Cisco Systems & Urban Decay: Sandy Lerner

In the pre-Internet 1970's, Sandy Lerner was part of a loosely-knit group of programmers that was trying to get computers to talk to each other. Eventually, she and Len Bosack launched Cisco Systems, making the routing technology that helped forge the plumbing of the Internet. But when things turned sour at the company, she was forced to leave, giving her the chance to start something entirely new: an edgy line of cosmetics called Urban Decay. PLUS in our postscript "How You Built That," how Justin Li created a solution for staying cool and hydrated in the heat with IcePlate. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Hey, it's Guy here. And before we start the show, I just want to let you know that we still have tickets available for our upcoming live show in LA. It's with Michael Dubin. He's the co-founder of Dollar Shave Club. It's an amazing story of how he turned that into a billion-dollar company. And if you haven't been to a live show, they are so much fun. It's a chance to meet me and meet the team behind the show, and also a chance to meet your fellow HIBT listener. So if you want to take it, go to nprpresents.org. That show is supported by American Express, and I hope to see you there.

• 0:37Speaker 01

  I had to go get another job besides Cisco. And we had only my income, and we were mortgaged the house to the hilt, which we might have lost at any particular time. And we had creditors up the wazoo. And I had people calling me at 2:00 in the morning, complaining because they didn't have their routers. Yeah, it was very hand-to-mouth in a way that I think that people who want to be entrepreneurs these days really don't understand.

• 1:08Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:19Guy Raz?

  I'm Guy Raz, and on today's show, how Sandy Lerner helped launch one of the most successful companies in the world, why she had to leave it, and how she went on to remake herself again, and again, and again.

• 1:37Guy Raz?

  If you use the internet today, or if you're listening to me right now through your smartphone or a computer, there's a pretty good chance that that information is flowing through a network that was developed by Cisco Systems. Cisco is the largest networking company in the world. Its hardware, servers, routers, and software touch almost every part of the internet. Now, the idea that one computer can talk to another computer isn't particularly earth-shattering, right? But in the early 80s, this was a pretty big challenge, even at Stanford University. If you worked on a computer in, say, the engineering department, it couldn't talk to a computer in another part of the campus.

• 2:21Guy Raz?

  Things that we take for granted, like email, or instant messaging, or Slack, there was no infrastructure to make these things work on a big scale. But there was an informal group of graduate students at Stanford that was trying to solve this very problem. And Sandy Lerner happened to be part of that group. She and another grad student, Len Bozak, founded Cisco Systems. Today, it has a market cap of around $200 billion. But that growth, it happened largely after Sandy and Len left the company, after Sandy was pushed out. It was pretty devastating at the time, and we'll get to some of that story.

• 3:05Guy Raz?

  But we'll also hear how, after all of that, Sandy went on to build another successful and entirely different type of business, a cosmetics company called Urban Decay. And then, she reinvented herself yet again by starting an 800-acre, sustainable farm in Virginia, where she now lives. And even Sandy's childhood almost sounds like a fairy tale. Her mom and dad split up when she was just four years old, and there was so much turmoil in the family that Sandy was sent off to live with one of her aunts, which sounds like it could have been pretty traumatic, except her aunt lived in Beverly Hills and made Sandy the center of her life.

• 3:47Speaker 01

  I thought it was a wonderful thing to go and stay with my aunt. She was very cool, and she had a very elegant world. We would go to the May Company Tea Room and sit in that gorgeous, blue dining room, and I didn't think life got any better.

• 4:01Guy Raz?

  So you, your childhood was spent largely in living with this aunt in Beverly Hills?

• 4:08Speaker 01

  Until I was six, and then there came a day when my aunt's sister said, "If you come and live with me, I'll give you a pony." And my other aunt Beverly Hills said, well, if you live with me, when you're 16, you can have a car. But you know, when you're six, you're thinking, my God, I might not even live that long. Maybe there won't be cars. So I took the pony.

• 4:27Guy Raz?

  Wait, they were competing for you to live with them?

• 4:30Speaker 01

  Did I hit the jackpot or what?

• 4:32Guy Raz?

  So you, at age six, moved to where?

• 4:34Speaker 01

  Clipper Gap. It's in the higher Sierra foothills, up on the northeastern part of the state.

• 4:42Guy Raz?

  Of California.

• 4:43Speaker 01

  Of California, yeah.

• 4:44Guy Raz?

  And what, what, where do they live? Was it a ranch? Was it a farm?

• 4:47Speaker 01

  Well, it was, it started out at 108 acres and they were farming pears and my grandpa lived up there also and raising some cattle. And I just fell in love with farming.

• 4:59Guy Raz?

  So you, I guess, when it was time to go to college, you stayed pretty close, right?

• 5:05Speaker 01

  Oh, I left home at 15 and got a job working at the bank for a year and a half before I went to college.

• 5:12Guy Raz?

  So where did you go?

• 5:13Speaker 01

  To Auburn, six miles down the road.

• 5:15Guy Raz?

  Was that interesting? Did you, was it just a job?

• 5:18Speaker 01

  You know, my uncle, it was a very small town. My uncle went to Kiwanis with the bank manager. And, you know, I think my uncle was kind of watching out for me and making sure that I had a, a safe place to work. But it was a terrible job. The bank owner made all of the tellers kneel so he could check that our skirts were long enough. And he called us all Louise.

• 5:36Guy Raz?

  This is in like 1970, 1971?

• 5:39Speaker 01

  1970, 1971, 1972. We were all Louise because he knew Louise and she'd been there a while and we didn't really rate our own names.

• 5:47Guy Raz?

  And were you, at that time, were you enraged about that? Did you seethe about that?

• 5:53Speaker 01

  You know, it was the first time I'd ever experienced any sort of sexism. I mean, on the farm, I was the kid, you know? So you did the boy jobs, you did the girl jobs, you did, you know, I loaded the gas trucks. I drove a truck for a summer. You know, you just, you just got on with it. And it was the first time I hit sexism and it just completely rattled my world and I needed to get out. I just needed to get out.

• 6:17Guy Raz?

  So I guess it was around that time that you did decide to go to college and you went to, I think it was Chico State in California. What did you study there?

• 6:25Speaker 01

  My undergraduate degrees are in international relations with an ESS assigned comparative communist theory and a minor in Marxist economics.

• 6:33Guy Raz?

  Wow.

• 6:34Speaker 01

  These were the Vietnam years, remember.

• 6:36Guy Raz?

  Yeah, right. Did you have a sense of what you wanted to do?

• 6:40Speaker 01

  Oh, absolutely. I went through college in two years and I wanted to be, I had it all mapped out. I would have my PhD by the time I was 22.

• 6:47Guy Raz?

  You did your degree in two years. I mean, obviously, you're, we'll get to this, I mean, you're a highly intelligent person, but were you just sort of, did you feel unusual? I mean, that's very fast.

• 6:58Speaker 01

  I mean, it was a lot of work. It was a tough two years, but on the other hand, I was so convinced I was never going back to that bank. Never.

• 7:07Guy Raz?

  Yeah.

• 7:08Speaker 01

  Never, ever, ever going back to that bank and having to put up with that. And I ended up getting an absolutely first-rate education.

• 7:14Guy Raz?

  So how did you go from studying Marxist economics and international relations to studying computers?

• 7:21Speaker 01

  Well, I went to Claremont Graduate School because I had a full scholarship. And the first quarter, I ended up being an advisor in the computer room. And, you know, in 1975, I was making 25 bucks an hour computer programming. And, you know, to me, it was easy and it was something that I thought would pave the way to being able to enter the job market in a good place.

• 7:46Guy Raz?

