Source:  Forbes, March 16, 1992 v149 n6 p136(2).
    Title:  Long distance relationship. (Sandra Lerner and Leonard Bosack,
            founders of Cisco Systems Inc.)
   Author:  Julie Pitta
 Abstract:  Cisco Systems Inc founders Sandra Lerner and Leonard Bosack
developed a network router while they were managers of two computer networks
at Stanford University. The router enabled the two networks to share data.
Lerner and Bosack founded Cisco System using their new technology and employed
family members and friends. Eventually the couple had to turn to venture
capitalist Donald Valentine. Valentine hired John Morgirdge as Cisco Systems'
chief executive. Lerner eventually quit over differences between her and
Morgirdge. Bosack also quit and the couple sold all their stake in Cisco
Systems. The router that Lerner and Bosack developed enables computer networks
comprising equipment made by different manufacturers to communicate with each

Full Text COPYRIGHT Forbes Inc. 1992

A TIGHT BUDGET is always good training ground for an entrepreneur, and the
husband-and-wife team of Sandra Lerner and Leonard Bosack put that training to
good use when they decided to quit their jobs at the university and
commercialize their computer networking invention under the name Cisco Systems

Lerner oversaw the computers at Stanford's graduate school of business. 
Bosack, her husband, worked 500 yards across campus as the manager of the
computer science department's lab.  Although the computers within their own
departments were linked, the two departments were not linked.  Bosack figured
out how to connect the two networks so they could share software and
databases.  "We were on a tight budget," Lerner remembers of those days a
little over a decade ago.

Accustomed to shoestring operations, they financed their venture by mortgaging
their house and running up bills on credit cards, put a used mainframe in
their garage and persuaded friends and relatives to work for deferred pay.  At
one point in 1986, strapped for cash, Lerner went back to work as a corporate
data-processing manager.

Bosack and Lerner were onto something.  The movement for so-called "open
systems" was picking up steam.  This meant that it would become possible to
hook up lots of computers, even rival brands.  Other entrepreneurs seized on
this trend by selling devices to link computers into networks.  Lerner and
Bosack were working on a higher, less crowded plane: networks of networks.

Cisco's product is a router, a combination of software and hardware that links
clusters of computers.  Not just universities need routers.  "We suspected
that Proter & Gamble in Des Moines was going to want to talk to Procter &
Gamble in San Francisco," says Lerner.

Lerner and Bosack at first sold mostly to fellow engineers via Arpanet, an
electronic grapevine used by many universities.  But it was the Procter &
Gambles of the world that made Cisco into a giant success.  Just five years
after Lerner quit her last outside job, Cisco Systems has taken on a
breathtaking market value of $2.5 billion.  The company sold only $183 million
of routers in its fiscal year ended last July, but it has a fabulous 24% net
margin, and Wall Street is expecting a jump in sales to $300 million for
fiscal 1992.

Lerner and Bosack offered their technology, unsuccessfully, to several
established companies.  Turned down, they opened the business on their own,
beating back a demand from Stanford University for $11 million in "license"
fees for the right to sell an invention Bosack developed while still on the
Stanford payroll.  Stanford eventually settled for about $150,000 plus free
routers and support service.

Bosack, now 40, was the inventor and visionary; Lerner, now 36, was the
business manager and trouble-shooter.  They sold their first router in 1986. 
A year later they were selling $250,000 worth a month--and in danger of going
broke.  The business was profitable but short of cash.  And so, with some
mixed feelings, they went to Donald Valentine, the venture capitalist who
funded Apple Computer, for help.

Lerner and Bosack had already given away a third of the stock to workers who,
like the two founders, were getting little or no cash salaries.  In the deal
with Valentine they had to give up still more stock--and surrender control.

They got a taste of what was in store when Valentine hired John Morgridge, a
Silicon Valley veteran, as chief executive over their heads.  "The first time
I met John Morgridge he had already been hired," Lerner says.  Cisco's
managers had been a collection of Lerner's and Bosack's friends--a 70-year-old
retired physicist, for instance, was a plant manager.  Morgridge replaced them
with more experienced hands.  Morgridge also built up a direct sales force to
woo the corporate accounts.

Says Morgridge about the founders: "They were basically selling to their peer
group, through word of mouth.  The initial customer set started with the
lunatic fringe--the kind of people who are way out on the leading edge.  The
early people were very technical and tolerant.  There's been a big shift in
who uses the product."

No doubt a dose of button-down salesmanship was just what the company needed,
but Lerner, whose job under Morgridge was running customer service, did not
take well to the stranger on board.  She and Morgridge squabbled constantly. 
He fired her in August 1990, at which point chief scientist Bosack quit.

Lerner and Bosack had begun to sell their Cisco stock as soon as the company
went public.  They have unloaded all their shares now, for a total of about
$200 million.  They have given away 70% of their fortune.  Lerner supports
zoos and animal welfare charities, while Bosack's pet cause is "alternative"
technology; one of his grants was to a Harvard professor searching for
extraterrestrials.  Cisco's founders still have millions to fund their next
venture.  Now living in Redmond, Wash., they are working on Bosack's next
invention, electronic circuitry to speed up the input/output process of

Regrets?  Scarcely any from Bosack, who had little interest in running a
business day to day.  "We had to ask ourselves the question, 'Do we want to
run a company or do we want to make money?'  For us, it was the latter," says
Bosack.  Lerner, however, is not as complacent.  "Len and I under-estimated
our skills," she says.  "I certainly could have run that business.  I had my
hands on the reins."

Like a lot of startups, Cisco had its share of growing pains.  Unlike many of
them, it was built on an idea strong enough to survive the early turmoil.


