involved with to the present day, including a huge farm offering locally raised beef and organic produce and a research project into 17th century women’s writing, inspired by Jane Austen.
Lerner’s business interests are many and varied, but her guiding values have remained firm and unwavering throughout her career. When asked, she always says that she is driven on by outrage and a refusal to accept the status quo, and that she channels these into an approach that produces valuable and engaging products.
‘Anybody can become angry — that is easy. But to be angry with the right person, to the right degree, at the right time, for the right purpose and in the right way — that is not within everybody’s power and is not easy.’ (Aristotle).
Lerner and her husband experienced countless rejections at Cisco, even though they knew that what they had was a valuable solution to a pressing need, just because it did not meet the needs of the corporate giants under their existing protocols. At Urban Decay, she felt that cosmetics companies were stereotyping women, placing them in boxes that didn’t necessarily fit them, and she wanted to give voice to the idea that every woman has the right to enjoy makeup. The Ayrshire Farm she restored is her protest against the food cartels in the United States that produce food that is harmful to the environment, lacking in nutritional value and places a stranglehold on local agriculture that would otherwise strengthen the local economy.
Product Market Fit in a Blue Ocean
Over the years, Lerner has preferred to enter less trendy markets, where competition is not as stiff and she is able to analyze the market using objective tools — as much as possible — to understand whether the gap in the market is due to a lack of need or because we have simply become used to living without the product, in a form of inertia.
The tech industry in the 1970s was still raw and in its infancy. The ideas and new inventions in the sector were game-changers, genuine solutions to critical problems. Today this market has matured and is held by a small oligopoly of tech giants. New products are not necessarily the best in terms of technology, but rather are based purely on consumer demand.
Lerner says that almost every venture she founded met with significant opposition to begin with — ’everyone thought I was crazy’ — and by the time she began to introduce it, the product had already become mainstream. Authenticity was what kept her going through those early stages — remaining true to herself and her beliefs. She questioned herself over and over to make sure that her product met a genuine need and had a meaningful role to play in its industry.
Lerner’s Tip for Entrepreneurs: What’s Wrong with Just Working?
Aged 66, Sandra Lerner is a battle-hardened veteran of many wars. Cisco took a heavy toll on her personal life, tore apart her marriage, and represented a real risk to the money she had saved up. Her experience has taught her to be cynical about ambition that is not backed up by hard graft.
Her tip for entrepreneurs is not to be afraid of hard work.
She believes the role of the CEO is to lay the foundations for the company’s direction and approach for years to come, and not to respond to external influences. She is opposed to the approach that sanctifies an expectation to make an exit with a quick profit, believing that this filters down to the workers and even to the product itself and is detrimental to it, in contrast to building a strategy that ensures long-term profitability. As she likes to say to new entrepreneurs that ask for her advice: what’s wrong with just working?
