Special Episode: John Chambers, Former CEO of Cisco and Founder of JC2 Ventures, on the Future of AI-Driven Work and Investing in PeopleReign
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I think there's not going to be a major company, either established or new startup entrepreneur, that doesn't have AI as a broad-based foundation. They have to have an AI-first mentality, and it's got to be a platform on which they build everything else around. I don't invest anymore in a company that doesn't have a real good AI strategy and well-induced implementation.

Good morning, good afternoon, or good evening, depending on where you're listening. Welcome to a special episode of AI and the Future of Work. I'm your host, Dan Turchin, CEO of PeopleRain, the AI platform for IT and HR employee service. Loyal listeners know we've published more than 300 amazing conversations over the past five years. To those joining for the first time, where have you been?

And welcome to a community of more than a million AI enthusiasts. If you want more insights and of course, fun facts, dig into the archives and of course, sign up for the weekly newsletter. Both links are in today's show notes. No AI fun fact or listener mailbag today. We're going with a different format.

I have questions for the guests then as part of today's big announcements from PeopleRain, our guest has a few questions for me. Let's jump right in. We've met unicorn CEOs, Nobel laureates, Pulitzer Prize winners, and AI pioneers. We've never met a guest who has had more impact on how we live and work

Today's guest is a legend in business and tech who has changed more lives than any elected official, pop star, or dare I say monarch. Under his leadership, Cisco Systems built the infrastructure of the internet and grew from $70 million to $49 billion in revenue and from 400 to 75,000 people. Cisco is a perennial leader in customer satisfaction and is consistently ranked a best place to work.

Today's guest personally oversaw 180 acquisitions and correctly predicted more market transitions than anyone along the way to creating one of the most successful companies in history.

Time named him one of the 100 most influential people. CNN named him one of the 25 most powerful people. I call him an investor and a friend. Without further ado, it's my pleasure to welcome John Chambers, former CEO of Cisco Systems, founder of JC2 Ventures, and chairman of the US-India Strategic Partnership Forum to AI and the Future of Work.

John, let's get started with your backstory. I've read your great book, Connecting the Dots, but for those listeners who haven't, share a bit about how you got to where you are today.

Well, Dan, first for the kind introduction, extremely nice on your part. Like many leaders, we're also a product of our challenges we face and how we dealt with those. And I've seen every movie at least twice, and I've made every mistake at least once. But what you do is you learn from them and make yourself stronger. In terms of the backstory, I grew up in West Virginia. I

son of two doctors. West Virginia at that time was the coal center of the US and also the chemical center with 7,000 engineers in Charleston, West Virginia, chemical engineers, FMC, DuPont, et cetera. More millionaires in the state than all the United Kingdom. Tremendous economic

success. And because we didn't reinvent ourselves, we fell behind. And instead of being at the top of most lists, we were in the bottom 10% of almost all the US states. We're now turning that around. But I learned painfully, if you don't disrupt yourself,

you get disrupted and the implications are hard. Went to IBM when they let a mainframes, saw that who were led in a given technology didn't lead in the next technology. Many computers as with Wang, there was DEC, Data General, a number of players.

then to client and server, then to the internet, which we led at Cisco, then to the cloud, and now to AI. So I've watched market transitions occur, and they have very much similarity on it. Connecting the dots is my way of telling the story. I'm dyslexic by background, so I kind of tell it in a way that

has each chapter on how to do acquisitions, how do you do culture. And then at the end of the chapter, Cliff Notes, if you will, here are the key takeaways that you might want to see. I love challenges, I love competing almost to a fault.

And I enjoy building great organizations out of our 22 startups. We now have nine unicorns already. We've had two of the top three exits in the last two and a half years out of the market M&A with OpenGov and Pensando, top defense M&A exit with Ddrone getting occurred and one of the real hot startup rubric Bipples Company doing an amazing job. So it's been in what was a very tough couple of years for venture capital.

We are more of a strategic partner, more of a coach than venture capitalists, but our financial returns have been very fortunate as well. John, you talked about so many of the platform shifts that you've been a part of, many of which you predicted. Let's talk about the shift to AI-first workflows, AI-first apps. What's different this time around? Well, I think if you watch out of all the platform changes, Dan, you articulated and I covered, the

There have only been two that will change the way you work, live, learn and play. And when I said that early 90s on the Internet, that was when Jeff Bezos biggest issue about explaining what Amazon was doing was selling over the Internet. He had to explain to people what the Internet was.

