Thanks to the Round Rock Public Library. I am really glad I got to read Michael Dell’s Play Nice But Win. The book has two stories running in parallel. The odd chapters are based on the privatization of Dell, and the even chapter talks about How Michael Dell got started and his life journey. It was a little confusing to me at first. The story of how Michael Dell got started was so interesting that I skipped the odd chapters for a bit (came back to it later) to finish up what Dell did to make Dell?
How Michael Dell got started in his life is very inspiring and will be a great read for kids or teens. It was like reading a Novel. Michael Del’s dad was a dentist, and his Mom had a real estate license and also dealt with stocks. At the dinner table, they were not discussing sports or movies but were discussing stocks, the economy, and more. The biggest learning from his Mom was to always stay curious. A lot of his business skills were imparted at his home. He made money working at restaurants – he was fascinated by computers. He read an interview from Steve Wozniak on Apple II and purchased one (with the money he saved). He attended the Usergroup conferences of Apple (Usergroups existed even in the ’70s, and it is the same today). He soon learned about IBM PCs and also found out that IBM was not manufacturing its own PCs – they were buying parts from different companies and assembling them. They were using the Operating System from Microsoft. Dell thought he could do the same thing. He attended a conference in Houston, TX, where he learned about hard drives. He bought hard drives and installed them on the computers. He enhanced the IBM computers, and it helped Doctors, Lawyers, and more. Suddenly he was making money. Houston was booming in the 60s and 70s, with a lot of construction happening all around. When he headed out to play with kids, his Mom told him – Play Nice But Win and hence the title of his book. Sold Newspaper subscriptions at the start. Later he hired people to do it. Michael bought a BMW car with his own money. Micheal filed $18K on his W2 when he was still a student. It is hard to imagine someone who is 18 years old, able to generate $50,000+ in cash by selling computers.
Michael was one of 3 children. His parents wanted him to be a doctor. He got enrolled in the University of Texas at Austin. He was not interested in tubing. (In Michael’s words-he had a lot of other fish to fry). He was not too interested in school. His business was flourishing and making a cash flow of $50-$80k a month on a consistent basis. When his parents came to know about it, they were upset and wanted him to pursue medicine. He took a ten-day break and tried to focus on medicine. However, his heart was on computers. He found out that he need not attend a semester and still join back without penalties. He decided to quit school for a semester, and if the business did not work out, he could always go back to school. It started getting bigger and bigger, As the business grew, he kept moving from an apartment to house to office in need of a bigger space (warehouse to store computers). He never looked back ever since. Started as a trader – buying and assembling. Some shops will have an excess inventory. He would buy from those cities and then sell in cities where inventory for PCs was low. Michael Dell shuttled using Southwest.
Public to Private to Public
Silver Lake Capital partnered with Michael Dell in getting the company private. Egon Durban was his neighbor (Dell owns a house in Hawaii). There was a lot of turmoil in taking the company private. Micahel Dell details the feud with Carl Icahn (It would also be good to hear Carl’s side of the story). Michael Dell decided to visit Carl Icahn at his home for dinner. The story is very interesting. The initial offer for Dell was $13.65/share at $24.4 billion. However, they had to increase it (Carl did benefit 10s of millions of dollars which was not much for him anyway). Michael Dell also details various other encounters in the process, which is an interesting read.
Other Learnings/interesting facts from the book:
Michael Dell says that Great Strategy and execution are what create success. They were also into the software services and solutions business. Dell had $33 million in sales in the very first year. They experimented and improvised ways to succeed. Dell was first called PC’s Limited. They hired an outside agency(one of the best in the industry) to create the logo (slanting E). When he was 20 years old, Michael Dell traveled and visited Taipei Hong Kong Tokyo Osaka Seoul. To source directly from the manufacturer. He also hired Indian Engineers. (He even took them to HEB and bought them groceries as they did not have a car). He always hired the best people. One of his big hires was Lee Walker (then President of the company). Michael details how he hired him (got referred by a mutual friend – walked into Lee’s house one day). People make a big difference. Every time Dell needed credit, it was hard to get it from the bank (because of an inefficient Chief Financial Officer). However, Lee made it easy. Knowing your adversary is a good rule. The company grew from $3M in sales in 1983 to $60M in 1987. Calling the company, Dell looked strange to him at first. IBM had a lot of patents, and Dell had Zero. They had to pay a fee to IBM for every PC sold. (As Dell was benefiting from IBM technology). Dell also quotes President Roosevelt. ‘You should do the thing you think you cannot do’. As the business grew, he became friends with Bill Gates and Steve Jobs.
In 1988 Dell had 650 people, and in 1993 almost 5000. The people who can help in getting a company from Point A to Point B are not the same as the people who can get a company from Point B to Point C. If Revenue or profits fall, it is not going to be a great company no matter how good the culture is. Michael Dell had a habit of keeping track of great talent in the industry.
Michael Dell, You have inspired a lot of people in writing this book. I am one. There are a lot of learnings for everyone. Thank you for writing.
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