Calling the direct customer relationship the "lifeblood of success" for the company that shares his name, Michael Dell, chairman and chief executive officer of Dell Computer Corp., spoke to a standing-room only crowd of more than 600 students in the Kellogg School's Owen L. Coon Forum April 10, offering his perspective on the entrepreneurial spirit, the direct-to-consumer business model, and how Dell is working to dominate the global computing market.
Mr. Dell talked about how he started the company in 1984, with $1,000 and a belief that business models for computing companies at the time were inefficient. Mr. Dell's approach was an unprecedented idea in the computer industry: sell computer systems directly to consumers.
He developed a plan that focused on supply chain and logistics, and recognized that different customers require different products. He believed one company could address those varying needs.
During the 45-minute interactive discussion, Mr. Dell explained how the company's business model has enabled it to be the only computing company today that is both gaining market share and increasing profit.
He talked briefly about the impact the Hewlett-Packard/Compaq merger might have on Dell - "a market share opportunity for us" - to planning the company's global expansion.
And, for students who marveled at how a $1,000 investment grew into a multi-billion dollar company in less than 20 years, Mr. Dell offered this perspective to a small group of students who met with him after the presentation: "Don't worry about getting capital."
Some of the most successful stories come from individuals who lacked capital and instead were forced to come up with ideas that were truly necessary, he said.
"There is no relationship between the amount of money you have [to develop an idea] and success," he said. "You have to be willing to fail and to make a lot of mistakes, and then learn from those mistakes."
Mr. Dell contends that, in the early years of the company, "we made a lot of mistakes, but they were small mistakes. We were lucky," he said.
Clearly, Michael Dell and his team heeded such advice, learning quickly from minor mistakes to build what today is one of the leading computing companies in the world.