My Conversation with Michael Dell

Summary

Podcast Summary: Founders – My Conversation with Michael Dell

Host: David Senra
Guest: Michael Dell (Founder and CEO of Dell Technologies)
Release Date: October 13, 2025

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Episode Overview

In this special crossover episode, David Senra, host of Founders, interviews legendary entrepreneur Michael Dell. The conversation explores Dell’s lifelong curiosity for business and technology, his formative years, the iterative process of building one of the world's largest technology companies, and the mindsets and lessons driving his ongoing reinvention. Dell candidly shares stories from his youth, experiences of being underestimated, and how he navigated technological revolutions, maintained his drive, and built enduring competitive advantages. The episode is rich in practical wisdom for founders and business-builders, making history’s lessons intensely relevant for today’s entrepreneurs.

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Key Discussion Points & Insights

1. Early Curiosity and Entrepreneurial Drive

• Formative Experiences: Michael Dell recalls enrolling in summer classes at Rice University as a young teen, which spurred his interest in finance and technology ([01:26]).
  • Quote: "I was curious, so I was like, okay, if I just stay on the bus, takes me all the way downtown... and I see like the stock exchange... and I just started learning about the stock market."
    — Michael Dell [01:43]
• Disassembling for Understanding: Dell emphasizes his compulsion to take things apart to deeply understand them—even his first computer, the Apple II ([06:42]).
  • Quote: "My parents would get pretty frustrated, you know, taking apart things in the house. Sometimes I put them together, sometimes they would still work."
    — Michael Dell [05:42]

2. Seeing Opportunity and Relative Value

• First Big Insight – The PC Is Just Components: As a teen, Dell realized that even the world’s best computer (IBM at the time) was built from off-the-shelf parts, leading him to believe he could replicate and improve on industry leaders ([07:44]).
  • Quote: "You open the thing up... chips and wires and power supplies... you sort of add it all up and then you compare it to the cost they're selling for and you go, wow, they're really charging an incredible markup for this."
    — Michael Dell [08:37]
• Obsession with Cost Structure: Dell mastered understanding and leveraging structural cost advantages (e.g., Dell’s operating costs at 18% vs Compaq’s 36%) ([10:09]).

3. Motivation and the Infinite Game

• What Drives Michael Dell: For Dell, business is a lifelong puzzle. Solving problems, learning, and curiosity are what motivate him more than any particular end goal ([04:16], [21:36]).
  • Quote: “It’s an infinite game. Right. Never, never ends. Love to win, hate to lose. And yeah, it's just like the most exciting thing you could do.”
    — Michael Dell [04:16]
• Addiction to Solving Problems: He describes a "burning desire to understand things and to figure them out" ([05:10]).

4. Building Through Iteration, Not Expert Certainty

• Relentless Experimentation: Dell advocates for experimentation over reliance on expert opinion. Start with a hypothesis, iterate, and learn; don’t bet the whole company in one go ([29:04], [41:12]).
  • Quote: “Go make some mistakes nobody's ever made before. Try to make them in small increments. Fix your mistakes as fast as you find them. You actually want to make mistakes. You just want to make them small and iterate and fix them quickly.”
    — Michael Dell [29:04]
• Skepticism About Experts: Reflecting on Henry Ford’s principle, Dell agrees that expertise can hinder progress if it leads to complacency ([43:15]).
  • Quote: “At the limit, nobody knows anything. Right. And it's not a bad philosophy when you're thinking about the future.”
    — Michael Dell [43:15]

5. Institutional Memory, Storytelling & Team Alignment

• The Value of Story: Dell wrote his book—and is open to podcasting—as both a history for new team members and a way to transmit company culture and values ([16:12], [19:01]).
  • Quote: “[The book is] for our team inside the company... as a business grows larger, it's harder to be able to tell the stories directly... it's just a great opportunity to encapsulate all that and share what happened.”
    — Michael Dell [16:12]
• Power of Founders’ Narratives: Senra notes how stories (Dyson, Carnegie, etc.) sell products, guide teams, and outlive the founders themselves ([19:34]).

6. Role Models, Learning by Osmosis

• Influences: Dell learned from stories of Charles Schwab, Fred Smith, Sam Walton, Steve Jobs, and Bill Gates—reading and observing both successes and failures ([22:06], [23:32]).
  • Quote: “You can learn from just about anybody, whether they succeeded or failed. And so I tried to just understand…” — Michael Dell [23:32]
• Role of Naivete and Confidence: Dell explains the importance of “not knowing enough to know it can’t be done,” balanced by relentless self-belief ([87:15]).
  • Quote: “I think it's a combination of naivete, right?... and confidence. But, you know, you never want to go over into the arrogant zone.”
    — Michael Dell [87:15], [89:34]

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7. Navigating Disruption and Change

• The Crisis That Isn’t—And Reinvention: Dell emphasizes the need to preemptively challenge your own business before someone else does, especially in the face of new technological breakthroughs like generative AI ([30:24], [31:05]).
  • Quote: “I stood up and told the company that five years from now, we will have a new competitor…The only way that we're going to prevent that is we are going to become that company.”
    — Michael Dell (quoted by Senra) [30:24]
• Speed of Change Is Accelerating: Each technology wave moves 5–10x faster than the previous, requiring both adaptability and open-mindedness ([35:22]).
  • Quote: “The time frames that these things occur tend to be shrinking... it’s five to ten times faster.”
    — Michael Dell [35:22]
• Protecting and Nurturing New Ideas: Dell cautions against dismissing wild ideas out of hand—any of them could be the next big thing ([36:44]).
  • Quote: “You need to be open minded enough to consider all possibilities.”
    — Michael Dell [37:36]

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8. Competitive Advantages and the Power of Supply Chain

• Inventing the Negative Cash Conversion Cycle: Dell’s innovative approach was to shrink inventory and collect payments faster than he paid suppliers, generating immense cash and maintaining technological freshness ([63:21]).
  • Quote: “If our components are five days old and the competitors components are 90 days old, well, theirs cost a lot more than ours do, right? And so now you've got this structural competitive advantage.”
    — Michael Dell [63:21]
• Supply Chain Obsession: Dell’s renowned supply chain prowess is presented as yet another puzzle; learning through mistakes, continually iterating, and optimizing ([52:11]).
• Secret Sauce and Moving in Silence: Avoiding attention and letting competitors remain ignorant of your true strategy can be a stronger advantage than being recognized ([66:48], [69:04]).
  • Quote: “In business, it's better if the competitor doesn't understand or doesn't see you.”
    — Michael Dell [70:33]

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9. Embracing and Amplifying Underestimation

• Underestimation as Motivation: Being dismissed as a "mail order company" by competitors was fuel for Dell’s drive ([74:01]).
  • Quote: “They didn't see us coming because they were underestimating us. ... All that was motivating.”
    — Michael Dell [74:01]

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10. Failure, Fear, and the Founder's Mindset

• Fear of Failure vs. Love of Winning: Dell admits that even now, fear of failure is a bigger motivator for him than hope of success ([90:12]).
  • Quote: “You don't want to fail. Although failing is how you learn. You have to have some little failures along the way. But that fear... you can’t have it paralyze you. ... Be incremental, and again, it’s back to iterating.”
    — Michael Dell [90:12], [90:52]
• Staying Humble, Staying Naive: Confidence balanced by naivety and vigilance against arrogance is key ([87:15]).

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Notable Quotes & Memorable Moments

• "You want to understand things at a very deep level." — Michael Dell [13:04]
• "If you've been doing it every day for 41 years, it seems pretty normal, right?" — Michael Dell [57:18]
• "Go make some mistakes nobody's ever made before. Try to make them in small increments." — Michael Dell [29:04]
• "If you don't have a crisis, make one." — Michael Dell [31:05]
• "Fear of failure, to this day, is a bigger motivator than the love of success." — Michael Dell [90:12]
• “It's like you need to build a business that's authentic to you.” — Podcast Host, paraphrasing Lee Walker and Michael Dell [56:38]

Timestamps for Key Segments

• Michael Dell’s Early Curiosity and Stock Market Story
  [01:26] – [02:45]
• The Apple II and Dismantling for Deeper Understanding
  [06:24] – [06:42]
• Realizing the PC Is Just Off-the-Shelf Components
  [07:44] – [09:37]
• Motivation: Curiosity, Fun, the Puzzle of Business
  [04:16], [05:10]
• On Reinvention and the Need for Crisis
  [30:24] – [33:54]
• Negative Cash Conversion Cycle and Core Supply Chain Lessons
  [63:21] – [66:48]
• On Being Underestimated and Using It as Motivation
  [74:01] – [75:02]
• On Fear of Failure and Iteration
  [90:12] – [91:24]

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Conclusion

David Senra’s conversation with Michael Dell gives listeners deeply human and practical perspectives on building and reinventing a legendary business. Dell’s journey is driven by insatiable curiosity, a puzzle-solver’s mindset, humble confidence, and relentless experimentation—principles repeatedly reinforced with rigor and story. For aspiring entrepreneurs and business operators, the episode is a masterclass in founder psychology, competitive advantage, and the compounding power of understanding, iteration, and storytelling.

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If you enjoyed this summary, consider subscribing to Founders and following David Senra’s new podcast, David Senro, for more conversations with iconic entrepreneurs.

Transcript

[David Senra]

I have started a new show where I have conversations with the greatest living founders. That show is called David Senro. It will be on a separate podcast feed from Founders. So it is very important that you follow David Senro on Spotify, Apple Podcasts, YouTube, or wherever you're listening to this right now, so you don't miss future episodes. The first episode was with Daniel Ek, the founder of Spotify and one of the wisest people that I know. That episode spread all over the world, and the response has been greater than anything I could have ever imagined. Imagined. The next episode is with one of my personal heroes, Michael Dell. A few years ago, Michael was kind enough to send me one of the greatest messages that I've ever received in my life. He believes in what I'm doing with Founders and thinks it's good for the world. And so I was thrilled that he immediately agreed to be one of the first guests. His career is singular and he is one of the most impressive people on the planet. Today I am posting our entire conversation on this feed so you know what the new show is like. I hope you enjoy our conversation and you if and please don't forget to follow the new show. David Senro now, so you don't miss future episodes. Oh, and by the way, nothing is changing with Founders. I'm still doing episodes every week and will work on Founders until I die.

