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Former Cisco M&A managers discuss Linksys disaster

"Meanwhile, Linksys, which catered more to individual consumers (and a lot of them), had a call center receiving 100,000 calls a day, Lee said."

New York City:   Tue, 1/27/15 - 11:59pm    View comments
 

Niki Lee Shari Yocum CiscoToday, 2 former managers of Cisco's Acquisition Team:

Shari Yocum

and

Niki Lee

Discussed Cisco's Linksys disaster:

Pet peeves, deal breakers and strong first impressions: 2 M&A consultants on the inner workings of an acquisition
 

5. How and when are the products or services deployed?

This piggybacks on the previous question and gets to the core of a business's philosophy, particularly in the tech space.

LinksysAnd the dichotomy was especially visible when Cisco acquired Linksys, Lee and Yocum said.

At the time, Linksys — where Lee was working — was a small company run by a couple who made decisions quickly, particularly when it came to products.

"We were launching two products a week," Lee said. "Their theory about it was, 'If it sold, great. If it didn't sell, OK, fine. Take it off the market and try a different product next time.'"

That approach worked well in the startup framework, where the early adopters were part of an experiment of sorts. The company gave them the new product, solicited their feedback, made changes and created a new version — all before it went mainstream. High volume, low margin.

As for Cisco? "They're not going to launch a product half done," Lee said. "They want to have it perfect and then launch it." Low volume, high profit.

There was another major difference in their customer-relations approach, Lee said. Cisco, which sells products used predominantly by large corporations and small businesses — has a "high-touch" approach. If you're having an issue, they'll send somebody to fix it.

Meanwhile, Linksys, which catered more to individual consumers (and a lot of them), had a call center receiving 100,000 calls a day, Lee said.

"It's not because the product is bad. It's because you have your standard user, like my mom, who doesn't know how to install a router," she said. "You're dealing with a different customer."

Read more...


 

Related stories:

Pet peeves, deal breakers and strong first impressions: 2 M&A consultants on the inner workings of an acquisition

Unconfirmed rumor: Belkin will guillotine Linksys staff in October

Unconfirmed rumor: Belkin paid a mere $65 million for Linksys

Unconfirmed rumor: Belkin to purchase Cisco Linksys division

Is Cisco getting ready to close Linksys and announce more layoffs?
 


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