Chapter 45

The prosperity of the U.S. economy in the 21st century cannot do without oil, nor can it do without electronic information technology. It can be said that it is precisely because of its breakthroughs in information technology that the U.S. has managed to maintain a place in high-end manufacturing and has not completely degenerated into a financial country.

When it comes to the U.S. information industry, one cannot help but mention Silicon Valley, and when it comes to Silicon Valley, one cannot help but mention Stanford University. For the engine of the information technology industry, Silicon Valley, Stanford University can be said to have played both the role of a father and a mother. Not only has it supplied a large number of high-end talents, but it has also set a world model in industry incubation.

Among the many companies incubated by Stanford University, Cisco is undoubtedly the brightest star. And the end of 1984 was precisely the eve of the birth of this star.

Leonard Bosack, the director of the computer centers of the Computer Science Department and the Business School at Stanford University, and his wife, Sandy Lerner, were at the Raymond Tavern in the Stanford University Business School, preparing to make the most important decision of their lives—whether to establish a company for a product called "router."

"Sandy, Sandy, listen to me, dear." Leonard was a bit sad but still decided to try to persuade Sandy Lerner: "I know you are worried about life after resignation, but you must have confidence in our router. It will definitely become a great product that changes the world! What we need to do is to bravely take the first step. This is a rare opportunity. Don't you want to apply the economic theories you've learned in practice?"

"Leonard, of course, I have confidence in the router." Sandy's expression was a bit unnatural, and she sighed: "But the board of trustees has not given us a response yet. Starting a company might lead to a lawsuit from the university."

"But we can't wait any longer. Who knows when a similar product might appear?" Leonard said anxiously: "The early market for new products is small, but it is very important. If we are a step behind, we might be always lagging behind in the future. We must seize the time! Is there any business without risks? For our dreams, taking some risks is worth it!"

"No, if that happens, we might even lose our positions at the university!"

Sandy's concerns were not without reason. No one would have thought that the famous Cisco, in its early days, was just a small business run by Leonard and Sandy. The router technology, although invented by them, was developed using Stanford University's equipment and resources. Once they started operations, there would be significant patent issues.

If they lost money, it would be one thing, but if they made money from the router, what would the Stanford University board of trustees think? Would they take the credit? Would they take the credit? Would they take the credit?

But to obtain the patent rights from Stanford University, they would have to pay a substantial patent transfer fee, which would be a significant challenge for a young academic couple.

It's worth noting that Cisco's early capital was quite limited. While HP and Apple started in a garage, Leonard and Sandy didn't even have a garage; their production line was their living room!

In fact, this was not an overreaction. Although Stanford University is dedicated to the role of an information industry incubator, it is not a charity. With a large scale comes large expenses, and a significant portion of the capital supporting student entrepreneurship at Stanford comes from investment returns.

If it weren't for the investment from Sequoia Capital later on, they might have been sued by Stanford University. Yes, this Sequoia Capital is the same Sequoia Capital—standing behind Google, Yahoo, Apple, Oracle, and Alibaba.

The terrifying aspect of Sequoia Capital is not just its wealth but also its role as an arm of the U.S. financial industry in Silicon Valley. Everyone knows that these famous IT companies are backed by Sequoia Capital, and behind Sequoia Capital stands the true masters of the country, Wall Street.

It was precisely because of Sequoia Capital's involvement that Cisco later resolved the inherent issues it faced at its inception. However, this also laid the groundwork for Leonard and Sandy's eventual ousting from Cisco by the capital.

Indeed, as the founders, Leonard and Sandy were kicked out of the board of directors after Cisco went public, becoming a cautionary tale for entrepreneurs seeking investors in Silicon Valley.

Returning to the main story, at this point, Leonard and Sandy were still unknown figures. Even two months after Cisco's establishment, its registered capital was a mere five dollars. For them, it was an incredibly daunting task to raise the money to acquire the patent rights from Stanford University.

"Uh, sorry." Just as Leonard and Sandy were at a loss, a typical Asian man holding a drink approached their table.