  Source:  Forbes, August 25, 1997 v160 n4 p58(2).
    Title:  Does pink make you puke? (Urban Decay founder Sandra Lerner)
   Author:  Dana Wechsler Linden
 Abstract:  Cisco Systems co-founder Sandra Lerner, 42, founded Urban Decay in
1996 to produce makeup in colors that reflected the urban environment. The
company made a profit in its first year even though it grossed less than $5

Full Text COPYRIGHT 1997 Forbes Inc.

HEADS TURN as 42-year-old Sandra Lerner strides into the tea room of Manhat-
tan's Pierre Hotel. She's not just walking, she's making a statement. Most of
the room reeks of money and power: elegant business suits and expensive
hairdos. Lerner is virtually shouting, "Look at me--I can afford this place
but I'm not one of you." She says it with pale turquoise nail polish, a
grunge-style, sheer turquoise shirt and magenta hair hanging limply down her

Considering her accomplishments, Sandra Lerner is entitled to make a statement
like that. With Leonard Bosack, she founded Cisco Systems (1996 revenues: $5.4
billion), one of Silicon Valley's biggest success stories. They created the
first commercially successful router, a device that enables once-incompatible
computers in far-off computer networks to communicate. In 1990 they walked
away with $170 million after being booted by the professional managers the
firm's venture capitalists brought in.

As she munches vegetarian sandwiches, Lerner does not want to talk computer
routers. She wants to talk nail polish--specifically, the hip product line
made by her new company, Urban Decay. With names like Uzi, Gash and Asphyxia,
the vivid, deep makeup colors are supposed to reflect the realities of the
urban environment. Shattered is bluish-green and resembles a shattered car
windshield; Roach is dark brown, as is Rat; Snow is not white (think
urban)--it's yellow.

Hard-edged stuff? You bet. But so far, no Cisco. Urban Decay grossed less than
$5 million wholesale in 1996, its first year on the market. Never mind.
Lerner's making a statement again. "Fundamentally I was just pissed off that
[cosmetics firms] were telling women they had to look like Barbie," says
Lerner. She sneers at the mention of the ubiquitous pink and red nail polish
and lipstick shades. "I think we've created something that is about choice.
You don't have to be afraid of anything you can wash off."

Are women ready for this? Lerner became convinced she had a good idea a couple
of years ago when she noticed Chanel's Vamp, a black-red nail polish that was
a far cry from the traditional pinks and reds. Vamp was hot. Why not more like

Lerner and her financial adviser, David Soward, now president of Urban Decay,
spent six weeks putting the product line together. "Does pink make you puke?
"blared the first ads.

In just six months Urban Decay was in stores like Fred Segal, a chain of
super-trendy Los Angeles boutiques. A few months later, and having gone
through nearly $1 million in Lerner's seed money, Urban Decay had its own
counters in Nordstrom. Within a year Lerner had lots of imitators, including
industry giant Revlon, which came out with a similar line.

Urban Decay's second ad, "Burn Barbie, burn," had to be dropped: Barbiemaker
Mattel threatened to sue. Clearly, Urban Decay had gotten people's attention.

Lerner has been getting people's attention since she was a kid. She was raised
by two aunts, splitting her time between a California cattle ranch and Beverly
Hills, after her parents split up when she was 4 years old. She started her
business career when she was 9, buying a steer, selling it and investing in
two more. By the time she went to California State University, Chico, she had
30 head of registered cattle. She went on to Stanford, where she did graduate
work in computational mathematics. She met Leonard Bosack at the Stanford com-
puter lab.

He was a little different from most of her classmates. "Nerd culture at Stan-
ford was pretty extreme," says Lerner. "There was no way I could have taken
one of these people home to meet my family. But Len's clothes were clean, he
bathed, and he knew how to use silverware. That was enough. I was enchanted."
At Cisco, Bosack was the technological genius. Lerner contributed her fierce
intensity and entrepreneurial drive. The couple married in 1980 and have since
separated but remain on close personal terms. The two talk in computer
shorthand: Lerner says "Control-D!" when she wants Bosack to shut up.

Together they have a charitable foundation and trust funded with 70% of the
money from the sale of their Cisco stock. The foundation provides a
tax-advantaged channel for pursuing their idiosyncratic interests. The founda-
tion finances a wide range of animal welfare and science projects. It also
bought an English manor house once owned by Jane Austen's brother that Lerner
plans to turn into a research center on 18th- and 19th-century women writers.
She is an avid collector of early editions by these authors.

Lerner's personality is as hard-edged as her dress and manner. She is being
sued by her horse trainer and former close friend, Patricia Holmes, with whom
she developed the first Urban Decay color, Bruise. Holmes claims Lerner
breached an oral contract to share ownership of the company. "She didn't have
a role in the company, and my gardener didn't have a role either," says
Lerner. "She hung on for a while, kind of in a groupie status, because she was
my friend and she had my horses."

After Lerner wrote aletter to Revlon Cosmetics U.S.A. president, Kathy Dwyer,
Revlon sued Urban Decay asking for a ruling that it had not infringed on Urban
Decay's trademark. Lerner's letter protested that the giant company had
"ripped off" Urban Decay's products with its new Street Wear line of alterna-
tive colors. The letter began "Does pink make you puke? I doubt it."

Last year Urban Decay was profitable, despite its meager revenues. Cosmetics
margins are enormous: A bottle of Urban Decay nail polish costs less than a
dollar to make and sells for $6 to retailers, who charge $11. But Lerner says
she's already bored. "I guess the things that were bugging me are not bugging
me anymore," she says. "Blue-green nail polish is really mainstream now."