  So you are studying, you're sort of exposed to computing at Claremont. And then what? What was your next move?

• 7:54Speaker 01

  Well, at this point, I still thought I wanted to be an academic. And so I picked up my little self and applied to Stanford. And because the political science department there needed programmers because, of course, they were getting to the point where you couldn't publish anything if it didn't have some numbers in it.

• 8:13Speaker 01

  They let me in. And I got in and immediately segued into the Statistics and Computer Science Department.

• 8:20Guy Raz?

  Now, 1975, 76, Stanford, like, now it's a legendary time, right? I mean, it's like, we're talking about, you know, the beginnings of the Internet and all these, the people influenced by JCR Licklider and Steve Jobs going through Park Xerox, all that era. That was an amazing time. So you get to Stanford in the late 70s. What does a computer look like at that point? Like, what were you working with there?

• 8:48Speaker 01

  Well, I was really lucky. At Claremont, we had a DEC System 10. And that's what I learned to program on. And I learned a number of the programming languages and did a little bit of systems programming. But when I got to Stanford, they also, they had DEC 10s and DEC 20s, which was great because it's a huge time-sharing system that would have 200 simultaneous users. And since I'd been running the math and statistical software on the time-sharing computing at Claremont, they had the Lots Volunteers, and so I became a Lots Volunteer.

• 9:18Guy Raz?

  A Lots Volunteer.

• 9:20Speaker 01

  Largely overloaded time-sharing system.

• 9:21Guy Raz?

  Got it, okay.

• 9:22Speaker 01

  A little orange time-sharing system.

• 9:24Guy Raz?

  So just explain this to me in language that I can understand. When you say you were programming these computers, you were taking in raw data and helping them to create statistics from that raw data?

• 9:37Speaker 01

  That's right.

• 9:38Guy Raz?

  And this was just, this just would come to you intuitively? Like, you just kind of learned this by playing around with it?

• 9:46Speaker 01

  Absolutely not. I worked my butt off. When I was in high school, girls didn't get to take fourth-year calculus. And when I was in high school, girls didn't get to take physics. So I had to learn all that stuff in graduate school.

• 9:56Guy Raz?

  You had to learn how to program a computer?

• 9:58Speaker 01

  Oh, absolutely.

• 9:59Guy Raz?

  What did you love about it?

• 10:02Speaker 01

  Two things. One, the money. And two, the independence that it offered was hugely attractive to me. You know, not being tied to hours, not being tied to a desk. You know, I've always been kind of an anarchist. And the idea that you could come and go, and as long as you got the work done, nobody cared about your day.

• 10:19Guy Raz?

  Yeah. When you got to Stanford, what was your impression of the place? Was it like, wow, I've finally arrived to this amazing Valhalla of technology?

• 10:30Speaker 01

  No, not technology, of smart people.

• 10:33Guy Raz?

  Huh.

• 10:34Speaker 01

  I wasn't a freak anymore. They were very welcoming, and I had great friends in the computer science and at LOTS, the time-sharing system. And we would have two meals a day together and-

• 10:46Guy Raz?

  With who? This group of engineers?

• 10:48Speaker 01

  Yeah.

• 10:49Guy Raz?

  All hanging out around computer labs, basically?

• 10:51Speaker 01

  The computer system, absolutely.

• 10:53Guy Raz?

  We hear a lot about the, and we know a lot about the gender gap in the tech world. We're talking about the late 70s. I mean, you must have been like one of one or two or three women around all of these male grad students.

• 11:09Speaker 01

  There were very few, I think. I was the only graduate-level female. But it was also a very welcoming group, and they didn't care really if you were three foot high green and stink, as long as you could, as long as you had the technical chops and you kept up. And I could do that.

• 11:24Guy Raz?

  It was a small group of people?

• 11:25Speaker 01

  You know, there were probably about eight, 10, or 12 of us. People would sort of drift in and drift out. But remember, we had two meals a day together. We spent the weekends in LOTS together. I mean, I would leave these people at 2:00 in the morning.

• 11:37Guy Raz?

  These guys, these were just computer geeks, just total programmers, total-

• 11:41Speaker 01

  One of the people had written the first spell checker and typed in the entire dictionary himself.

• 11:46Guy Raz?

  Wow.

• 11:47Speaker 01

  One of us had a triple major at Stanford and a master's degree in 40 years. And we were all computer addicts, in love with this particular architecture. We built our own internet. We maintained our own internet. We built our own printer interfaces. We built our own computer terminals. It was just one of those times in life where what you gave, you got back.

• 12:11Guy Raz?

  How did you meet Len Bozak?

• 12:14Speaker 01

  I met Len the first time when he was interviewing Stanford. And I mean that. Stanford was not interviewing Len. Len was interviewing Stanford.

• 12:23Guy Raz?

  To become a student there?

• 12:24Speaker 01

  Well, he was thinking about getting a master's degree. And he was kicking around, thinking he needed something to do. And on that day, I remember we went to Chinese food. And remember, these guys are all largely overweight. And they're not the people who were picked on the baseball team. And we're all sitting around there. And these guys are flaming themselves out with hot oil on the Chinese food. And they're like all red and they're like perspiring and everything. And Len sat there. And they were all like being very noisy and, you know, of questionable hygiene. And Len sat there and his clothes were ironed and his clothes matched. And he had this beautiful blond hair and this very soft voice. And he could eat with a knife and fork. And when they would get all done arguing with each other, they would look at Len and they would say, well,

• 13:07Speaker 01

  you know, basically, essentially, what is the answer? And Len didn't join in until they invited him. And then he would tell them the answer. And then they would have another topic and argue and argue. And then they would come back and say, well, Len, what is the answer? And I was just absolutely enchanted. I had never seen a more perfect human being in my entire life.

• 13:26Guy Raz?

  And basically, you guys became partners?

• 13:31Speaker 01

  It was very quiet because the dynamics of the group were that, you know, you weren't supposed to have favorites. That would have been very destructive to kind of the collegial kind of group dynamics there. And so it was, really, nobody even knew we were seeing each other until we decided that we wanted to get married.

• 13:50Guy Raz?

  So I'm trying to get a sense of what some of the problems you were dealing with at Stanford in the early 80s. Basically, Stanford, right at the cusp of, you know, at the sort of the bleeding edge of the technological revolution, lots of computers all over Stanford, presumably. But I guess they couldn't communicate with each other? Was that, that was a problem?

• 14:15Speaker 01

  Well, it used to be that you either bought DEC computers, you bought IBM, or you bought HP, or you bought Data General, or you bought Wang, or you bought whatever.

• 14:22Guy Raz?

  Because those were the only ones that could communicate? Like IBM could only communicate with IBM?

• 14:26Speaker 01

  No, it wasn't. That is true. But the reason was that it was so new. You entered into this unholy alliance with the vendor and they would help you.

• 14:35Guy Raz?

  I see. So some departments had IBM, some had DEC, some had Wang, whatever was around.

• 14:42Speaker 01

  Well, whatever they felt matched their research or their pedagogical requirements. They were aligned to themselves and they bought what they wanted.

• 14:51Guy Raz?

  Which is typical of universities, right?

• 14:53Speaker 01

  Absolutely.

• 14:53Guy Raz?

  Everybody wants autonomy. So there are 5,000 computers, probably many more at Stanford today, obviously, but this is the late 70s and these computers could not talk to each other?

• 15:03Speaker 01

  That's right.

• 15:04Guy Raz?

  And meanwhile, Stanford, I guess, was actually trying to build its own computer network, right? I mean, and that wasn't working. So what, in the meantime?

• 15:13Speaker 01

  We built one.

• 15:14Guy Raz?

