A Modern-Day David and Goliath – Techno Teen Takes on Computer Giant – and Wins!May 4, 2020
“Those who say it can’t be done need to get out of the way of those that are doing it.” Unknown
The entrepreneur of today’s world can be compared to the legendary Don Quixote – chasing windmills in search of great fortune.
The entrepreneurial journey I would like to share with you in this article might be a bit of a surprise. I find it remarkable yet I have barely seen it mentioned in the press over the years.
Imagine the following scenario. The year is 1983. You are a college freshman at The University of Texas in Austin, sitting in your dorm room playing around on your computer.
1983. Pre-Internet. Pre-computers-on-every-desk, in-every-room-of-the-house. These were the days of PONG, where very few people sat around playing with personal computers. (If you don’t know what PONG is, ask someone a lot older than you.)
Back to your dorm room. You are supposed to be in class. Instead, you are sitting there playing around on your computer and you have a bright idea – the proverbial “light bulb” goes off in your head.
“I think I’ll start a computer company and compete with IBM!” Since no one is around to hear you and tell you how ridiculous you sound, you continue.
You have no employees. No manufacturing facility. No family in the computer business. You’ve never even worked for a computer company. Sure, you’ve been pulling computers apart and putting them back together since your were 15 but come on! Compete with IBM? Everyone around you thinks you have lost your mind.
Yet, you believe you have a better way.
You develop a passion for the idea of making better computers and selling them for less by going directly to the consumer.
The story goes that mom and dad heard that sonny-boy was skipping a lot of classes so that he could play with his computers. Mom and Dad decided to pay a visit one day and caught him red-handed. After reading Michael the riot act, Michael’s dad asked him what he wanted to do with his life. He told his dad that he wanted to compete with IBM.
Imagine that conversation!
And so it was that the 19 year old boy genius, techno-teen Michael Dell, armed with only $1000, abandoned his plans of becoming a doctor and dropped out of college after his freshman year to take on the big boys – IBM, Compaq, Hewlett-Packard, and others.
He believed he could outsource everything – the manufacturing, distribution, sales and service. Remember now, this was pre-Internet. Pre-global-out-sourcing. He believed he could bypass the traditional expensive distribution channels and go straight to the consumers, giving them exactly what they wanted – better quality, lower cost computers made specifically for them.
He knew what his consumer wanted because he was his own consumer – frustrated by poor customer service, crappy quality, non-existent customization and high prices.
The rest is history. Modern American business history, that is.
By the time Dell was 22 years old, his company had achieved annual sales of about $150 million. Starting with only $1000 and growing the company to a $1 billion (with a B!) public company in less than 10 years is a record few companies can match.
Today Dell, Inc. is a $57 billion company with the leading market share in the United States with over 46,000 employees, including more than 16,000 in Central Texas. Dell is listed as the 8th wealthiest person in the United States according to Forbes magazine (August 2007). Dell first made the Forbes 400 Wealthiest People in the United States at the ripe old age of 26. He is said to have been worth over $20 billion by the age of 40.
Dell has been named “Entrepreneur of the Year” from Inc. magazine; “Man of the Year” from PC Magazine; “Top CEO in American Business” from Worth Magazine; “CEO of the Year” from Financial World and Industry Week magazines.
Not bad for a college dropout.
Michael Dell. At age 19, he realized he could build a better mousetrap and sell it for less.
Simple formula. Brilliant execution.
The first time I heard this story, I frankly didn’t believe it. A college freshman takes on IBM, and wins?! No way, said my logical left brain. There has to be more to this story!
No, this one goes in the “truth is stranger than fiction” category.
Michael Dell was just a bright boy with a bright idea. Fueled by passion. Too young, too foolish, and certainly too focused to listen to the naysayers who said it couldn’t be done.
According to Dell, “No one told me that we couldn’t do it, and if they did, I wasn’t listening.”
It’s a good thing he wasn’t listening. In addition to revolutionizing the personal computer industry, Dell has donated more than $1 billion in stock to the Michael and Susan Dell Foundation, which is now one of the country’s largest foundations. The foundation focuses on children’s health and education initiatives.
Even though today’s story is about a mega-millionaire with a gazillion dollar company, never forget that once upon a time, Michael Dell was a lot like you and me. Just a kid with a dream that wouldn’t die.