Note: This transcript is not final and may contain errors. The final transcript will be available soon.

[David Senra]
I wanna jump right into what we were talking about before we started recording there. You said somebody was... uh, you've been obsessed. You've been running Dell for 41 years. You've been obsessed really since you were like 11 or 12, so you've been running it for 50 years 'cause you were... it was, there was a Dell before a Dell, right? But you were saying somebody was telling you this story about you in middle school.

[Michael Dell]
When I was in, uh, junior high school in, in the summers in Houston, uh, there were classes at Rice University for, for young kids, okay? And so you could go to Rice University to take these classes. And my, my mom, you know, kinda signed me up and it was great. You know? They, they had these college professors and they were teaching these classes. And, uh, the- the way I would get to Rice University is I would take the bus

[Michael Dell]
from, from, from our house, right? And it would, like, take you downtown.

[David Senra]
Okay.

[Michael Dell]
And, and, uh, I was, I was curious, so I was, I was like, "Okay, if I just stay on the bus, takes me all the way downtown to where the really tall buildings are." [laughs]

[David Senra]
[laughs]

[Michael Dell]
So, so I go down there, there's, like, really tall buildings. I'm, like, roaming around. I'm, like, 11 or 12 years old. And I see, like, they've got, like, the stock exchange there and all these tickers going. I'm like, "Wow, that's pretty cool." [laughs]

[David Senra]
[laughs]

[Michael Dell]
So I just started, started learning about the stock market. So anyway, it's just something I remembered. [laughs]

[Michael Dell]
And, and, you know, my- my parents were always talking about financial markets and, uh, it just sparked sort of this, this, uh, interest really, really ear- ear- early in, in life.

[David Senra]
There's a great line I've seen, um, from both Ken Griffin and Larry Ellison describing you. They're like, "Just, this guy was manufacturing computers in America at a time when there was, like, thousands of other people doing the exact, a very similar thing, and he was the only one that survived." And the reason I just thought about that is because I was watching this, um, this talk that Ken gave, I think at Yale, and he said something. He's like, "For reasons I can't explain, I don't know why, I've just been obsessed with the stock market, with business, since I was in the third grade." And you know, 60 years later, however old he is, like, I- that obsession has not dulled. We were just in your office and you were showing me one of your new unreleased, uh, products that we can't film or photograph. [laughs] But you were like- I was like, "This is, this is like a kid on Christmas." Like, you're still so-

[Michael Dell]
It's a super cool product, yeah.

[David Senra]
[laughs]

[Michael Dell]
I'm- I'm very excited. [laughs]

[David Senra]
I told you I'll buy one that's, uh... I think it's cool too. I'm gonna buy one as soon as it comes out. But I just love this enthusiasm that is just not dulling. What do you think... I was just with your son, Zach, last night, and I was... we- we- we were talking a lot about his business. Absolutely ripping. He's super intense and like-

[Michael Dell]
Yeah

[David Senra]
... he's just in it right now, right?

[Michael Dell]
[laughs]

[David Senra]
And then, that was like 95% of our conversation. And then he's like, "All right, I have some things that you should talk to my dad about." And then, like, he- it was so good. I was like, "Shit, he just did the outline better than me." So one of the things, uh, he's like, "You need to get on record what motivates him." He's like, "It's one of the most fascinating things." He's like, "Just ask him what motivates him." So what motivates you?

[Michael Dell]
You know, it's all just, like, fun and interesting and I wanna learn. And it's like, uh, it's like a big puzzle to solve and understand. And you think about the impact that technology has on the world,

[Michael Dell]
what could be more exciting than to be in the middle of that and- [laughs] and, and to

[Michael Dell]
figure it out and to, you know, help- help advance it? And it's an infinite game, right? It never- never ends. Love, love to win. Hate to lose. And, um, yeah, it's just- it's just like the most exciting thing you c- you could do, to be in the middle of a business like this and to see it all unfold and play out.

[David Senra]
Yeah, he... that's one of the things. He's like, he's addicted to puzzles.

[Michael Dell]
[laughs]

[David Senra]
So that's the way you look at it?

[Michael Dell]
Yeah, I mean, it's- it's- it's like- it's like the curiosity, solving a puzzle, understanding things, and figuring it out. Yeah, that's- that- that's, uh... You always wanna do that. I mean, I- I- I would feel unfulfilled if I couldn't figure out a puzzle, a question. So yeah, there's, like, a burning desire to understand things.

[David Senra]
You-

[Michael Dell]
And to- and to figure them out. Puzzles and- and math have always been, uh, important.

[David Senra]
When did you realize that about yourself?

[Michael Dell]
I never really realized it. I just [laughs] you- you just asked me about it.

[David Senra]
[laughs]

[Michael Dell]
Uh, I- it's just- just- it's just what I did. I just wanted to understand things.

[David Senra]
Mm-hmm.

[Michael Dell]
And- and, you know, when I was dealing with- with, uh, physical things, the way I would understand them is to take them apart. It's like how can you understand something if you don't take it apart?

[David Senra]
Yeah.

[Michael Dell]
Like... And, um, my parents would get pretty frustrated, you know, taking apart things in the house. [laughs]

[David Senra]
[laughs]

[Michael Dell]
Sometimes I'd put them together, sometimes they would still work. Um, but it's just the desire, it's to understand things, to, you know, the curiosity.