  You were doing a shadow network yourselves.

• 15:16Speaker 01

  Yeah.

• 15:17Guy Raz?

  You, Len, and this group of engineers, you guys are trying to figure this out.

• 15:20Speaker 01

  And plus, plus all the people in the ARPANET community who were working on parts of this.

• 15:25Guy Raz?

  And ARPANET is this precursor to the Internet. This was the thing funded by the government.

• 15:29Speaker 01

  Yeah, and that's what ARPA was for. It was, it was a network to foster the interaction and inner sharing of ideas and information among the different people who were taking, taking ARPA money. And that's what we were doing.

• 15:43Guy Raz?

  So, so how are you doing this? Was Stanford aware of what you were doing?

• 15:48Speaker 01

  Officially? Absolutely not. We were definitely under the radar and we kept it under the radar. And it wasn't until one day, I think it was 1981, our time-sharing Ethernet became the Stanford University Network.

• 16:04Guy Raz?

  Wow.

• 16:04Speaker 01

  Just one day, it just, you know, the benediction went in our direction and then we were the, we were the Stanford University Network.

• 16:11Guy Raz?

  So you created a system that would allow these computers to communicate, what today we would, I guess, call a router. You build a network at Stanford. What was the thing that was motivating you guys? Why did you want to do this for Stanford?

• 16:26Speaker 01

  I didn't do it for Stanford.

• 16:29Speaker 01

  I think there's a lot of misunderstanding about those early ARPA years. We did it because it was the right thing to do. ARPA was giving money. It was all public, public domain. Nobody had a financial motive. And the thing that ARPA did that was so amazing even today was it gave the right people the right money. It wasn't political. It wasn't, there wasn't any religion involved in it. It was just this collection of these incredibly smart, dedicated people who made things. And I was really, really lucky to get to be a part of that. I mean, everything that you could do every day. And you could hook something new up, or you could, you know, you could get a message

• 17:13Speaker 01

  someplace, or you could, you know, you could get these milestones. And it was, I guess if you're a nerd, it was just a tremendous adrenaline rush.

• 17:20Guy Raz?

  Hmm. So you are in your twenties at this time. And ARPA, this government agency, is funding all these cool projects that eventually would help to create the internet. You are part of this team that, that creates a network that Stanford then adopts as its, as its protocol. And, and at that point, these 5,000 computers are able to talk to each other?

• 17:45Speaker 01

  Uh huh.

• 17:46Guy Raz?

  So what, at that point, you and Len, were you married at that point?

• 17:51Speaker 01

  Yeah, we married in 1980. We both graduated from Stanford, same department, same, same platform, in June of 1981 with master's degrees. And Len had walked into a job as the head of computing systems for the Department of Computer Science, and I'd gotten a job running computers for the business school. So we were looking at long, happy, nerdy careers in that environment.

• 18:16Guy Raz?

  But didn't you want to do something with, with the routing technology that, that you'd worked on?

• 18:21Speaker 01

  Oh, absolutely. But Stanford said, no, you cannot license this technology. They would not entertain any, any licensing. We had done our part, and we had taken the government's money. This is all public domain. We'd invented all of these wonderful things, but the Office of Technology Licensing didn't let anything out. And Stanford was not even letting us sell it to the universities.

• 18:43Guy Raz?

  So you and Len are frustrated because you believe that this technology needs to get out into the world, that there's all kinds of uses.

• 18:51Speaker 01

  We took our money. This is United States money. We don't have a right to this stuff. We didn't develop. We did develop it, but we didn't invent it. It was a community of people. We're very smart and very committed in all of these different places and in Stanford, all of these different departments. There was a huge community at that point. And Stanford was saying, just no.

• 19:12Guy Raz?

  And you didn't care. You weren't saying, hey, we're going to take the money for this. No. The money would go to Stanford or whoever owned.

• 19:18Speaker 01

  We didn't care.

• 19:19Guy Raz?

  You didn't care.

• 19:19Speaker 01

  We didn't care.

• 19:20Guy Raz?

  You just wanted it to be out in the world.

• 19:21Speaker 01

  Stanford could have taken 100% of it, as long as, you know, they paid the bill for the parts.

• 19:25Guy Raz?

  I see.

• 19:25Speaker 01

  We had good jobs.

• 19:26Guy Raz?

  So was it at that point where you and Len just said, we better start a company and do it ourselves?

• 19:32Speaker 01

  At that point, I believe that Len knew a whole lot more about business than I did. And at some point, he looked at me and he says, well, we're just going to have to go and build this stuff on our own money because we can't do it. The university won't allow us to do it within the university. So one day, I drove up to San Francisco with a $5 bill and started the company.

• 19:50Guy Raz?

  A $5 bill for...

• 19:51Speaker 01

  It cost you $5 at that point to register with the California Secretary of State for a new company.

• 19:56Guy Raz?

  And so you are trying to build a company that, just in layman's terms, would help computers communicate?

• 20:04Speaker 01

  We're trying to build terminal servers and routers.

• 20:07Guy Raz?

  Right. And you called it?

• 20:09Speaker 01

  Well, that came later. Cisco was actually the 36th name that we tried to get. Anything having to do with computers, we couldn't have.

• 20:18Guy Raz?

  Because it was taken by someone else?

• 20:19Speaker 01

  Yeah.

• 20:19Guy Raz?

  So Cisco as in San Francisco?

• 20:21Speaker 01

  Yes. And I designed, it was my name, and I came up because, remember, at that point, a router's a gateway. So I came up with a little logo of the Golden Gate Bridge.

• 20:29Guy Raz?

  Which is still the logo for Cisco.

• 20:30Speaker 01

  Absolutely. And it was a part of San Fran and Cisco. And so we just, with tears on our eyes, basically said, well, I guess we've got to go do this. I had no idea what we were getting into.

• 20:41Guy Raz?

  I mean, you had no interest in leaving your jobs at Stanford at that point, leaving this comfortable life, you know, sort of servicing their computers.

• 20:50Speaker 01

  By this time, this was 1984, and there were starting to be creaks. I mean, I was paid half of what my predecessor made, and I was paid a third of what my successor was paid.

• 21:01Guy Raz?

  Wow.

• 21:02Speaker 01

  And, you know, when the faculty would meet at the beginning of the year to plan the curriculum, even though I was the head of all of the computing facilities, both administrative and the curriculum computing, I went and had lunch with the faculty wives because where they had their annual meeting didn't allow women.

• 21:19Guy Raz?

  This is in 1983, 84?

• 21:23Speaker 01

  Yeah. So it was starting to creak, and I was getting a little bit bored, and, you know, the mini computer, the microcomputers were starting to come in, and I really didn't have a lot of interest in that. So I would say that I was ready for something else, but, you know, it's a complete misunderstanding of the times to think that Len and I had huge dollar signs in our eyes and knew that this company was going to go public and make a bazillion dollars.

• 21:48Guy Raz?

  Okay, so Sandy, based on whatever, this is really where the story gets a little complicated here. So I'm going to try and abbreviate things and just say that during that period, you, I think, you leave Stanford, and then Len also leaves, and then around the same time, Stanford, like, looks at what you guys are doing with Cisco, and they claim that you've stolen their technology, right? And they threatened to take legal action.

• 22:16Speaker 01

  Yep.

• 22:17Guy Raz?

  So how did you deal with that situation?

• 22:19Speaker 01

  Well, when Len and I left, well, when Len left Stanford, a great deal of the engineering team behind the Internet at Stanford left, and so Stanford was left with a network it didn't have any ability to run and certainly nothing to maintain. So within that very fortunate confluence of events, a very serendipitous confluence of events, we actually did have some bargaining power, and we ended up paying them, I think, a very fair royalty for the first, gosh, I want to say $3 million a product or something, a very fair royalty. And we had to fix their network for three years.

