Michael Dell is the founder and Chairman of Dell Computers Inc.
BORN: February 23, 1965
NATIVE CITY: Houston, Texas
EDUCATION: One year at University of Texas in Austin; dropped out when his part-time computer business took off
In 1984, 19-year-old University of Texas freshman Michael Dell had a simple idea. Why not sell custom-made computers directly to customers? At the time,computer manufacturers sold their machines wholesale to retailers, who marked up the price for consumers. Instead, Dell assembled computers from cheap surplus parts, then created souped-up machines to the specificationsof his customers.
Fifteen years later, the simple idea is still working. Dell's still doing essentially the same thing—supplying made-to-order computers directly to customers—but on a scale that now brings in $18 billion a year and employs25,000 people. Dell's breathtaking success made him, at age 27, the youngest CEO of a Fortune 500 company in history, and Fortune magazine named hiscompany one of the most admired firms in America, following General Electric, Coca-Cola, and Microsoft.
Even at age 19, Dell already had considerable experience as a businessman. At age 12, he formed a direct marketing company which offered a national stamp auction through the mail. He earned $2,000 on the venture. Four years later, he developed a scheme to sell newspaper subscriptions through target marketing, and bought a BMW with the $18,000 he earned. By the time hestarted college, his parents were beginning to worry about his grades, so he promised he would quit his computer venture and devote himself to the booksif his business didn't perform well. But by the end of the year, the company was making $50,000-$80,000 a month. Dell incorporated his business and dropped out of college.
Two years later, he offered the first toll-free technical support and on-site service in the PC business—services which later became standard practice throughout the industry. Meanwhile, he was usually able to give his customers the computer they wanted at a 10 percent discount over other companies. His discounts came from revolutionary supply practices: Dell's staff didn't begin assembling a computer—or even ordering the parts—untilthey had an order. As a result, the company didn't end up with a roomful of expensive unsold computers. Eventually, the company insisted its suppliers store parts in warehouses near Dell factories so the orders could beassembled immediately. Called "just-in-time" delivery, the process meant no costly inventory for Dell, and meant the very latest, most up-to-date computers for its customers.
The company was also one of the very first to sell computers via the Web. In July 1996, Dell offered online purchasing. Even with no promotion or advertisement whatsoever, the site began selling 30 to 50 computers a day. By the late 1990s, the company was selling an average of $18 million a day online and proving to skeptics that online commerce couldbring in tremendous revenues. In 1999, Dell launched Gigabuys.com, an online store featuring computer-related products. To date, about 50 percent of Dell's sales and technical support activities are Web-enabled, while 76 percent of the company’s order-status transactions occur online.
In 2000, Forbes magazine named Dell Computer Corporation the third most admired company in the U.S. Furthermore, Michael Dell holds the notable distinction of being the computer industry's longest-tenured chief executive officer.
With a net worth of US $ 15.5 billion, Michael Dell is currently ranked by Forbes at No. 9 among the 400 richest Americans.
Adapted from Television Networks & Forbes Magazine.