[David Senra]
Yeah, that's one of your character traits. You have a great story in the book where I think you save up for the Apple II. It was a computer, and it was, you know, relatively expensive, especially, I think you were like 12 or something at the time. And then you bring it home and your parent's like, "Oh, he's, you know, he's gonna plug it in and play with it." It's like, no, I immediately took it ap- took it apart. I needed to understand how it worked.

[Michael Dell]
Well, it's like this machine, it's like it does really cool stuff, but how does it work?

[David Senra]
Yeah.

[Michael Dell]
It's like what- what's inside it? [laughs] And- and how do all those things work, and how do they fit together, and why did they put these things versus those things? And, you know, sort of

[Michael Dell]
getting down to the essence of it.

[David Senra]
I had a thought when I was reading your book. You know, at the time, you're- you're taking apart IBM. You know, this is, I'm pretty sure before... you were- you're a teenager, so this is before you start Dell officially.... but it's, you know, I- and I didn't know this about IBM, I had to go back and look it up. This is like the most valuable company in the world at the time. It was the first company to ever hit a hundred billion dollar market cap, which also blew my mind. But you take it apart and you're like, "Oh, wait. It's just components." This is the biggest company in the world, and this is their product, and if you take it apart, it's just made of components from other companies. And it's just like, it's implied, or at least this is what I was reading through the lines when reading your books, like, "Well, I can do the same thing." Like, "what are they doing here that I couldn't do?" Did you have that thought?

[Michael Dell]
Yeah, absolutely. I mean, so it's, it's back to when you open the thing up-

[David Senra]
Mm-hmm

[Michael Dell]
... you look inside, what's there? Well, there's chips, right? [laughs]

[David Senra]
Yeah.

[Michael Dell]
And there's wires and there's power supplies and disc drives and all these components. It's like, "Well, where do those things come from? Uh, who makes those," right? [laughs] "W- what's inside those? How-"

[David Senra]
Yeah.

[Michael Dell]
"... how did they make those?" And so you sort of peel the onion, you know, [laughs] and you understand all the different elements. And, you know, when I, uh, originally got the first IBM PC, you know, yeah,

[Michael Dell]
probably took it apart before I turned the thing on-

[David Senra]
[laughs]

[Michael Dell]
... you know? [laughs] Just to-

[David Senra]
Yeah

[Michael Dell]
... just to see what's, what's inside. And one of the really cool things back then was that you didn't have these, uh, sort of application-specific integrated circuits. They call them ASICs, right?

[David Senra]
Mm-hmm.

[Michael Dell]
Y- or these big sort of, uh, chips that nobody really knows what's inside-

[David Senra]
Yeah

[Michael Dell]
... except the designers. All the chips were off-the-shelf chips. So you could see,

[Michael Dell]
you could sort of, uh, understand what the, the, the logic flow was-

[David Senra]
Mm-hmm

[Michael Dell]
... and what each chip was supposed to do inside the circuit. And inside the IBM PC, none of the chips were made by IBM, right? [laughs] And, and, and, uh, none of the disc drives were made by IBM. The power supply wasn't made by IBM. And, and so, uh, you know, I was also interested in the economics of it. It's like, "Well, what does this chip cost? What does that chip cost?" And you sort of add it all up, and then you compare it to the cost that they're selling the thing for, and you go, "Wow, this is... They're really charging an incredible markup for, for this."

[David Senra]
That's an incredible insight to have as a teenager, though. It's like figure out what the, like, actual cost of the components are, and then go look up... And it sounds like what Elon did with rockets. It's just like, "The, the Russians won't sell it to me. I'm on the flight back." These are famous stories in all of the bo- books, and he's just like, "Well, what is a rocket made of?"

[Michael Dell]
[laughs]

[David Senra]
Like, okay, well, there, there's a list of components. How much do those components cost? What you just said is like, you just kept asking questions like, "Oh, I'm gonna take it apart." It's like, okay, well, this is all the components. This is what it is. This is like where you get 'em from. This is the co- look, the company name's right here. I can just call them up and find out how much this is.

[Michael Dell]
Well, you could go to the distributors-

[David Senra]
Yeah

[Michael Dell]
... and you'd say, you know, "Okay, how much does this chip cost?" And they'd say, "Well, it's this price for a hundred of them."

[David Senra]
Yeah.

[Michael Dell]
Right? Uh, a- and y- you could, you could literally map out the cost of every chip-

[David Senra]
Yeah

[Michael Dell]
... inside the thing.