• 22:53Guy Raz?

  So that's a pretty good deal.

• 22:55Speaker 01

  You know, it's the deal they should have made to begin with. You know, if they'd have said, "Here, pay us a modest royalty that you can handle from a catfish point of view and maintain our network," we'd have gone, "Okay."

• 23:06Guy Raz?

  And how are you, first of all, how are you funding your company? I mean, to build-

• 23:10Speaker 01

  Credit cards. We mortgaged our home. A friend of mine that used to work for me at Stanford would sit on the telephone and tell our vendors that the check was in the mail.

• 23:20Guy Raz?

  How were you even getting customers? You were just word of mouth?

• 23:23Speaker 01

  The internet. The internet knew, me and Len, the internet knew about the routers. The internet was the internet.

• 23:29Guy Raz?

  And everybody who was part of that wanted what you were offering?

• 23:33Speaker 01

  Absolutely. By 1987, with no sales force, we were booking a quarter million dollars a month.

• 23:39Guy Raz?

  Wow. Who were your customers?

• 23:41Speaker 01

  Our first customer was Hewlett Packard Laboratories. The second one was Rutgers University. The third one was Boeing. And by that time, the internet community had matured, and it was no longer just the bleeding edge that we're ordering these inter-networks, which were networks of networks. So it had kind of moved into the keeping up with the Joneses in the sense that if you didn't have an internet, it was kind of, you were backwards. So the style had changed.

• 24:07Guy Raz?

  And you guys were building these in a-

• 24:10Speaker 01

  In our living room, at Len's parents'.

• 24:12Guy Raz?

  With soldering irons?

• 24:13Speaker 01

  Absolutely.

• 24:14Guy Raz?

  I'm trying to figure this out.

• 24:15Speaker 01

  Absolutely.

• 24:16Guy Raz?

  Really?

• 24:16Speaker 01

  Well, jobs started in garage. At least I had a living room. I had heat.

• 24:20Guy Raz?

  What did the actual, I'm trying to imagine you guys soldering and building these routers. What did they look like? Was it a giant thing? Was it the size of this room?

• 24:32Speaker 01

  You know, I would say it was the size of a good-sized bread box.

• 24:34Guy Raz?

  So it wasn't that much, it was more or less the size of today's routers?

• 24:38Speaker 01

  Well, today's routers are that size. But, you know, it was-

• 24:42Guy Raz?

  An iPhone size, right?

• 24:42Speaker 01

  It was the size of a microwave.

• 24:43Guy Raz?

  Yeah. Can I ask you a dumb, I'm gonna ask you a dumb question, because you and Len were programmers. You guys could sit at a terminal and figure out how to create these programs that would then do things.

• 24:57Speaker 01

  Cisco was a hardware company.

• 24:58Guy Raz?

  That's what I want to know. How did you, how did you know how to build the hardware? Is it something that you just kind of figured out?

• 25:05Speaker 01

  I had nothing to do essentially with the hardware. But Len is a superb hardware engineer, and that's how Cisco made its money, because of Len and his hardware engineering. Len also happens to be-

• 25:18Speaker 01

  An unparalleled systems programmer. Len's just really good.

• 25:22Guy Raz?

  Were you stressed out about, I mean, OK, I understand that you were not motivated by money, but you had to have money, the company had to be sustainable.

• 25:30Speaker 01

  Oh, absolutely. I had to go get another job besides Cisco. I worked for Slumberjé Computing, Computer Systems Laboratory, running their computers. And we had only my income, and I didn't have a car. And we had seven people that we were working, we were mortgaged the house to the hilt, which we might have lost at any particular time. And we had creditors up the wazoo. And I had people calling me at 2:00 in the morning complaining because they didn't have their router or their terminal server. And, yeah, it was stressful.

• 26:01Guy Raz?

  Because you didn't have a factory. You were making each one.

• 26:03Speaker 01

  We didn't have the money to build the damn things. We were having to buy parts on credit.

• 26:07Guy Raz?

  Wow.

• 26:07Speaker 01

  We had every credit card maxed out. Kirk Laheed, who was one of the founders, gave us $10,000. Len's parents gave us $10,000. Robert Michaels loaned us $10,000. He worked at HP, HP Labs.

• 26:20Guy Raz?

  But everybody, all these people wanted to buy them from you. You just could not make them fast enough, and you didn't have the money to make them.

• 26:26Speaker 01

  Well, think about the university payment cycle. You know, universities, by the time, they're budgeted.

• 26:32Guy Raz?

  Right. They're paying you 90 days later.

• 26:34Speaker 01

  Yeah. And, I mean, literally, we would get the money. We had pretty good margins. I mean, we were doing a good business. We would get the money, and we would pay off the two months' bills before.

• 26:47Guy Raz?

  Wow.

• 26:47Speaker 01

  But then, if you had an order for another 20 boxes.

• 26:50Guy Raz?

  You would borrow it.

• 26:51Speaker 01

  We had no collateral. We had already mortgaged the house.

• 26:56Guy Raz?

  So here's what I don't get. You guys, it's just a few of you, mainly you and Len at the beginning, trying to build this. You obviously have this thing that a lot of companies are interested in, a lot of universities, a lot of people are interested. Why didn't you just go and get some investors to put some money into the company?

• 27:14Speaker 01

  We went through about 70 or 80 of them.

• 27:16Guy Raz?

  70 or 80?

• 27:18Speaker 01

  And the problem was that, you know, at this point, the investor community, which is a whole bunch of old Fairchild semiconductor salesmen.

• 27:27Speaker 01

  They didn't think that you could make any money on a public protocol because, of course, everybody would do it. You know, DECNet was a proprietary protocol. SNA was proprietary protocol.

• 27:35Guy Raz?

  Ah.

• 27:35Speaker 01

  PUB was proprietary protocol.

• 27:36Guy Raz?

  But of course, your technology was in the public domain. So they thought, you know, anybody could do this, right? You don't own this.

• 27:44Speaker 01

  Right. Everybody else was going to do it.

• 27:46Guy Raz?

  Which makes sense, right?

• 27:48Speaker 01

  Except that if everybody could do it, why didn't they?

• 27:50Guy Raz?

  So when you went to investors and you pitched them on this?

• 27:54Speaker 01

  They had no clue what I was talking about. First of all, there was a woman founder. And they're all 60 or 70. They just didn't know how to relate to a woman in business. And you know, Len is a great guy, but he's not normal.

• 28:08Guy Raz?

  Meaning?

• 28:09Speaker 01

  Well, two of us are pretty abnormal. I mean, so I was basically a translator a lot of times.

• 28:14Guy Raz?

  You were the face? You were the front man?

• 28:16Speaker 01

  Well.

• 28:17Guy Raz?

  Front woman?

• 28:17Speaker 01

  Not a lot of people can have a conversation with Len.

• 28:20Guy Raz?

  And were you feeling, I don't know, were you feeling dejected or nervous or anxious? I mean, you needed to build these? You didn't have money?

• 28:30Speaker 01

  I think that, I've never been in a war, but I think that we had, all of us who were there, there were probably about 10 or 12 of us at that time, very much had a trench mentality.

• 28:40Guy Raz?

  How were you paying everybody?

• 28:42Speaker 01

  We could get enough income, fast enough to meet payroll. And we had a whole bunch of free labor. Len's parents were building cables and my aunts came down and did Xeroxing for us. And I was managing the cash flow. But it was very hand mouth, in a way that I think that people who want to be entrepreneurs these days really don't understand.

