2022 was marked by uncertainty. From the Ukraine war to the ongoing COVID-19 pandemic and a chaotic global climate, the past year has been a stress test for us all. At Cisco, we began 2022 with a clear vision for driving inorganic innovation with our M&A and investment strategies.
However, the ever-changing environment compelled us to be even more strategic and diligent in our company evaluation. We saw high-flying publicly traded SaaS companies lose over half of their valuation in an instant. Rising global interest rates hampered corporate growth. Founders and CEOs had to make tough choices around the future of their companies—from raising capital to navigating a closed IPO window.
These challenges bring to mind an analogy from Geoffrey Moore, the notable business consultant and author best known for Crossing the Chasm and Zone to Win. Based on the venture capitalist playbook, Moore’s analogy of the horse, rider, and trail offers real wisdom for companies seeking to incubate innovation within their walls:
The horse represents the product
The rider is the leader of the team building the product
The trail represents the customer opportunity and guiding strategy
The analogy describes an approach to delivering innovation that requires a careful balance between each element. While Moore’s analogy is deeply illuminating, it’s missing a critical fourth element: the weather. The horse, rider, and trail do not exist in a bubble; their performance can be severely impacted by the weather. When it comes to business, the weather represents the macro-level challenges—including geopolitical and economic uncertainty—that can impact a company’s product, team, and strategy.
Today, the weather forecast is unpredictable, and investors need to be ready to pivot at any moment. What may have looked like a sure bet six months ago may be off the table now. And vice versa—companies and technologies that were not on the radar six months ago could suddenly become very attractive. It’s for these reasons that in 2022, Cisco took a more agile approach in our investments and M&A activities.
However, the approach did not hamper our efforts to share our thought leadership content on industry dominating trends across the enterprise technology and investment ecosystems. Throughout 2022, we connected with key audiences to share and exchange powerful perspectives with founders, business leaders, and VC industry colleagues.
You might have attended one of our events, like Magnetic Aspire—a virtual summit on the critical impact of diversity and inclusion on the growth of businesses and innovation. Or you might have read our annual CISO Survival Guide, a leading report on innovation and investment trends dominating the cybersecurity landscape. You may have seen our investment portfolio companies in the media.
We can all agree that 2022 was a year of learnings and opportunities to be more focused and deliberate (while at the same time agile) in our investing and M&A approaches. Moving into 2023, we are excited to see how the enterprise technology and investment landscapes will evolve, how they will impact companies nationwide, and how Cisco Investments and Corporate Development will uncover new insights to power businesses of all sizes. You can read our 2022 Year in Review report here.