[David Senra]
There is a book Ken Griffin, the founder of Citadel, recommends reading called Hardball. The subtitle of that book is, Are You Playing to Play or Are You Playing to Win? It is a book about extreme winners and some of the best operators in business. There is a line in that book that says, "If you have not examined your costs in detail, it is very likely that there exists, lurking somewhere in your cost structure, a major opportunity to improve your profits, weaken your competitors, and expand your influence. The first move is to drive down your costs faster than your competitors can and use the cost savings to upset their strategies." That sounds like the author was describing Dell. In his autobiography, Michael Dell says that one way that he was able to out-compete his better-funded competitor Compaq was with a structural cost advantage. Compaq's operating costs were 36% of revenue compared to Dell's 18% of revenue. More than 40 years later, Dell is thriving and Compaq no longer exists. The best operators in business have this in common. They know their business from A to Z and their costs down to the penny. Ramp makes doing this effortless. Ramp gives your business easy-to-use corporate cards for your entire team, automated expense reporting and cost control all on a single platform. Ramp's corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand. Most companies only find out about excessive spending after the fact. With Ramp, you can stop it before it happens. Matt Paulson, who listens to this podcast and who's the founder of MarketBeat, recently switched to Ramp, and this is what he said about it. "Ramp is the best. The amount of money you will save from unwanted renewals and employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program." Matt is talking about the importance of cost control. Ramp helps you make this an obsession. Almost all of the top founders and CEOs I know are running their company on Ramp. Go to ramp.com to learn how they can help your business play to win today. That is ramp.com. Something I- I don't even know if I- I've ever, like, verbalized it before, but it's in all these biographies that I read. What I feel is just, like, there's just, like, a lot of common sense where they just, the founder tends to just keep asking more questions and just, like, going to like an app- You just said, I think, peeling an onion. It's like, yeah, just like, "Okay, I got that answer. What's the next one? And then what's the next one?" And there's something in human nature where we just, like, we stop at the first question. But you have this, like, infinite curiosity that was o- very obvious, like, from chi- from childhood. And I think based on-

[Michael Dell]
[laughs]

[David Senra]
... what we were just talking about in your office, it's obviously [laughs] still present. But yeah, it's just very fascinating. It's like, it's not rocket science, just, like, keep asking questions and collecting information and thinking about the answers that you're getting.

[Michael Dell]
Hey, you wanna understand things-

[David Senra]
Yeah

[Michael Dell]
... at a very deep level. [laughs]

[David Senra]
Yeah.

[Michael Dell]
I- it, and, and so that's always been a, a...... thing for me.

[David Senra]
Yeah, I think that's what I'm very interested in. It's like if you read the life story of somebody, like I'm very interested in understanding who the person is and like why they're doing what they're doing. And this is the, the, the genius line from Charlie Munger, he's just like, "Well, if you just... It's way more effective to tie the ideas to the personality that developed them." And the way you tie it to the personality that developed them is like you read about their life story. [laughs] You read about their childhood, you read about what their interests were. But I love the part in your book, I was rereading it yesterday, where your parents confront you. Okay, you've started Dell [laughs] in your dorm room at University of Texas, and they're just distraught. [laughs] Which is really funny given what's occurred over the next four decades. Like, "What are you doing, Michael? You're supposed to be, [laughs] you're supposed to be, you know, on this path to be a doctor." And I think your mom's crying. You're, you know?

[Michael Dell]
She was, yeah. Yeah.

[David Senra]
It's very emotional.

[Michael Dell]
Yeah.

[David Senra]
And so you, you were like, "Okay." And in the book you said, "I caved." Okay? Which is very unusual 'cause it was super strong personality from, from, from a young kid. But then the very next page, I can see it in my mind right now, you're like, uh, uh, cold turkey. Didn't even look at a computer for 10 days and tried to take notes in classes. And then when I realized like, no, like, i- it was like you were compelled. Like, "I thought working in computers was going to be thrilling. I'm going to drop out [laughs] with $1,000 and I'm gonna take on the biggest company in the world."

[Michael Dell]
I think the fact that they, they, uh, put all that pressure on me is the thing that caused me to really reflect on it-

[David Senra]
Yeah

[Michael Dell]
... and decide that, no, this is more than a little hobby or a side thing. This is just like, I have to go do this.

[David Senra]
Do you feel it was all-consuming, even at that age? 'Cause you're, at the time, you're like sleeping in the office when, when you do start. Like you start... Yeah, I know, we talked about this last time, it's hilarious, where somebody asked you, it's like, "Well, when you started Dell, like how many hours did you work?" And you're like, "All of them." [laughs]

[Michael Dell]
[laughs] Yeah, I mean, I, I wasn't doing anything else.

[David Senra]
Yeah.

[Michael Dell]
I mean, there wasn't really anything else that was important to me. [laughs] And so yeah, it was, it was totally all-consuming and, uh, super exciting and wasn't doing anything else. Yeah.

[David Senra]
Were you more of like, before that, somebody that just focused on one task at a time?

[Michael Dell]
I, I would get pretty obsessed with, you know, individual topics, uh, and-

[David Senra]
Yeah

[Michael Dell]
... sort of go, go deep on them.

[David Senra]
Mm-hmm.

[Michael Dell]
Um, so yeah, I wouldn't consider myself, you know,

[Michael Dell]
generally interested in a bunch of things. I was like super deep on certain things that excited me or interest- interested me.

[David Senra]
Is that still the case today? Or is it just basically-

[Michael Dell]
Yeah, tends to be, yeah, yeah.

[David Senra]
Yeah, Zach told me, he's like, he'll call me at like 5:00 AM.

[Michael Dell]
[laughs]

[David Senra]
And he was like, "I have an idea." [laughs] Like we should do this product or this acquisition or whatever. He's just like, he just can't help himself. And I asked him, I go, "Uh, what would get him to stop?" He's like, "You have to kill him." [laughs]

[Michael Dell]
[laughs]

[David Senra]
What made you decide to write the book?