• 29:03Guy Raz?

  Was it exciting? Or was it?

• 29:05Speaker 01

  No.

• 29:06Guy Raz?

  It was nerve wracking?

• 29:07Speaker 01

  If you can imagine being in a World War I trench in the mud, being constantly shelled by the Germans and the mustard gas and no food and no relief and no sleep. It was that exciting.

• 29:21Guy Raz?

  When we come back, how Sandy and Len finally did get their funding for Cisco Systems and why they both eventually walked out of the company they built. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 30:03Guy Raz?

  Hey, welcome back to How I Built This from NPR. So by the mid 1980s, Cisco Systems was up and running. And Sandy and Len went through a bunch of different investors trying to get their router company funded, until finally, they found the guy they needed. I guess it's at that point where you come across a guy who is, becomes pretty well-known to people who follow the investment, the VC world, a guy named Don Valentine. You come across him, and this is a time where you are really desperate for cash. And what does Don Valentine, he's with Sequoia Capital, what does he say to you?

• 30:41Speaker 01

  Don told us that, well, you know, I've taken 200 companies public. You walk into his office and, you know, like your little cubes back there, he's got like all these lucid cubes, you know, making this kind of untenable mountain. And he says, you know, you'll be part of the Don Valentine group of companies.

• 30:55Guy Raz?

  He had already launched tons of companies.

• 30:56Speaker 01

  Yeah, including Apple and Intel.

• 30:58Guy Raz?

  Wow.

• 30:58Speaker 01

  Oh, yeah.

• 30:59Guy Raz?

  So the guy who launched Apple and Intel is coming to you and saying, I'll invest in you.

• 31:04Speaker 01

  Yes, and telling us that, oh, don't worry about getting your own lawyer, we'll, you know, we'll pay for it. Len and I walked into a four-year vesting plan after funding the company for three years, clearly a mezzanine investment. We were making, we were booking a quarter million dollars a month at that point.

• 31:19Guy Raz?

  Four-year vesting plan means that you're...

• 31:22Speaker 01

  We had four years to put in to get our stock and no employment contract.

• 31:27Guy Raz?

  And what did he get? What did he give you and what did he get?

• 31:30Speaker 01

  He gave us $2.6 million, and Len and I got about 30%. But remember, he was the chairman of the board of the company, and he got stock from that, and all of his friends got stock.

• 31:39Guy Raz?

  Okay, I think we're foreshadowing that this story does not end well, but we're going to get to why. So Don Valentine is now essentially the boss.

• 31:52Guy Raz?

  Right. And so, does he say to you guys, "I don't want you to run the company anymore"?

• 31:57Speaker 01

  No, no, he was, Don is much more clever than that. You know, Don said, "Well, for the good of the company, we need to get you a professional CEO. For the good of the company, you know, we need a professional CFO." And Len and I were still kind of doing the, I think we wanted to believe it.

• 32:10Guy Raz?

  Yeah.

• 32:11Speaker 01

  You know, we had given our health, our marriage, everything for this company. And here's this guy who's been wildly successful. And, and we, we truly did want to believe that that was for the best. And his next strategy was to bring someone in who was hostile.

• 32:24Guy Raz?

  As a CEO.

• 32:25Speaker 01

  As a CEO.

• 32:26Guy Raz?

  This is John Morg- This is John Morgridge.

• 32:28Speaker 01

  Yeah, and he denies it, but I will swear on the lives of my cats. The first thing he said to me was, "I hear you're everything that's wrong with Cisco."

• 32:34Guy Raz?

  When the first time you meet-

• 32:36Speaker 01

  The first-

• 32:36Guy Raz?

  The new CEO of the company that you started, he said-

• 32:38Speaker 01

  I will swear that.

• 32:41Guy Raz?

  So, when John Morgridge comes in to run the company, tell me what he would have thought was wrong with Cisco.

• 32:49Speaker 01

  Well, Cisco by this time had a sales force. But remember, the sales force looked like Don Valentine, but younger. Salesmen way into the, this current millennium are still having the parties with the naked girls jumping out of the cake and, and all of this stuff.

• 33:05Guy Raz?

  There was a type, you're saying, that came into Cisco?

• 33:07Speaker 01

  Yes.

• 33:08Guy Raz?

  So, it sounds like, like, once the, the money came in from Don Valentine and Sequoia, there was just a complete, like, they kind of took over the culture that you guys had. You had this culture of passionate computer programmers, and they brought in salespeople who were, who had different, a different motivation, right?

• 33:27Speaker 01

  Well, they all had a different motivation. They had a, a very different set of experiences. And we had a very complicated product. I mean, we were people who'd been talking to each other for a decade at that point.

• 33:37Guy Raz?

  Right, you were all at Stanford together.

• 33:39Speaker 01

  And, I mean, if you think about it, 20 years ago, try explaining what a router did to people. And we didn't talk normal things. And the salesmen, they would come in and they would start talking to Dave Means or Leonard Robert Michaels, or Kirk LaHiette, or Greg Zatz, or one of those people. And the engineers would just like be staring at them.

• 34:01Guy Raz?

  They weren't speaking the same language.

• 34:02Speaker 01

  They had no clue. And so I was trying, A, to translate, and B, to take the flak from the salespeople, translate it, write it up, and discuss it with the engineering people. And these guys were used to having a product that they frankly didn't understand. But to sell a Cisco box, I think you had to understand some part of it because it's what made us different and it's what's made us successful. And at one point, I looked at Don and I said, because he was arguing that we didn't need more floor space because we literally didn't have a place to set the boxes that we were making. And he says, "Every company I invest in always wants more space and they always go out of business." And I said, "You don't understand, Don. This is going to be a $1 billion company." And he looks at me and he goes, "How do you know that?" And I said, "Look at the people here."

• 34:47Speaker 01

  And then I said the most stupid thing I've ever said in my life, which was, "Leaving me out of it. These people are really, really special." And I did it because I felt, I grew up with a grandma who said, "Prit is as prit does and you don't say nice things about yourself." You know, I was being modest. I was saying, "Even if you don't like me," which he didn't, he loathed me, "look at these other people. They're truly special." I mean, these were people that came out of Stanford at the end of the 70s. You don't know what you've got here.

• 35:17Guy Raz?

  How many women worked at Cisco at that time?

• 35:19Speaker 01

  Well, not very many, although we had a couple that were doing inside sales. And we had my friend, who was still at that point running the purchasing department. I do remember that at the executive meeting, the head of HR, who was the former Miss California, and I were the only women.

• 35:34Guy Raz?

  So, this is another part of the story where it's a little complicated. And there are obviously different versions of what happened. But essentially, there was a lot of tension at Cisco. And it seems pretty clear that there was somebody or some group of people who wanted you out.

• 35:55Speaker 01

  That's right.

• 35:57Guy Raz?

  And so I guess, one day, your CEO, John Morgridge, calls you into his office.

• 36:03Speaker 01

  Yep.

• 36:04Guy Raz?

  And what do you remember about that day?

• 36:07Speaker 01

  Everything.

• 36:09Guy Raz?

  What happened?

• 36:10Speaker 01

  I was just sitting in my little office in the corner, as I did every day. And he came in and he sat down in the chair without making an appointment. And he said, you know, I think it's time you retire.

• 36:19Guy Raz?

  That was it?

• 36:20Speaker 01

  He says, you've got, you've got all this money now. You just, time to retire. And I said, well, John, I'm not even half vested yet. And I've got a lot I still think I'm doing here. And I started, of course, in my practical way to tell him what I was doing. And he practically told me to shut up. And basically, I was fired.

• 36:37Guy Raz?

