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What’s on the Horizon for Collaboration Technology   | Cisco Investments

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What’s on the Horizon for Collaboration Technology  

Mike Lim's avatar

Mike Lim

The pandemic underscored an old truth: that necessity is indeed the mother of invention. As the world raced to stay connected in the face of global shutdowns, a burst of creativity produced new ways of working collaboratively, securely and — most importantly — from anywhere. And just like that, the era of Hybrid Work was born.

Perhaps not surprisingly, COVID also had a huge impact on investing trends around collaboration, defined as the practice of individuals working together for a common purpose to achieve business benefit. According to PitchBook, 2021 was a banner year for the U.S. VC industry with investments reaching $330 billion, including multiple monster rounds of $100 million and up. Investment in collaboration companies hit $50 billion, PitchBook said.

Much of this recent investment was opportunistic fundraising fueled by COVID, and in innovations in enterprise software. Notable exits included Slack (acquired by Salesforce), Asana (a year after going public in September 2020, shares were up more than 400%) and Freshworks (raised over $1 billion in its IPO) — all due to Hybrid Work fueling demand for their products.

The next phase of Hybrid Work

But with many workers now returning to the office, Hybrid Work is entering a new phase. Instead of employees working only from home, many are asking what the return to work will look like. There is a huge opportunity here to reinvent how people work.

Leaders are rethinking how to define, design and deploy workspaces. Many are transitioning to flexible seating models such as hot-desking, either in place of permanently assigned desks or mixed with them.

They’re also looking at how to fine-tune operations so that workers can both do focused work alone and have a better experience when gathering to ideate and collaborate. And they’re looking at how collaboration tools such as whiteboards need to evolve, as well as how everything will be managed and secured.

Where the initial phase of Hybrid Work was mainly an IT-focused conversation, this next phase will require conversations with facilities managers, with HR and with event marketing teams. And conversations with employees will be pivotal to keeping them engaged, re-establishing a sense of workplace belonging and driving all-important company culture.

Where is Cisco investing?

Many of Cisco’s own investments during the pandemic also show a strong focus on collaboration. Look no further than its acquisitions of Socio Labs (now Webex Events), Slido, BabbleLabs and IMImobile.

This trend continues today. Hybrid Work underscored the need for collaboration solutions to scale and to enable superior experiences for end users. This in turn accelerated the migration of a variety of solutions — video conferencing, contact center and communication platforms, for example — to the cloud.

Combine this with the new focus on the workplace and on hardware in this next phase of Hybrid Work, and it becomes clear why Cisco is currently focusing its investments on innovations in the following six different areas of collaboration:

  • Workplace Safety

  • Hybrid Work

  • Devices

  • Communications Platform as a Service (CPaaS)

  • Customer Experience

  • Contact Center

Needless to say, bringing innovation to customers across these six areas is not something Cisco can do alone. This represents a significant opportunity for VC investors, partners (including startups), independent software vendors and others.

It’s a good time for investors to take stock of their portfolio companies, and for startups and others to review their offerings for potential synergies. 

The benefits of becoming a Cisco collaboration partner include turbo-charging your business growth and go-to-market motions via Cisco’s massive distribution system. In addition, our partners get to build connections with our global sales teams and customers, and raise their profile to our customers through partner marketing programs and events.

BabbleLabs, the background noise removal company we acquired in 2020, is a case in point. In the space of roughly three months after acquisition, the company went from relatively small usage to tens of billions of minutes scrubbed for background noise removal.

Tomorrow’s market

It’s a foregone conclusion that the VC boom of 2021 will cool down in 2022. Indeed, according to a recent Crunchbase report, growth investors have pulled back amid market turmoil and IPO markets have slowed significantly.

Some investors foresee a greater breadth of investments in early-stage companies, with seed funding being the most robust. Certainly there is no shortage of promising companies with strong performance in the wings, many of them with collaborative functionality embedded in them.

Consider companies like Miro, an online collaborative whiteboard platform; Gong, a revenue intelligence platform for B2B sales teams; and Envoy, which improves a wide range of workplace experiences to boost employee engagement.

In fact, employee engagement is one of the hot trends of the times, along with synchronous video/collaboration and — you guessed it — AI.

On the synchronous video/collaboration front, a number of companies now offer a multiplayer component — a combination that has virtually become table-stakes for SaaS companies.

And AI continues to permeate an ever-wider array of use cases and applications, from chatbots and NLP, to computer vision and meetings (recording, transcribing, capturing action items and so on).

And trends that didn’t take off? These include next-gen PowerPoint, the virtual office and VR/AR (virtual reality/augmented reality).

Advice for founders

While considering your investment options or how to grow your startup, it’s good to keep the basics in mind. Wise investors invest in founders, not companies. Look for leaders who can hold a vision and have the technical chops to achieve it.

And look for leaders who know they can’t do it all alone, especially when it comes to scaling. Next-gen leaders need to be able to hire great people and to do so early. And if they want to create a truly great company, they need to allow those people to do their jobs.

Just as crucial is the team itself. Nothing will make up for a bad team. And in the rare cases where a bad team manages to build a good company, a better team could have built a great company.

Finally, if you’re a founder considering acquisition by a larger company, do not underestimate the importance of getting the cultural fit right.

At Cisco, we have seen enormous benefit from partnering with a company before moving ahead with an acquisition. Whether that means working together on an early integration or feature, it provides both parties the opportunity to spend an extended period of time together — so that there are fewer surprises after the marriage takes place.

Interested in more?

These and other topics were covered in a fireside chat and in a panel discussion of leading VCs as part of our recent Magnetic Collaboration event. The fireside chat featured Janey Hoe, VP, Corporate Development and Cisco Investments, and Javed Khan, Senior VP and GM, Cisco Collaboration. The VC panelists were David Ulevitch, a General Partner at Andreesen Horowitz, and Stacey Bishop, a Partner at Scale Venture Partners. The moderator was Mike Lim, Director of Corporate Development and Cisco Investments.