And yet when we said this would change every aspect of our lives, which now looking back should have been easy to call, but no one did. They said you're moving around zeros and ones over routers. What does that have to do with work and the way we live and the way we learn? I think we now realized it. So the parallel with the internet

to AI is going to be, I think, very similar. If you want to know what's going on in AI, you look purely at what is in videos earnings, how are they doing, how fast they're growing. If you wanted to know how the internet was growing, you would have just looked at Cisco revenue growth and earnings for over a decade on it. I think we're at the very early innings of it, and I think they're going to parallel. Those will be the two technologies that not only

allow business and personal market transitions enabled by the technology. The difference is AI will move it probably five times the speed and three times the impact.

In simple terms, a startup that used to take five years, two years to build a product, a year to get five to seven references, get a million run rates a year, three, two more years up to five million a year unicorn, that will occur in 12 to 18 months today.

Speed impact dramatically different on it and it's breathtaking. So we'll see how it goes, but I'm extremely optimistic on how it's going to change our lives, mainly for the better, even though it does have key challenges. Yeah, John, building on that, I've heard you talk about how AI-first companies get to market faster for less investment. They're more innovative. There are a lot of advantages. So you talked about nine unicorns so far in the JC2 portfolio.

What do you look for in companies, specifically AI-first companies? So the first thing I look for is a business model change.

that is occurring, like Amazon selling books over the internet, and they will buy a new technology, the internet. So I look for the business models. Now, the neat thing about AI first, every industry, and in my predictions for 2025, I said 2025 will move from most of the people on this podcast to AI has not changed their

that they work or play or learn yet. That's about to occur and in people rain as you know, you're using that very uniquely in terms of the approach. I think by the end of this next calendar year, it will be across all industries and many of the people will be

both in this country and around the world will already be experiencing in their work and their personal lives, either through a next generational personal assistance and Lexus type device with AI capability from companies or the way their car is driven or their new mobile phone operating system is able to do things they've never envisioned before.

So I think that's going to go across all industries. Second thing I look at is the CEO. Does he or she have a great vision? Do they understand where they're going to go? Do they have a culture that I really believe in? And do they want to be coached? And that's one of the reasons, Dan, I invested in you is I believe that you all hit all those. I then go to customers.

And Steve Jobs did an amazing job of building products, but he just somehow knew what the customer wanted. I'm a business-to-business person, so I go straight to the customers and say, what do you think about this technology? What do you think about this company? And usually if a company has as few as five to seven customers, I'm going to know one of them. And Steve

say what do you really think overall? Then I try to catch them near an inflection point where there can be a sudden increase, if you will, two to three years ahead of time, i.e. call that market transition. And does the company have short-term and longer-term sustainable differentiation if they execute well?

And then I end on culture. We often tease if it weren't for customers and people, this would be an easy business to run in each of our industries. It's all about customers and people in terms of what you do and the direction you go.

So you talk to a lot of entrepreneurs who are always chasing elusive product market fit. You talked about the early days of the internet and Bezos and disrupting the market. And you also said every market is ripe for disruption in an AI-first world. What's your advice to entrepreneurs who are looking for that Bezos book-selling online kind of disruptive opportunity?

Well, the first thing, I think there's not going to be a major company, either established or new startup entrepreneur, that doesn't have AI as a broad-based foundation. So today's world, if you don't have that in place in your startup, your funding evaluation is going to be half of what it would be in a traditional software-as-a-service type environment or operating system type environment for the same business case.

And I think you've got to have this not as a check the box, but what were you going to do that differentiate you? How do you gather your data? How do you really bring that to the market? And so I think about what this is going to mean in terms of entrepreneurs. They have to have an AI first mentality, and it's got to be a platform on which they build everything else around. I don't invest anymore in a company that doesn't have a real good AI strategy and well-induced implementation.

The second thing is speed. You've got to disrupt yourself. Dan, it used to be that if you as a CEO had a new strategy and vision evolution every 18 months, I would say, Dan, my career for 40 years has taught me that if you're changing strategies every 18 months dramatically, you're chasing the new shiny object and markets don't move that fast.

Today, it's actually reverse. If you're not evolving your strategy dramatically every 18 months with the speed at which AI is doing, you're falling behind. So you've got to have the courage to disrupt yourself, and you've got to take risk in that process. Are the majority of startups going to crash and burn? Yeah, they are.

Are there going to be some obstaculars, Fortune 500 companies? In fact, the majority of them won't exit this next decade on that list. That is going to happen. But will there be a new generation of job creation and exciting new companies through this? The answer will be absolutely yes. And that's really what I'm focused on. I know firsthand how and why JC2 is unique as an investor.

