The Entrepreneur Who Made More Money Than His Economics Professor
In 1984, a first year graduate student at the University of Texas borrowed 1000 Dollars from his parents to start his own venture. A venture which is today a 60-plus-billion dollar empire.
Michael Saul Dell, the founder of Dell Computer Corporation is one of the most successful entrepreneurs of today. A testimonial to his strong business mind, he started investing in stocks and making money at an age when normal kids play soccer or video-games and can't even pronounce "investing".
His love for electronics and gadgetry followed with him breaking down an Apple II computer and studying its parts when he was 15.
In a 1999 book titled "Direct from Dell", with Catherine Fredman, Michael Dell reveals that in high school, he used to sell subscriptions to the Houston Post in the summer. He observed that newlyweds and people moving into new homes were most likely to buy a subscription and targeted this demographic group by collecting names from marriage and mortgage applications. He earned $18,000 that year, exceeding the annual income of his Economics Professor.
In University of Texas as a freshman, Dell started his PC business. The PC world was still young and Dell realized that no company had tried selling directly to customers.
Read this excerpt from Kim Kulish's Biographical notes on Dell:
"In examining the personal computer, or PC, industry, he noticed an opportunity to sell PCs for less, as he explained to Richard Murphy of Success magazine: "I saw that you'd buy a PC for about $3,000, and inside that PC was about $600 worth of parts. IBM would buy most of these parts from other companies, assemble them, and sell the computer to a dealer for $2,000. Then the dealer, who knew very little about selling or supporting computers, would sell it for $3,000, which was even more outrageous." Dell realized that he could assemble computer parts, skip the step of selling to a dealer, and go directly to the consumer. That way the consumer could buy the product for less, and Dell held on to every penny of the profits. Dell thus combined his knowledge of computers with his well-developed business sense and began his own business, assembling upgrade kits for personal computers."
Bypassing the middleman and the retailer, Dell started building and selling computers for people he knew at college. With strong customer support and cheaper prices, he expanded his business outside of school and it wasn't long before the young Dell dropped out and focused all his efforts on selling computers.
In 1984, after a full year of his business, he had made a staggering 6 million dollars in sales. In 1992 at the age of 27, Dell became the youngest CEO to have his company ranked in Fortune magazine's list of the top 500 corporations. In the later 1990s he setup dell.com and was one of the first e-commerce businesses on the world wide web. The profits just soared both through online and offline sales. By 2000, Dell was a billionaire.
In 2004, he stepped down as the CEO to concentrate on his philanthropic activities. Inspired by his passion for children and by a shared desire with his wife Susan to improve the lives of children living in urban poverty, Michael and Susan Dell established their Austin, Texas-based foundation in 1999. In its early years, the foundation's work focused on improving education and children’s health in Central Texas. But within a few short years, their reach expanded, first nationally and then globally. To date, the Michael & Susan Dell Foundation has committed more than 700 million dollars to assist non-profit organizations working in major urban communities in the United States, South Africa and India.
"We focus on opportunities with the greatest potential to directly and measurably transform the lifelong outcomes of impoverished urban children around the globe." - Michael Dell
But soon after he stepped down as CEO, Dell sales slumped and fell short. After persuasion, in 2007 he returned to his position at Dell. With Michael's return, Dell has returned to its old ways of making money.
Today, Michael Dell is the chairman of the board of directors and chief executive officer of Dell. Notably quoted as saying that “technology is about enabling human potential,” Michael’s vision of how technology should be designed, manufactured and sold forever changed the IT industry.
In this tweet, he aptly summarizes his success:
That's a story to remember for all you student entrepreneurs.