[Michael Dell]
You know, we, we had, we had gone through a whole lot, uh, with the going private and buying EMC and VMware, and

[Michael Dell]
there had just been so much that happened, I wanted to kind of document it. And it was during COVID, I had some time.

[David Senra]
[laughs]

[Michael Dell]
Start- started writing this stuff down. And it felt like a logical place to, uh, sort of capture everything that, that had happened. And, y- you know, one of the main reasons I wrote it was for our team inside the company, 'cause I, you know, want them to understand, uh, you know, how we think about the business and where it came from. And, you know, as a, as a business grows larger, it's harder to be able to tell the stories directly w- with, with, with everyone. And so i- it's just a great

[Michael Dell]
opportunity to encapsulate all that and, uh, share, you know, what happened really. The, the good and the bad, the

[Michael Dell]
things that worked well, things that didn't work well. And, um, you know, I certainly benefited from reading the stories or hearing the stories of other people and thought it'd be a good idea.

[David Senra]
I said this on the, the episode I made about it, it's like a great gift to like future generations of, um, entrepreneurs. I actually think that idea of like having, uh, like a singular piece of media, whether it's a book, there's another idea for you for podcast, uh, for people as the company grows to understand like this is the decisions that were made, this is why it was, this is what we've gone through. Uh, Spotify has this. Originally they, they did... Gustaf is the head of product at Spotify, and he's the actual one that made this. And originally, um, I talked to them about this, they were just gonna do, it was like an eight-part series. Uh, it was gonna be a private podcast inside the company, which tells the history of Spotify.

[Michael Dell]
Mm-hmm.

[David Senra]
So if you come in now, you know, 20 years into its existence, it's like, well, what were we... What, what was like year one in our apartment? You know, we got a server and a closet. And so what they did is they did this beautiful like narrative and, uh, they would also include the people that were important at the ear- in the early days. Like, you know, some people don't last in the company, but they were really important first two, three, four years.

[Michael Dell]
Right, right.

[David Senra]
But I listened to the thing like two or three times. And thank God that now it's public, anybody could just type in Spotify. The Product Story, I think is the name of the podcast. I'm like, "Why don't more companies do this?" Like, I'm not an employee, but if I was coming into Dell or any other company now and I could have here, here's eight, you know, eight one-hour episodes. And they say not just "This decision was made." It's like, "Why? These are the constraints we were under. This is what was going on."

[Michael Dell]
Exactly.

[David Senra]
Yeah.

[Michael Dell]
So, you know, if we walk downstairs right below th- this room where we are-

[David Senra]
Mm-hmm

[Michael Dell]
... there's a new class of small business salespeople being trained.

[David Senra]
Mm-hmm.

[Michael Dell]
Okay? And you would love for those...... team members to be able to understand, okay, how did we get here? What are all the things that, that, you know, we did right and wrong? And to really deeply understand the culture, the values, the beliefs, and then to be able to build on that with their own contributions.

[David Senra]
Yeah. Gotta bring them up to speed. And this is the context. I also think there's a, a, an additional benefit for, for it to make it public- facing, because humans buy stories. Money flows as a function of stories. And I've experienced this. It's like if I read, I spend, you know, 40 hours reading about this person that had this idea in their head, they built a company, at the end of that, you're gonna have a way better appreciation. I would find up buying my, buying their products that I never even would have thought of because now I understand the story. Um, I just reread James Dyson's, uh, autobiography, which is w- one of my favorite books. Probably my number one recommendation out of the 400 books I've read so far, just because it's like 90% just struggle. The first autobiography is just like-

[Michael Dell]
[laughs]

[David Senra]
... "I'm failing for 14 years, this guy is like a mule. He won't give up. 5,127 prototypes." But there's an idea in the book that- that was smart, where

[David Senra]
he understood the power of storytelling, okay? And so he's like, "You're gonna walk into the retailer. You're gonna see six different vacuum cleaners." His obviously is designed different so it's gonna catch your eye, but he insisted, they wrote like a 200-word story on like a little flyer, right? Maybe like a little piece of cardboard and the- that you could attach it to the handle of-

[Michael Dell]
Mm-hmm

[David Senra]
... the vacuum cleaner. And what happens? If that person, humans are attracted to stories, they're attracted to people, right? And so they would, they'd read that and then they'd, it would increase their sales because they understood who's behind this, why did they make it, how is it different? Like, it was a very effective sales tool. Um, so I- I think like doing podcasts like this, books, anything like this where you can actually tell like why you're doing what you're doing. This is the crazy thing. I've heard from, I don't know, I've probably got thousands of messages about the episode I did, uh, on you. And the most common thing was, "I knew the name. I had no idea." Everybody knows Dell, ev- the brand name, right? But they didn't understand just how crazy your story and the- the multiple different transformations you've had to make over 41 years. And now they're like, "Oh, this guy." Like, "I'm so glad you- you put that in front of me." I think it's like a super important idea.

[Michael Dell]
It's all, it's all been a lot of fun.

[David Senra]
Yeah.

[Michael Dell]
And- and- and still, and still is. And- and it feels like we're just getting started actually [laughs], you know, when- when I think about the business and the opportunities we have. And, uh,

[Michael Dell]
yeah, it's all fun.