[Podcast Host / Interviewer]

I want to jump right into what we were talking about before we started recording that. You said somebody was, you've been obsessed. You know, you've been running Dell for 41 years. You've been obsessed, really, since you were like, 11 or 12. So you've been running it for 50 years because you were. It was. There was a Dell before a Dell. Right. But you were saying somebody was telling you the story about you in middle.

[Michael Dell]

School, when I was in junior high school, in the summers in Houston, there were classes at Rice University for young kids. And so you could go to Rice University, take these classes. And my mom kind of signed me up, and it was great. They had these college professors and they were teaching these classes. And the way I would get to Rice University is I would take the bus from our house, right? And it'll, like, take you downtown. And I was curious, so I was like, okay, if I just stay on the bus takes me all the way downtown to where the really tall buildings are. So I go down there, it's like, really tall buildings. I'm, like, roaming around. I'm like 11 or 12 years old, and I see, like, they've got like, the stock exchange there and all these tickers going. I'm like, wow, that's pretty cool. And so I just started. Started learning about the stock market. So anyway, it's just something I remembered. And. And, you know, my. My parents were always talking about financial markets, and it just sparked sort of this. This interest really, really early in. In life.

[Podcast Host / Interviewer]

There's a great line I've seen from both Ken Griffin and Larry Ellison describing you. Like, just, this guy was manufacturing computers in America at a time when there was, like, thousands of other people doing the exact, very similar thing. And he was the only one that survived. And the reason I just thought about that is because I was watching this. This talk that Ken gave, I think, at Yale, and he said something. He's like, for reasons I can't explain, I don't know why, I've just been obsessed with the stock market, with business, since I was in the third grade. And, you know, 60 years later, or however old he is, like, that obsession has not dulled. We were just in your office, and you were showing me one of your new unreleased products that we can't film or photograph, but you were like. I was like, this is. This is like a kid on Christmas. Like, you're still super cool product.

[Michael Dell]

Yeah, I'm very excited.

[Podcast Host / Interviewer]

I told you, I'll buy one. I think it was cool, too. I'm going to buy one as soon as it comes out. But I just love this enthusiasm that is just not dulling. What do you think? I was just with your son Zach last night, and I was. We were talking a lot about his business. Absolutely ripping. He's super intense, and, like, he's just in it right now, right? And then it was like 95% of our conversation. Then he's like, all right, I have some things that you should talk to my dad about. And then I. He. It was so good. I was like, shit. He just did the outline better than me. So one of the things he's like, you need to get on record what motivates him. He's like, it's one of the most fascinating things. He's like, just ask him what motivates him. So what motivates you?

[Michael Dell]

You know, it's all just, like, fun and interesting, and I want to learn. And it's like. It's like a big puzzle to solve and understand. And you think about the impact that technology has on the world. What could be more exciting than to be in the middle of that and to figure it out and to, you know, help advance it and it's an infinite game. Right. Never, never ends. Love. Love to win, hate to lose. And yeah, it's just, it's just like the most exciting thing you could do. To be in the middle of a business like this and to see it all unfold and play out.

[Podcast Host / Interviewer]

Yeah, he, that's one of the things. He's like, he's addicted to puzzles. So that's the way you look at it.

[Michael Dell]

Yeah, I mean, it's like the curiosity. Solving a puzzle, understanding things and figuring it out. Yeah, you always want to do that. I mean, I would feel unfulfilled if I couldn't figure out a puzzle, a question. So, yeah, there's like a burning desire to understand things and to, and to figure them out. Puzzles and, and math have always been important.

[Podcast Host / Interviewer]

When did you realize that about yourself?

[Michael Dell]

I never really realized it. You just asked me about it. It's just what I did. I just wanted to understand things and, and you know, when I was dealing with, with physical things, the way I would understand them is to take them apart. It's like, how can you understand something if you don't take it apart? And my parents would get pretty frustrated, you know, taking apart things in the house. Sometimes I put them together, sometimes they would still work. But it's just the desire to understand things, to, you know, the curiosity.

[Podcast Host / Interviewer]

Yeah, that's one of your character traits. You have a great story in the book where I think you save up for the Apple ii. It was a computer and it was, you know, relatively expensive, especially I think you were like 12 or something at the time. And then you bring it home and your parents like, oh, you know, he's going to plug it in and play with it. It's like, no, I immediately took it apart. I needed to understand how it worked.

[Michael Dell]

Well, it's like this machine is like, it does really cool stuff, but how does it work? What's inside it and, and how do all those things work and how they fit together and why did they put these things versus those things and you know, sort of getting down to the essence of it.

[Podcast Host / Interviewer]

I had a thought when I was reading your book, you know, time you're taking part in IBM. You know, this is, I'm pretty sure before you were, you're a teenager. So this is before you start Dell officially, but it's, you know, and I didn't know this about IBM. I had to go back and look it up. It's like the most valuable company in the world at the time. It was the first company to ever hit $100 billion market cap, which also blew my mind. But you take it apart and you're like, oh wait, it's just component. This is the biggest company in the world and this is their product. And if you take it apart, it's just made of components from other companies. And it's just like it's implied. Or at least this is what I was reading through the lines when I'm reading your books. Like, well, I can do the same thing. Like, what are they doing here that I couldn't do. Did you have that thought?

[Michael Dell]

Yeah, absolutely. I mean, so it's back to when you open the thing up, you look inside, what's there? Well, there's chips, right? Yeah. And there's wires and there's power supplies and disk drives. And all these components say, well, where do those things come from? Who makes those? What's inside those? How do they make those? And so you sort of peel the onion, you know, and you understand all the different elements. And you know, when I originally got the first IBM PC, you know. Yeah. Probably took it apart before I turned the thing on, you know, just to, just to see what's, what's inside. And one of the really cool things back then was that you didn't have.

[Podcast Host / Interviewer]

These.

[Michael Dell]

Sort of application specific integrated circuits. They call them asics, right. Or these big sort of chips that nobody really knows what's inside except the designers. All the chips were off the shelf chips. So you could see, you could sort of understand what the, the, the logic flow was and what each chip was supposed to do inside the circuit and inside the IBM PC. None of the chips were made by IBM, right? And, and none of the disk drives were made by IBM. The power supply wasn't made by IBM. And so I was also interested in the economics of it. It's like, well, what does this chip cost? What does that chip cost? And you sort of add it all up and then you compare it to the cost that they're selling the thing for and you go, wow, this is, they're really charging an incredible markup for this.

[Podcast Host / Interviewer]

That's an incredible insight to have as a teenager though. It's like, figure out what the like actual cost of the components are and then go look up. And it sounds like what Elon did with rockets. This is like the, the Russians won't sell it to me. I'm on the flight back, these famous stories in all of the books, and he's just like, well, what is a rocket made of? Like, okay, well there's a list of components. How Much those components cost. What you just said is like. You just kept asking questions like, oh, I'm going to take it apart. It's like, okay, well, this is all the components. This is what it is. This is like where you get them from. This is the. Look the company names right here. I can just call them up and find out how much this is.

[Michael Dell]

Well, you could go to the distributors and you'd say, you know, okay, how much does this chip cost? And they'd say, well, it's this price for 100 of them. Yeah, right. And you could. You could literally map out the cost of every chip. Inside the thing.

[David Senra]

There is a book Ken Griffin, the founder of Citadel, recommends reading called Hardball. The subtitle of that book is are you playing to play or are you playing to win? It is a book about extreme winners and some of the best operators in business. There is a line in that book that says, if you have not examined your costs in detail, it is very likely that there exists, lurking somewhere in your cost structure, a major opportunity to improve your profits, weaken your competitors, and expand your influence. The first move is to drive down your costs faster than your competitors can and use the cost savings to upset their strategies. That sounds like the author was describing Dell in his autobiography. Michael Dell says that one way that he was able to out compete his better funded competitor, Compaq, which is a structural cost advantage. Compaq's operating costs were 36% of revenue compared to Dell's 18% of revenue. More than 40 years later, Dell is thriving and Compaq no longer exists. The best operators in business have this in common. They know their business from A to Z and their costs down to the penny. Ramp makes doing this effortless. Ramp gives your business easy to use. Corporate cards for your entire team, automated expense reporting and cost control, all on a single platform. Ramp's corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand. Most companies only find out about excessive spending after the fact. With Ramp, you can stop it before it happens. Matt Paulson, who listens to this podcast and who's a founder of MarketBeat, recently switched to Ramp. And this is what he said about it. Ramp is the best. The amount of money you will save from unwanted renewals. And employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program. Matt is talking about the importance of cost control. Ramp helps you make this an obsession. Almost all of the top founders and CEOs I know are Running their company on ramp. Go to ramp.com to learn how they can help your business play to win today. That is ramp.com something I don't even.

[Podcast Host / Interviewer]

Know if I've ever verbalized before. But it's in all these biographies that I read. What I feel is. It's like there's just a lot of common sense where the founder tends to just keep asking more questions and just like, going to like an. You just said, I think peeling an onion. It's like, yeah, just like, okay, I got that answer. What's the next one? And then what's the next one? And there's something in human nature where we just like, we stop at the first question, but you have this, like, infinite curiosity that was very obvious, like, from child, from childhood. And I think based on what we were just talking about in your office is obviously still present. But, yeah, it's just very fascinating. It's like, it's not rocket science. Just, like, keep asking questions and collecting information and thinking about the answers that you're getting.

[Michael Dell]

Hey, you want to understand things at a very deep level. And so that's always been a thing for me.

[Podcast Host / Interviewer]

Yeah, I think that's what I'm very interested in. It's like if you read the life story of somebody, I'm very interested in understanding who the person is and why they're doing what they're doing. And this is the genius line from Charlie Munger. It's just like, well, if you just. It's way more effective to tie the ideas to the personality that developed them. And the way you tie to the person you developed them is like you read about their life story, you read about their childhood, you read about what their interests were. I love the part in your book, I was rereading it yesterday, where your parents confront you. Okay. You've started Dell, and you're dormant. University of Texas. And they're just distraught. Which is really funny given what's occurred over the next four decades. Like, what are you doing, Michael? You're supposed to be. You're supposed to be on this path to be a doctor. And I think your mom's crying.

