Ex-Cisco CEO Chambers’s Next Act: Grandpa Startup Investorby
Cisco Executive Chairman invests ‘substantial’ sum in OpenGov
He joins investors Marc Andreessen and Joe Lonsdale on board
On his most recent annual retreat to Davos, John Chambers decided somewhere between cocktails and dinner that he was passionate about government-finance data.
The Cisco Systems Inc. executive chairman spent the evening in January learning all about OpenGov Inc. from co-founder Zac Bookman. The Silicon Valley startup aims to make financial data from governments more accessible and, in turn, more transparent.
Chambers said he has served as an informal adviser to OpenGov since the encounter at the World Economic Forum. He made things official on Thursday by joining the board of directors, alongside venture capitalist Marc Andreessen and Joe Lonsdale, an investor and OpenGov co-founder. Chambers said he invested a “substantial” sum into OpenGov but declined to say how much.
Since stepping down last year after two decades as Cisco chief executive officer, Chambers has been the subject of some curiosity over what he’ll do next. Never to shy away from the spotlight, he’s been bandied about as an eventual force in politics. The outspoken Republican said at the Bloomberg Breakaway Summit on Wednesday that he expects Donald Trump will win the 2016 presidential race due to the candidate’s momentum.
“Transitions wait for no one,” Chambers said at the conference. “You’ve got to be willing to make these transitions and disrupt and take the risk and take the criticism as you disrupt.”
At Cisco, Chambers ran the company during a period when its networking technology became the backbone of the Internet. While his tenure delivered phenomenal growth at the equipment maker, briefly making it the world’s most valuable company, his last few years in the job saw that growth slow -- and then in 2014, decline.
Critics of Chambers said he was slow to embrace the types of trends that startups like OpenGov in some ways embody: the shift to cloud-based computing from proprietary software and hardware. Under his successor Chuck Robbins, Cisco is realigning itself to offer open hardware and software before its customers switch to alternatives. In an interview on Bloomberg TV, Chambers graded the new CEO’s performance in that business transition an eight out of 10. He said Robbins’s overall performance was a 10.
In Chambers’s new role as startup investor and adviser, he must help effect the sorts of technological changes he fought against while running Cisco. He said he’s excited about companies that help digitize information, a huge potential market that could change industries over the next five to 10 years. He plans to invest in two to four such startups in what he called the “digitization” sector. He backed Airware, a video-drone company, and joined its board in March.
“Like a grandparent, I get to give all the advice and coaching,” Chambers said in an interview. “This is what I will be doing in this next chapter of my life.”
Since it was founded in 2012, OpenGov said it’s raised $47 million from Andreessen Horowitz, 8VC, Intuit Inc. co-founder Scott Cook, actor Ashton Kutcher and other investors. It employs more than 100 people, and its CEO has ambitious goals for the startup.
“This is a mission-driven company, but we are venture-backed,” said Bookman. “We obviously want to become a multi-billion dollar company.”
OpenGov said it counts more than 1,000 government agencies in 46 U.S. states among those using its tools to extract and analyze payroll, accounting and other data. The Redwood City, California, company faces competition from other data-analytics upstarts, such as Tableau Software Inc. and Domo Inc., as well as established software providers, including SAP SE and Oracle Corp., which are still used widely throughout many governments.
Annual contracts for OpenGov customers range from $5,000 to more than $1 million, said Bookman. The closely held company declined to discuss its revenue or other financials. Bookman said he’s looking to expand OpenGov to local and county governments, as well as schools. He said the various institutions could learn a lot from one another once they start sharing data.