Michael Dell is an American businessman, philanthropist, investor, author and founder and CEO of Dell Technologies.
Dell Technologies is the world’s largest privately-controlled technology company and is also the world’s third largest personal computer vendor, only after Lenovo and HP (Hewlett-Packard).
Dell is globally well-renowned for revolutionising the personal computer industry, supply chain management and e-commerce.
This company was founded with just $1000 in a college dorm room and now, it is a multinational with a revenue of approximately $92 billion.
Michael Saul Dell was born on February 23, 1965 into a middle class Jewish American family in Houston, Texas, U.S.
His father, Alexander Dell worked as an orthodontist while his mother, Lorraine Charlotte worked as a stockbroker.
Michael Dell’s younger brother, Adam R. Dell works as a venture capitalist and an attorney.
A born businessman-
Michael Dell did his schooling from Herod Elementary School in Houston and was bitten by the entrepreneurial bug at a very young age.
He was very influenced by his mother and started learning investments and business from her.
From a very early age, Michael Dell started doing several part-time jobs and invested his earnings in shares and precious metals.
At the age of 8, while studying third grade, he applied to earn a high school diploma.
Michael Dell wanted to complete his schooling as early as possible and was very impatient to wait for many years to earn a high school diploma.
At the age of 12, he developed an interest in collecting stamps and as he needed money to finance his passion, he started working as a water boy in a Chinese restaurant located in his neighbourhood.
Later, Michael Dell and his friend purchased the stamps from an auction and there, he realised that the auctioneers are making decent money by auctioning the stamps.
So, he decided to earn some money by conducting his own stamps auction.
Michael Dell earned $2,000 in this process and realised that to make huge profits in any business, one must eliminate the middlemen and sell directly to the customers.
Earning more than his teacher-
Later, he attended the Memorial High School in Houston and here, the 16 year old Michael Dell started selling subscriptions to the Houston Post in the summer vacations.
The newspaper agency provided him with the list of new phone numbers and asked him to sell the subscriptions by cold calling them.
Later, Michael Dell realised that this is an inefficient way to sell the newspaper subscriptions and while speaking to the people on the phone.
He noticed that only two categories of people really require newspaper subscriptions, those who are newly married and those who shifted to new houses.
So, he started enquiring on the ways to find out the addresses of the people who are either newly married or are going to get married and those who are getting mortgages.
Luckily, Michael Dell found that in the Texas state when a couple is planning to get married, in the process of obtaining a marriage license,they had to furnish their address on which they intend to receive the marriage license and this is public information.
So, he hired all his high school friends and they visited the courthouses in the surrounding 16 counties in Houston and captured their addresses.
Later, Michael Dell sent them a direct mail offer offering them a free trail of newspaper and then a subscription.
He also found that some companies provided the list of the people who applied for mortgages.
These new techniques enabled Michael Dell to target his buyers directly and sell them newspaper subscriptions in huge quantities and in this process he made huge money.
In that year, he earned $18,000 and made more money than his history and economics teacher.
This ascertains that Michael Dell is infallible in business since his childhood.
Getting attracted towards computers-
When Michael Dell was 7 years old, he was very intrigued by the calculator and was very mesmerised by a machine which could perform calculations.
Later, in his seventh grade, while studying in an advanced math class, he encountered a teletype terminal.
Michael Dell used to write programs on this device and it would give him the answers and this increased his interest towards the computing machines.
Later, he came across computers at Radio Shack.
As during those times, Apple computers were the most hyped personal computers, Michael Dell wanted to buy one of them.
His first computer-
So, he started forcing his parents to buy him a computer and on his fifteenth birthday, his parents gave him an expensive Apple II computer.
Michael Dell was very happy about getting his first ever computer but his parents were not because as soon as he got his hands on the computer, he disassembled it to learn its working mechanism.
He was more fascinated to learn about the components which made the computer to work than in learning about computer programs.
As Michael Dell was always interested in learning the working mechanism of the electronic devices, he would take apart telephones, radios, televisions, etc.
Luckily, during those times, many magazines (manuals) used to describe everything about the specific chips and described all the important things like inputs, outputs, etc. and this helped him to gain a vast amount of knowledge.
These manuals taught Michael Dell the basics and working mechanism of computers.
In 1981, he brought an IBM PC and was quick to realise that this PC would dominate the business arena in the future.
The IBM PC was more powerful than the Apple PC.
Starting a computer business-
It took Michael Dell no time to realise that he can set up a successful business in computers.