[Michael Dell]

She was, yeah, very emotional.

[Podcast Host / Interviewer]

And so you were like, okay, in the book, you said, I caved. Which is very unusual because you have super strong personality from a young kid. But then the very next page, I can see it in my mind right now. Cold turkey. Didn't even look at a computer for 10 days. I tried to take notes in classes. And then I realized, no, it was like you were compelled. I Thought working in computers was going to be thrilling. I am going to drop out with $1,000. I'm going to take on the biggest company in the world.

[Michael Dell]

I think the fact that they, they put all that pressure on me is the thing that caused me to really reflect on it and decide that, no, this is more than a little hobby or a side thing. This is just like, I have to go do this.

[Podcast Host / Interviewer]

Do you feel it was all consuming even at that age? Because at the time you're like sleeping in the office, when you do start, like, you start. I know we talked about this last time. It's hilarious where somebody asked you, it's like, well, when you start Dell, like, how many hours did you work? And you're like, all of them.

[Michael Dell]

Yeah, I mean, I wasn't doing anything else. I mean, there wasn't really anything else that was important to me. And so, yeah, it was totally all consuming and super exciting and wasn't doing anything else. Yeah.

[Podcast Host / Interviewer]

Were you more of like before that? Somebody that just focused on one task at a time?

[Michael Dell]

I would get pretty obsessed with, you know, individual topics and sort of go. Go deep on them. So, yeah, I wouldn't consider myself, you know, generally interested in a bunch of things. I was like, super deep on certain things that excited me or interest interested me.

[Podcast Host / Interviewer]

Is that still the case today or.

[Michael Dell]

Is it just basically used to be? Yeah. Yeah.

[Podcast Host / Interviewer]

Zach told me, he's like, he'll call me at like 5am and he was like, I have an idea, like, we should do this product or this acquisition or whatever. He's just like, he just can't help himself. And I asked him, I go, what would get him to stop? He's like, you have to kill him. What made you decide to write the book?

[Michael Dell]

You know, we, we had, we had gone through a whole lot with the going private and buying EMC and VMware. And there just been so much that happened. I wanted to kind of document it. And it was during COVID I had some time and started, started writing this stuff down. And it felt like a logical place to sort of capture everything that had happened. And one of the main reasons I wrote it was for our team inside the company because I want them to understand how we think about the business and where it came from. And as a business grows larger, it's harder to be able to tell the stories directly with everyone. And so it's just a great opportunity to encapsulate all that and share what happened, really. The good and the bad, things that worked well, things that didn't work well. And, you know, I certainly benefited from reading the stories or hearing the stories of other people and thought it'd be a good idea.

[Podcast Host / Interviewer]

I said this on the episode I made about it. It's like a great gift to like future generations of entrepreneurs. I actually think that idea of like having like a singular piece of media, whether it's a book, there's another idea for you, for podcast for people. As the company grows to understand, like, this is the decisions that were made. This is why it was. This is what we've gone through. Spotify has this. Originally they did. Gustav is the head of product at Spotify and he's actually one that made this. And originally I talked to them about this. They were just going to do. It was like an eight part series. It was going to be a private podcast inside the company which tells the history of Spotify. So if you come in now, you know, 20 years into its existence, it's like, well, what were we. What was like year one in an apartment? You know, we got server in a closet. And so what they did is they did this beautiful, like narrative and they would also include the people that were important at the. In the early days. Like, you know, some people don't last in the company, but they were really important for two, three, four years. But I listened to the thing like two or three times and thank God that now it's public. Anybody could just type in Spotify product story, I think is the name of the podcast. I'm like, why don't more companies do this? Like, not an employee. But if I was coming into Dell or any other company now, and I could have here, here's eight, you know, eight one hour episodes. And they say not just this decision was made. It's like, why? These are the constraints we were under. This is what was going on.

[Michael Dell]

Exactly. So, you know, if we walk downstairs, right below this room where we are, there's a new class of small business salespeople being trained. Okay. And you would love for those team members to be able to understand, okay, how did we get here? What are all the things that we did right and wrong and to really deeply understand the culture, the values, the beliefs, and then to be able to build on that with their own contributions.

[Podcast Host / Interviewer]

Yeah. Kind of bring them up to speed. And this is the context. I also think there's an additional benefit for it to make it public facing. Because humans buy stories, money flows as a function of stories. And I've experienced this. It's like if I read, I spend 40 hours reading about this person that had this idea in their head, they built a company. At the end of that, you're going to have a way better appreciation. I find out buying their products that I never even would have thought of because now I understand the story. I just reread James Dyson's autobiography, which is one of my favorite books. Probably my number one recommendation out of the 400 books I've read so far. Just because it's like 90% just struggle. The first autobiography is just like, I'm failing for 14 years. This guy is like a mule. He won't give up 5,127 prototypes. But there's an idea in the book that, that was smart, where he understood the power of storytelling. Okay. And so he's like, you're going to walk into the retailer, you're going to see six different vacuum cleaners. His obviously is designed different, so it's going to catch your eye. But he insisted. They wrote like a 200 word story on like a little flyer, right? Maybe like a little piece of cardboard and you could attach it to the handle of the vacuum cleaner. And what happens if that person. Humans are attracted to stories, attracted to people, right? And so they would, they read that and then they, it would increase their sales because they understood who's behind this, why did they make it? How is it different? Like, it was a very effective sales tool. So I think, like doing podcasts, like this books, anything like this, where you can actually tell, like, why you're doing what you're doing. This is the crazy thing I've heard from. I don't know, I probably got thousands of messages about the episode I did on you. And the most common thing was I knew the name. I had no idea. Everybody knows Dell, the brand name, right? But they didn't understand just how crazy your story and the multiple different transformations you've had to make over 41 years. And now they're like, oh, this guy. Like, I'm so glad you, you put that in front of me. I think it's like a super important idea.

[Michael Dell]

It's all, it's all been a lot of fun and, and still, and still is. And, and it feels like we're just getting started actually. When, when I think about the business and the opportunities we have and, yeah, it's all fun.

[Podcast Host / Interviewer]

You mentioned earlier that you benefited from studying people that came before you. And this is, you know, you wanted to pass that forward. Like, who are a few of the people that you study you felt you learned from, or that influence, like Your thinking about how you're building, how you built your business.

[Michael Dell]

You know, when I was, when I was a kid, I. You would read about entrepreneurs, you know, that were starting companies. Charles Schwab or Fred Smith, certainly Sam Walton, some of the early telecom pioneers, people that were doing it right then, like in the 70s. And those stories were also, were just super interesting to me. And I grew up in Houston, which was kind of a boom town. You see these new companies being created and parents were talking about that. And so those, those stories were always just interesting and compelling. And you want to understand, well, how did they do that and why did they do that? And you know, what happened? And you know, I never imagined myself doing anything else other than starting a business. You know, the idea just was in my, in my consciousness from, from a very early age.

[Podcast Host / Interviewer]

This great line that Jeff Bezos says where he's like, our passion, we don't choose our passions, our passions choose us. I think there's multiple, like my notes, myself in the margins, like, oh, he's compelled. It's like this is coming through him. Like, he's like, he has no choice, this is going to happen. But is there anybody in particular that you like, really like honed in on and admired and tried to emulate in some way?

[Michael Dell]

I always think you, you can, you can learn from just about anybody, whether they succeeded or failed. And so I tried to just understand, you know, as many people as I could that were entrepreneurs that were starting businesses, how did they struggle, what, what worked, what didn't work? And those were always the compelling and interesting stories.

[Podcast Host / Interviewer]

When you were 15, you met, you were, I think, at some kind of conference with. And this is the first time you were in the presence of Steve Jobs. I think Steve was like 25 at the time. So when was he somebody? Like when you saw him at 15 and you saw, okay, wait, this is a young kid in his 20s building a computer company. Was like that a model for you or like, what was your interpretation of like that experience? I guess what I'm trying to get at.

[Michael Dell]

Yeah. So, you know, in the early days of the computer industry, you know, as I knew it, the microprocessor based computer industry, you know, Apple was a leading company and Steve was obviously the sort of legendary figure. So I was in this Apple user group, which is a bunch of, you know, geeky people, like get together and you don't say exactly and, and sort of compare how they had souped up their computers and software. They had written and learned from each other. And so Steve came to speak to our user group. And yeah, I mean, he was like using these incredible metaphors and listening to him and looking at what Apple's doing and going, wow, that's, that's really cool. And you know, you'd also start, started hearing about Bill Gates, you know, who's also about the same age as Jobs. And you know, they're both about 10 years older than I am. And you kind of look at them and go, well, okay, they did something cool. Maybe I've got a shot.

[Podcast Host / Interviewer]

Yeah, that's really cool. There was something you mentioned to me when we had dinner that has been rattling around in my head and I think it's part of the reason that I couldn't sleep. And I don't even think it was like explicit advice. I think you were just making an observation. But you said something along the lines that you've seen countless different companies and entrepreneurs come and go over four decades, four plus decades. And you said something that terrified me unintentionally. That most entrepreneurs and founders that you've known were never taken out by competition, that they sabotaged themselves. Can you say a little bit about that?

[Michael Dell]

Yeah. I mean, I think you could make the argument that they made mistakes along the way that were fatal. And you know, ultimately, you know, the companies didn't, didn't succeed, but it's, it's all of their own doing.

[Podcast Host / Interviewer]

Right.

[Michael Dell]

You know, you have to make the right choices in order to continue on and survive and ultimately thrive.

[Podcast Host / Interviewer]

What do you think are some of the causes of mistakes? You have obviously smart, talented, competitive people. Right. Charlie Munger has this great line where it's like, intelligent people are taken up by three things, ladies, liquor and leverage. So like, what, have you seen any common, like, causes for somebody to sabotage themselves or to not live up to what they should have?

[Michael Dell]

Charlie's right about those three things. You know, we, we, we, we, we stay away from those. Yeah, I sort of go back to understanding things and curiosity and it's like you got to, you got to know why something is working or not working. And if you're in the middle of, of a super competitive endeavor and you don't really completely understand what's going on, well, you're going to make mistakes. Right. And so, you know, when I, when I look at the, the competitors that, that, that are no longer around. Yeah, they had either overzealously expanded or made design errors or they failed to understand the competitive landscape. I mean, there's lots of ways to fail.