But for those who haven't had the pleasure of getting to know you and the team, talk about when you started JC2 Ventures. What did you set out to do that really is unique in the venture industry? Well, I started with, out of all the things that I did at Cisco, I loved innovation and scaling. And we were...

As I mentioned earlier, we were remarkably good and effective and great teams. And we built a great team. We had 12 out of 18 products, number one, three that were number two, three that were number three in it. And we went in with a philosophy of we either do that or we don't compete. And so I love to build organizations and get these market transitions done.

uh, on it. And then I realized really what I love is helping to identify them, but I like staying with them afterwards. I love to see them grow and scale. And at Cisco, I flew cover for him with a new startup, such as people rain. As you know, I get very much involved in your strategy and vision. It's your company to run, but to be your advisor and trusted partner and how we go forward, that changes things dramatically, uh, in terms of the direction. So we outlined more of a business partner, uh,

than a typical VC investor. And I don't view VCs as competitors to other VCs. They usually view us as a partner with them, helping to grow and scale the company. And we focus on how do you both build cultures? How do you scale an organization? Unfortunately, really good at crisis management because I've seen them all before.

And an ability to separate dreams to a combination of building good process, which isn't bureaucracy, but move with speed that others have not seen. So you talked to a number of CEOs of my JC2 portfolio before you came on board, but they probably said, I'm a business partner first. The Indian companies would say I'm their guru.

I help them grow and scale. Tough love. I get really close to the team, help them on evolution of culture, help them drive it through. But more of a strategic, trusted business partner who also invests. And usually I get a fair amount of options in addition to the investment as we move forward. So not the traditional VC at all.

John, because this is a turn the tables episode, I got to get you off the hot seat so that I can be on the hot seat. But you got to answer one last question for me. All right. Roll back the clock to, let's say, the mid-90s when you took over as CEO of Cisco. What's your advice to that younger version of John Chambers? So lessons learned are something I wish I knew then that I knew now.

Two things, first I knew most important to a company's future was their own people and customers. That was inbred from IBM, Wang all the way through, I knew that. What I didn't know is how important playbooks, replicatable processes were to your ability to move fast. I considered that as we alluded to earlier bureaucracy and I was all about moving fast.

I've learned that if you have a logical approach to what you do and play out the chess game to the end before you make your first move and know where your why is on the road, you can move with speed that others cannot. And when your inevitable surprises happen, and they happen to all of us, you can adjust better. I wish I'd really understood the impact of replicatable processes

and how important that is to the success of the companies, even when the companies are moving with speed that are five times faster than I needed to move in the 90s with the internet. That would be my one takeaway. But now I get to the fun part, and that's why I got excited when you lit it up, because you already know part of what I'm going to take you into. But let's do this as though I were looking at PeopleRain as an investment, which I'm

already have made and I'm really excited about. But let's say we were in the early conversation. First question I would ask you is, what is your vision and strategy for PeopleRain and how does it differentiate versus your counterparts? I love being on the hot seat. This is fun, John. Yeah. Finally. First off, for those who aren't aware, today's a big day at PeopleRain. I don't talk much about our milestones on this podcast, but we're very excited to announce a year of record growth.

New investment from JC2 Ventures, John and the team among others, stellar new customers, new partners, and perhaps most important, new amazing humans that we've added to our leadership team. All of this is really a way of saying the founding vision is becoming a reality even faster than we expected when we launched the company five years ago. Our founding vision, which drives our commitment to innovation every day,

We want to improve work life for the next billion employees. We believe that every employee deserves to feel trusted and valued and respected. We believe that with the power of technology, we can extract the drudgery, the friction out of work. And we believe that when you extract the drudgery and the friction out of work, what remains is work that humans love. We were all put on the planet to do something special, and it's not

filing our benefits. It's not filling out forms. It's not waiting in a queue, waiting to get your technology upgraded. It's doing the thing you love, that you're passionate about, that you were put on the planet to do. So for me and my team, that vision was helping a billion employees. And we're going to get there. We're not quite there yet, but gosh, we're on a rocket ride. And it's an exciting time that people are in.

So the second question I would usually ask and did ask you originally in multiple different ways is we kidded earlier about the environment that if it weren't for people and if it weren't for customers, this would be easy companies to run. And we had a good chuckle on that, but really that's what it's all about.

So when AI is implemented, it really is about how do you implement it in customer service, which has been the one that really took off first. And then secondly, it's how you do this in terms of employees and how you do this in terms of both from a human resource culture perspective, but also from an IT perspective.

