Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi, everybody. I'm Nikolaj Tangen, and today I'm here with one of the... most incredible tech entrepreneurs of all times, who started off in his freshman dorm room and built his company to one of the largest technology companies in the world. Now, one third of you will have a PC with his name on. Michael Dell, welcome.
Thank you so much. Great to be with you. Normally, Michael, I would kind of start with the presence. But I think when it comes to you, we have to go all the way back, you know, with the beginning. So you were very young and you bought an IBM computer. And most people would kind of start to do computer things, but you took it apart instead. How did that happen? What did you see inside that computer? Well, back then, you could actually learn a lot because...
You didn't have these large chips that we have today that are an amalgamation of lots of small chips. And so you could literally get a book that would explain what each chip did. And you could understand the circuits. And as I said, I was upgrading computers to make them do more, right? More memory, more storage.
make them go faster, right? And so what I found in this IBM personal computer was that none of the parts were made by IBM. And then I sort of discovered that the Cost that they were You know the price they were charging for the computer was Roughly six times the cost of the parts right and so it didn't really seem like it was fair to me that it was that expensive.
But IBM was the most valuable company in the world at that stage, and you were 16-year-old. They were the most valuable company in the world, and they were about 80% of the value of the sector. called technology at the time. So they were more dominant in their sector than any company, maybe in any time in history. Are there any companies today that are 80% of one sector of the S&P 500? No, not even close. So yeah, they were incredibly successful company. And then.
I went off to college. I was... In Texas? University of Texas. I was a biology major. I was supposed to be a doctor. Because your parents wanted you to study pre-med. It was sort of the family business, you know, be a doctor. and strong encouragement from the parents. So I'm not in my parents' house anymore. I'm in the dorm room. I've got a lot of time, right?
University of Texas is a big school. Some of the classes are enormous. If you show up or you don't show up, they don't really notice all the time, right? So you didn't always show up. So I'm... kind of doing this computer thing, and it's getting bigger and bigger. And my parents found out about it. They got very upset. They kind of made me stop. I stopped for 10 days. And that's when I decided that actually this was something more. So in early May of 1984...
The company was incorporated, Dell Computer Corporation, became a corporation. And it was about a week or two before my final exams of my freshman year. And so the first year, we had $6 million in revenue. And the second year was about $33 million. And we grew about 80% per year. for the first eight years compounded. Why do you think there are more entrepreneurs in America than elsewhere? I think there's something in the culture that is accepting risk, even embracing risk in a good way, right?
says, well, OK, if you try something and it doesn't quite work and you fail, it's OK. Try something else, right? And maybe that is not as accepted everywhere. I think there's a combination of factors, right? It's this risk acceptance. It's capital that will invest behind that. There's a history of
other entrepreneurs that you can look to, that I look to and others look to, and say, well, yeah, they did it, so maybe I could do it. Did you think it would risk it at the time? Did you ever have fear? No. So if you have nothing, nothing to lose, right? So it did seem like a big risk. I mean, the risk for me was if it didn't work, I'd go back to college. A third of your income is from commercial pieces.
like the one I have at my desk. What are the important innovations taking place here now? They look a bit like, they don't change so much, right? I mean, they look a bit like the one I had last year and last year. Well, actually, what the PC does is very, very different than it used to do. And so we keep asking it to do more and more things. Right now, the big thing that's going in the PC is AI.
And we used to have the CPU, right? Then we had the GPU. Now we have something called the NPU, a neural processing unit. And it is a part of the processor that... speeds up the AI activities that occur on the PC to an incredible degree. And pretty much all the software that you're using is being rewritten so that Anytime there's a prompt or some user interaction, that is...
That experience is enhanced and made better using AI. And most of that AI, maybe 85% or 90% of it, will run locally on your PC. And that's probably the biggest thing that's going on in addition to, you know. longer battery life, we have more than 24-hour battery life, super bright display, super thin, super light, very secure.
you know, all the things that you'd want in a new machine to replace the one that's several years old. So we will continue to buy new ones, basically. Yeah, I mean, if you want to be in the future. You were listed on the stock exchange for 25 years, and then in 2013, you took Dell private, you took it off the stock exchange. Correct. Why did you do that? Around 2010, we started.
evolving the company into new areas. And we were making acquisitions and we were building cloud, data center, networking, storage capability. And kind of the more we did that, the less the market liked it. At the same time, something else was going on. You had the smartphone and the tablet. were sort of on the rise. And so a lot of people looked at the smartphone and the tablet. They said, well, that's the new thing. We don't need the PC anymore because we have these other things.
And Dell, even though it has all these other businesses, it's kind of a PC company. So the PC is dead. So therefore, Dell is dead, right? So the stock kept going down. We're buying back the stock. At one point, the stock is like really low. And I'm thinking, this is kind of crazy. I mean, this company is generating lots of free cash flow, billions of dollars of free cash flow every year. It had generated.
$150 billion of cash flow in its lifetime. Let's just do a huge buyback. Let's buy back all the shares. So that's what we did. But you also bought, so when it was private, you also bought EMC, very big deal. Yeah, so when we took Dell private. I think it's like $67 billion, right? So biggest technology acquisition. Correct. So when we took Dell private, it was the largest take private ever in technology.
And then a private company bought a $67 billion public company and took it private too, which was kind of fun. And that. significantly accelerated our transformation. Now, we kind of became like a public company then because we had a tracking stock associated with EMCs. ownership in VMware. And then ultimately, we became a fully public company again at the end of 2018. So it's the most profitable.
private equity deal ever, I think. That's what I'm told. It's worked out well. Could have been a lot worse, but it worked out well. What is the copper culture at Dell? How would you describe it? It's winning. It's delivering value for our customers. It is understanding their requirements and solving them. It is a results orientation. It is play nice but win. You mentioned fun a few times, and clearly you are more fun than most CEOs. That's very clear. What place does humor?
play in your company. I think Uber is very important. Yeah. I mean, if you can't laugh, joke around. play tricks on people, you know, you're doing it wrong, right? So you have to be able to laugh at yourself and laugh, you know, and humor is incredibly important.