After thoroughly understanding how a computer works, he began upgrading the PCs and selling them to the customers for a profit.
A year later, Michael Dell was exposed to the latest and greatest in computer technology at the National Computer Conference held at Astrodome, Houston, Texas.
Here, he observed the computers of some major companies and also the computer components of several vendors.
Later, while conversing with other computer enthusiasts, Michael Dell learned that IBM was selling a PC through the stores for $3,000.
As he had experience in dealing with the computer components, he calculated the overall cost of the PC and figured that making a computer should cost around $600 to $700 and this made him to ponder the reason behind the expensiveness of the IBM PC.
Later, Michael Dell found that IBM sold its single unit of PC to the dealers of the computer stores for around $2,000 but these middlemen would often charge $1,000 extra and this practise financially burdened the end customer.
His previous experience with the middlemen while selling stamps helped him to analyse the situation of the computer market.
So, Michael Dell utilised this opportunity and began assembling and selling computers with higher specifications at very competitive prices.
The beginning of a revolution-
He understood that the computers were set to bring a revolution in many areas of work and so, he was very keen to start a computer company and compete with IBM.
During that time, Michael Dell was very ambitious and wanted to directly compete with IBM by offering much better computers, services and value by selling directly to the end consumer.
Even though he was very interested in computers, his parents wanted him to become a pre-med major because many of his family members did medicine and so,he was also preordained to study medicine.
In 1983, Michael Dell enrolled as a premed student at the University of Texas at Austin.
As he was only passionate about computers, studying medicine could not appeal to him.
Fortunately, Michael Dell did not give up on his passion and started upgrading and repairing the computers in his dorm room at the University of Texas.
And he became so involved with the computers that he stopped attending the classes and as a result, his grades started spiralling down.
Starting PC’s Limited-
On January 2, 1984, the 20 year old Michael Dell registered his company, PC’s Limited.
As he did not have sufficient funds, the PC’s Limited was started with only $1000.
It was not an easy task for the young Michael Dell studying in college to compete with giants like IBM but his prior business experiences and great determination helped him very much in his entrepreneurial journey.
Thankfully, his previous contacts in the field of computers helped his business to take off in no time and soon, it became very profitable.
Per month, Michael Dell was selling around $80,000 worth of upgraded PCs, kits, etc.
As the confined dorm room was very inadequate to contain all the computer components, he moved to a much more spacious condominium.
Later, Michael Dell incorporated his startup as Dell Computer Corporation and moved to a thousand square foot office space.
Here, he employed some people and scaled up his business.
Michael Dell did not go to the retail stores to sell his computers instead he made computers on orders, so he was freed from the hassles of maintaining large inventories.
This technique also eliminated the role of middlemen and as a result, the end consumers got computers with good specifications at a much lower price than the existing competition.
Dropping out of college-
As Michael Dell’s business was growing by leaps and bounds, he found it difficult to attend college and so, he planned to take a semester off and just focus on his business.
Fortunately, the University of Texas allowed its students to take a semester off.
In the meanwhile, he struck a deal with his parents that if in this period if his business did really well, he will continue doing the business but if it did not work out well, then he will return to attend medical school.
Luckily, after 90 days, the financial statements confirmed that Michael Dell’s business was booming with no signs of slowing down.
So, he finally dropped out of college after completing his freshman year.
In the initial days, Michael Dell was worried about the competition from the established players.
Compared to his new company, his competitors like Apple and IBM had a much better brand recognition and also a wide network of retailers to sell their products.
Even as the middlemen at the retail stores inflated the price of the computers, the customers during those times were comfortable with purchasing the computers from them.
Here, Michael Dell found the lifeline for his business and determined to cut the middlemen and sell the computers directly to the consumers at very affordable prices.
This model is known as the direct-sales model and this enabled Dell to create efficiencies in the supply chain.
As in the initial days, Michael Dell sold computers directly to the customers without maintaining any physical stores, so in order to gain the trust of the customers, they offered a 30 day money-back guarantee for the computers.
He also took the help of advertising in newspapers and magazines.
During those times, the demand for the computers rose so high that even IBM couldn’t produce the computers in required quantities and so, Michael Dell took advantage of this opportunity to grow his business.
Unlike his competitors, he also provided an option of custom assembling the PCs and later, also began making the PCs.
Profitable from start-
Dell made its first computer in 1984 and named it as Turbo PC and it was sold for US$795.
In its very first year, PC’s Limited was able to make more than $6 million in sales and this figure soared to $159 million in 1988.