How does this fit into your strategy and especially how does it tie to the launch that you're announcing today? What are you doing uniquely in that category? Yeah, as you know, we very intentionally committed to improving work life for employees. And part of the premise is that I firmly believe that your customer experience will never be better than your employee experience.

Employees who feel trusted and valued and respected at work are the ones that are more motivated, more engaged. They contribute more to your culture. They recruit their friends. They build enduring companies. And so when we think about giving every employee back, let's say four to six hours of productive time per week, it's very intentional because when we think about the fastest path to deliver better business outcomes with AI or really with any technology,

We believe that it starts by investing in your people and that transcends just snacks in the break room, that transcends the foosball table. It really is about demonstrating to your employees that you care about how they work and you create an environment where they can do the best work of their life. What we did at PeopleRain is built an AI-first platform with five AI-first applications that actually operationalizes our commitment to employee success.

Well, when you think about it ties right back in, my view is that AI will allow well-run companies to drive productivity at 7% to 10% a year on it. And in terms of the people, if you give them back four to six hours a week, that is interesting enough, 10% to 15% increase in productivity and we get the math on it. The next thing I delve into with a company is what is your differentiation today and how do you maintain it? Because

in an area such as being driven by AI and people will realize over time it is about customers and then it's about our people and how do we add productivity as well as culture to both. What's your differentiation today and what is it that you think you can differentiate in the longer run in terms of speed and customer relations?

The unique approach that we take at People Reign, everything from our vision, our mission to our innovation agenda, it has to do with putting people, putting humans at the center of the technology kind of life cycle and having the technology orbit around the people instead of what we in particularly Silicon Valley have done in the past, which is force the people to adapt to how the technology works. We think that's broken.

And we were very intentional about this. From day one, when we started the company, we set out to build a people experience that involved automating the 5,000 most common requests, things that create friction at work. We automated those. And we did that before anyone was talking about AI agents, this notion of a spectrum of agentic behavior didn't exist five years ago.

But we believe that if you think about the best way to get an employee back to being productive, back to doing what they love faster, it involves really at a very data-driven level understanding what's impeding their progress. So 5,000 common actions integrated with more than 100 enterprise backends. It speaks more than 90 languages, but it goes beyond that.

Part of the philosophy of PeopleRant is that we do what we call, if you're listening, you're not seeing my finger quotes, but we automate the full life cycle of the employee service requests. What that means is that no human, no employee should feel penalized because they don't have an optimal experience with a virtual agent. Two of the five applications built on the PeopleRant AI platform

are to support the human. So if the virtual agent isn't being helpful, it detects using sentiment analysis that it should probably bring a live human into the conversation. People are in classify as an application that finds

and routes the conversation to the best live human based on skills, languages spoken, geography. Then PeopleRain Recommend is an application that provides a set of next best actions in the form of real-time live coaching to the human that was brought into the conversation. To get the employee back to work as efficiently as possible involves a combination of AI first, virtual agents using agentic behavior,

but also knowing when the right time is to pull the ripcord, bring a smart human in,

That's the unique approach that PeopleRain takes. And when you think about the world of work from the perspective of what's best for the human and not the capabilities of the technology, you build PeopleRain. You know, you've alluded to the next area I wanted to delve into with your comment about one of the best ways to get employees. Many of us in the people side are worried about way I displace this. What does it mean is to get them experience using AI and realize that it actually increases the

the quality of the work they do and their personal enjoyment as opposed to mundane approaches. But how do you approach that in a concept level when you think about, really, it's about the human resource capital of a culture of a company and the IT implementation of it. How do you address that and tell your customers how they should address it with their employee base? Yeah, it's an important question. I think the best way to answer it is with a customer story.

So recently had a very successful go live with 16,000 employees at the world's third largest construction firm. And going into the project, there was a lot of apprehension. Leadership wanted to quote invest in AI, but they weren't really sure where to start. And so our approach with that company and with all of our amazing customers was the same. We start with what we call a 30 day sprint to value.

And we challenge the customer. We say, let's not talk about AI. Let's talk about a business problem that's worth solving. Let's talk about what we call a true north success metric. How are we going to know if it's working? And lastly, let's talk about who the stakeholders are, whose life is going to be better if we solve this business problem together. And they said, it's a lot of friction related to the onboarding of new employees. We got requests. We've got all kinds of issues that have to

get floated in between different organizations, HR and facilities and IT and InfoSec. And what we would really love is to onboard new employees in half the time it currently takes. That was a business problem. That was a TrueNorth success metric. And so very quickly on day one, we call it the configuration workshop of the 30-day sprint to value. We had a framework in place that was not