[David Senra]
You mentioned earlier that you benefited from studying people that came before you. And this is, you know, you wanted to pass that forward. Like, w- who are a few of the people that you study, you felt you learned from or that influenced like your thinking about how you're building, how you built your business?

[Michael Dell]
You know, when I was a, when I was a kid, I- I- I, y- you'd read about entrepreneurs, you know, that- that were starting companies. Charles Schwab or Fred Smith, certainly, uh, Sam Walton, some of the early, uh, telecom pioneers. Uh, people that were doing it right then, like in- in the '70s. And those stories were also, were- were just super interesting to me. And I- I grew up in- in Houston, which was kind of a boom town. You'd see these new companies being created and my parents were talking about that. And so the- those- those stories were always just interesting and- and compelling and you want to understand, well, how did they do that? And

[Michael Dell]
why did they do that? And, you know, what happened? And, you know, I never imagined myself doing anything else other than starting a business. [laughs]

[David Senra]
Yeah.

[Michael Dell]
Or, you know, the idea just was in my, in my consciousness

[Michael Dell]
from- from a very early age.

[David Senra]
There's this great line that Jeff Bezos says where he's like, "Our passion, we don't choose our passions. Our passions choose us." I think there's multiple mar- like, my notes to myself in the margin is like, "Oh, he's compelled." It's like, "This is coming through him." Like, e- he's like he has no choice. He's, this isn't going to happen. But is there anybody in particular that you, like, really, like, honed in on and admired and tried to emulate in some way?

[Michael Dell]
I always think you- you can- you can learn from just about anybody, whether they succeeded or failed. And so I tried to just understand, you know, uh, as many people as I could that were entrepreneurs, that were starting businesses, how did they struggle? What- what worked? What didn't work? And those were always the compelling and- and interesting stories.

[David Senra]
When you were 15, you met... You were, I think, at some kind of conference with... And this is the first time you were- were in the presence of Steve Jobs. I think Steve was like 25 at the time.

[Michael Dell]
Yep.

[David Senra]
So when... Was he somebody, like when you saw him at 15 and you saw, "Okay, wait, this is a young kid in his 20s building a computer company." Was like that a model for you? Or w- like what was your interpretation of, like, that experience, I guess what I'm trying to get at?

[Michael Dell]
Yeah, so y- you know, in- in the early days of- of the computer industry, y- you know, as- as I knew it, the microprocessor-based computer industry-

[David Senra]
Mm-hmm

[Michael Dell]
... you know, Apple was a leading company and Steve was obviously this sort of legendary figure.

[David Senra]
Mm-hmm.

[Michael Dell]
So I was in this Apple user group, which is a bunch of, you know, geeky people.

[David Senra]
[laughs]

[Michael Dell]
It was like get together and- and, you know?

[David Senra]
You don't say. [laughs]

[Michael Dell]
[laughs] Yeah, exactly.

[David Senra]
[laughs]

[Michael Dell]
And, uh, and, you know, sort of compare-

[David Senra]
Yeah

[Michael Dell]
... you know, how they had souped up their computers and software they had written and learn from each other. And so,

[Michael Dell]
you know, Steve came to speak to our user group. And yeah, I mean, he- he... You know, he- he- he was like using these incredible, you know, metaphors and we were like listening to him and, uh, looking at what Apple's doing and going, "Wow, that's- that's really cool." And...... you know, they, you, you'd also start, started hearing about Bill Gates, you know, who's also about the same age as Jobs.

[David Senra]
Yeah.

[Michael Dell]
And, you know, they're both about 10 years older than, than I am. And you kinda look at them and go, "Well, okay, they did something cool. May- may- maybe, maybe I've got a shot." [laughs]

[David Senra]
Yeah. That's really cool. There was, uh, something you mentioned to me, uh, when we had dinner that has been rattling around in my head, and I think it's part of the reason that I couldn't sleep. And I don't even think it was like explicit advice. I think you were just making an observation. But you said something along the lines that, um, you know, you've seen how countless different companies and entrepreneurs come and go over, you know, four decades, four plus decades. And you saw something that terrified me [laughs], uh, unintentionally, uh, that

[David Senra]
most of the entrepreneur, uh, most of the entrepreneurs and founders that you, you, you've known were never taken out by competition, that they sabotaged themselves. Can you say a little bit about that?

[Michael Dell]
Yeah, I mean, I think, I think you could, you could make the argument that, that they made mistakes along the way that, that, uh, you know, were fatal. And, and, you know, ultimately, uh, you know, the companies didn't, didn't succeed. Um, but it's, it's all of their own doing, right? Uh [laughs], you know? But, but you have to make the right choices in order to, to continue on and, and survive and ultimately thrive.

[David Senra]
What do you think are some of the causes of mistakes? You have o- o- obviously smart, talented, competitive people, right? Uh, Charlie Munger has this great line where it's like, "Intelligent people are taken out by three things, ladies, liquor, and leverage." [laughs]

[Michael Dell]
[laughs]

[David Senra]
So, like, what do you... Have you seen any common like causes for somebody to sabotage themselves or to not live up to what they should have?

[Michael Dell]
Charlie's right about those-

[David Senra]
[laughs]

[Michael Dell]
... three things. Uh, you know, we- we- we- we- we stay away from those.

[David Senra]
Yeah.

