Some of the most successful tech companies in U.S. History started from humble beginnings. Former Apple CEO Steve Jobs built the tech giant’s first computer model in a garage—and Dell’s founder started his $90 billion legacy from his dorm room. Another thing they have in common—they were both college dropouts.
While many businesses have modest beginnings, Dell says risk-taking focused his mind.
“If you want to really make it big, you better come up with something unique,” Michael Dell, the founder, chairman, and CEO of Dell Technologies, told Coins2Day in a 2017 interview. “It better be differentiated—that nobody else is doing.”
His other piece of advice for entrepreneurs is to take feedback with a grain of salt. Instead, he says, he empowers people to trust their gut instincts on whether a new product or business idea will be successful in the long run.
“If you go and ask people if it’s a good idea, most of them will tell you no,” Dell told Coins2Day. “So don’t go ask.”
To please his parents, Dell took up pre-med at the University of Texas in 1983, according to Entrepreneur. But Dell had long been fascinated by computers and technology, having disassembled an Apple II model at the age of 15 to see how it worked, according to a 1999 biography, Direct From Dell: Strategies That Revolutionized an Industry. It was at the age of 19 that Dell started selling upgrade kits for personal computers to other students in his dorm—a move that launched his tech empire.
Taking a risk
Dell Technologies was born from risk. Only partway into his college career, Dell had just $1,000 to invest into the business, and his manufacturing team consisted of “three guys with screwdrivers sitting at six-foot tables,” he said in Direct From Dell.
“You have to embrace risk, and you have to accept failure,” Dell told Coins2Day.
Even before the inception of Dell Technologies, Dell had long had an entrepreneurial spirit. While attending Memorial High School in Houston, he sold subscriptions to the Houston Post (later acquired by the Houston Chronicle), and was hugely successful in learning how to target specific populations instead of pursuing the classic cold-call sales technique. He made $18,000 in one year from that venture, which was even more than some of his high school teachers made, according to a 2021 Coins2Day Leadership Next podcast.
Dell had figured out newlyweds were more likely to buy newspaper subscriptions, so using FOIA requests, he found the marriage licenses—and subsequently, addresses—of the people he thought would be most likely to purchase a newspaper subscription from him.
“Jackpot!” Dell said in the 2021 Coins2Day podcast. Dell then used those addresses in direct-mail campaigns, and even hired a few friends to help him with his venture.
Growing from a dorm room operation into a full-blown tech empire, Dell remained steadfast in taking risks. By the age of 27, he had become the youngest CEO in the Coins2Day 500 in 1992—and by 2001, Dell Technologies became the world’s largest personal-computer maker. The company’s success in the 1990s owed a lot to what Dell learned selling newspapers, with a similarly innovative direct-marketing strategy.
The numbers tracking Dell’s trajectory as a public, then private, then public company are headspinning. Valued at over $120 billion in 1997, when Apple was floundering at $2.3 billion, the company’s devotion to its core PC business threw it for a loop after the dot-com crash. By 2007, it was time for a change amid slower sales and greater competition.
“The direct model has been a revolution, but it is not a religion,” Dell wrote in an April 2007 memo to his 80,000 employees. Even Dell admits in its company history “many believed that it was a dying company that would perish like Kodak or Motorola.” That led to leadership changes and new corporate strategies, with Dell’s knack for creative solutions ultimately breathing new life into his creation again and again.
The founder ultimately took Dell private in 2013 for $24.4 billion in the biggest leveraged buyout since the Global Financial Crisis. And with help from private equity sponsor Silver Lake, Dell retooled, especially via the highest-valued tech acquisition ever, EMC Corp. For $67 billion in 2015. The company re-listed the next year at a $16 billion market cap, which had climbed to almost $90 billion, as of Nov. 17. And as for Michael Dell himself? His own net worth is estimated at $150 billion by the Bloomberg Billionaires Index.
Dell told Coins2Day that risk-taking has been his greatest advantage in business, and a downfall for other major corporations.
“Big companies generally [aren’t good at taking risks],” Dell told Coins2Day. “If you talk about risk, they’ll talk about the risk reduction, and the risk committee, and the risk management, and all those say the risk is bad. Well, if you don’t have risk, you don’t have innovation.”
In fact, Dell says, his company does “all sorts of things internally to promote risk innovation,” including investing billions of dollars in research and development.
“We’ve got hundreds of projects, and they’re not all going to work out,” Dell told Coins2Day. “That’s okay.”
A version of this story appeared on Coins2Day.com on February 23, 2024.
