CHAPTERS
- 0:00 – 7:22
The Icahn Fight and Going-Private Idea
David Senra opens with Michael Dell's account of the fight with Carl Icahn and Dell's struggles by 2012. He covers Egon Durban's approach about taking Dell private, ending with the framing of the book Play Nice But Win.
- •Dell faced headwinds by 2005 as PC sales stopped being the profit center and acquisitions followed
- •By 2012–2013 conventional wisdom said Dell was a dead company
- •A banker told Dell in 2010 that a take-private was too complicated and too much debt
- •Egon Durban of Silver Lake approached Dell in 2012 about buying back the stock for about $25 billion
- •Senra introduces the book and its alternating chapter structure
- 7:22 – 11:42
Childhood, Family and Early Business Heroes
Senra turns to Dell's upbringing in Houston, his parents' emphasis on business and the phrase Play Nice But Win. Dell's heroes were entrepreneurs, and Senra links this to other founders he has covered.
- •Dell's father was a successful orthodontist who outworked everyone
- •His mother was a stockbroker and the family discussed the economy constantly
- •Dell's heroes became entrepreneurs who challenged the status quo
- •Senra's maxim: the greatest entrepreneurs studied the greatest entrepreneurs
- 11:42 – 16:46
Apple II, Stamps and Meeting Steve Jobs
Dell becomes obsessed with computers through Byte magazine, buys an Apple II with his savings and takes it apart. He meets Steve Jobs at a user group, and IBM then introduces its PC.
- •Dell ran a stamp-selling business and tutored neighbors on Apple IIs
- •He took the Apple II apart immediately, to his parents' horror
- •Steve Jobs spoke to his user group in 1980 and left a deep impression
- •Senra ties Game of Thrones' 'those on the margins often come to control the center' to Dell
- 16:46 – 18:55
Taking Apart the IBM PC
Dell disassembles the IBM 5150 and finds it was made entirely of other companies' parts. Senra discusses how big companies fail to imagine a different future.
- •IBM was by far the most valuable US company in the 1980s
- •Wired predicted IBM's entry would sweep away competitors
- •The IBM PC had an open architecture and nothing inside from IBM
- •IBM chose DOS and Intel's 8088 out of expediency
- 18:55 – 25:40
Selling Newspaper Subscriptions and Souping Up PCs
As a teenager Dell used public marriage records to sell Houston Post subscriptions and earned over $18,000. His PC upgrade business grew out of tutoring clients and IBM user groups.
- •He found an edge in marriage license records and new residents
- •He brought an Apple II to courthouses and hired friends to cover 16 counties
- •He earned more than his teacher in high school
- •He customized PCs for doctors and lawyers and sold them at a markup
- 25:40 – 36:11
Pre-Med Track Versus Entrepreneurial Pull
Dell's parents expected him to become a doctor, but he kept building his business. Senra discusses flying buys, the Michael Jordan point that great people reveal themselves, and the dorm room where Dell began.
- •The family expected Dell to become a doctor
- •He bought IBM surplus in one city and resold it where there was a shortage ('flying buys')
- •Senra cites Michael Jordan: great people are not discovered, they reveal themselves
- •He won state government bids and moved into Dobie 2713 with an Olympic cyclist roommate
- 36:11 – 45:12
Parents' Ultimatum and the Founding of Dell
Dell's parents confront him in Austin, he tries ten days without computers, then returns to business. Senra uses the episode to argue that belief comes before ability, and Dell formally incorporates in 1984.
- •His father asked whether he was in school or running a computer business, and Dell said he wanted to compete with IBM
- •Ten days cold turkey convinced him medicine held no appeal
- •Senra ties this to Phil Knight's conversation with his own father in Shoe Dog
- •Senra, citing Nolan Bushnell and Bill Walsh, argues healthy ego and self-belief precede evidence
- •Dell became Dell Computer Corporation doing business as PCs Limited in 1984
- 45:12 – 1:01:16
Direct Model and Underdog Growth
Dell advertised nationally and built custom machines to order, a model that was simple yet nobody else was doing. Senra covers the explosive revenue growth, constraints as a friend, the structural cost advantage, and a grandfather's praise.