[Michael Dell]
Um, I sort of go back to understanding things and curiosity. And it is like, you gotta, you gotta know why something is working or not working. And if you're in the middle of, of a super competitive, uh, endeavor and you don't really, uh, completely understand what's going on, well, you're gonna make mistakes, right? [laughs] And so, uh, you know, when I, when I look at the, the competitors that, that, that are no longer around, yeah, they, they, uh,

[Michael Dell]
they, you know, had either

[Michael Dell]
overzealously expanded or made, you know, design, you know, uh, errors. Or they failed to understand the competitive, uh, landscape. I mean, there's lots of ways to fail, right?

[David Senra]
You have a great example of one in the book with Adam Osborne, where he had a very successful... I think the Osborne 1 was relatively successful, right?

[Michael Dell]
Yeah.

[David Senra]
Okay.

[Michael Dell]
Yeah.

[David Senra]
And he's like, "All right, now we, we're coming out with Osborne 2. It's even new and improved and it's great." And you make the point, it's just like, yeah, maybe, but it didn't ship in time. And so now you just made this big announcement where you're like, "We have this great new product, it's even better than 1." What are you telling to the market?

[Michael Dell]
The, the Osborne effect.

[David Senra]
[laughs]

[Michael Dell]
The, the, uh, I don't think people talk about it so much anymore, but back then the Osborne effect was a thing where you introduce a new product that's better than your first product, and nobody buys your first product anymore, and you're, you're out of business. And it's, so, you know, yeah, don't wanna do that.

[David Senra]
[laughs]

[Michael Dell]
So, [laughs] so go make some mistakes nobody's ever made before. Try to make them in small-

[David Senra]
Yeah

[Michael Dell]
... increments. Fix your mistakes as fast as you find them.

[David Senra]
Mm-hmm.

[Michael Dell]
And you actually wanna make mistakes. You just wanna make them small and, you know, iterate and fix them quickly.

[David Senra]
Yeah.

[Michael Dell]
I mean, one of the things when you're, when you're creating a new business in an area that is never been done, or with some new technology, new business model, there's no playbook. There's no like, uh, book you can read says-

[David Senra]
Yeah

[Michael Dell]
... "Here's how you do it," right?

[David Senra]
[laughs]

[Michael Dell]
And, and if you hire the people from the adjacent, you know, industry companies

[Michael Dell]
and ask them to go do it, well, they're just gonna go do what they were doing before, right? [laughs]

[David Senra]
Yeah. [laughs]

[Michael Dell]
And so that's not gonna work. So you need a lot of creativity and you need to sort of intuit your way to the answer by experimenting. It's like, "Okay, uh, here's a theory that we think will work. Let's try it," right? And, and-

[David Senra]
Yeah

[Michael Dell]
... and, and, you know, does it work? Great. Okay, let's do 2X that. Okay, let's do 10X that. Let's do 100X that. Doesn't work? Okay, let's stop, you know, restart, come up with another theory.

[David Senra]
Yeah.

[Michael Dell]
And just keep experimenting until you find the answer.

[David Senra]
You're kind of going through that now. In fact, I wanna read something that you said that was one of the most interesting things. You said it on a podcast, and, uh, you made this, essentially talked to your entire company. And you said, "I'm just gonna read this quote. 'I stood up and told the company that five years from now...'" I love this so much. [laughs] "I stood up and told the company that five years from now, we will have a new competitor. And that new competitor is going to be in every business that we are in, except they're gonna be faster, more efficient, and more capable. And they're gonna put us out of business. And the only way that we're gonna prevent that is we are going to become that company.' It's gut-wrenching stuff to reinvent and reimagine your business, but if you don't do it, you go out of business."

[Michael Dell]
Yeah, ex- exactly. So, you know, when, uh, ChatGPT came out in November of '22, we're still looking at this and going, "Wow, this is a big deal. [laughs] This is, this is pretty interesting." And you started to see the rate of improvement in the LLMs. And you, you, you know, in technology you can i-You can sort of look at the, the rate of improvement and the learning curve and you can f- sort of plot, "Well, where is this thing going?" Right? "Where it's gonna be in a year or two years or three years?" And you look at, okay, we're gonna, uh, have agents and multi-agent systems and we're gonna be able to reason over incredible amounts of information. Well, what does that actually mean for the way knowledge work gets done and the tools that humans are gonna have? So you think about that, you go, "Wow, this is a b- big, big deal here." [laughs] Um, we need to totally reset how we're thinking about the business and reimagine it, reframe it, and

[Michael Dell]
understand what the processes are, are gonna look like in five years. And so

[Michael Dell]
you d- you do all that and you say, "Uh, if we keep doing what we were doing before, we're gonna be in serious trouble because some new company's gonna come along and yeah, they're gonna, uh, [laughs] have all these new tools. They're not gonna have this legacy of crap, [laughs]-"

[David Senra]
[laughs]

[Michael Dell]
"... from the past, right?"

[David Senra]
Yeah.

[Michael Dell]
Old ways of doing things and they're just gonna do it the new way. And so we have to change

[Michael Dell]
or we're gonna go out of business. You know, I also believe in this idea that, uh, if you don't have a- a crisis, make one, right? [laughs] You know?