The cost of his computers were very affordable because Michael Dell believed in selling PCs directly to the consumers.
Additionally, he also took great care to satisfy his customers.
These two factors played a major role in the success of the Dell and eventually, the production costs came down while the profits skyrocketed.
This is the foundation for any successful business.
The breakthrough moment-
Dell began to sell its 12 megahertz PC for $1,995 and this PC directly competed with the 6 megahertz PC of IBM which was priced at $3,995.
Michael Dell highlighted these differences in the price–performance ratio through the advertisements in various technology magazines and conveyed the message that he was offering the best performing PC at the most affordable price in the market.
The year 1986 was the most important year for him.
In this year, Michael Dell attended a Comdex (Computer Dealers’ Exhibition) where he displayed a 12 MHz 286 PC and this computer stole the show as it was the fastest PC.
This PC outperformed the likes of the other prominent players like Compaq and IBM.
The people and the press queued up at his kiosk to get a look at, to praise him and probably buy one of his super fast machines.
This skyrocketed Michael Dell’s popularity and helped Dell, a comparatively small company to feature on the cover of the PC Week.
Soon, his company became famous for not only providing the best performing computers but also great value and services.
Initially, Dell competed with IBM and later, it started competing with many other computer and technology companies.
In 1987, Michael Dell renamed the PC’s Limited to Dell Computer Corporation and in the same year, the company started its worldwide expansion.
In 1992, at the age of 27, he became the youngest CEO of a Fortune top 500 company.
The power of internet-
The internet was a boon for Dell as it helped its global ascent.
In 1996, Dell launched its direct sale website and this allowed them to expand their market worldwide.
In June 1996, Dell started selling computers online and within a short period of time, its sales rose to $1 million per day.
And in the same year, it also launched servers.
Michael Dell also did digital marketing through websites and additionally, he also promoted Dell’s website and online sales through various mediums.
By 2000, Dell’s annual revenue reached a whopping $27 billion.
Michael Dell was the CEO of the company from its inception until March 4, 2004 and at that time, Kevin Rollins was made the CEO.
Later, on January 31, 2007, he once again became the CEO.
On June 10, 2014, the United Nations Foundation announced Michael Dell as its Global Advocate for Entrepreneurship.
Dell employs more than 150,000 people and owns several well-known companies like Alienware, Perot Systems, Security Software, EMC², etc.
Dell is present in 180 countries and sells various products like personal computers, tablets, servers, data storage devices and also provides software services.
Michael Dell made investments in numerous companies like Domino’s Pizza, Dollar Rent A Car, Applebee’s International, Inc., etc.
According to Forbes, he is the world’s 27th richest person and he possesses a net worth of $27.2 billion as of April 2020.
MSD Capital LP-
In 1988, Michael Dell founded MSD Capital LP, a private equity company to manage his and his family’s capital.
MSD Capital LP invests in many real estate projects and also in hotels, other properties, etc.
It owns properties in Mexico, Hawaii and California.
In 2014, Michael Dell acquired a penthouse (One57) in Manhattan for a whopping $100 million.
On October 28, 1989, Michael Dell married Susan Lieberman, a fashion designer in Austin, Texas.
He currently lives in Austin, Texas.
Michael Dell is blessed with four children, Alexa Dell, Kira Dell, Juliette Dell and Zachary Dell.
His children are following in his father’s footsteps by becoming entrepreneurs, his son, Zachary Dell, at the age of 17, founded an online dating website for college students named Thread.
While one of his daughters, Alexa Dellmuch like his father dropped out of her college to pursue her passion.
She runs a business consulting firm and also is a branding and business development consultant at Bumble, a location-based social and dating application.
Michael & Susan Dell Foundation-
In 1999, Michael Dell founded Michael & Susan Dell Foundation, this charitable organization works in different parts of the world like the United States, India, South Africa, etc. to positively influence the lives of the children suffering from urban poverty.
This foundation has committed more than $1.7 billion and works for improving education, economic stability, health, wellness, etc.
In 2013, Michael Dell also established the Dell Medical School in Austin, Texas.
Embracing newer technologies-
Michael Dell became hugely successful by embracing the internet early on.
Likewise, his company also entered the world of the Internet of things.
In 2017, Dell announced to invest a whopping $1 billion in that area.
Going public twice-
Going public financially benefits a company in a big way.
In 1988, Dell offered its initial public offering and in this process it was able to raise $30 million.
As the company was striving for funds, it went public in 1988 but on October 29, 2013, Dell went private and it cost Dell a whopping $24.4 billion for the management buyout and this is the largest buyout since the Great Recession.
