Entrepreneur of the Century—Michael Dell
He’s one of the great success stories of the modern era: a college dropout whose operating principle revolutionized the business world. And made him soooo rich.
(Page 2 of 2)
Along the way, Dell has shown he can run the company he founded—no easy feat. “Conventional wisdom says that most entrepreneurs are good at starting companies but not good at managing them once they reach a certain size,” says Joan Magretta, a contributing editor at the Harvard Business Review. “Dell can do both.” In particular, he wins points for his precise attention to the details of his business (referred to as “Michaelmanaging”) and for his record of hiring senior executives—for recognizing, in the words of Dallas attorney Tom Luce, a Dell director since 1990, that “a $500 million company and a $25 billion company require people with different skill sets.”
Dell is also routinely praised for graciously accepting criticism, a sign of maturity well beyond his years. “His willingness to listen is unbelievable,” says Tom Green, the company’s senior vice president for law and administration. “He detects insight, mines it, absorbs it all, and acts on it immediately.” Luce, who has two children older than Dell, remembers flying to Austin to meet him: “Frankly, I was thinking, ‘This is gonna be a twenty-five-year-old who knows everything.’ I was very impressed by how open he was. I later kidded [UT System chancellor] Bill Cunningham that there must not be much value to a UT education.”
He created wealth. “I’m a firm believer that success that’s shared is always better,” Dell said. All over the world, there are people who would agree. Dell stock has increased in value by 69,000 percent in the last decade—yes, you read that right too—expanding the ranks of the rich to include both investors who bought into the company early and employees at all levels who receive stock options.
There’s no way to measure the number of so-called Dellionaires in Texas or anywhere else, but the anecdotal evidence of their existence is startling. In certain circles in Austin, for instance, everyone is talking about the lawyer who recently sold his house for twice its appraised value to a techie who’d just moved to town. How, the lawyer asked, could the buyer afford it? He had invested a modest sum in Dell when the stock went public and was now a millionaire many times over. For every story like that one, there are two or three that are more earthbound, involving people who sold Dell stock to make a down payment on a house or pay for college for their kids. (And there are sob stories: A guy in my poker game reports that he bought five hundred shares of Dell stock at $4 and sold them at $8.)
Dell the man has gotten rich too. Forbes puts his net worth at $20 billion—Fortune says it’s $21.49 billion; what’s $1.49 billion between friends?—and he and his wife, Susan, live with their four children in a 33,000-square-foot mansion west of Austin. As is often the case with enormous wealth, however, Dell’s has invited intense scrutiny. When his house was being built, for instance, Dell came under fire for challenging a Travis County tax assessor’s valuation as unfair; his critics charged that he was trying to weasel out of paying the appropriate level of property taxes (he and the county eventually reached a settlement).
And there are those in the press—among them, columnists for Vanity Fair, Fortune, and Texas Monthly Biz—who’ve wondered aloud whether Dell is overpaid, his stock’s steady climb notwithstanding. From January 31, 1998, to January 31, 1999, counting his salary, bonus, and paper profits from his stock options, his total pay was $1.4 billion, “more than twice the compensation I have ever seen for a single year’s work,” Graef Crystal wrote in Texas Monthly Biz. Such criticism is “nonsense,” Luce says, noting that Dell’s bonus and stock options are incentive pay: “He only makes money if the company makes money.” Dell agrees, offering his own wry take on the issue. “If I were the CEO of Compaq,” he says with a chuckle, “then I would be overpaid.”
He gave back to his community. Only a few years back, Austin’s high-tech entrepreneurs were the subject of a whisper campaign: The money goes up MoPac and I-35, the line went, but it doesn’t come back down. That is, Michael Dell and others like him were quick to take tax breaks to locate their companies in the Silicon Hills north of the city, but they were slow to say thanks by donating to downtown arts organizations and other non-profits when the money started rolling in.
Better late than never. Nowadays, Dell is unrivaled as a role model for good works. In the past five years he and his wife have donated forty acres to the Jewish Federation of Austin for the creation of a Jewish community center, $7 million to the Austin Museum of Art, $3 million to Saint Andrew’s Episcopal School, $1 million to the Austin Children’s Museum, $1 million to the Children’s Hospital of Austin, and $500,000 to the Austin Public Library. And they’re not the only ones: The Dellionaires have given way to the Dellanthropists. The two-year-old Dell Foundation doled out more than $400,000 in 1998, while other cash-rich Dell executives have been giving as well. When the Dells made their pledge to the art museum, four of his top lieutenants and their wives kicked in $6 million more.
DELL MAY BE GENEROUS WITH HIS MONEY, but he’s stingy with information about his home life. The press has rarely been able to penetrate the protective layer that shields the private man from the public view, and that’s how he wants it. Ask even a remotely personal question and he shifts in his seat, politely declining to answer. Ask to interview his family and the request is turned away—again, politely. Ask any of his colleagues to describe what their boss is like offstage, and they offer singsong generalities about how he’s so devoted to Susan and the kids, how he used to work long hours but now tries to make it home for dinner.
A balance between family and work? It’s another thing about Dell’s life that we’d all like to emulate, and he would no doubt wish us all the success in the world.
Pages: 1 2
My Library