"I was sitting next to you, and it seems you are facing some trouble?" No need to ask, the person who appeared at this moment was none other than Hu Wenhai, who was waiting for an opportunity.

"We'll lower our voices. I'm sorry for disturbing you." Leonard looked up at Hu Wenhai, his tone softening. As a Stanford University Ph.D., he had taught many Asian students and subconsciously assumed Hu Wenhai was a newly enrolled student.

Hu Wenhai smiled and shook his head. "No, I mean, I am very interested in your discussion. Can I sit down?"

Leonard was a bit surprised but did not drive Hu Wenhai away. He nodded and pointed to a chair at the table. "Sure, please sit. How should I address you? Mr. Uninvited?"

"You can call me Hu." Hu Wenhai was not offended by his attitude and said, "Although it might seem impolite, it's hard not to overhear your conversation from the next table. It seems you have a product you want to bring to market, but part of the patent is held by Stanford University?"

"Yes, but I won't give up. We plan to start the company first and buy the patent rights from the university once we make money."

"But the university will demand a share of your profits first." Hu Wenhai pointed out bluntly, "If your business is as good as you say, the university might not want to sell its patent share or might demand a higher transfer fee, or even take equity in your company."

"So what?" Leonard was a bit annoyed and grunted, "As long as the company starts operating, these issues will be resolved eventually."

"Oh, of course, they will be resolved eventually." Hu Wenhai smiled like a little fox and said enticingly, "By the way, I have a solution to Mr. Leonard's troubles."

"Oh?" Leonard sized up Hu Wenhai, not committing to anything, and asked, "Which department are you from, and have you heard of our situation?"

Leonard was not a fool. After all, how could a fool develop a router or take Cisco public? However, from his attitude towards capital, it was clear he was not that smart.

But Hu Wenhai's behavior was too obvious. No one would casually join a conversation they overheard in a bar. It was too impolite and presumptuous. But Hu Wenhai not only approached them but also claimed he could solve their problems. If Leonard still didn't realize Hu Wenhai had an agenda, it would be a disgrace to Stanford University's standards for selecting Ph.D. students.

"Alright, I've heard that Mr. Leonard has developed a machine that allows local networks using different network protocols to communicate with each other." Hu Wenhai was straightforward, "To be honest, I believe this is a groundbreaking product that will change the way the world operates. It is a revolutionary technology."

"Haha, you have some insight. Tell me, what is your solution?"

Clearly, even Leonard took Hu Wenhai's praise as flattery. Given his American sense of self-importance, he was a bit embarrassed by the praise. As a result, he was less bothered by Hu Wenhai's sudden appearance.

However, Leonard probably never thought that the invention he created to send love letters to Sandy—yes, this is the story of the great router, originally invented by Leonard to send love letters to his wife Sandy between two Stanford University computer centers—would become the cornerstone of the future world. The entire information society would flow through the routers they invented, forming a terrifying network system.

"The solution is simple: buy the patent share from Stanford University." Hu Wenhai spread his hands and said straightforwardly.

"But we don't have the money, and the university won't sell it cheaply." Leonard and Sandy exchanged glances. They had certainly considered this option, but they had no savings. Living beyond their means was not the American way.

"I, if Mr. Leonard allows, I can provide the money to buy the patent share from Stanford University and then license it to you." Hu Wenhai saw Leonard frown and quickly added, "We can sign a long-term license agreement, for ten or twenty years."

Leonard raised an eyebrow and asked cautiously, "I don't understand, Mr. Hu, why are you doing this?"

"Ha, it's simple. I see great potential in this product called the router, and I have some other ideas. I hope to collaborate with Mr. Leonard."

"Do you want to be our partner?"

"Yes, a partner." Hu Wenhai nodded and smiled innocently, showing eight teeth, "A loyal partner."

---

**Interlude:**

You can call me Hu.

Who?

Yes, Hu.

I know, but who are you?

I'm Hu.

...fxxk off!

---

**End of Page**