[David Senra]
[laughs]

[Michael Dell]
You get people excited, motivated, and

[Michael Dell]
to drive the- the necessary change. I mean, i- one, in one sense, this is not a technology problem. The technology's there whether you use it or not.

[David Senra]
Mm-hmm.

[Michael Dell]
It's a- it's a question of how do you organize the team and people to actually go and get this thing done? How do you motivate them? How do you give them the right tools? How do you structure, uh, you know, the, uh, ways people work together so that you can do it quickly? And

[Michael Dell]
it's very hard for people to, you know, if you've been doing something for 10 years or 20 years or 30 years the same way and all of a sudden it's, like, some new thing comes along, you're like, "No, I don't wanna do that." You know? [laughs] P- people don't like to change, but you have to.

[Michael Dell]
And so that's what we've been doing.

[David Senra]
Yeah, this is ac- excessively rare. I mean, think about the story in the book where I think the line that I summarized where you were saying about IBM is like, yeah, the personal computer is, you know, fine. It's gonna be a great terminal for the mainframe and it's just like, oh, you see this over and over again in these biographies if you're studying s- you know, something that's occurring over multiple decades. It's like companies and people cannot envision a future that's different from the present that they succeeded in [laughs] so they kind of like, dismiss it- dismiss it or kind of ignore it. I- I'm trying to think though, like, so you just said, okay, there's no books. Like what you guys are doing right now at Dell, right? You can't, just like, you're on the cutting edge. There's no, there's no books you can read about it, but you have surfed how many different technological revolutions? You did the micro processor, right? Microcomputer, sorry. Uh, the personal computer, um, then obviously the internet was invented and-

[Michael Dell]
Client server technology a little bit before the internet, yeah. Yeah.

[David Senra]
Yeah. H- how many? So like I got four or five. H- how many have you successfully navigated and had to reinvent Dell over and over again? How many of these, like, huge shifts do you think you've navigated?

[Michael Dell]
Yeah, there's probably been six or seven of 'em.

[David Senra]
So if you've done that six or seven times, and then I think in the book, you know, obviously you say, "We did really great on this one, not good [laughs] on this one, but we've, we've fixed-" [laughs]

[Michael Dell]
Right, right. [laughs]

[David Senra]
"We have to fix that." You're not gonna be perfect over that many decades. But do you see, like, is there, like, an echo between all of these, like, that you can apply? Like certain ideas you could take away and, like, form a structure? It's like, "Oh, that's kind of similar to what we had to do when we had to reinvent for X that we're doing now."

[Michael Dell]
Yeah, there are, although the- the- the- the time frames that these things occur tend to be shrinking. A- and-

[David Senra]
Oh, say more about that.

[Michael Dell]
So if you think about the- the internet, you know, when, uh, y- you know, first you had the internet and you had the worldwide web, right? And websites started popping up in the mid '90s and then, you know, but it took, like, a decade before there was really a boom in things like e-commerce. And I mean, it was, it was going on, uh, in the late '90s [laughs] and, you know, early 2000s but it- it really didn't... It took a long, long time. So now, uh, maybe it's like five to 10 times faster?

[David Senra]
Yeah.

[Michael Dell]
You know? If- if you look at the growth in the usage of these tools, and part of it is that each successive, uh, wave of technological improvement is built on the prior w- you know, foundations and so they're able to go faster. So if you have five billion people connected with all kinds of devices, well now they can use these tools and that just goes way faster. Uh, I- I think you have to have this idea in your head that any, uh, you know, new thing has some chance of succeeding, right? [laughs] And, and-

[David Senra]
Wait, say more about that.

[Michael Dell]
So there's a lot of wild ideas out there and

[Michael Dell]
if you dismiss them all, you're gonna miss some- some things. So- so you- you- you kinda have to hold this idea in your head that, uh,

[Michael Dell]
any of these wild ideas has a chance of succeeding and, uh, let's sort of understand what do all these things mean and figure out what is the point of intersection, right? W- what, you know, what should we be doing a- about this? And when- when is it actually relevant, interesting, valuable, and it sort of, you know, hits escape velocity? And if you're- if you're sort of stuck in a particular paradigm or you're, like, dismissing things, you're gonna miss 'em.

[David Senra]
... yeah.

[Michael Dell]
[laughs] And, and so- and so, uh, you know, you need to be open-minded enough to consider

[Michael Dell]
all possibilities.

[David Senra]
But your ability to do that is so counter to human nature, 'cause we're habitual- like, we're habitual creatures, you know? It's like, "Oh, I found what I want," or, "I found, like, what I like to do and, like, this is the best." You know, like, if you look at, like, what peop- what music people listen to, for example. It's like, music you listened to when you were in high school and college, and maybe you've added a couple. But like, you're kind of, like, just stuck on that. Where you are just, like, completely open and maybe addicted to, you know, new technology and new ways to think about or new ways to solve, like, old problems.

[Michael Dell]
Yeah, I love- I love the stuff.

[David Senra]
But how do you not squash new ideas? Like, you just said, like, you know, that- those- those are great lines. Like, any idea can work now. Everybody's connected and they can grow faster than you can possibly imagine. So, how do you like... Do you have a process for, like, how do you not... You know, i- New ideas are fragile and, you know, they need some kind of protection and some time t- to grow, like, but most people just like kind of snuff 'em out or dismiss 'em immediately.

