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Again: no secrets, no particular genius. The company was fast, frugal, and right, as it had been before. Victor seems almost proud that his success is not built on something more spectacular. "There's not a lot of difference," he says. "We all went to business school or read books or listened to lectures. We all know we need to work hard, make sure capital is coming in, all these things. Execution is the key."

Linksys now owns 49% of the networking market, and Glen McLaughlin says it is aiming for 70% by 2005. Because the brand is so well known, Linksys products fetch a $20 or $30 premium over competitors' wares. "Their dominance is unbelievable," says CompUSA buyer Doug Lane. Linksys hit revenue of $430.4 million in 2002, and Ehud Gelblum, a JP Morgan analyst, estimates the company will pull in $538 million for the fiscal year ending this June.

But the Tsaos have never stopped sweating the small stuff. Victor still occasionally answers customer-support calls and Dan Sherman, the Cisco senior vice president who led Cisco's investigation of Linksys, was shocked when he brought up complaints he'd read on an Amazon.com message board and Victor not only knew the exact problems but had read the same board and responded to several of the posters.

For her part, Janie continues to supply a straightforward approach to negotiating with retailers. CompUSA's Lane describes her sales force as "definitely not shy," and Todd Magnuson, a buyer at Best Buy, says, "The first time I met Janie, it was a short greeting and right into business. Very focused and very adamant on protecting their market share."

She isn't all steel, though. "Janie impressed me because every year she would call at Christmastime and leave a holiday message," says John Herr, a former Buy.com buyer who had received plenty of holiday cards before but never a phone call from a company founder. "It was a nice personal touch."

STILL DRIVEN

Riding an essentially unbroken string of successes, the Tsaos weren't particularly eager to sell their company. But it was--of course--a practical matter. More than 90% of Linksys' revenue came from the U.S. and Canada, and the company didn't have the cash or the infrastructure to expand overseas. More important, Dell, HP, and Microsoft are all aiming for the market, and Victor felt certain that eventually somebody would try to crowd Linksys out. Victor met with bankers from CSFB to examine raising money with a public offering. CSFB instead suggested a sale, and Victor agreed to consider it.

The attraction for Cisco Systems was obvious: With a huge share of big-business networking but no small-business and home-office products, Cisco was hungry for a retail company. Cisco contacted the Tsaos in fall 2002, and by March 2003 a deal had been announced. Cisco would pay $500 million in stock for the company, which, except for a small employee stock option plan, was owned by Janie, Victor, and their two sons. As part of the deal, the Tsaos agreed to stay on for two years and Cisco agreed to let the company remain a standalone unit, something it had never done in its 80 other acquisitions.

"Going forward, their biggest risk is that they stop being Linksys and become Cisco," says NPD's Baker. Victor says he wants to quit if that happens, but so far little seems different. Except for six Cisco transplants, the executives are the same, and the decision-making speed remains that of a small company. Mike Wagner describes going to the company's new vice president general manager, a Cisco exec named Tushar Kothari, with plans for a $600,000 German ad campaign. "Within four days he had made the decision," Wagner says. "Maybe it's not one hour, but it's not six weeks. He's definitely got the spirit."

Linksys has started to sell an 18-product collection of wireless networking devices, including a wireless router and a wireless adapter that lets people link televisions and stereos to a network so MP3 songs can be streamed from computer to stereo and chosen on TV. And Cisco has launched Linksys offices in China, India, Australia, Hungary, and Italy, and has made it possible, for the first time, for Linksys to advertise on national cable and broadcast television.

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