Michael Dell sold stamps at auctions to make extra money as a kid.
At 16, he started driving his parents’ old station wagon to the Harris County courthouse to collect data on marriage licenses to target newlyweds and sell newspaper subscriptions. He then hired some of his high school buddies to check the filings in the surrounding counties and get more addresses.
“It worked really well,” Dell said.
It was the humble beginning of what would later become the global computer maker Dell Technologies, which reported revenues of $91.1 billion in 2023. Round Rock-based Dell is also one of Austin’s largest technology companies, with more than 14,000 local employees. According to the Bloomberg Billionaires Index, Dell has become the world’s 12th richest person, with a personal fortune of $104 billion.
At 19, Dell started his eponymous computer company in his freshman dorm at the University of Texas. He later dropped out. This year, the company turns 40 years old, and Dell, 59, spoke about his entrepreneurial journey during a fireside chat on Thursday at South by Southwest. The featured session: “Businesss, Life and the Magic of Austin: A Conversation with Michael Dell.”
Dell said he’s learned a lot throughout the years, especially how to build a team, surround himself with intelligent people, and keep learning
“I learned that integrity and reputation are the most valuable things, and it takes a long time to build them up, and it’s really easy to destroy them,” Dell said.
He said Dell’s success was due to its customer-focused approach. He learned from customers’ challenges, problems, opportunities, and unmet needs.
Dell said making mistakes, iterating, trying new things, and experimenting contributed to the company’s success.
Dell said he was fortunate to attract great people to sign up for Dell’s grand adventure, and Austin was a great place to attract people.
Today, Dell is the leader in infrastructure products and server storage, but its first couple of attempts at creating those products could have been more successful, Dell said. Dell had its version of Unix, and that turned out not to be a great idea. Dell also tried to get into the smartphone business, but that did not work. In his latest book, “Play Nice, But Win,” Dell recounts many failures and learnings, he said.
Dell said it’s OK to make mistakes but not repeat them; learn from them.
Dell said he remembered going to Japan a lot in the ’80s, and they were developing amazing things, but nobody needed them. Dell iterated into this idea of pragmatic innovation. The customer can’t consistently articulate what the future solution is, but they can usually articulate the pain or the problem they’re having and trying to solve, he said.
“But you have to be agile, flexible, and continually adaptive because you’re going to get it wrong. Just accept that, deal with it, and be able to change quickly and iterate,” Dell said.
Along the way, Dell Technologies went from a public company to a private one. At one point, people threatened to take the company away from Dell.
Going private was a way of liberating the company, reinvigorating the entrepreneurial spirit, and accelerating Dell’s transformation,” Dell said.
He said There were awkward moments when Dell was curious if he was supposed to go to the office or talk to the management team. The uncertainty inflicted on Dell’s team and its customers was painful, but Dell managed to get through that.
“Going private was a way of accelerating the transformation, and then a couple of years later, we got to the point where we were experiencing once again strong positive growth and momentum, and so returning to the public markets allowed us to simplify the capital structure and the ownership structure,” Dell said.
Dell said another part of Dell’s success is creating a good company culture that fosters innovation. The culture that allows Dell to develop great products, he said.
He said that bringing artificial intelligence to the enterprise is Dell’s enormous priority for the future.
“And it’s a big platform shift, and it’s just beginning,” he said.
Dell’s customers also want to bring AI to their data and not the data to their AI in a public cloud, so that’s undoubtedly a massive priority, he said.
“That’s on top of all the things we’re doing around modern data centers and multi-cloud edge, which is a really big deal because you know everything in the physical world is becoming intelligent and connected,” Dell said. He said about 75% of enterprise data is still on-premise or on devices and the edge.
Dell also sees AI empowering creators. He says he’s a technology optimist. AI is happening ten times faster than the Internet.
“In almost no time, we will have 5 billion people with PCs and phones accessing AI, and that’s pretty cool,” Dell said. And if you think about this, the cost of having a cognitive superpower as your friend enabling whatever you’re trying to do is approaching 0, and that’s a really interesting thought.”
Dell said AI will tremendously impact education, healthcare, science, and every aspect of humanity.
“Nobody knows what the true impact of AI will be, Dell said. “But I’m very excited about it and optimistic because technology has always been about enabling human potential, making us healthier, making us safer, making us more successful in everything we’re trying to do.”
Dell also said AI regulation should encourage innovation rather than slow it down.
“Any time you have an emergent technology that’s evolving super-fast, it’s a big challenge for regulators because if you think about regulation, let’s say last year regarding AI, just look at the dizzying pace of improvement that occurred last year. It’s gonna be hard for the regulators to imagine how fast it’s evolving,” Dell said.
In addition to the technology, Austin has evolved incredibly, doubling in size every decade for the past four decades, Dell said.
“But I think it’s kept a lot of its character, and it’s been an incredible attractor of people with talent,” Dell said.
Dell said technology has played a major role in all the great things that have happened in the world and certainly here in central Texas.
SXSW started with music, then moved to film and television, and now it is interactive with technology. In Central Texas, you have this great combination of innovative businesses, Dell said. Texas’ great universities and 1.6 million college students fueled the region’s growth.
“I believe entrepreneurs go where their ideas can flourish and are welcome,” Dell said. Talent goes where there’s opportunity. Capital goes where it’s treated well, and it turns out Texas is a great place for that.”
Dell said Austin has been a hub of innovation. It has attracted the best and brightest minds, new ideas, companies, and opportunities.
Dell also mentioned that the Michael and Susan Dell Foundation started 25 years ago and that they donated to Austin.
“Much more to come on in the future, by the way,” Dell said.
Dell said the last 40 years have been incredible and exciting.
“But I think it’s all just the pregame show for what’s to come,” he said. “When I think about the future and all the technology will play in the world, I think about the incredible innovations we’re already starting to see in healthcare driven by technology. As we use all this cognitive power and explore the mysteries of the universe, maybe with the combination of quantum technology, wow, there’s never been a better time to be alive right now.”
When asked where he sees Austin in 25 years, Dell said it will continue to grow.
“Will it double every decade for the next three decades? I don’t know, maybe,” Dell said. We certainly have land in the broader area to do that, and if you think about the overall country, populations have been moving South and southwest for quite some time.”
Dell said Texas has been an amicable environment, and that’s why all this migration and growth are happening. Dell said the University of Texas and other universities in Texas have played a critical role in its development.
” If you find great companies, there’s always a great university nearby,” Dell said.
Dell said finding the right balance between growth, development, and livability is essential, and Austin has managed that pretty well.
“All the things that make our city great and wonderful, all the things that I loved when I first came here a little over 40 years ago, and a lot of those things are still there,” he said.
