When discussing computer hardware manufacturers, Dell is often among the top names on the list. Since its launch in 1984, Dell Technologies has become well-known for its top-quality, robust, and reliable hardware, as well as responsive customer support system.
As of October 2022, Dell Technologies has an estimated market value of $27.7 billion, making it the 576th most valuable company.
The success of Dell Technologies goes hand in hand with the success and remarkable story of its founder and CEO, Michael S. Dell. With an estimated net worth of approximately $49.7 billion, Micheal Dell has spent almost an entire lifetime building one of the world’s leading computer infrastructure technologies.
You can be sure it was not a walk in the park. He opted to quit college, where he was a premed student. However, this was much to the displeasure of his parents, who also did not believe in his dreams of manufacturing computers.
Dell also encountered many other hurdles later in life, including marital and corporate challenges, which further contributed to his success.
Keep reading to find out how Dell managed to build a computer hardware manufacturing empire from his college dorm room. We will also discuss what motivated him to follow his dreams despite his challenges.
Born in 1965 in Houston, Texas, Michael Saul Dell’s inspirational story began in his early childhood years. His mother was a stockbroker and a financial consultant, while his father worked as an orthodontist.
From his early years, Dell was always interested in electronics and business since they were a common discussion topic at the dinner table. In fact, he applied for a high school equivalency exam when he was eight years old to get into the world of business faster.
Dell began earning money while he was still young, which he used to invest in precious metals and shares. Among his first means of earning money was gathering stamps and selling them. But, when he noticed the stamp prices rising, he realized that he required more money to collect more stamps and boost his earning potential.
At the age of 12 years, he got a job as a dishwasher at a local Chinese
He gained immense wisdom from the restaurant owner, who enjoyed his work and personally cared about every customer who came through the door.
From this job, Dell acquired his customer-first mindset, which became a significant part of his future company. As a result, he understood the importance of customer service in running a thriving business.
At 16, he expanded his business savviness by selling Houston Post subscriptions in the summer.
The Houston Post gave him a list of phone numbers and was instructed to cold call them to sell the subscriptions. After talking to customers over the phone, he soon realized the inefficiency of cold calling.
After researching, he realized that the only people who required newspaper subscriptions were those who moved to new homes and newly wedded couples. So, he began looking for ways to get the contact details of these potential customer groups.
He employed all his high school friends to help him get these contacts, in which they were successful. Dell then decided to try a new approach. He opted to send them a direct mail and offer a free newspaper trial before offering a paid subscription. Through these tactics, Dell managed to sell massive subscriptions, making lots of money.
It is worth noting that he made a resounding $18,000 that year, which is more than his economics and history teachers. This shows that Dell’s impeccable business acumen was present even during his teenage years.
Thanks to his massive earnings from his subscription sales, he rewarded himself by buying a new BMW and an IBM PC.
Apart from the dinner table discussions on technology, Dell first encountered a calculator at seven years old. This device particularly piqued his interest as he wondered how such a small gadget worked to perform even the most complex calculations.
In the seventh grade, he came across a teletype terminal that he used to write programs, which provided him with answers. It was this gadget that further piqued Dell’s interest in computing devices.
He came into direct contact with computers at a local Radio Shack.
During this time, Apple computers emerged on the market and were a hot topic. This led to Dell pressuring his parents for one of these personal computers.
His parents got him an Apple 2 computer for his 15th birthday. He was so excited about getting his first computer that he did not wait to disassemble it and learn how it worked.
He was actually more interested in learning how the computer worked than enjoying the computer programs like many of his peers. He also took apart televisions, radios, and other similar electronics to learn how they worked.
He was fortunate enough to have access to numerous manuals (magazines) at the time that covered a wide range of topics, including outputs, inputs, and other crucial information about the various chips.
Through these manuals, Dell learned the fundamentals of computers and how they worked.
Within no time, Dell realized he had a knack for computers, and these devices had yet to take over the business world. No sooner had he enrolled in the University of Texas at Austin to study medicine in 1983 than he began upgrading PCs in his dormitory and selling them to his friends and acquaintances for a profit.
IBM was the leading personal computer brand in the business world during that time. However, the prices of these computers were exorbitantly high. During a conversation with other computer enthusiasts, Dell realized that the high prices of the IBM computers were due to the costs incurred by go-betweens.