[Podcast Host / Interviewer]

You have a great example of one in the book with Adam Osborne, where he had a very successful. I think the Osborne one was relatively successful, right?

[Michael Dell]

Yeah.

[Podcast Host / Interviewer]

Okay.

[Michael Dell]

Yeah.

[Podcast Host / Interviewer]

And he's like, all right, now we're coming out with Osborne 2. It's even new and improved, and it's great. And you make the point. It's just like, yeah, maybe, but it didn't ship in time. And so now you just made this big announcement where you're like, we have this great new product. It's even better than one. What are you telling to the market?

[Michael Dell]

The Osborne fact? I don't think people talk about it so much anymore, but back then, the Osborne effect was a thing where you introduce a new product that's better than your first product, and nobody buys your first product anymore, and you're. You're out of business. And so, you know, yeah, don't want to do that.

[Podcast Host / Interviewer]

So.

[Michael Dell]

So go make some mistakes nobody's ever made before. Try to make them in small increments. Fix your mistakes as fast as you find them. And you actually want to make mistakes. You just want to make them small and, you know, iterate and fix them quickly. I mean, one of the things when you're. When you're creating a new business in an area that has never been done or with some new technology, new business model, there's no playbook, there's no, like, book you can read, says, here's how you do it, right? And if you hire the people from the adjacent, you know, industry companies and ask them to go do it, well, they're just going to go do what they were doing before, right? And so that's not going to work. So you need a lot of creativity and you need to sort of intuit your way to the answer by experimenting. It's like, okay, here's a theory that we think will work. Let's try it, right? And does it work? Great. Okay, let's do 2x that. Okay, let's do 10x that. Let's do 100x that doesn't work. Okay, let's stop, you know, restart, come up with another theory, and just keep experimenting until you find the answer.

[Podcast Host / Interviewer]

You're kind of going through that now. In fact, I want to read something that you said that was one of the most interesting things. You said it on a podcast and you made this essentially talk to your entire company and you said, I'm just going to read this quote. I stood up and told the company that five years from now, I love this so much. I stood up and told the company that five years from now, we will have a new competitor. And that new competitor is going to be in every business that we are in, except they're going to be faster, more efficient and more capable and they're going to put us out of business. And the only way that we're going to prevent that is we are going to become that company. It's gut wrenching stuff to reinvent and reimagine your business, but if you don't do it, you go out of business.

[Michael Dell]

Yeah, exactly. So, you know, when ChatGPT came out in November of 22 or so, looking at this and going, wow, this is a big deal, this is, this is pretty interesting. And you started to see the rate of improvement in the LLMs and you know, in technology you can, you can sort of look at the rate of improvement in the learning curve and you can sort of plot, well, where's this thing going, right? Where is it going to be in a year or two years or three years? And you look at, okay, we're going to have agents and multi agent systems and we're going to be able to reason over incredible amounts of information. Well, what does that actually mean for the way knowledge work gets done and the tools that humans are going to have? So you think about that, you go, wow, this is a big, big deal here. We need to totally reset how we're thinking about the business and reimagine it, reframe it and understand what the processes are going to look like in five years. And so you do all that and you say if we keep doing what we were doing before, we're going to be in serious trouble because some new company is going to come along and yeah, they're going to have all these new tools. They're not going to have this legacy of crap from the past, right, and old ways of doing things and they're just going to do it the new way. And so we have to change or we're going to go out of business. You know, I also believe in this idea that if you don't have a crisis, make one, right? You get people excited, motivated and to drive the necessary change. I mean, in one sense, this is not a technology problem. The technology is there whether you use it or not. It's a question of how do you organize the team and people to actually go and get this thing done. How do you motivate them, how do you give them the right tools, how do you structure, you know, the ways people work together so that you can do it quickly? And it's very hard for people to, you Know if you've been doing something for 10 years or 20 years or 30 years the same way, and all of a sudden it's like some new thing comes along. You're like, no, I don't want to do that. People don't like to change, but you have to. And so that's what we've been doing.

[Podcast Host / Interviewer]

Yeah, this is excessively rare. I mean, think about the story in the book where I think the line that I summarized where you were saying about IBM's like, yeah, the personal computer is fine. It's going to be a great terminal for the mainframe. And it's just like, oh, you see this over and over again in these biographies. If you're studying something that's occurring over multiple decades, it's like companies and people cannot envision a future that's different from the present that they succeeded in, so they kind of like dismiss it or kind of ignore it. I'm trying to think, though, like, so you just said, okay, there's no books, like, what do you guys are doing right now? Dell. Right. You can't just, like, you're on the cutting edge, so there's no books. You can read about it. But you have surfed how many different technological revolutions you did the microprocessor. Right. Microcomputer. Sorry, the personal computer. Then obviously the Internet was invented client.

[Michael Dell]

Server technology a little bit before, you know, how many?

[Podcast Host / Interviewer]

So, like, I got four or five. How many have you successfully navigated and had to reinvent Dell over and over again? How many of these, like, huge shifts do you think you've navigated?

[Michael Dell]

Yeah, there's probably been six or seven of them.

[Podcast Host / Interviewer]

So if you've done that six or seven times. And then I think in the book, you know, obviously you say, we did really great on this one. Not good on this one, but we've fixed that. You're not going to be perfect over that many decades. But do you see, like, is there like an echo between all of these? Like, that you can apply, like, certain ideas you can take away and like, form or structure. It was like, oh, that's kind of similar to what we had to do when we had to reinvent for X?

[Michael Dell]

Yeah, there are. Although the, the, the, the time frames that these things occur tend to be shrinking.

[Podcast Host / Interviewer]

Oh, say more about that.

[Michael Dell]

So if you think about the, the Internet, you know, when, you know, first you had the Internet, you had the World Wide Web, right? And websites started popping up in the mid-90s. And then, you know, but it took like a decade before there was Really a boom in things like E commerce. And I mean it was, it was going on in the late 90s and you know, early 2000s, but it really didn't, it took a long, long time. So now maybe it's like five to ten times faster. You know, if you look at the growth in the usage of these tools and part of it is that each successive wave of technological improvement is built on the prior foundations and so they're able to go faster. So if you have 5 billion people connected with all kinds of devices, well now they can use these tools and that just goes way faster. I think you have to have this idea in your head that any new thing has some chance of succeeding. Right.

[Podcast Host / Interviewer]

Say more about that.

[Michael Dell]

So there's a lot of wild ideas out there and if you dismiss them all, you're going to miss some things. So you kind of have to hold this idea in your head that.

[David Senra]

Any.

[Michael Dell]

Of these wild ideas has a chance of succeeding. And let's sort of understand what do all these things mean and figure out what is the point of intersection.

[Podcast Host / Interviewer]

Right.

[Michael Dell]

You know, what should we be doing about this and when, when is it actually relevant, interesting, valuable, and it sort of, you know, hits escape velocity. And if you're, if you're sort of stuck in a particular paradigm or you're like dismissing things, you're going to miss them.

[Podcast Host / Interviewer]

Yeah.

[Michael Dell]

And so, and so, you know, you need to be open minded enough to consider all possibilities.

[Podcast Host / Interviewer]

But your ability to do that is so counter to human nature because we're habitual, like we're habitual creatures. You know, it's like, oh, I found what I want or I found like what I like to do. And like this is the best, you know, like if you look at like what people, what music people listen to, for example, it's like music you listen to when you're like high school and college and maybe you've added a couple, but like you're kind of like just stuck on that where you are just like completely open, maybe addicted to, you know, new technology and new ways to think about or new ways to solve like old problems.

[Michael Dell]

Yeah, I love, I love this stuff.

[Podcast Host / Interviewer]

But how do you not squash new ideas? Like you just said, like, you know, that there's a great line. It's like any idea can work now. Everybody's connected and they can grow faster than you can possibly imagine. So how do you, like, do you have a process for like, how do you not, you know, new ideas are fragile and you know, they need some kind of protection and some time to grow like, but most people just like kind of snuff them out or dismiss them immediately.

[Michael Dell]

Well, you know, sometimes it's a, it's a good idea, but it's the wrong time. Sometimes it's a good idea, but it's the wrong company. Sometimes it's just a bad idea. Right. And so, but there's no absolutes here. Right. You just have to be open minded and consider the possibility that things are changing fast enough that some new thing comes along. If you took the top computer scientists and researchers in AI or just broadly, you know, five years ago and you said, okay, you know, this is what's going to happen with LLMs in the next five years, probably 99 out of 100 would say no, no, that's not going to happen. Right. And so that's a, that's a pretty good example in contemporary period here, you know, where you just need to be open to the possibility that things are going to change. And there's also this thing where about every 10 years or so something comes along and just completely expands the opportunity set for the industry. And that's part of the fun, the excitement, the super interesting aspect of what we get to do every day.

[David Senra]

The best leaders in business are able to spot patterns, but you can't spot patterns if you can't see your data. And most businesses are only using 20% of their data because 80% of your customer intelligence is invisible, hidden in emails, transcripts and conversations. Unless you have HubSpot. HubSpot is where all of your data comes together so you can see the patterns that matter. Because when you know more, you grow more. And that is a pattern that never fails. Visit HubSpot.com today. That is HubSpot.com I just had a thought.

[Podcast Host / Interviewer]

Listening to you speak tied to something else that you said earlier. It's like basically humans inability to have accurate predictive behavior predictions about the future. It's kind of tied to the importance of iterating and make sure you're doing a lot of experiments and then having that tight feedback loop to constantly get information. Oh, that didn't work. Okay, we ran an experiment, didn't work. Let's try it a different way. Those two things work really well together. It's like we're not going to predict the future, we're going to create the future through iteration.

[Michael Dell]

Yeah. And it's okay to try to predict it as well. It's just really hard to do. And you know, you might want to have a lot of experiments. I mean if you go back and and say, okay, let's say you had somebody who was supposed to be really smart or supposed to be an expert at something, right. Ten years ago, how good were they at predicting what was going to happen? Not very good.

[Podcast Host / Interviewer]

No.

[Michael Dell]

Terrible. So don't rely too much on that. Right.