  Wait, but your share of the company was going to fully vest in four years. This is two years.

• 36:44Speaker 01

  Bingo.

• 36:45Guy Raz?

  So if you were to walk out of that point...

• 36:48Speaker 01

  I'd be walking out with half my net worth. And notice they only fired me and not Len.

• 36:53Guy Raz?

  And you could do nothing about that?

• 36:56Speaker 01

  You know, at that point, it was women don't get along. They're not playing team players, you know? This was six months after the company IPO. So you fire one of the founders, big deal. And Len and I were not getting along. We did have an adjustment period where it was very difficult.

• 37:11Guy Raz?

  Your marriage was, was suffering at that point?

• 37:14Speaker 01

  We'd given everything up for the company, our health, our marriage, you name it.

• 37:18Guy Raz?

  Which sounds like it. I mean, I don't know how you could have had a normal marriage.

• 37:22Speaker 01

  You can't. And people handle stress in different ways. And they were simultaneously pandering to Len's ego. And I had no idea Len had an ego until then. But, you know, he went on the road show. He got the board seat. And I was literally chopped liver. And so they, they very consciously tried to drive this wedge between us. And...

• 37:41Guy Raz?

  Sounds like it was working.

• 37:42Speaker 01

  Well, except for one thing. And someone like Don Valentine has no way to really internalize. Len, for all of his things that can make him very unusual and sometimes very difficult, he is fundamentally fair and decent. And it is inviolable. And I went to him and I said... Len, I don't know, you're on the board, whether you've heard about this, but Mortgage just fired me. And then looked at me in his usual way, his little nose kind of goes up one side, and he says, "I am sure you are mistaken." And I said, "Well, I'm sure I'm not." The words "You are fired, leave the building" were said.

• 38:23Speaker 01

  And so Len, I think you probably could have knocked over both Valentine and everybody else like little bowling pins when Len walked up there and walked out with me.

• 38:31Guy Raz?

  He walked out in solidarity with you.

• 38:35Speaker 01

  He absolutely did.

• 38:36Guy Raz?

  He gave up half of his...

• 38:38Speaker 01

  Potentially. We ended up getting it back, but only because it would have looked very bad for the stock six months after, when both of the founders walk out, and you can't tar and feather the other one with, "Girls don't know how to play on a team."

• 38:52Guy Raz?

  Wow. So you did manage to retain your one-third stake in the company?

• 38:57Speaker 01

  With our lawyer and threatening to expose all this stuff six months after the IPO.

• 39:03Guy Raz?

  Right. It speaks to the power of your intellectual partnership that Len walked out with you. I mean, it speaks to how much he respects you.

• 39:16Speaker 01

  I agree with you, and Len and I, you know, we respect each other as people, and we adore each other, and we're each other's best friend.

• 39:25Guy Raz?

  And I should say, you're no longer married today, right?

• 39:29Speaker 01

  That's right. But what fundamentally hit was something that they could not have reckoned on, and that is that there exists people in the world who fundamentally see black and white, right and wrong. And Len is one of those people that has an unerring sense of ethics.

• 39:48Guy Raz?

  Did they... They must have panicked...

• 39:50Speaker 01

  They did.

• 39:51Guy Raz?

  ...when he walked out with you.

• 39:52Speaker 01

  They did.

• 39:53Guy Raz?

  That could have sunk the company.

• 39:55Speaker 01

  They were wholly, wholly taken aback. They had no plan B.

• 40:00Guy Raz?

  So Sandy, somebody who knows, somebody who's hearing the story and knows a little bit about it, might ask you this question, which is, when you and Len walked out, it's been reported you walked out with $170 million. Their argument, Cisco's argument, was, look, you guys are now rich. Just go enjoy life. And so, I mean, you did have all that money. Was any part of you like, yeah, all right, I mean, I did my job here and, OK, I'll move on?

• 40:34Speaker 01

  You know, it could have been that way had the sequence of events been less brutal and less personal.

• 40:40Guy Raz?

  Yeah.

• 40:41Speaker 01

  They could have bought Len and I out. We could have kept, you know, a facade of a relationship. It could have been done 500 ways that would have been a positive thing. Yeah, it was probably time for me to go. It was probably time for Len to go. We're just not good people in a collaborative environment.

• 40:57Guy Raz?

  So you both leave the company. And how was your emotional state at that time?

• 41:02Speaker 01

  I was a wreck. You know, my entire adult working life was tied up in everything that had been done and sacrificed and built in that company. And the people who stayed there were now longer not my friends.

• 41:15Guy Raz?

  Yeah.

• 41:16Speaker 01

  The people who were customers of them were no longer now not my friends. And it was, it was a time that, you know, any kind of tentacle or root that I had managed to put down was just forcibly ripped up. I was on my own. I had a comfortable amount of money. Remember that right after that, Len and I put 70% of the proceeds into charitable vehicles.

• 41:40Guy Raz?

  Which does not get distributed until both of you guys are long gone, right?

• 41:43Speaker 01

  Well, yeah. And we've paid out about $50 million on a, on a private charity that, that we've been funding since, since that time. So, you know, I had money, but we're not talking about billions. We're talking about, you know, a 10th of that.

• 41:58Guy Raz?

  You guys sold all your stock.

• 42:00Speaker 01

  We did. You know, certainly people would say, well, you look, you're crying all the way to the bank. Yeah, how much money can you spend? How much money do you really need? I'm not somebody that, you know, I live in a log cabin.

• 42:11Speaker 01

  You know, what they had taken from me was what they meant to take from me, which was basically my whole working identity.

• 42:17Guy Raz?

  And the amazing thing is you were 35 years old when this happened. You were a very young person. So you're 35, you're ousted from the company that you founded. You do have quite a bit of money at this point. So what did you do?

• 42:32Speaker 01

  You know, I come from a family that believes very strongly in the common good. I've been given great values with respect to work. And, you know, I decided that animals were always my first love. And there were five animal shelters in the Bay Area that if your pet happened to cross the street, it could end up in a shelter 60 miles away. And they had no way to tell where your pet was. And a lot of times, by the time you figured it was really missing, it had been euthanized. And I went across the street to the animal shelter and I said, you know, hey, I have this idea for Network. And we could put all these animals, you know, in this database that would be shared by all of these five networks that ring the Bay and we could call it PetNet.

• 43:15Speaker 01

  And, you know, you guys could just sit there and, you know, take picture of the animal and like type in a few things about it. And people could sit at home and see where their animal was. So I just started working really, really hard with Marin and Peninsula and San Jose and Palo Alto and the Oakland shelters building PetNet.

• 43:36Guy Raz?

  You spent a couple of years in the Bay Area after you were ousted from Cisco. And then I guess in the mid 90s, you started a cosmetics company, Urban Decay, which is a completely, like totally, totally different direction, right?

• 43:51Speaker 01

  Oh, yeah.

• 43:52Guy Raz?

  How did that, how did that happen?

• 43:54Speaker 01

  My aunt, whom I adored, I was turning 40 and she said, hey, kid, it's time to lose the T-shirts and jeans. And by the way, you could use a little makeup. And I adored her and I thought she loved me. And so I took that to heart. And I thought that jeans and T-shirts were not a negotiable item, so I would concentrate on the makeup. And I went to go look at that and I went to the department store and it was all great if you were Christie Brinkley. You know, I don't look like Christie Brinkley. And I've always been kind of a... Hippie, kung punk sort of person, just because I don't fit in. So I tend to gravitate toward those fashions that belong to those people who enjoy not fitting in. And, you know, it was all pink. And I just go, I can't do this for the rest of my life. This is not right.

