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Cisco co-founder Sandy Lerner now sells organic turkeys at Ayrshire Farms in Va.

By Thomas Heath
Washington Post Staff Writer
Sunday, November 14, 2010; 10:20 PM

Is there a second act after founding Cisco Systems?

Sandy Lerner has starred in a second and a third.

After being fired from the Silicon Valley computer networking company in 1990, six years after she helped start it, Lerner created a line of punk cosmetics she later sold for a hefty profit.

Now 55, the no-nonsense entrepreneur, self-described cattleman and onetime socialist is deep into her third career.

She runs Ayrshire Farms near Middleburg. The $7 million-a-year business includes 3,000 certified organic, certified humane, heritage-breed turkeys now giving their lives for next week's Thanksgiving holiday.

I grew up on Butterball and Plainville turkeys at Thanksgiving and Christmas, and I confess to not caring much about eating organic.

Lerner thinks I'm nuts.

"If you are not eating heritage-breed [turkeys], you are eating a hybridized, genetically engineered freak," she said. "You are what you eat."

Her turkeys aren't cheap: A 22-pounder runs $230, and even then she doesn't make money on it.

Ayrshire tries to raise its animals as close to traditionally as possible. No chemicals, hormones or other artificial additives reach her flock, which includes 800 head of cattle, hundreds of pigs, hundreds of veal calves and thousands of chickens. Ayrshire doesn't even string overhead wire, out of concern it might shear the wings off dive-bombing eagles and hawks.

Ayrshire is a vertically integrated business with 100 employees - from bartenders to a soils engineer - across seven business units.

Its Home Farm Store in downtown Middleburg sells its humane heritage meats, in addition to other locally grown and organic goods. There is a catering business, and a mansion for weddings and celebrations. You can book a ride on a restored horse carriage for $650 an hour.

Wholesale customers include the Inn at Little Washington, local grocery chain Mom's Organic Market, Restaurant Nora in D.C. and chef Todd Gray's Equinox downtown.

Why does she do it?

A love of animals, even the ones she eats.

"I came to Virginia to make an organic, humane farm," she said. "There is an alternative to factory farming . . . and the intense suffering it causes all the animals."

It's just not clear if she can make money while doing it.

Ayrshire will lose around $1 million this year, mostly as a result of the expensive cattle operations.

"I can sustain the loss indefinitely," Lerner said. "But I don't want to."

Lerner's love of animals and farming goes back to her days living with relatives on a farm in the foothills of California. She was a nine-year 4-H all-star, owned a Welsh cob horse named Blackjack and raised her own herd of cattle.

She sold her herd in stages to pay her tuition at California State University at Chico, where the future capitalist studied comparative communist theory with a minor in Marxist economics.

She earned a master's degree in econometrics at Claremont Graduate School, followed by a joint master's degree in computer science and statistics from Stanford University. At Stanford, she and then-husband Len Bosack worked on breakthrough computer systems that helped build the Internet.

Cisco went public in February 1990. Even though she and Bosack owned a third of the company, Lerner, who was vice president of a customer advocacy group, was fired in August 1990; they left Cisco with $200 million. They plowed 70 percent of their Cisco stock proceeds into charities, with Lerner concentrating on helping animals.

Lerner said she isn't suited to working in an organization.

"With the exception of my parents, pretty much everybody in my family has been the classic, middle-class, small-time entrepreneur," she said.

An aunt suggested she lose her jeans-and-T-shirt look and start using makeup at 40. The jeans and T-shirt stayed, but she started experimenting with cosmetics.

In 1995, she started Urban Decay cosmetics in Mountain View, south of San Francisco. She targeted the goth/punk crowd with colors named "Plague" and "Oil Slick." She sold the venture to LVMH in 2000 for double her investment. The company is now owned by someone else.

"They are doing $60 million this year," she said, "and I'm proud of that."

She was one of the largest landowners in the Bay Area, with a 92-acre horse farm in San Mateo County, but was unable to get zoning for anything bigger than a 5,000-square-foot house.

Lerner purchased her 800-acre Virginia farm in 1996 for $7 million after becoming familiar with the area on business trips to Washington. She recently has bought up several more farms in the area, totaling 3,000 acres in all. The plan is to scale up the number of animals, reducing her cost per unit and enabling her to turn a profit. Her financial commitment in Ayrshire is "in the double-digit millions," she said.

She gave up a 30-year commitment to vegetarianism - "Nobody is going to buy meat from somebody who doesn't eat it" - built roads and other infrastructure, and dived into what she called "an alternative to factory farming."

Ayrshire has been selling turkeys for seven years. The farm buys the birds for $9 a pult, or baby turkey, each spring. The birds are fed until November, when they are slaughtered on the premises.

If you don't slaughter turkeys, according to Lerner, they will get too fat and die of a heart attack. The birds are more expensive because they take twice as long to raise as hybridized birds. Bottom line: feed and labor costs, including hand-slaughter, come to about $220 per bird, leaving little room for profit.

Last year, Ayrshire sold only half of the 1,000 birds it raised. So Lerner has ramped up Ayrshire's Web site, begun advertising with Google and elsewhere, sealed a deal with Mom's Organic Market and boosted her output to local restaurants. Her 90 percent repeat business will help bring customers back.

The breeds include traditional ones such as Midget White, American Bronze (which the Pilgrims ate) and Bourbon Red from Kentucky.

"We cleaned out every heritage breeder on the East Coast," she said.

Now if she can get the cattle piece of the business fixed, the enterprise could be north of break-even and Lerner may be able to rest.

"I'm a cattleman through and through," she said proudly during a telephone call from another home in the English countryside. "I'm at the time in my life when I know how to do this."

Then the unsentimental capitalist emerges. The one who invented one of the most successful technology companies ever.

"Even as dear to my heart as the cattle operation is," she said, "if I can't make that profitable, it goes."

Follow me on Twitter at addedvalueth.

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