- •Customers phoned in specs and received a custom PC shipped the same day
- •Revenue grew from $6 million to $25 billion in the first 16 years
- •Lack of capital led to build-to-order, as Senra compares to Sam Walton
- •Direct sales gave low inventory days and a clear demand signal
- •IBM and Compaq dismissed Dell as a garage operation, and his grandfather called him a businessman
- 1:01:16 – 1:05:32
Going Direct to Suppliers and Love of the Game
Dell flies to Asia to buy components at the source. Senra reflects on Dell's love of the game, drawing on his conversation with Zach Dell and Phil Knight's regret that he cannot relive it all.
- •Dell cut out middlemen by visiting factories in Taiwan, Japan, Korea and Hong Kong
- •He wrote that he was excited at 20
- •Senra says Dell loves business and computers for their own sake
- •Phil Knight's wish to relive it all and advice to document the experience
- 1:05:32 – 1:14:36
Hiring Spiky Talent and Bringing in Lee Walker
Dell hires the erratic engineer Jay Bell to build the first 286 PC, and Senra discusses hiring for spikes. Dell then recruits veteran Lee Walker as president to solve the company's cash and credit problems.
- •Jay Bell worked in bursts of 36 to 72 hours and created the board behind the 286 computer
- •Senra tells of a founder who sat beside a gifted but unstable designer
- •Dell owned 100% and needed experienced leadership
- •Lee Walker got bank credit based on receivables
- •Dell ran a negative cash conversion cycle, but selling to enterprises required credit
- 1:14:36 – 1:23:51
IPO, the Dell Name and Beating Compaq
Dell survives Black Monday with a private placement and goes public in 1988. Senra covers the decision to use the Dell name, IBM's blind spot, and the Compaq competition with Chiat Day advertising.
- •While Black Monday hit, Dell took apart a competitor's computer, much as Sam Walton shrugged off Black Friday
- •Dell worried about the Osborne Effect before naming the company after himself
- •He met his wife Susan and they remain married
- •IBM fellow Glenn Henry joined Dell because IBM saw the PC as only a terminal
- •Dell's operating costs were 18% of revenue versus Compaq's 36%
- 1:23:51 – 1:33:11
Scaling Pains, Servers and the Internet
Dell enters the Fortune 500 and keeps scaling, Lee Walker leaves, and the company outgrows its systems. Senra covers the push into servers and early online sales, along with Andy Grove's point about non-obvious decisions.
- •Lee Walker said the business came naturally to Michael and left after the strain
- •Dell entered the Fortune 500 in 1991 at age 26
- •Headcount grew from 650 to 5,000 in five years and systems broke
- •A server push was needed because servers were far more profitable than PCs
- •dell.com launched sales in 1996 and reached a million dollars a day
- 1:33:11 – 1:36:07
Dot-Com Durability and Going Private
Dell weathers the dot-com bust thanks to its lean model, which Senra links to Munger's views on durability. He then covers Dell's choice to stay and take the company private in 2013.
- •Stock fell from $50 to $17 in 2000 and Dell made its first layoffs
- •Revenue fell only 2% in 2002 and market share grew
- •Munger's idea of building strong companies like strong bridges
- •Dell said he would care about the company after he's dead
- •The take-private closed in 2013 at $24.4 billion
- 1:36:07 – 1:42:15
The EMC Acquisition and Dell's Transformation
Dell buys EMC and VMware in 2015, applying 'make no small plans'. Senra covers Dell's reasoning against a string of pearls, the Jamie Dimon story, and Jensen Huang's praise.
- •EMC acquired for $67 billion and VMware later sold to Broadcom for $61 billion
- •Dell judged that buying a number-one company beat building up a number six
- •Startups were losing money and could not challenge EMC and VMware
- •Jamie Dimon vouched that Dell had the money
- •Dell's equity value rose over 625% after going private
- 1:42:15 – 1:44:36
The Most Important Lesson: Being a Father
Senra shares what he considers the most important lesson, drawn from his talk with Zach Dell about Michael's relationship with his children. He closes with Paul Orfalea's definition of success and a recommendation of the book.
- •Zach describes his father as one of his best friends
- •Senra says you can have a great career and be a good father and husband
- •Work backward from the outcome you want
- •Paul Orfalea: success is when your children want to be with you as adults
