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Michael Dell
Michael Dell
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Michael Dell Interview (page: 6 / 7)

Founder & Chairman, Dell Inc.

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  Michael Dell

What advice would you give a young person who is interested in being an entrepreneur? What do you think are the qualities that are most important?

Michael Dell: I think you have to be able to experiment and make mistakes. I find the question a bit perplexing, in a sense that if you really don't know what it means to be an entrepreneur, maybe you aren't one. So I think there's a bit of self-initiative and self-starter that is an incredibly important part of entrepreneurship. I mean, no one can tell you how to do it. You have to sort of have an instinctual feeling, or an idea about something. And you've got to be passionate about it. I think people that look for great ideas to make money aren't nearly as successful as those who say, "Okay, what do I really love to do? What am I excited about? What do I know something about? What's kind of interesting and compelling?"

[ Key to Success ] Courage

You have to follow your heart in a way.

Michael Dell: Yeah.

If you look at our story, at any point in the process you could've gone to conventional experts. In fact, I remember -- I won't name the person, 'cause he's still an extremely well-known author of famous business books, teaches at a very prominent university -- I showed up at a conference when the company was three or four years old, and he was sort of critiquing our business. And he said, "Oh, this will never work." And it was a common experience. When we launched our business in the United Kingdom, we had about 22 journalists show up. And it was sort of funny, because about three or four weeks before we launched, we started actually selling. And the thing was just going like crazy. It was just growing so, so fast, which is a good thing, because when we had the launch, about 21 of the 22 journalists said, "Oh, this is a horrible idea. Never work in the U.K. It's a completely American idea. Don't even think about coming here. You should just pack your bags and go home." Lucky for me we'd already started. "Hey guys, love to entertain some more questions but I got to go back to the office, 'cause we're busy taking orders and making computers."

[ Key to Success ] Perseverance

The U.K. grew faster than the U.S. The U.K. just took off at super rate. We're number one there as well.

Even a business as spectacularly successful as yours can have a few ups and downs. Could you tell us some of the problem you had in the early '90s? Around 1993?

Michael Dell: We had problems in 1993 that I think were multifaceted. One big challenge was that the company had grown so fast. We had grown from -- in 1988 -- maybe 150 million to -- by 1993 -- almost two billion in revenues. And the infrastructure and the systems and processes were not really keeping up. In fact, in one year we grew from less than nine hundred million to over two billion. People say when you hit a billion you hit the wall. We just jumped right over it and went right to two billion. But it was a real mess. We sort of had to stop and re-evaluate things.

Was it ever difficult to keep up with demand?

Michael Dell: Oh yeah, for sure.

We had real challenges in how fast can you build factories and how fast can you hire people and put up new buildings. Hyper-growth sounds really fun and exciting, but, I learned the hard way, there is such a thing as growing too fast, where the wheels sort of come off and you have to take a time out and say, "Wait a second here, let's prioritize." I was absolutely to blame. We were going and doing so many things at one time, 'cause we were really excited. We were like, "Okay, we're going to go in this business, we're going to go in that business, we're going to go to this country and this new product and this new service... " It was just too much of a good thing. We had to really sort of hone it back.

[ Key to Success ] Perseverance

Speaking of setbacks, what happened with the Olympic project?

Michael Dell Interview Photo
Michael Dell: The Olympic was a project that we created. We had a really bright technical team and they came up with a new computer architecture which was sort of unbelievable in terms of what it would accomplish. It crossed all sorts of new boundaries for us into the server opportunity, into the workstation opportunity. It turned out that it was technically too much of a challenge for our team to digest. Even if we could digest it, our customers weren't really ready for it. So we learned a valuable lesson. It's not just technology for technology's sake, but relevant technology and what really matters to customers and what inventions are really valuable, versus just let's go create a whole bunch of new things.

What was the issue with the Sony batteries catching on fire? When did that happen?

Michael Dell: That was actually fairly recently. That was not too long ago. We had a notebook computer. You know, computer batteries -- or batteries themselves -- are basically devices that store energy, and they're supposed to release the energy very, very slowly. It's a complex chemical device. If the process of building the batteries is in any way flawed, the battery can release the energy much more rapidly than it's supposed to, and you don't want to be around when that happens. So we had some batteries -- a very small number, like a handful of batteries -- and it made kind of a global news story. So we went into action, with electron microscopes, tearing these things apart and looking at them.

A handful of batteries caught fire. Is that what you're saying?

Michael Dell: Yes.

We did a complete, full investigation and found that one of our suppliers, Sony, had made some batteries that had the possibility of this defect. Quite a small likelihood, but still it was there. So we made the decision to recall all of those batteries. Now the interesting thing, if you go back and look at when we made that decision, the popular wisdom was that it was an issue that was unique to Dell, and Dell was the only company in the world that had this problem, and it must've been because Dell did something wrong in the way it designed its computers. Several weeks later, another computer company announced a similar recall for the same Sony batteries. And then several weeks after that, another company. Eventually all of the companies that used the Sony batteries announced recalls. We were very proactive in doing it, and I think our teams did a fantastic job in sort of doing the right thing, when you know you could have had all sorts of arguments about, "Well, it's a really small percentage..." or those kinds of things. But we actually knew the problem was there. And you know, even though there were debates about, "Okay. Is it going to be six batteries that fail, or is it going to be ten batteries that fail?" Doesn't really matter. One battery failing is one too many.

[ Key to Success ] Integrity

You have to face reality, I guess.

Michael Dell: Absolutely. My experience is that when you find a problem, you fix it as fast as you can find it and just move on. Whatever the consequences of fixing it are, it you just deal with it and keep going. No one's going to fault you for fixing a problem. Now if you keep making the same mistake over and over again, that's not acceptable. I'd always rather be the first one to fix a problem, and have others follow us, than to wait and kind of see what other people do.

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This page last revised on Aug 01, 2008 17:53 EST
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