Later, in December 2018, Dell once again went public.
Direct from Dell-
Michael Dell along with Catherine Fredman wrote a book by name, Direct from Dell: Strategies that Revolutionized an Industry.
This book was published on 17 February 1999.
His success secrets-
Never stop experimenting-
Dell became one of the world’s most successful companies because it keeps on experimenting with different things right from the beginning.
Only by experimenting, the company realises what really works and later, it scales up the things which work.
For any business to become successful, it must focus on trying many new things rather than trying to achieve perfection in a very few things.
An individual or business can learn new things by experimenting and so, while experimenting, it is acceptable to sometimes fail.
But if you are not failing while trying new things, then it implies that you are not taking sufficient risks.
Look for opportunities in the difficult times-
Many great technology companies were born in difficult times and during those times, many people believed that this industry might not perform well and missed looking for opportunities.
Dell was founded in 1984 and during that time, the American economy was not at its best state and also, the PC industry was facing many setbacks.
At that time, many people believed that the electronics industry would be completely dominated by the Japanese companies and they would rule the computer industry.
But unlike others, Michael Dell was well aware of the opportunities present during that time and he plunged to start his own company.
Majority of the people cannot execute the right actions during the times of difficulties.
But only a few people are sharp enough to grasp the opportunities these difficult times present and they can easily succeed because they do not face much competition from others as the others stun into inaction on facing the difficult situations.
Know yourself better-
For any entrepreneur to become successful, he himself should know the right time to begin his endeavours.
He must trust his instincts and must be passionate about his ideas.
An entrepreneur can only be successful when he possesses some knowledge about his business and be more excited in doing the things than in accumulating the wealth.
Ignore the criticizers-
Once, Michael Dell sought advice from an expert at a conference and during that time, he had already run his company for around four years.
Even though his business was growing, the expert critiqued his business and opined that it will never work.
But as Michael Dell was very confident of himself and his business, he never gave up and ultimately became one of the most successful entrepreneurs in the world.
Later, in 1987, when he expanded his business to the UK, many journalists anticipated that his business would definitely fail.
They believed that the direct model can only succeed in America but not in the UK and they even advised him to return home.
But fortunately, Dell had already started selling computers before this meeting (around 3 to 4 weeks before launching officially) and the business was growing by leaps and bounds much against the predictions of the journalists.
Michael Dell’s life story teaches us a very important lesson that we should follow our passions to become successful.
He too became successful by following his passion for computers.
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Frequently Asked Questions (FAQs)
What made Michael Dell successful?
Michael Dell is very successful in the computer business and the reasons for his success are-
• Selling computers directly to the customers at very affordable prices.
• Taking a great care of customer satisfaction.
Why is Michael Dell important?
Michael Dell is important because he is the CEO of Dell Technologies, the world’s third largest personal computer vendor.
Also, he is a philanthropist and donated billions of dollars for addressing social issues.
What kind of opportunities did Michael Dell have growing up?
Michael Dell was lucky to have many opportunities while growing up.
He learned investments and business from his mother, Lorraine Charlotte and invested his earnings in shares and precious metals.
The 12 year old Michael Dell earned $2,000 by organising a stamps auction.
How did Michael Dell start Dell?
Michael Dell was very interested in computers and so wanted to start a computer company and compete with IBM.
He used to upgrade and repair the computers in his dorm room at the University of Texas.
In 1984, Michael Dell registered PC’s Limited and in 1987 it was renamed to Dell Computer Corporation.
What did Michael Dell invent?
Michael Dell embraced the direct-sales model.
By this, he eliminated the middlemen and sold the computers directly to the consumers at very affordable prices.
Michael Dell revolutionized the personal computer industry, supply chain management and e-commerce.
Also, he was one of the first persons to provide an option of custom assembling the PCs.
Did Michael Dell drop out of college?
Yes, Michael Dell dropped out of college.
Michael Dell found it very difficult to simultaneously attend the college and manage his computer business.
So, after completing his freshman year, he dropped out from the University of Texas.
What degree does Michael Dell have?
Michael Dell doesn’t have a degree because he dropped out of college.
Where does Michael Dell live now?
Now Michael Dell lives in Austin, Texas, United States.
Does Michael Dell still own Dell?
Yes, Michael Dell still owns Dell.
The parent organization of the Dell computer company is Dell Technologies and Michael Dell owns 54% of Dell Technologies.
Is Dell a public company?
Yes, Dell is a public company and it went public for the second time in December 2018.