• 44:39Speaker 01

  Why is your nails red? Well, because it has to match your lipstick. Why? Do you stand there and put your hands up by your face? No, your nails should maybe match your clothes. How about that? What if your nails matched your clothes? So makeup's a very easy thing. You can do it three weeks. We're on the shelf in three months. You know, just add $50,000 and stir.

• 44:57Guy Raz?

  Wait, hold on one second. Because at this point, you were like, I am never going to outside investors ever again.

• 45:03Speaker 01

  Bingo.

• 45:03Guy Raz?

  So you had the money.

• 45:04Speaker 01

  Bingo.

• 45:04Guy Raz?

  And you funded this company.

• 45:06Speaker 01

  That's right.

• 45:06Guy Raz?

  And because you could do that, you could make it happen quickly on your terms. And so what was Urban Decay? What would make it different?

• 45:13Speaker 01

  Well, I just thought, you know, there's a whole market for people like me that really grew up in the time of, you know, Vietnam War and hippies and punks. And, you know, I was really heavy into the punk scene at that point. I was a little delayed gratification. So I just started making these really cool colors.

• 45:31Guy Raz?

  Like?

• 45:32Speaker 01

  Beautiful blues. We had a kind of a light steel blue that was called UVB. We had Plague, which was kind of purple with a green tint. Roach, which was an absolutely drop-dead gorgeous brown. And we had Mildew, which was a really lovely, lovely green. We had Uzi, which was a gorgeous kind of steel, steel color.

• 45:54Guy Raz?

  Wow. So you were making up colors and giving them some interesting names.

• 45:59Speaker 01

  And really, really good ingredients. The first place we were in was in Nordstrom's and Neiman Marcus.

• 46:04Guy Raz?

  Wow.

• 46:05Speaker 01

  We were using top-of-the-line ingredients, and it was absolutely committed to no animal testing.

• 46:10Guy Raz?

  And because you put your money behind it, you were able to... Like, how did you get Nordstrom to agree to carry it?

• 46:19Speaker 01

  Because A, it was a really good product. And B, I think it was good timing because, you know, you're talking about the mid 90s. You know, you're talking about Nirvana and, you know, the grunge wave and Pearl Jam and that whole thing. And I think Nordstrom rightly felt that they were missing a market.

• 46:33Guy Raz?

  So it's, I mean, it's really cool because you sort of had spent so, the previous like two decades, really understanding, learning, mastering computer technology. And I have to assume that you had to dive into cosmetics in the same way because I, I mean, did you know?

• 46:50Speaker 01

  No, it's really easy. You know, the base of the nail polish, how much mica you want to put in it, the base for the, you know, the color cosmetic eyeshadow, what kind of mica you're using, how much mica, how much pigment you're putting in it. Everybody uses the same stuff. It's just how they put it together and what they're willing to pay for.

• 47:06Guy Raz?

  So you, so you would go to these factories that would make, that'd make makeup for 100 different companies and you would tell them exactly what you wanted?

• 47:14Speaker 01

  No, we would make it.

• 47:15Guy Raz?

  You'd make it?

• 47:15Speaker 01

  We would sit on the bench with the people and, and make it. And we had three weeks to get it out on the shelf before the same company would, would knock it off for the other people down the street.

• 47:24Guy Raz?

  I mean, you were and you are such a highly respected technology pioneer and, and you had all these friends in this community. Did anybody ever say, Sandy Cosmetics, that's interesting. That's like a total departure.

• 47:39Speaker 01

  I wanted it to be a total departure because, and I was, I was using my technical chops for PetNet. So I was doing that and the, the makeup to me was really, I was quite offended by the makeup industry putting all the women in this pink box. You know, our first, our first ad for Urban Decay was, does pink make you puke? You know, to me, it was about choice.

• 48:01Guy Raz?

  I guess to, to illustrate like how kind of punk this Urban Decay was, I've read that Dennis Rodman used it. Like that was.

• 48:11Speaker 01

  Dennis Rodman, The Cure, The Cure used it. Gwen Stefani used it. I mean, we had a, we had a whole lot of people who were, who were using our makeup.

• 48:21Guy Raz?

  So why, why did you, I mean, I think it was like five years after you launched Urban Decay that you sold it to, to LVMH, which the company that, that includes Louis Vuitton. Why?

• 48:32Speaker 01

  Oh, I, for the simple reason that there's no intellectual property. You can't patent color.

• 48:38Guy Raz?

  Right, meaning, well, like, other companies could keep knocking you off, so you just, you just figured...

• 48:43Speaker 01

  Done with this.

• 48:44Guy Raz?

  Yeah, done with this. Was it worth the price, or was it worth selling it?

• 48:48Speaker 01

  Um, I made money.

• 48:50Guy Raz?

  And I believe, by the way, I think Urban Decay is now owned by L'Oréal.

• 48:53Speaker 01

  Yep, $400 million.

• 48:54Guy Raz?

  $400 million, that's not what they paid you in 2000, unfortunately, right?

• 48:59Speaker 01

  No.

• 49:00Guy Raz?

  But still, you know, you started this company, it's probably cool to see this around, I mean, it's still around.

• 49:05Speaker 01

  Absolutely.

• 49:06Guy Raz?

  So you have this entirely other part of your life, which is arguably the biggest part of your life, which, now, which is a sustainable farm in Virginia. You completely left the West Coast, you built your life in the Virginia countryside, where you raise rare breeds of cattle and pigs and chickens.

• 49:30Speaker 01

  And turkeys.

• 49:32Guy Raz?

  And turkeys. Tell me about that, how did that start?

• 49:35Speaker 01

  Well, you know, I was raised on a farm, and I believe in eating meat, I mean, we've got these pointy teeth right here, that's why we survived the Ice Age, which may come again. But, you know, the idea that you had factory farm, to me, was beyond horrifying.

• 49:48Guy Raz?

  Yeah.

• 49:49Speaker 01

  And I absolutely believe that, we did not use that kind of farming when I grew up, we farmed the way my grandfather knew how to farm, which was the manure on the fields, and you fed your cows good things, and at the end of the time, your cow fed your neighbor. I mean, we would no more have poisoned our cows, because we would have poisoned our neighbors at that point. So, I was convinced that I could find an economic model, because I had the resources to raise large livestock profitably, in a sustainable, organic, and humane paradigm.

• 50:15Guy Raz?

  Hmm.

• 50:16Speaker 01

  And I am.

• 50:17Guy Raz?

  But, I mean, I have to imagine that, like, doing this kind of farming is hard.

• 50:22Speaker 01

  You know, I'm one of those people that doesn't have, I guess, the good sense God gave it, to just not do something, because it's going to take a whole lot of hard work. Farming is the hardest thing I've ever done. Much, much harder than learning calculus as a graduate student, and, you know, physics and the rest of all of that stuff. It's much, much, much harder than anything I've done, and it takes more work, and more heartache, and more aggravation than you can ever imagine.

• 50:51Guy Raz?

  You know, Sandy, something that is really striking to me is that you still have this partnership with Len. Like, even though you haven't been married since, like, the 90s, you still collaborate together and clearly, like, you still value each other tremendously.

• 51:07Speaker 01

  Yeah, and our foundation is called the Ampersand Foundation because it stands for Len and Sandy.

• 51:13Guy Raz?

  Oh, that's so cool.

• 51:14Speaker 01

  And we both have put our money in. No matter what we do with our personal lives, the rest of our lives, we are each other's legacies.

• 51:20Guy Raz?

  Yeah.

