Direct From Houston: Dell is Born

In 1999, Michael Dell was giving a lecture on the ABCs of entrepreneurship to a business class at his psuedo-alma mater, the University of Texas. When it came time for the question and answer period, one of the students eagerly stood up and asked Dell why, despite being worth over $17 billion, he continues going to work each day. “You’ve got so much money,” the student said. “Why don’t you just sell out, buy a boat, and sail off to the Caribbean?” Dell stared back at the student and replied, “Sailing’s boring. Do you have any idea how much fun it is to run a billion-dollar company?”

Michael Saul Dell was born on February 23, 1965, in Houston, Texas. The son of a Jewish orthodontist, Dell’s family was financially well off. Dell discovered his entrepreneurial instincts at a young age, starting his first business, Dell’s Stamps, when he was just 12 years old. After he earned $2,000 from his stamp collection, Dell was hooked. When he was 16 years old, Dell began selling newspaper subscriptions to the Houston Post by sifting through the city’s mortgage and marriage license lists. This, he believed, would lead him to people who were new to the area and who would not yet have a subscription. By the end of his first year, Dell had made over $18,000. Although he was still a student at Memorial High School in Houston, Dell was earning more than even his high school teachers. By the time he graduated, Dell was driving his very own BMW.

Despite being financially successful, Dell’s early teachers saw little promise in him, with one commenting that he “would probably never go anywhere in life.” Dell enrolled in the University of Texas at Austin and began studying biology with the intention of becoming a physician. Although Dell’s first exposure to computers was when he was 15 years old – he took apart and reassembled the motherboard of his brand new Apple II – it wasn’t until he was in university that his interest in computers was again peaked.

In 1984, Dell came up with a simple but radical idea: build custom computers and sell them directly to the customers. He had learned early on from his stamp experience the benefits of removing the middleman. With a $1,000 loan, Dell created a computer company called PC’s Limited from his dorm room at UT. He soon realized that biology was not his passion – that perhaps the stacks of computer books and magazines beside his bed were trying to tell him something.

As the success of PC’s Limited continued to grow throughout the school year, Dell began to realize that he was on to something great. He was 19 years old and in his freshman year, but school was the farthest thing from his mind. With an additional loan from his grandparents, Dell changed his company’s name to Dell Computer Corporation and dropped out of school to focus on his business full-time.

“I had to give it a full go and see what happened,” recalls Dell. “I couldn’t resist the opportunity.” But, Dell’s parents were less enthusiastic. All of a sudden, their soon-to-be physician had become a university dropout. To placate his parents, Dell made them a bargain: “The deal was, I would start into business full time in May, and at the end of August we would take a look and decide if it was doing well.” If it was not, Dell promised to return to school.

Dell never went back to university.

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