[Podcast Host / Interviewer]

This is why I think entrepreneurs have to like study past entrepreneurs too. And it's like obviously very valuable. Like it's, it's no surprise that like you were reading about these people. Like what I would say is like the greats all studied the greats. This is like very like they were doing it today, they were doing it 40 years ago, they were doing it 200 years ago. If you took like an average person in normal society. And the way they think about experts, okay. And the way it's discussed in all these biographies, it's like they're very dismissive of experts. Right. I just mentioned, I was reading James Dyson's autobiography. You know, the whole thing is just like he believes in the Edisonian principle of design, this constant iteration. You learn as you go. You can't predict like you're. You just, you know, change one thing and then test it and see how it goes. And he mentions setting Henry Ford a lot in that book. And then James Dyson wrote an autobiography 30 years after that that he also mentions Henry Ford a lotta. And the reason I thought of that is because as you were speaking about, you know, you go and ask an expert from 10 years ago, what's gonna happen? Like they're not gonna tell you that. ChatGPT is absolutely, you know, that my 13 year old, I use ChatGPT all the time, but I'm a nerd. I like to research stuff, I like to read about stuff. She uses like a therapist, a shopper, a friend. Like it's an entire ecosystem to them. There's no way you can predict that. So there's a great line in Henry Ford's autobiography, which was written 120 years ago. This is not a new phenomenon. Human nature does not change. History doesn't repeat. Human nature does. And he says, if I ever want to sabotage my competition, I would fill their ranks with experts. Experts tend to know so much and they're so convinced that they're right, they'd get no work done.

[Michael Dell]

Yeah, at the limit. Nobody knows anything. Right. And it's not a bad philosophy.

[Podcast Host / Interviewer]

When.

[Michael Dell]

You'Re thinking about the future. It's good to have a hypothesis though, right? And ideas and experiments and to keep an open mind. So what was.

[Podcast Host / Interviewer]

When we go back to that hey, this, they're coming for us. They're going to be faster, more efficient, more capable, and they're going to put us out of business. And we're not going to let that happen because we're going to transform. We are going to be that business.

[Michael Dell]

Right.

[Podcast Host / Interviewer]

What was your hypothesis back then? Do you remember?

[Michael Dell]

Oh, pretty simple. It's that it will be possible to dramatically improve the way we do things in all the core processes of the business, from software development to support to sales to every major function, our supply chain. Everything can be improved in a dramatic way. And that's what we're doing. And we're finding as we take our data, as we reimagine the processes and simplify and standardize them, we can make them way more effective. So, you know, example would be in support. We have incredible amounts of data. We have telemetry data that the machines are giving us all the time, right, about soft errors and all these things that are going on inside the usage patterns from customers. We have warranty data. You know, we have previous call logs, we have all these knowledge bases, we have JIRA databases. It's like millions and millions of documents. No human could ever interpret all this. And so we created this tool called Next Best Action, which takes all this data and understands what problem the customer's trying to solve. And it helps either the customer or the agent that's trying to help the customer get to exactly the best way to solve that problem in the fewest possible steps. And so the person helping them feels like, wow, I'm way better at my job than I used to be. Because now I got this genius on my shoulders telling me exactly how to solve this problem. The customer's way happier, the problem solved way faster, and the tool summarizes the call, so that saves a ton of time. And so everything gets way better. So you can take that same example and, you know, software development with coding assistance. Our sales teams have access to incredible tools. And so we're doing this all over our business and of course our customers are doing it. And what is this doing? It's unlocking the power of data using compute and using all these models, which also happens to be, you know, we're in the business of compute and storage and networking. So it's an enormous opportunity for Dell itself to be able to help all of our customers unlock the power of their data.

[Podcast Host / Interviewer]

You couldn't predict, like, the actual tools that were going to be invented. You just knew that now we have this new. There's this new technology that it will Transform every single process inside the business. We not be. We won't be able to predict, like, all the tools, but we just know that they're coming.

[Michael Dell]

If we didn't do that and our competitors did, we'd be. We'd be finished. All right? And so we're not going to do that. And, you know, even if we did it and our competitors did it, let's say it just neutralizes. You have to do it. You have no choice. Yeah.

[Podcast Host / Interviewer]

There's a line in Andrew Carnegie's biography. It was really fascinating because, you know, he dabbled in a bunch of different businesses. He was pretty wealthy before he started the steel company. But once he realized that, you know, think about how important steel was at that time. It's like everything. This is the new. The new product that everything else, every other product is going to be made out of, from bridges to railroads and everything else. Like, this is the biggest opportunity in my life. I'm going to go all in on it. To the point where he didn't even want any distractions. He sold all of his stocks because he didn't want to find himself looking at the newspaper, wonder, like, what the price of the stock was, like, fully focused on the greatest opportunity of my entire life. He went into an existing business that was run by older gentlemen. Right. He had this new way to do steel. I think it's Bessemer steel that he got from England. So he took that idea from England, imported into America, which is kind of weird how often that is in the history of entrepreneurship, where it's like, oh, this idea is working in one geography. Will it work over there? It's like, yeah, because humans are kind of the same everywhere. There's some cultural differences, but, you know, our core motivations are, you know, very similar, and they were very resistant to change. So they're like, no, that's not the best process. And then they would ridicule him for investing in the newest technology. He was spending a ton of money. Every time there was a better machine, a more efficient machine, he would immediately rip out the old machine and input and put in the new technology of his day. We wouldn't think about his technology today. It's definitely technology back then. And when you read his autobiography, which, you know is in the public domain, anybody could read it for free. It's. It's an incredible gift to humanity there. I remember getting to this part of the biography, which is exactly what you just said. It's like, okay, even if this doesn't give us advantage over our competitors, if we don't do it, like, they will have the advantage. So even if we're on point, like on the same level, and the summary of what Andrew Carnegie was saying, these guys wind up not adopting the technology and they went out of business. So he says, invest in. This is not a direct quote. This is me summarizing his idea. And it says, invest in technology. The savings compound. It can make the. It gives you an advantage over your slow removing competitors. And it can be the difference between a profit and a lost. If he didn't do that investment into the new technology that his competitors were dismissing, the stupid young kid with his fancy machine. Right. That wind up making. Making his company profitable in a year or two and their company unprofitable. And then slowly and slowly they just. They kept losing money and then they went out of business. It's very fascinating how these themes just keep reappearing.

[Michael Dell]

Yeah, exactly. You don't necessarily want everybody to know what you're doing.

[Podcast Host / Interviewer]

Also, the maxim I have from this I use on the podcast all the time is that bad boys move in silence. And so you mentioned earlier that sometimes there's no book. You're on the cutting edge. And so I remember there's this great line in this biography of Steve called Becoming Steve Jobs, which I actually think is the best biography written about him. And Steve's like, I don't even know what the business model of animation is. And they start partnering with Disney, and he has this great line. He goes, you can't go to the library and check out a book called the Business Model of Animation because there's only one company that's ever done it. Well, it's Disney. And they don't want anybody else to know how lucrative it is. One thing that was hilarious that your son Zach wanted me to ask about was what he calls dad Terminal.

[Michael Dell]

Yeah. So dad Terminal is what he refers to as when he kind of taps in and wants to talk about a particular topic or has a question. And it's one of my favorite times with Zach because we're talking about solving problems or challenges inside his business. And, you know, I get to share the mistakes I made, mistakes I saw other people make lessons learned, and hopefully save him some pain and suffering and, you know, steps from, you know, learnings along the way.

[Podcast Host / Interviewer]

Yeah. He says instead of typing in the. I was like, why is it called. I was like, why is it called DAT Terminal? I didn't understand what that was. And he's like, well, Bloomberg Terminal.

[Michael Dell]

He's like, you know, Exactly.

[Podcast Host / Interviewer]

Yeah, he's like, you subscribe, you log in, and you have a question, and then you type in and you get this really advanced answer. He's like, I don't use Bloomberg. I use.

[Michael Dell]

I use that terminal.

[Podcast Host / Interviewer]

And I was like, give me an example. Like, what's the last query in your dad terminal? And he goes, supply chain. He said it like, it was, like, obvious. It was like, I don't have a supply chain. I run a podcast. I read books. Like, explain it to me. He's like, there's a handful of things. Not even a handful. He's like, there's a bunch of things my dad is world class at. And he's just like, one of them is supply chain. And I'm curious as, like, why you think, why other people describe you as really good at that. Is that. Is supply chain just related back to how we started this discussion? It's just like another puzzle for you to direct your curiosity to.

[Michael Dell]

It's definitely an important puzzle and. And a critical puzzle. I mean, I think if we had not figured out how to do our. Our supply chain well, you know, we would not be here today. It's as simple as that. So it's a. It's a fundamental thing that is just super important in it. In our business.

[Podcast Host / Interviewer]

So it's just. You've thought more about this area over and.

[Michael Dell]

And made. And made a ton of mistakes and learned a ton of lessons and sort of, you know, figured out what works and what doesn't work. Yeah.

[Podcast Host / Interviewer]

There's a line in the book. I think the first time you realize, hey, I. I don't like these. Your whole thing is eliminating middlemen and, like, getting as close to the source as possible. And I think you're like, it might be 20 years old at the time, but you're taking your first trip to China, if I'm not mistaken.

[Michael Dell]

Well, so that would have been 1985. It really wasn't. You couldn't really go into mainland China at that point. There was nothing really to do there. They weren't making anything.

[Podcast Host / Interviewer]

So where were you were going to? Asia.

[Michael Dell]

You were going to Asia. So, yeah, I went to. I went to Japan, Hong Kong, Taiwan, and South Korea.

[Podcast Host / Interviewer]

Yeah, but what I love is just, like, how excited you were. Oh, yeah, because it's like you said, it's something you said earlier. It's like you got a deep love for your business, and then now you get to keep peeling back the onion and getting closer and closer to how now it's like, oh, I'm like, spending 16 hours a day I'm sleeping in my office, I'm working. We have customers, we have our hiring employees, we have revenue growth. But now I'm getting like deep, deeper and deeper, deeper understanding and like, so as I read these biographies of people, I try to like build like, you know, I, I think I have a good sense of like how you think and like what's important to you. And what I realized is like that instinct that you had as a 20 year old man or however old you were and at that time, it's like that has not you never been alleviated. It's just like this constant like keep going lower and lower and lower to like seek more a deeper understanding of like the world around you, but also how your business like fits in that world and how you can build technology to like enhance everybody else around you.

