Tweet

Lesson #1: Build Byte By Byte

Article Overview: “I've learned from experience that a company can grow too fast,” says Dell. “You have to be careful about expanding into new businesses because if you get into too many too quickly, you won't have the experience or the infrastructure to succeed.”

Lesson #1: Build Byte By Byte

“I've learned from experience that a company can grow too fast,” says Dell. “You have to be careful about expanding into new businesses because if you get into too many too quickly, you won't have the experience or the infrastructure to succeed.”

It is said that there are two basic types of entrepreneurs. There is the roving deal junkie, who engages in a never-ending search for new deals and markets. Then, there is the methodical optimizer, who takes one good idea and works it to death. “I’m not a deal junkie,” says Dell. It is this quality that is perhaps the secret of Dell’s success. Once he knew he had landed on a great idea, Dell stuck to it. The few times he chose to veer off course, his company suffered. Dell learned from the mistake and would never make it again.

For over 20 years, Dell has made the concentration of his company on the building of quality, custom-made computers to be sold directly to customers at a lower price than his competitors. That was what he was known for and that was what he excelled at.

In 1991, Dell veered off course. He decided to expand his company and try selling products through computer superstores and warehouse clubs. The experiment failed. Looking back on that experience, Dell says, “It was just a bad chapter of the company’s history…[It] was both a violation of our core business strategy and incredibly confusing to our organization.”

But, Dell took what he could from that mistake. “What's interesting is that when we corrected it, there was almost a galvanizing force on the culture and on the strategy of the company,” he says. “Because it became crystal clear to everyone what the strategy was and how we're going to execute, and it was reinforced with great success and growth.”

Critics point to the lack of innovation occurring within Dell. In its first twenty years, Dell Computer had been awarded just 867 patents – less than the total many of its closest competitors receive in a single year. Skeptics also claimed that Dell was simply filling a niche market, which would soon expire. But, unlike in 1991, today, Dell knows his company’s place in the industry.

Dell is no longer trying to go retail and he’s not trying to compete with the likes of Microsoft. Instead, Dell is focusing his company on what it’s done best since its inception, providing customized Dell computers direct to customers. And, since it uses standardized components, it admittedly doesn’t need to spend money on research and development. “Fortunately the niche became the whole market,” says Dell. “So our focus on executing the business model after that misadventure turned out to be a powerful force for us.”

Dell’s direct business model – with no inventory and no middlemen – has withstood the tests of time and critics. By narrowing his focus, building up slowly and learning from his mistakes, Dell has transformed and revolutionized the industry.

Related Articles
  5 Secrets to Attracting More Business Whenever You Open Your Mouth
  SEO Measures for Mobile Search
  It’s E-Time!
  Lesson #3: “Our whole purpose was to help others”
  Are you hiding behind your computer? Three Offline Marketing Strategies that Work

Article Tags: computer superstores, concentration, core business strategy, custom made computers, dell computer, first twenty years, infrastructure, innovation, junkie, mistake, new businesses, optimizer, patents, quality custom, skeptics, warehouse clubs



Related Forum Posts
Re: Great start, but no finish - My advise is FOCUS on your business. Focusing is the main factor to succeed on business. If you have a great idea, then follow it only, don't look anywhere else. It is especially essential in an online business. Because there are a lot of mind blowing sales letters promising millions dolllars or overnight success, people find it difficult to concentrate on one business and they lose their energy. Concept is simple. 1- Have a good idea; 2- Build your business on it; 3- Monetize your business; 4- Promote it; 5- Build list of responsive customers; 6- Maintain You Business. Focusing and not fearing from competition (instead you can learn from competitiors) are main tips of billionaires ,BTW. Orxan
Re: How to do Link Building? - Be diligent. Build blogs.Pay attention to the contents.
Dan Kennedy Marketing Methods - We haven't sent out the physical letter yet as the person owning the list wanted to make modifications to the letter that we knew would work well but the List owner had a point - it didn't reflect her personality so her clients would know it didn't come from her. Lesson learned for me. We're back to the drawing board with the list owner more involved in the development of the letter and emails. I should have known better being a Business Analyst in my day job that you never leave the end-user out. So Evan we haven't had the opportunity to test any of it yet but it's been a fun process for me to stand back and look at.
How do you know if you have a good idea? - [quote="orxan":3118uboz]My advise is FOCUS on your business. Focusing is the main factor to succeed on business. If you have a great idea, then follow it only, don't look anywhere else. It is especially essential in an online business. Because there are a lot of mind blowing sales letters promising millions dolllars or overnight success, people find it difficult to concentrate on one business and they lose their energy. Concept is simple. 1- Have a good idea; 2- Build your business on it; 3- Monetize your business; 4- Promote it; 5- Build list of responsive customers; 6- Maintain You Business. Focusing and not fearing from competition (instead you can learn from competitiors) are main tips of billionaires ,BTW. Orxan[/quote:3118uboz] Thanks orxan! But how do you know if you truly have a good idea or not? If we ask ourselves, we may be suffering from tunnel vision. On the other hand, friends/family may try to discourage us from pursuing a small business because of their own fears, while others will simply give us an empty "you can do it!" line.
Starting A Business - go get a customer! you can have a great idea but if you don't have a customer you'll never be successful. Build a product / service around someone who will pay you for what you can offer! It's the best way to build a business.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

WHAT IS MANAGEMENT CONSULTING

12 Principles to Spark Innovation

Starting A Set of Books

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.