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.

Michael Dell’s mantra these days is “be direct,” so I decided to take him up on it. “You and I are a lot alike,” I said as we sat in the conference room down the hall from his office in Building One on the Dell Computer campus in Round Rock. “We’re about the same age. We’re both nice Jewish boys from big cities. We both sold newspaper subscriptions. My daughter goes to the school your kids went to. But you’re worth billions, and I’m not. Why? Why you and not me?”

For a moment Dell looked at me as if I were crazy, then realized I was kidding. He smiled as broadly as he would in our time together and returned the volley. “Why not you?” he said. “It’s not my fault that other people aren’t successful. I wish you all the success in the world.”

Touché. He gave as good as he got. Better than good, actually: His half-serious answer was more revealing than the totally serious one that followed (“I think I’ve been resourceful…I’ve been opportunistic…I’ve identified discontinuities in the marketplace . . .”). Entrepreneurship is the art of the possible. Anyone with money and a good idea—the fabled dollar and a dream—has what it takes to write his own ticket; why not me indeed? The hitch, of course, is follow-through. You have to execute. You have to do it. And no one in the history of Texas business has done it as well as Michael Dell.

His accomplishments stack up like the planes sometimes do on the runway at the new Austin Bergstrom International Airport (which was made necessary, it can be reasonably argued, by the economic boom that Dell Computer helped ignite in Central Texas). Number one in the U.S. in personal computer sales. Number two in the world. More than $21 billion in sales over the past four quarters, including an average of $30 million a day on the Web. The best-performing stock of all time. Dell himself is the youngest CEO of a company ever to land on the Fortune 500 and the longest-tenured chief executive in the computer industry. He’s the richest Texan of all time—far richer, say, than H. Ross Perot ever was. He’s also the fifth-richest person in America, according to Forbes, and the richest under 40, according to Fortune. About the only thing he isn’t is the richest man in America, period—that honor belongs to his friend Bill Gates—but he’s not even 35 yet; what’s the hurry?

BY NOW THE DELL LOG-CABIN STORY IS THE STUFF OF LEGEND. He was raised in an upper-middle-class neighborhood of west Houston, by his mother, a stockbroker, and his father, an orthodontist. Precocious at age eight, he clipped a form from the back of a magazine and applied for a high school equivalency diploma. At nine, he got his own checkbook. At twelve, he ran a mail-order stamp-trading business, earning $2,000. At fifteen, he bought his first computer, an Apple II, and promptly took it apart to see how it worked. At sixteen, he began selling subscriptions to the Houston Post , pocketing $18,000 in commissions in a twelve-month stretch (yes, you read that right). At eighteen, he enrolled at the University of Texas at Austin and started selling upgraded PCs out of his dorm room high above Dobie Mall (the current residents of that room have a Compaq computer, plus a pinup of Leonardo DiCaprio and a poster declaring “Shit happens”—not a bad business philosophy, by the way). A few months later he moved into an off-campus condo and registered his business; at the end of his freshman year, he quit school altogether.

The rest is history—and, to an extent, mystery, because many of the accounts of Dell’s rapid rise take at face value that he’s done something unfathomable without addressing the simple question of how, exactly, he got from there to here. The answer is equally simple: He did three things.

He built a company. From the beginning, Dell articulated a vision for his fledgling business, and he rarely wavered. “The core concept,” he told me, “was that these dealers were popping up all over the countryside who didn’t know much about computers, and they had incredibly high markups. So they created all sorts of opportunities: a better level of service and a lower cost structure, by working directly with the consumer.”

Onto that premise—eliminate the middleman—Dell grafted the idea of a build-to-order model, in which the company would minimize its inventory and maximize its ability to serve its customers by assembling a computer only when someone wanted one. At least as far as the PC industry went, it was a revolutionary rejiggering of the laws of supply and demand; the latter would drive the former, not the reverse. Initially, Dell’s presumed rivals, Compaq and IBM, paid him no mind—one Compaq executive predicted that the kid with the Coke-bottle glasses would be out of business in a few weeks—but both have long since come around; Compaq now embraces build-to-order, and IBM has become Dell’s leading provider of parts. The mountain has come to Muhammad.

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.

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