[Michael Dell]

Yeah, of course. I mean, that's what you're supposed to do, right? You're supposed to understand things, right?

[Podcast Host / Interviewer]

You say of course. Like, this is the, this is another thing I told you when we had dinner, like, how else would you do it? I don't put to you this.

[Michael Dell]

I understand.

[Podcast Host / Interviewer]

This is why I think like writing a book and having conversations like this is important because like there's so much shit in your head that is so unusual and like, like just, it's so valuable like getting it out and putting it like out into the world. Because I remember, like, I wouldn't know.

[Michael Dell]

Any other way to do it.

[Podcast Host / Interviewer]

I know because you don't understand how, how abnormal you are. So we were halfway through our dinner, I looked at you and I was like, dude, I have this paradox in my head that I cannot reconcile between like the, your, the crazy career that you've had. It's like I study uncommon people for a living. You are uncommon amongst uncommon people. Right?

[Michael Dell]

You have this.

[Podcast Host / Interviewer]

So the paradox. I couldn't recognize this crazy ride that you had that's described beautifully in your book. This four decade, you know, mission that you've, that you've been on, that you've relentlessly given a lot of your life energy to and just how normal you are. Like, you're like, not. I'm talking about like your affectation, your personality. Like, you're very polite and calm and measured, but it's like you understand how rare this is. No, I know because you're like, of course you like, this is what I love.

[Michael Dell]

It's like just wake up every day and go do the thing.

[Podcast Host / Interviewer]

This is why you're great. But that's why you're great.

[Michael Dell]

So like, seems pretty normal to me.

[Podcast Host / Interviewer]

There's nobody that reads this book like, this guy's normal. No, it's not at all.

[Michael Dell]

So there's.

[Podcast Host / Interviewer]

What I love about this, and this is why it's so important, because. And I mentioned this on the episode I made on you, but there's this. This engineer turned and turned founder, Sydney Harmon. You know the company Harman Kardon?

[Michael Dell]

Sure, yeah. Yeah.

[Podcast Host / Interviewer]

So he has a great line. He said that the founder is the guardian of the company's soul, that it's impossible to separate, you know, the. The. The creation from the creator. And I think over time, like, the.

[Michael Dell]

I resemble that.

[Podcast Host / Interviewer]

Goddamn right you do. This is also, again, how abnormal you are. I used to say, it's like, you need to build a business that's authentic to you. And then in this book, Lee was talking about he was only able to last four years, I think, and he's just like, we're fighting IBM. We don't have any money. And he's like, my back's hurting, I'm losing my hair, I can't sleep. And he's just like, Michael's ecstatic. He's tap dancing to the office every day. And he said a line that changed, like, really made me think about things. He's like, he built a business. This was natural to him. Of course, it's not abnormal to you, because you built a business that's natural to you.

[Michael Dell]

Yeah. And if. If you've been doing it every day for 41 years, it seems pretty normal, right?

[David Senra]

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[Podcast Host / Interviewer]

At what you do, you need to.

[David Senra]

Maximize your energy and output. And that is why I've partnered with function. Function provides access to comprehensive blood tests and other lab testing to help you improve your health so you can perform at your highest level. Function has made it easy for me to monitor and improve my internal health markers so that I feel at my absolute strongest as a member of Function. You get access to test over 100 of your biomarkers. From hormones to toxins to markers of heart health, inflammation and stress. Function gives you a straightforward analysis of all your results along with advice from expert doctors who are on how to improve things like your testosterone, your stress hormones, how to reduce toxins in your body, and much more. The platform is absolutely beautiful and provides an easy to understand picture of your overall health. Once you try Function, you'll immediately understand why it's the fastest growing health platform in the country. To learn more about Function and to join, go to functionhealth.com senra. Right now, Function is offering $100 credit to the first thousand people who sign up for a Function membership. To get this $100 credit, just visit functionhealth.com forward/senra. Again, that's functionhealth.com forward/senrA.

[Podcast Host / Interviewer]

Lee Walker. Tell me how important like that was finding a person because you were relatively persistent in recruiting him and you were like 21, I think at the time.

[Michael Dell]

21, yeah.

[Podcast Host / Interviewer]

And he was 45 or something like that.

[Michael Dell]

Yeah.

[Podcast Host / Interviewer]

What's the role that you feel he played at that point in Dell's history?

[Michael Dell]

Well, yeah, the company was, was, I mean, it's like our rocket had sort of taken off, but, you know, it was, it was pretty fragile. And you know, we had some good ideas, but there was a lot of missing pieces and Lee helped fill in those missing pieces and, you know, sort of organize the uncontrolled chaos and help this sort of really, you know, scale, scale up the business in like operations.

[Podcast Host / Interviewer]

Like, what do you think?

[Michael Dell]

Yeah, I mean, it was. Well, well, well, first of all, we were growing so fast. We just, we just didn't have the balance sheet or the capital to support our growth. And so he helped us, you know, get some credit lines and, you know, that, that, you know, freed up capital and then like, you know, sort of organized some, you know, some of the operations and stuff I didn't really know about or, or have a great interest in, you know, because it wasn't the technology or, or the customers. Yeah. And so he helped sort of get all that stuff on the right path. And then as we, as we needed even more capital, you know, with a private placement and going public, you know, he helped help sort of get all that going. And you know, just basically how do you, how do you scale this thing up to get it ready for 10x or 100x growth?

[Podcast Host / Interviewer]

One thing I thought was very fascinating that Lee Walker said, right. Is you got to the point where, you know, you had that negative cash conversion Cycle where? But you were selling to like individuals, so individuals like, oh, I want a computer, Michael. Okay, give me your credit card. You're like, great, I got this money, which we'll talk about in a minute. But now you've moved up and now you're doing enterprise. And some of these companies are huge, like Texaco and like these giant companies. And I remember at one point in the book, it was something you were doing like 60 million a year in revenue and you had like 200 grand in your bank accounts or something. It's just like, there's just no cash here. And what was smart is he went to the banks and I was curious. It sounds like he had relationships with the bankers. And I always have this maxim that relationships run.

[Michael Dell]

He did.

[Podcast Host / Interviewer]

Okay, so relationships run the world. You see that over and over again. And so Lee had relationships with these, these bankers that I assumed in the book and you just verified, but then what I thought he did was really smart. They're like, listen, we trust you, Lee, but we don't know this kid. And his whole point is like, you don't have to even trust me or the kid. He's like, look at all the purchase orders. Like, do you think Texaco is going to pay us or not? And using the, like the brand and the prestige and the, you know, essentially the value, like, Texaco's not going out of business, they're going to pay them. Pay this kid that you said, you don't know, lend us against our receivables.

[Michael Dell]

Yeah, that's a really good idea. Yeah, it was receivable based financing. The problem was that, you know, as, as, as a 21 year old, you know, starting a business with really no capital, you know, in infusion from, from the beginning. $1,000, right? Yeah. You know, a banker looking at it with no one known inside the business to trust would sort of their, their general reaction would be, I think I'll go do something else. Right.

[Podcast Host / Interviewer]

Yeah.

[Michael Dell]

But, you know, Lee had those relationships. He was trusted and he was able to kind of explain it to them. And, you know, that helped sort of break open that log jam and that, you know, gave us some of the capital we needed to continue to grow and expand.

[Podcast Host / Interviewer]

So can you explain how you stumbled upon the negative cash conversion cycle and why that was so powerful? Yeah.

[Michael Dell]

So, you know, we didn't have any capital. Right. And so, you know, what we figured out was that if we could dramatically shrink our inventory and get paid from our customers faster and, you know, maybe not pay our suppliers, you know, instantly Pay them a little bit later. Then if you're growing and you have a negative cash conversion cycle, you actually generate a lot of cash. And so you don't need as much capital to raise to be able to grow the company. You have a high return on capital. So we started looking at the business that way. And of course we also, there was this really interesting thing where our competitors who didn't really understand what we were doing, they had these elongated supply chains, they had distributors and dealers. And so they would have, you know, like 90 days of collective inventory from the time that they actually made the product to when it actually got to the customer. And you could actually understand this because if you opened up the computers, the chips had dates on them that showed the weeks they were made. Whoa. So you know, it would say like 42, 92. And that meant it was, that chip was built in the 42nd week of the 92nd year. And so you could literally date how old the inventory was by opening these things up. But anyway, so they had like 90 days in their collective supply chain and we figured out how to have like five days. I mean, it was crazy. It was like, it was like a massive advantage. Now the other reason this is important is because it turns out that the price of electronic components generally goes down, right? And you know, it's a pretty predictable thing. And so if our components are five days old and the competitors components are 90 days old, well, theirs costs a lot more than ours do, right? And so now you've got this structural competitive advantage. Now another element of this is that you also have the freshest and the newest and the best technology. You're not selling the 90 day old fish or bananas, right? You're selling the new chip, the latest capability. And so now you've got even another advantage. And then you've got this feedback loop because you're getting signal from the customers of, oh, I like this, I want that, change this. And so you're able to create this dynamic feedback loop. So that was what we created and it worked and we kept iterating it and evolving it. The competitors, they kind of dismissed it. And one of the best things was they just didn't understand it, they misunderstood it, which was fantastic.

[Podcast Host / Interviewer]

How is that?

[Michael Dell]

So it's like you don't want them to understand what's going on. You don't want to explain it.

[Podcast Host / Interviewer]

But how do you explain their inability to.

[Michael Dell]

Now you can explain it, but back then you don't want to. You don't want them to know what's happening. You Just want them to maybe not even see what's going on.

[Podcast Host / Interviewer]

So I have a funny story about this, and then I want to get back to compact and IBM. So I had dinner with one of.

[Michael Dell]

The wealthiest people in the world.