• 51:21Speaker 01

  But, you know, it is good that Len and I found each other because we probably were more suited to each other than most everybody else on the planet. You know, my parents thought Len was a space alien until he fixed my uncle's chainsaw. Then he was, like, the golden boy. But when my parents and Len's parents met each other for the first time, I think they were each expecting sort of like E.T. and wife, you know, because both of their children were so bizarre. You know, it was a little touchy there for a while.

• 51:53Guy Raz?

  I mean, I know you've been asked this before, and it's a bit of a touchy question, but I want to ask you it anyway. You have been able to do almost anything you wanted to do, and you've given away so much of your wealth. Had you and Len kept that stock, it would have been worth 50, maybe more, billion?

• 52:16Speaker 01

  Yeah, last time I checked, I think I would have been worth 9 billion, but it's probably gone up since then.

• 52:21Guy Raz?

  What do you think about that?

• 52:23Speaker 01

  You know, I think that nobody can see the future, and that Len and I agreed to sell our stock on a very joint basis, and we did it because we fundamentally had no respect for people running the company. And it wasn't really that we didn't believe in the company. I mean, I was the one who said that Cisco would be a billion-dollar company, and I knew that that was, as long as those people stayed there, even without me and Len, they had a technology legacy, that they would be successful. It was because Len and I did not wish to live our lives with those people having any more control over our day. It had nothing to do with financial. You know, we made a pile of money, and it

• 53:04Speaker 01

  really had nothing to do with, you know, ROI or, you know, P and E rates and, you know, what that company was going to do. It had to do with the quality of our life and how we wanted to look at the morning.

• 53:17Guy Raz?

  How much of your success do you attribute to your intelligence and your hard work? And how much do you attribute to just luck?

• 53:26Speaker 01

  You know, I've always said that it's a third being smarter, a third working harder, and a third luck. No, I take that back. It's a half being smarter, half working harder, and a half pure luck, because that adds up to more than one. And there were times that Cisco could have just been an asterisk and a footnote. I mean, there were so many times that company could have gone under, and we were saved by circumstances out of our control. So there was huge luck in there. I still work harder than anybody I know. That's my great gift, and I love work. I'm besotted with work. You know, I've already designed my epitaph. It has one word on it. What do you think it is?

• 54:12Guy Raz?

  One word. Wow, that's tough.

• 54:14Speaker 01

  One word.

• 54:15Guy Raz?

  I can't sum your-- I can't summarize your life into one word, Sandy. I don't know. I have no idea.

• 54:23Speaker 01

  Bold. Bold.

• 54:28Guy Raz?

  Sandy Lerner, co-founder of Cisco Systems and founder of Urban Decay Makeup. By the way, Sandy did guess right. When she once predicted that Cisco was going to be a billion-dollar company, it is now more like a $200 billion company. In addition to running Ayrshire Farm and running its restaurant, Sandy also started a library in the UK, the Chotten House Library, which contains thousands of books written by female authors around the time of Jane Austen, who Sandy says is her drug of choice. In fact, a few years ago, Sandy wrote a Pride and Prejudice sequel. It's called Second Impressions.

• 55:12Guy Raz?

  And please do stick around because in just a moment, we're going to hear from you about the things you're building.

• 55:20Guy Raz?

  Hey, thanks so much for sticking around because it's time now for how you built that. And today's story begins about seven years ago, outside San Diego, literally on a manhunt.

• 55:33Speaker 02

  We were searching for an armed suspect. The mission was tough. The suspect was even tougher.

• 55:40Guy Raz?

  This is Justin Lee. He was a sheriff's deputy at the time, and he was one of the people chasing that suspect in the California desert.

• 55:47Speaker 02

  It was incredibly hot. 100 degrees is really hot if you're in San Diego. And we were sweating a lot. We were carrying about 40 pounds of gear.

• 55:56Guy Raz?

  And Justin kept thinking, there has to be a better way to stay cool out here. Now, he didn't know much about design or engineering, but after he got home, he called up a friend who did.

• 56:07Speaker 02

  Oh, yes. JD is a management science and engineering major from Stanford.

• 56:11Guy Raz?

  JD and Justin started to bat around a bunch of different ideas. And after a few years, they eventually designed a piece of clothing that could keep someone comfortable in hot or cold weather.

• 56:24Speaker 02

  It's just a compression base layer shirt that would look a lot like a Nike or an Under Armour shirt that somebody might buy at Dick's Sporting Goods. But it had unique pockets that could hold heating or cooling elements.

• 56:35Guy Raz?

  So they took this idea and put it up on Kickstarter. And a few weeks later, the phone rang. And it was actually the US Army. The Army had been looking for a way to keep soldiers cool. And they said to Justin, hey, we love the shirt, but can you make it stay cooler for longer?

• 56:52Speaker 02

  One way that we put it is we built a scalpel for athletes, and they asked us to build a sledgehammer for soldiers.

• 56:58Guy Raz?

  But how were they going to build that sledgehammer? Well, Justin and JD were stuck for several weeks. And then...

• 57:05Speaker 02

  I was having drinks with a few friends that had just come home from Afghanistan. They had remarked that our shirt that was on Kickstarter reminded them of how they tried to stay cool overseas, which was they freeze bottled water, and then they jam it in their body armor. And that is when I had the lightbulb moment of, oh.

• 57:25Guy Raz?

  Justin's lightbulb moment was, maybe I could create a frozen water bottle that you could strap directly to your body, like a flat plate of armor. Well, that's exactly what JD and Justin came up with.

• 57:39Speaker 02

  The way it works is you fill it with drinking water. You freeze it overnight and then you wear it. And as your body heat melts the ice, you have cold water to drink.

• 57:50Guy Raz?

  JD and Justin called it the Ice Plate. And they made it so it could stay cold for like two to four hours. They took it back to the army to pitch it, but okay, this is the army, right? So it turned out it was going to take years to deal with all the military red tape before Justin and JD could actually get a contract.

• 58:10Speaker 02

  And we just couldn't do that. We were going to basically go broke. So we took it to the commercial market in August of 2016.

• 58:17Guy Raz?

  But they started to get some pushback.

• 58:19Speaker 02

  Negative pushback from the market. Oh, it'll never work. That's a dumb idea. There was every objection in the sun. People just didn't get it right away. And we were just like, oh, my gosh, we just made the biggest mistake of our lives.

• 58:33Guy Raz?

  But just a few weeks after they launched the Ice Plate, their luck completely changed.

• 58:38Speaker 02

  September 2016, we got a live chat from a gentleman named Kevin Frye, who worked for Chick-fil-A at the time.

• 58:46Guy Raz?

  Chick-fil-A happened to be looking for a better way to keep their outdoor employees cool on hot summer days. So Chick-fil-A now uses the Ice Plates at about 200 of their stores.

• 58:58Speaker 02

  So, yeah, we've been busy.

• 59:00Guy Raz?

  And since they launched their company two years ago, Justin and JD have sold about 20,000 units to law enforcement, to construction workers, even to the Secret Service.

• 59:11Speaker 02

  This is the most fun I could have ever dreamed of having. It's nerdy engineering stuff. It's helping the men and women who protect our country and our communities. It is so much fun. I couldn't have designed a job this much fun if I tried.

• 59:27Guy Raz?

  Justin Lee. His company is called Core Performance. It's based in McLean, Virginia. And if you want to find out more about it or hear previous episodes, head to our podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thank you so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there, please do give us a review. You can also write directly to us. That's [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by Rachel Faulkner, with music composed by Ramtin Arablouei. Thanks also to J.C. Howard, Noor Kutsi, Neva Grant, Sanaz Meshkhanpour, and Jeff Rogers.

• 1:00:09Guy Raz?

  Our intern is Mia Venkat. I'm Guy Raz, and you've been listening to How I Built This from NPR.