| Michael Dell's first business venture, at 12 years old, arose from his hobby of philately. He had bought stamps at auction and realised that stamp sellers made good money, so got together a catalogue of his and his friends' stamps and sold them via mail order. He made $2000. This effort at cutting out the middleman and selling direct was a taste of things to come.
Born in 1965 in Houston, Texas, Dell came of age at the dawn of the personal computer, and they quickly became his real love. He hung around computer stores and eventually got his parents to give him a PC for his 15th birthday. They were infuriated when he immediately took it to pieces in order to find out how it worked. Then, by good fortune, the 1982 National Computer Conference happened to be held in Houston and Dell skipped school every day to attend. This was industry side of computing, and it opened Dell's eyes. He discovered the huge markups sustaining computer sales, by which IBM could buy the components for a PC for $600-700 and then sell it on to retailers, who would charge the public $3000.
Germination of a business
What Dell also realised was that anyone could buy these components and make their own machine. Furthermore, the person who sold you a computer in a store generally didn't know much about them. Retailers were making $1000 a computer but offering no real customer support. Demand for computers was enormous; people didn't ask questions, they just bought. Even at this age, Dell believed he could make better machines and sell them at a lower price - but his parents wanted him to go to college and become a doctor.
In his freshman year at the University of Texas, Dell was taking classes while on the side doing computer upgrades for businessmen and professionals. With his grades looking shaky, his parents paid him a surprise visit. He managed to stow away all the computer parts in his dorm room, but was firmly told he had to give up the computer business and concentrate on his studies.
His Dad said: "Get your priorities straight. What do you want to do with your life?" The reply, which Dell reports his father did not find amusing, came: "I want to compete with IBM!"
So begins Michael Dell's account of the early years of his company, one of the great success stories of our times. Dell readily admits it is neither a memoir nor a history of his company; the purpose of the book is to help the reader in 'honing your competitive edge, no matter what industry you're in or what your role is.' His story is one of a very small player changing an industry. As a piece of writing, Direct From Dell is not brilliant, but its value is in showing us how thinking differently, and then having the courage of our convictions, is a real law of success. To return to the story.
Dell's lessons for success
Think unconventionally
Plenty of people told Dell that his 'direct' approach to selling computers would never work on a large scale. "It's fun to do things that people don't think are possible or likely" he says. Consequently, questioning conventional wisdom became a basic element of the culture of the firm.
'Despise the status quo'
Dell staff are told to think like entrepreneurs or as if they are owners of Dell. They are much more likely to take risks. He tells staff: "There's not risk in preserving the status quo, but there's no profit, either."
Set big goals that may just be doable
At the end of 1986 the company set a goal to achieve $1 billion in sales by 1992 and to expand internationally. By 1992 it was doing twice this. Setting a large goal makes you think about how you will achieve it.
Final word
Written at the height of hi-tech mania in the honeymoon of the Internet, Direct From Dell is a classic because it is both a record of this amazing period and a success manual. Some will say that Dell was just lucky to be sitting on the tip of a rocket that took off, but he has lived through the hype and continues to produce remarkable results. Dell's overriding success lesson: the simpler you can make life for people, the more valuable you will be to them.
Direct From Dell is an inspiring book if you are thinking about forming a company. Part one is more interesting because it more personal and follows the excitement of the firm's rise from dorm room to the Fortune 500. Yet unlike some success manuals, there is little element of the heroic. It is quite understated, and although he is clearly a passionate businessman, Dell's humanity can be read between the lines.
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