[Podcast Host / Interviewer]

He's 76 years old. He's been in the family business. He's a second generation of this privately held, like, dynasty. And he started working the business since he was 6. And it was like, crazy stories. It started on the shipping. They own one of the largest privately held shipping companies in the world. And he's this raconteur. He's, like, super charismatic, and just, like, it was an incredible dinner, but I had found out same reason where you're like, hey, I'm writing this book because I want people to come to Dell to understand the history they had commissioned. The family had commissioned a real author. Right. I have some of these books at my house, not from this guy, where these family businesses or, you know, these people at brokerage companies, they have. They'll hire, you know, actual author, pay them whatever million dollars, write the book, and then they'll print it just like this. But there'll be no ISBN number on the back. It's not available for sale. So I have a couple of these in my own library that people have given me because of the podcast. But he was telling me the story. Yeah, we. We had. We commissioned a biography of the patriarch who passed away a long time ago. And then we did one for me, and I was just like, dude, give me those books. I, like, leaned in. I was like, I want those books. I was like, I'll crush the episodes. The episodes would be great because he had so many crazy stories. Without hesitation, he goes, absolutely not. I was like, why? He goes, I have no desire to educate my competitors so that you just nailed it. It's like, obviously, if you have an edge, shut up about it. This is what I don't understand. So maybe IBM and Compaq are the two people, two main companies that are not understanding the advantage that you had at this time. Right. IBM is a big old stodgy company. Okay, that makes somewhat more sense. Compaq was run by its founder. How do you think he deliberately misunderstood? Like, how is that possible for him to not be able to accurately analyze? Do you think he was just dismissive of you? You didn't think you were a threat? Like, what was going on there?

[Michael Dell]

He's still alive. You can go ask him. You know, I. I. You know, I think. I think when you're, you know, you're In a bubble, you know, people tell you things are working, and maybe you just don't want to believe that there's alternate information, and so you dismiss it.

[Podcast Host / Interviewer]

Did you read the new biography of Jensen Huang called the Nvidia? It's actually. It's a history of Nvidia, but he's heavily featured. Nvidia Way or.

[Michael Dell]

I haven't read the whole thing.

[Podcast Host / Interviewer]

Okay. No, I did an episode on it. I'll send it to you. Yeah, but he has this whole thing where the threat comes from below, and his. I think he reduces everything to maximums. He's like a really good communicator. And so his thing is like, we're going to ship the whole cow because the threat goes from below. And I think I mentioned this in the episode I did on. On your book, where it's just like you at the time came out with a. You just beautifully described. Like, you're just stacking one advantage on another advantage on another advantage. You're like, okay, we have the latest technology. We have way better supply chain management than you. We are putting out. I think you put out a computer that outperformed Compaqs, which you sold direct to the consumer for $795. If I remember correctly, it was faster than theirs, and they sold a worse computer for 1500, and it was only through retail stores. It's like that exact. The manifestation of all these advantages you had. You could just look at the market and be like, it's very curious to me how this founder could be like, hey, yeah.

[Michael Dell]

And, you know, you kind of hope that they don't even see it. Yeah, right. I mean, I think there's a human instinct to. To say, hey, look at me. I'm doing this great thing. Isn't this cool? Right. But actually, in business, it's better if the competitor doesn't understand or doesn't see you.

[Podcast Host / Interviewer]

So because you weren't in stores, the only way they would know that is if they were ordering directly from you. And they probably weren't doing that.

[Michael Dell]

Yeah. Or. Or if they were sort of paying attention. But. But you. You kind of hope they don't notice and don't pay attention.

[Podcast Host / Interviewer]

I think this is tied back to the importance of following, like, your natural star and something you're just obsessed with. Because I didn't know that part where you could take these things and see, oh, this is the 42nd week of the 96th year. That's insane. There's a line in the book, not that hard.

[Michael Dell]

The numbers are right.

[Podcast Host / Interviewer]

Not that Hard.

[Michael Dell]

The numbers, you're just sitting there. It's like they're, they're, they're just staring at you. They, they're, they're talking to you.

[Podcast Host / Interviewer]

I, I 100% agree with you. It's like. But this is the difference between somebody that's obsessed and somebody's not. Like, that guy wasn't taking apart computers compulsively. There's a story in the book, and no disrespect to him. There's. I'm not trying to throw any shade at anybody. There's a story in the book where you guys are doing, I think the private placement of the IPO and is Black Friday happens. And I think Lee Walker walks in your office to tell you that, oh, shit, we, there might be some trouble. There's trouble brewing in the capital market at this point. And he said Michael was in his office taking apart another computer.

[Michael Dell]

That's what you do.

[Podcast Host / Interviewer]

That's what you do. That's exactly. I think that's the biggest thing, man. It's like, it's an unfair advantage if you can direct your energy at something that you. There's no. We talked about this at dinner. We have a mutual friend and Sam Hinkey. And one of the things that's interesting about Sam is if you analyze who he keeps around him, they have different interests. You know, it's like this podcaster dude, this investor guy, this entrepreneur, this, like, athlete, and he's like, what, what, What I'm drawn to, what all these people have in common that may not be obvious to you, David, is that there's no end to, like, you can't get to the end of what they're interested in. He, you think he used the analogy of like a, a cup. You just pour and pour and pour. It's just like, it just keeps going. Like they can never get to the end of their curiosity. And I think you're a perfect example of that. Where if you look at other founders that are doing things for fame or status or whatever the case is, it's like, Jerry Seinfeld has a great line. He goes, if you just do it for the money, you're only going to go so far.

[Michael Dell]

Yeah. When it's like a passion or an obsession, there's, there's, you just. There's no end to it. Yeah.

[Podcast Host / Interviewer]

And you're, you're taking more chips and analyzing like, oh, I have a 90 days advantage over here. And I'm not worried about the capital markets because we're just going to keep serving our customers and, like, eventually that is going to change. It's not going to be a depression forever. So what can I focus on? I can just focus on understanding what I'm working on, what's in front of me, and then following this deep curiosity, you know, and. And. And actually taking the curiosity that comes from your head into, like, an actual product that makes somebody else's life better. It's like the miracle of entrepreneurship.

[Michael Dell]

You got it.

[Podcast Host / Interviewer]

So we. We were just talking about the fact that Compact and IBM, they were almost like, essentially you got fuel from being underestimated. You've mentioned in the book that, like, you found it. I think you said something that's like a powerful motivate. Motivating force. Do you recall why you felt that way?

[Michael Dell]

Yeah, it was. It was just. It was just like, okay, wow, this is going to be a multiplier for us because they underestimate us. They don't understand what we're doing. And so they. They didn't see us coming because they were underestimating us. You know, I think the CEO of Compaq, you know, would refer to us as a mail order company or, you know, garage operation or whatever, you know, and you'd hear that and you'd go, oh, wow, this is. This is great. It's like, no idea what we're doing. All that was motivating. You know, anytime there was sort of a setback and the conventional wisdom or even whatever interpretation was, okay, they're going to fail, they're going to go out of business. All that incredibly motivating.

[Podcast Host / Interviewer]

Is it still like that today?

[Michael Dell]

Of course, yeah. Yeah, absolutely.

[Podcast Host / Interviewer]

I love how everything is. Of course. Of course it is.

[Michael Dell]

Yeah. I mean, if it wasn't, I'd probably, probably, probably be dead. I mean.

[Podcast Host / Interviewer]

And still caring about the company even from the grave. It's a common, I think, misconception. I'm curious to get your take on this, where people are like, well, if you don't raise all the money at the beginning and your competitor does, you're automatically dead. And I hear that a lot. And I was like, I don't know. Compact raised 75,100 million and you had a thousand dollars and a dorm room. Do you feel that, like, it is actually different today? Like, if you were advising, like, a.

[Michael Dell]

Younger entrepreneur, I think it's very situation specific in terms of the company, industry, et cetera. So I don't think you could give generic.

[Podcast Host / Interviewer]

Yeah.

[Michael Dell]

Advice there.

[Podcast Host / Interviewer]

Yeah. That's why I think, like, the generic advice is you have to do this or you're dead. I'm like, I don't. I'm pretty sure that's not the case.

[Michael Dell]

I don't think, you know, like I was saying, saying earlier, I don't think there are ever these absolutes. I think you always have to hold out the possibility that somebody is going to figure out some clever, interesting way to do something that nobody's ever thought of that is different and, you know, that's just going to happen.

[Podcast Host / Interviewer]

Yeah, that's actually an interesting area to go down where it's like, who else you figured out by accident? Like, because, you know, necessity is the mother of all mentions. Like, I don't have capital, so how do I get money? Well, I'll just ask my customers for the money. And then you accidentally discovered all these advantages and had a deeper understanding as you went along. Are there any other examples of like, entrepreneurs or businesses that you've studied where it's like, wow, that's like a really clever way to do something effectively, inexpensively?

[Michael Dell]

Well, I mean, you think about some of the, some of the retailers, you know, like, you know, Walmart and Costco and Amazon obviously came up with, with super clever ways of, of winning in that space by, you know, doing things inexpensively, taking out all kinds of cost. Yeah.

[Podcast Host / Interviewer]

The other one that came to mind was Sam Zamuri, the Banana King. He essentially builds the second largest banana empire and at the time, then later on overtakes the first largest, which is a food company. But I guess one thing that he figured out, and he was actually your same age, he was 19 years old, he had no money, and he was trying to figure out a product to sell. And so what he did, he's just like, well, I was working the docks down, I think in Alabama at the time, and he's like, all these fruit companies, they have these things called ripes, which are the bananas that are going to go bad in like two days from now. And they just take them off the boat and throw them in the garbage because they can't get it fast enough to the store. And his idea is like, well, I can use this new technology of the day, which is the railroad, and I can buy this for almost nothing because they're not getting anything anyways. And I'm going to put their ripes and get on the railroad with it and then sell it at every single stop. And then he was generating so much cash and then he could start working down the line all the way to when he had his own banana plantations. Just like that idea. It's like it starts out with this little nugget of, like, oh, this is, like, an interesting opportunity. And not understanding. As you pull and pull and pull and pull, it gets more and more, like. You keep stacking these advantages one on top of another. Yeah, I gotta find. I should organize and, like, look into, like, more examples of, like. Is there another example of, like, what you had at the beginning of Dell? Because I think that's the key. Like, I think some degree, it's like, the easier, more path is just go and, like, sell part of the company or raise more money or find essentially, like, solve the problem with money. Where you solved it with, like, creativity and hustle and, like, intelligence. Those ideas are, like, excessively fascinating to me. IKEA is another one where he. You know, same thing where he was just selling mail order. He's a mail order company and he has a great line in.

