Michael Dell

In 1984, as a first-year college student in Austin, Texas, Michael Dell borrowed $1,000 from his parents to start a computer accessories business. He began by selling kits to help customers upgrade their personal computers, establishing a business model his company, Dell, Inc., still follows today: sell directly to consumers, eliminating the middle step of a retail store or a distributor, and hold on to far more of the profits. In just two decades, Dell's company grew to massive proportions, with more than 47,000 employees and annual revenues of more than $40 billion. Dell himself was squarely at the top of Forbes magazine's list of the ten wealthiest Americans under the age of forty. He has been praised as a visionary and an innovator, but he has also earned admiration for being a stable, consistent leader. In an industry that changes rapidly, in terms of both technology and personnel, Dell has stood out from his peers by remaining at the helm of his company from its struggling early days to its current status as a major player in the global field of information technology (IT).

Michael Saul Dell was born in 1965 in Houston, Texas. While he displayed intelligence and ingenuity from an early age, he had little interest in school. At the age of eight, he sent away for information on taking a high school equivalency exam, which, if he passed, would make him a high school graduate without having to endure the remaining years of school. His parents insisted he stay in the classroom, and Dell invested his considerable creative energy in after-school ventures. When he was twelve years old, he operated a mail-order trading business for stamps and baseball cards, earning $2,000. At the age of fourteen, Dell got his first computer, an Apple II and soon realized that he had a knack for taking computers apart and putting them back together. While in high school, Dell took a job delivering newspapers for the Houston Post. His aggressive selling strategies—which included obtaining mailing lists of newly married people, offering them free trial subscriptions, and then following up with phone calls—resulted in earnings of $18,000. Not one to hold on to his spoils, Dell spent the money on a new BMW.

In 1983, when Dell entered his freshman year at the University of Texas at Austin, his parents hoped he would become a doctor, but Dell's skills lay elsewhere. In examining the personal computer, or PC, industry, he noticed an opportunity to sell PCs for less, as he explained to Richard Murphy of Success magazine: "I saw that you'd buy a PC for about $3,000, and inside that PC was about $600 worth of parts. IBM would buy most of these parts from other companies, assemble them, and sell the computer to a dealer for $2,000. Then the dealer, who knew very little about selling or supporting computers, would sell it for $3,000, which was even more outrageous." Dell realized that he could assemble computer parts, skip the step of selling to a dealer, and go directly to the consumer. That way the consumer could buy the product for less, and Dell held on to every penny of the profits. Dell thus combined his knowledge of computers with his well-developed business sense and began his own business, assembling upgrade kits for personal computers.

In a 1999 article in Fortune, Dell recalled operating his new business out of his University of Texas dorm room on the twenty-seventh floor: "People would ride up to the 27th floor with their computers. I'd put in some memory or a disk drive, they'd pay me, and I'd send them on their way." His earnings soon reached about $25,000 a month. By the summer of 1984, after one year at the university, Dell had decided that he needed to focus all of his time on his business, and he dropped out of college. His company, then called PCs Unlimited, began building PCs, starting with parts from such established computer companies as IBM and Compaq and adding elements to make the products unique. Dell continued to sell directly to consumers, a strategy that paid off in vast sums: by the end of 1984, his company had earned $6 million. Dell was off and running, leading his company to enormous growth year after year.

On March 4, 2004, he stepped down as CEO of Dell but stayed as chairman of the board, while Kevin B. Rollins, then president and COO, became president and CEO. On January 31, 2007, Dell returned as CEO, succeeding Kevin Rollins (who resigned earlier in the day).