about AI. We had a framework in place that was about getting those employees back to work, reducing friction at work faster, and we had full alignment around a strategy. At the end of the 30 days, four one-week modules, it culminates in what we call a production migration workshop. And this customer that I mentioned, the construction company, 16,000 employees, and all of our customers, they benefit from the fact that we've got

a clear metric that we can use to measure the success of that first problem that we're solving together. And so when we're evaluating these technology projects, we're always thinking about them in terms of the impact to the human. And so we very rapidly try to get beyond some of the apprehensions about, is it going to take my job? Is it a threat to me? We get those conversations out of the shadows and we make it real. And if you lead with the benefits

to the humans, being more productive, doing more of what you love, you quickly diffuse those kind of existential or philosophical questions about how AI may interrupt my work. And instead, you get people embracing innovation.

No, I completely agree. I love the way you tell stories. But secondly, you make them very easy to understand outcomes. It's one of the many things that I focus on, on really successful startups, which become major industry players, is they focus purely on outcomes and what is the benefit to the customers. And then explain to me in ways that I understand how you differentiate your ability to

get to the outcomes, and what are the numbers? You understand math, very simple, four to six hours a week, 10 to 15% increase in productivity. You cut in half the cycle time for a new employee to come up to speed. That's a 50% improvement as well as less resources going into bringing that person up to speed. Now, your last question, play it out five years from now.

What is your view of how the future work evolves over the next five years? And what is it that people at RAINN do uniquely to really make that, but not only more productive, more effective, but more enjoyable for the average person in a company? Yeah, John, you do your annual predictions. This is my chance to do mine. Only mine are five years out. I get the benefit of a little longer time horizon. I'm going to give you five. Okay. And...

I'll frame them all with this thought. I believe that work will change more in the next three years than it has in the previous 300, like since the first industrial revolution in the 18th century in the UK. I believe that very soon AI will be just ambient in the enterprise. We'll stop thinking about, am I interacting with AI? Am I not? Is it an app? Is it a tool? Is it an agent? And it'll just be ambient. I believe that service for employees will come to you

will emerge from this world of where we need to go and get the service, we need to ask the question, we need to first be experiencing some downtime so that we know what to ask for. I believe that ambient intelligence will be smart enough to have service delivered to us at the point of need. I believe that will replace what I'll call the current a teleconomy. It's gonna become what I'll call an ask economy. And in the ask economy,

rather than what we do today, which is we make e-dates about where and when you can work and what tools you can and can't use. And we're very quick to tell you when you've done something wrong. I believe instead when these powerful technologies make it easier to do the right thing at work in the right way the first time, I believe instead as service providers, as employers,

It will be much easier to ask employees, what can I do to help you do the best work of your life? And I do believe that's a technology-first, AI-first approach is going to make it easier for us as service providers to establish these ask-based partnerships with our employees. Number four, I believe that the nature of organizations will change. I think that organizations are going to move to kind of ad hoc organizations where they consist of

kind of specialists brought together to perform a task or based on a skill they have that they love doing. And so you'll sit around in a team, it may be an economist and a designer and a coder and a marketer.

But to be able to design the best, let's say it's an ad campaign or we're pitching a new client or something like that, I believe that diversity of thought, diversity of ideas, bringing together the best skills that we all have. I think that AI-based identification and kind of horizontal expansion of your skills will make it a lot easier to bring together these ad hoc teams of specialists. And then lastly, I believe when it comes to, you just asked me a question about

AI taking jobs, apprehension about the role of AI. I believe and I celebrate the fact that within five years jobs that are, I call them one of the three Ds, they're dull, they're dirty or they're dangerous, will be replaced by jobs that are healthier for humans and that involve things like critical thinking and empathy and collaboration.

Many of those skills, to my thinking, are the ones that an AI-first culture, AI-first innovation are going to introduce into the workplace. And so in five years, John, when you and I are having a version of

of this conversation, we're not going to bemoan all of the jobs that we lost. We're going to celebrate all of the new amazing roles, careers, the ways that people are able to really be the best versions of themselves. And we're going to look back on the past five years and say, if it wasn't for this investment, this enthusiasm around the capabilities of AI, we never would have been able to unlock true human potential. So those are my five, John.

I also take away with stories, remember the three Ds, and you're right in terms of dull, dirty, or dangerous. That is what we wanna do. It's been an honor to be with you today, and I wanna thank you for the time.

John, the pleasure and the honor is all mine. Thanks for hanging out. Gosh, thanks to all of you for joining this special episode of AI and the Future of Work. It's all the time we have for today. But as always, I'm your host, Dan Turchin from PeopleRain. And of course, we're back next week with another fascinating guest.