[Michael Dell]

Yeah, there's that mail order thing again.

[Podcast Host / Interviewer]

I know. I think it's like, still, Silvan, he has that great line where he's like, expensive solutions to any problem or signs of mediocrity. So he was like, you have to be more creative.

[Michael Dell]

We had this whole thing in the 80s, and we called it beat the mail order stigma.

[Podcast Host / Interviewer]

Really?

[Michael Dell]

And it was sort of like, as we were establishing our brand, you know, sort of the conventional wisdom was mail order company, which was sort of like a pejorative, like an insult. Yeah, okay. It's like, okay, it's a mail order company, and. And it's sort of like a stereotype. It's like, oh, you can dismiss it because it's a mail order company. Right. And all the press, you know, for years, they were like, mail order company, Dell, you know, the mail order company Dell introduces server. You know, I was like, what? It's like, okay, we have 30,000 patents. When are we not a mail order company? It's like, what is this mail order thing? So, so anyway, we had to, like, get rid of that.

[Podcast Host / Interviewer]

So how did you beat it?

[Michael Dell]

Just kept doing our thing, you know, and eventually people go, I guess it's not really mail. I mean, it's Internet and it's not mail order. Nobody orders stuff in the mail. What is it?

[Podcast Host / Interviewer]

I think you just made me realize something that I didn't understand when I read the book. When you were talking about how important it is to, like, not squash ideas and that, you know, ideas can come from anywhere and they can, like, you know, they. They seem small. They can have a huge impact. I think Dell was, like, one of the first companies to sell on the Internet. Right, yeah.

[Michael Dell]

Well, so we. We were selling direct, right? You know, like, people would call us on the phone, and we used to have these rooms with, like, a gazillion fax machines, and they would send us the orders on faxes. It was crazy. And we had catalogs, right? And so then, you know, the World Wide Web comes along, and you websites, you know, like. Oh, you mean we can create a website and people can go on there, and, like, the catalog is there, and they can, like, press a button, order the thing. That's the coolest thing ever. We got to do that, right? And so in my first book, you notice on every page at the bottom, it said www.Delcom.

[Podcast Host / Interviewer]

I read that other book, too, like.

[Michael Dell]

Obsessed with getting people to the website because it just became, like, the easy way to interact with people.

[Podcast Host / Interviewer]

And that book came out in 97, right? 99, I think. 98.

[Michael Dell]

Yeah. But, yeah, we started. We started, you know, with. With. With one of the first websites. I mean, there are. There weren't many websites. I mean, I remember when there.

[Podcast Host / Interviewer]

It was a small number.

[Michael Dell]

I remember when you could, like, go to all the websites, like, in the. Who.

[Podcast Host / Interviewer]

I'm done for the day.

[Michael Dell]

Like, there's no more websites. Like, kind of. It sounds crazy now, but there. There. There used to be not that many websites. And you could, like, go to them and like, okay, I'm done. Like, it's just. There's nothing. Nothing else to see. That obviously changed quickly.

[Podcast Host / Interviewer]

So how the hell do you even build a store? Like you were collecting? Do they have to, like, call a number in? Because I remember, like, taking credit cards online. Maybe not 90, if you were doing. Do you remember what year you launched the site? 97. Probably 96.

[Michael Dell]

I think it was probably 90. 96. 95. 96. Had to build the whole thing.

[Podcast Host / Interviewer]

Okay. Yeah, yeah. It's funny, I forgot about the fact that Dell.com is on the bottom of every page. But what's fascinating is if you read Bezos shareholder letters, it's not. He never refers to it as Amazon. Every single shareholder letter up until, you know, you don't have to do it anymore. And then every single interview, it's Amazon.com, amazon.com, Amazon.com then it turns into Amazon because he's like, we got to push you guys to this new thing called the Internet where you can buy things. It's such a fascinating thought, like, how novel it was. But you kind of saw, like, right away, like, this just. We should just do this because it's cool.

[Michael Dell]

We'd experimented with. How do you create an electronic version of the catalog? Even like, we're going to send you a floppy disk or a CD rom and you put it in your computer and you load it up and the catalog is there. Right. Those are some of the ridiculous things that happened before the Internet, before the World Wide Web.

[Podcast Host / Interviewer]

Did you ship that?

[Michael Dell]

Yeah, yeah, we did.

[Podcast Host / Interviewer]

So you just kind of like, what? Remember aol? They just like essentially carpet bomb the entire country?

[Michael Dell]

Yeah, we didn't do it like that, but. But we. Ours are more targeted. But, you know, you wanted to make it easy for the customer to understand your offerings. And then the World Wide Web just made that, you know, kind of infinitely accessible to anyone.

[Podcast Host / Interviewer]

The idea of mailing out a floppy or a disc of a catalog is just like a hilarious idea.

[Michael Dell]

But then people were surprised when people started ordering computers online. And I remember we sold like a server for $50,000 online. People were like, no way. You know, it's like it didn't happen as fast as some of the things that are happening now. Yeah, but obviously for a business that was selling directly to businesses and, you know, individuals, you know, all over the world, it was just total rocket fuel.

[Podcast Host / Interviewer]

How soon into Dell were you starting to sell, like, targeting institutions over individuals?

[Michael Dell]

You know, it's really interesting if you go back to the very, very beginning, like the first full year, like, over 80% of the business was to businesses.

[Podcast Host / Interviewer]

Okay. So it started with like doctors and dentists. Right. Lawyers or some of your first. But they were using it for business purposes.

[Michael Dell]

An individual Dr. Dennis. I would think of them as more like an individual, but. Well, first of all, let's level set here. So if you look at all technology spending, roughly 75 to 80% of it is businesses, not consumer. And so that's kind of been the thing for a long time.

[Podcast Host / Interviewer]

So within the first year, you got the same similar percentages.

[Michael Dell]

Similar percentage, yeah. You know, there were companies, universities, they were buying 5, 10, 20, 50 machines at a time.

[Podcast Host / Interviewer]

One final thing that I want to talk to you about that I think is like one of the most important ideas in your book, especially when you're trying to push these stories down the generations. So I see it in a lot of the biographies, and I think it's another misconception, how we just talked about the misconception between entrepreneurs, know, be wary of experts and, like, how they can kill new ideas where, like, a normal person would revere them. Right. So there's like this, this, this difference of understanding between that. Another one that I would say, is like, the importance of ego and self belief and self confidence. And my, you know, general society might say, you know, you should generate evidence and then be confident. And I hear this a lot, which is perplexing to me, because in the books, this is. No, you have that direct, completely back backwards. Belief comes before ability. And so I would go back to this part in your book that I think is super important. When you're 19 years old and your dad's like, what do you want to do with your life? And you're like, I want to compete with IBM. And you'd sit there and like, again, I don't think you should be reading these books quickly. This is like, there's no test at the end. Like, sit with the ideas and really think about what's happening on this page. And I think it's one of the most important pages in the book. I can actually see the page in front of me. And what you realize, you say on that page where it's just like, was I a little full? You know, the idea is like, I have $1,000. I'm in UT dorm room. I'm gonna take on the biggest company in the world. And you said, was I a little full of myself at 19? Sure, I was. I think you have to be to do anything important. Can you explain that mindset?

[Michael Dell]

Yeah, I think. I think it's a combination of. Of naivete, right? Which is an important element. It's like you don't know enough to know that maybe this won't work. Work, okay. And confidence. But, you know, you never sort of want to go over into the arrogant zone because that's really, I think, a dangerous place to be. So it's like, okay, I have not been in this industry for a long time. And so, you know, all these reasons why it won't work are unknown to me. Okay, so that's the naive part, right? And that can actually be sometimes a good thing, right? Because you're not sort of bound by those conventional thinking that maybe are no longer as relevant or maybe you come up with some clever new way of doing it. And then the confidence piece is, all right, I'm gonna go make it work. I'm gonna go figure it out. Right? But, you know, there's always that little voice in your head. It's like, well, what if it doesn't work? And, you know, what about this? And what about this? And so, you know, you never want to sort of assume, okay, this is absolutely going to work no matter what, because then you're going to Ignore those little voices about, well, what about this? What about this? So, yeah, it's sort of, I think, a combination of naivete being real here and confidence.

[Podcast Host / Interviewer]

I think a perfect illustration of that would be your reluctance, initial reluctance, to name the company after you. Because it was PCs Limited, right? @ the very beginning.

[Michael Dell]

It was officially Dell Computer Corporation doing business as PCs Limited, Right.

[Podcast Host / Interviewer]

Yeah. Yeah. But then you realize, like, why don't we just do Dell? And then that's when I thought of the Osborne thing. Because you're like, wait a minute. This guy, he named his company after that. Like, there's no, what if it doesn't work? Yeah. But it's interesting because you just said, it's like, yeah, I have a lot of confidence I'm gonna do this. But the doubt never goes away.

[Michael Dell]

Yeah. And, you know, fear.

[Podcast Host / Interviewer]

Thank you. That's actually the last thing I want to talk to you about. When we. One of the first things when we saw each other last month, we talked about. We were, like, walking around Zach's office, and I don't know how it came up, but it came up almost immediately. And it wasn't a surprise to me because I feel the exact same way. But fear of failure, in my experience, from studying all these histories against entrepreneurs, but I think you said the same. It's just like the fear of failure to this day is a bigger motivator than, like, the love of success.

[Michael Dell]

Yeah, totally. 100%. Yeah. You know, you don't. You don't want to fail. Although failing is how you learn. You know, pain is the best teacher. And so, you know, you have to have some little failures along the way. But that fear of, you know, you can't have it paralyze you where you don't want to make any decisions because you're afraid to fail.

[Podcast Host / Interviewer]

Has that happened to you?

[Michael Dell]

Not really, no. What you want to do is sort of be incremental, and again, it's back to iterating. It's like, okay, we're not sure if this is a good idea. Let's try it, right? Let's experiment. Let's get started. We'll figure it out. And we're not betting the whole company on this decision. We're just experimenting. And if it doesn't work, great, we learn something, we move on.

[Podcast Host / Interviewer]

It's perfectly said. Thank you for writing the book. Thank you for the time. I really appreciate Michael.

[Michael Dell]

Thank you, David.

[David Senra]

I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review and make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.