Thanks to his previous experience with go-betweens and some research, he found that the average cost of building a personal computer ranges from $600 to $700, yet IBM PCs were sold for $2000 in computer stores.
In addition, middlemen added an extra $1000 to cover their costs and gain a profit, thus, burdening the customer.
This led him to build computers with better specifications at cost-effective prices. He wanted to compete with IBM by providing better PCs and providing customers with more value for their money paired with exceptional support services by connecting directly with the customer.
It took only a few months for his business to start booming, causing him to stop attending classes and gradually drop his grades.
In 1984, Dell decided to start and register PC’s Limited. He was only 19 years old and had a start-up capital of $1000. At this point, he had also decided to quit college and focus solely on his computer hardware manufacturing business. As expected, his parents were not supportive of this decision.
Although he did not have the resources that IBM had, he was determined. He had the adequate business experience to guide him through his entrepreneurial journey. Thanks to his contacts in the computer industry, it did not take long for his business to take off. He used to sell $80,000 worth of computers per month.
As many entrepreneurs already know, timing in business is everything. When the right moment comes, it is vital to seize it as it may never come back again. Dell took a risk at a moment when he felt the timing was right, and from the statistics, it paid off!
Now that PC’s Limited was in the computer-making business and was competing against reputable brands like Apple and IBM, Dell aimed to make his brand stand out. He decided that his distinct edge would be to sell his products directly to the consumers without any middleman.
He used the direct-sales model, which was more affordable and customer-friendly than other models used by other brands. Dell sold its computers directly to consumers and offered a 30-day money-back guarantee to unsatisfied customers.
He also took advantage of the popularity of various newspapers and magazines to advertise his products.
He also benefited from the high demand for computers at the time. He provided customized PCs and eventually started making them from scratch, allowing his business to grow immensely.
Dell made his first computer from scratch later in 1984 and named it the Turbo PC. He sold each piece at $795, contributing to the annual sales of $6 million by PC’s Limited. In 1988, this figure rose to a resounding $159 million.
When Dell made a 12 MHz PC and sold it for $1,995, it became a direct competitor to IBM’s 6MHz PC, which was sold for $3,995 at the time.
Dell’s computer gained immense popularity among consumers since he advertised the superiority of his PC against that of IBM in magazines and newspapers. It was a powerful device available at a remarkably low market price.
However, it was until 1986 that Dell’s company sales skyrocketed. Upon attending a Computer’s Dealers Exhibition (COMDEX) and showcasing his 12MHz 286 PC, everyone wanted to experience the speedy functionality of this computer. He received massive attention from the media and the attendees, increasing Dell’s computers’ popularity.
The following year, Dell renamed PC’s Limited to Dell Computer Corporation and began global operations. In 1992, he was the youngest CEO of a Fortune top 500 company at the age of 27.
With the internet paired with powerful computers and impeccable services and value for customers, Dell’s global operations were a hit. He began making $1 million in sales per day in 1996. And this was just the beginning of it all.
Michael Dell married a fashion designer in Austin, Texas, Susan Lieberman, in 1989. Together, they bore four children who seem to be following in their father’s footsteps.
In 1999, the couple decided to share their wealth by establishing the Michael and Susan Dell Foundation, which works to transform the lives of those suffering from urban poverty positively.
This non-profit organization operates in different parts of the world, including India, the United States, South Africa, and many more. The foundation has pledged over $1.7 billion and strives to improve health, wellness, and other areas such as economic stability and education.
Additionally, the foundation donated approximately $50 million to the
University of Texas in 2006. Michael Dell also founded the Dell Medical
School in 2013 in Austin, Texas. Dell continues to live his dreams to date simply because he believed in his dreams and took action at the right time.
Some of the most valuable lessons from Dell’s story are:
– Experiment with different things. Although many entrepreneurs believe that perfecting one craft is the key to success, Dell shows us that the willingness to try new things and take risks can pay off handsomely.
– Believe in yourself and your dreams. You must always trust your ideas and be passionate about your work. There is more to it than accumulating wealth.
Once you know what you want and believe in yourself, even your critics will come on board. Dell’s parents were his first critics. They wanted him to pursue his medical degree before focusing on his dream of building computers. However, with Dell’s persistence and determination, he managed to win them over.
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