[Michael Dell]
Well, you know, sometimes, uh, i- i- i- i- it's a- it's a good idea, but it's the wrong time.

[David Senra]
Mm-hmm.

[Michael Dell]
Sometimes, it's a good idea, but it's the wrong company. Sometimes, it's just a bad idea, right? [laughs] And so, um, but y- y-

[Michael Dell]
y- there's no absolutes here, right?

[David Senra]
Yeah.

[Michael Dell]
Y- y- you just have to be open-minded and

[Michael Dell]
consider the possibility that things are changing fast enough that, uh, you know, some- some new thing comes along. If you took the top computer scientists, uh, you know, a- a- and researchers

[Michael Dell]
in AI or just broadly, you know, five years ago, and you said, "Okay, you know, this is what's gonna happen with LMs in the next five years," probably 99 out of 100 would say, "No, no, that's not [laughs] gonna happen." Right? And so, uh, that's a- that's a pretty good example in contemporary period here, you know [laughs], where you- you just need to be, uh, open to the possibility that things are gonna change. And- and- and there's also this thing where about every 10 years or so, something comes along and just completely expands the opportunity set for the industry, and that's part of the fun, the excitement, the super interesting aspect of what we get to do every day.

[David Senra]
The best leaders in business are able to spot patterns, but you can't spot patterns if you can't see your data. And most businesses are only using 20% of their data because 80% of your customer intelligence is invisible, hidden in emails, transcripts, and conversations, unless you have HubSpot. HubSpot is where all of your data comes together, so you can see the patterns that matter. Because when you know more, you grow more, and that is a pattern that never fails. Visit hubspot.com today. That is hubspot.com. I just had a thought listening to you speak, tied to something else that you said earlier, where it's like, basically, humans'

[David Senra]
inability to have accurate predictive behav- predictions about the future, it's kind of tied to the importance of iterating and make sure you're doing a lot of experiments and then having that, like, tight feedback loop to constantly, like, get information. "Oh, that didn't work. Okay, we ran an experiment, it didn't work. Let's try it a different way." Like, those two- like, those two things work really well together. It's like we're- we're not going to predict the future, we're going to create the future through iteration.

[Michael Dell]
Yeah, and- and, you know, it's okay to try to predict it as well, it's just really hard to do. And, you know, you might wanna have a lot of experiments. I mean, if you go back and- and say... Okay, let's say you had somebody who was supposed to be really smart or supposed to be an expert at something, right? [laughs] 10 years ago, how good were they at predicting what was gonna happen? Not very good.

[David Senra]
No, terrible. [laughs]

[Michael Dell]
So- so- so, uh, don't rely too much on that, right? [laughs]

[David Senra]
Th- this is why I think, uh, entrepreneurs have to, like, study past entrepreneurs too, and it's, like, obviously very valuable. Like, it's- it's no surprise that, like, you were reading about these people. Like, what I would say is, like, the greats all studied the greats. This is, like, very c- This is like, they were doing it today, they were doing it 40 years ago, they were doing it 200 years ago. If you took, like, an average person in normal society and the way they think about experts, okay? And the way it's discussed in all these biographies, it's like, they're very dismissive of experts, right? I just mentioned, I was reading James Dyson's, uh, autobiography. You know, the whole thing is just like, he believes in the Edisonian principle of design, just constant iteration. You learn as you go. You can't predict. Like, you're- you just, you know, change one thing and then test it and see how it goes. And he mentions citing Henry Ford a lot in that book. And then James Dyson wrote an autobiography 30 years after that, that he also mentions Henry Ford a lot. And the reason I thought of that is because as you were speaking about, you know, you go and ask an expert from 10 years ago, what's gonna happen? What... Like, they're not gonna tell you that ChatGPT is abs- you know. That my 13-year-old... I use ChatGPT all the time, but I'm a nerd. I like to research stuff. I like to read about stuff. She uses it like a therapist, a shopper, a friend. Uh, like, it's an entire ecosystem for them. There's no way you can- you can, um, predict that. So, there's a great line in Henry Ford's autobiography, which was written 120 years ago-

[Michael Dell]
[laughs]

[David Senra]
... okay? This is not a new phenomenon. Human nature does not change. History doesn't repeat, human nature does. And he says, "If I ever want to sabotage my competition, I would fill their ranks with experts. Experts tend to know so much and they're- they're so convinced that they're right, they get no work done."

[Michael Dell]
Yeah. At- at the limit, nobody knows anything, right? And it's not a bad, uh, philosophy- [laughs]

[David Senra]
Yeah

[Michael Dell]
... you know, when- when- when you're thinking about the future. Um,

[Michael Dell]
it's good to have a hypothesis though, right? [laughs] And- and- and- and ideas and experiments and to keep an open mind.

[David Senra]
So, what was... When we go back to that, "Hey, this... They're coming for us. They're gonna be faster, more efficient, more capable, uh, and they're gonna put us out of business and we're not gonna let that happen, 'cause we're gonna transform. We are going to be that business."

[Michael Dell]
Right.

[David Senra]
What was your hypothesis back then? Do you remember?

[Michael Dell]
Oh, it's pretty simple. It's that i-It will be possible to dramatically improve the way we do things in all of the core processes of the business, from software development to support to sales to every major function in our supply chain. Everything can be improved

[Michael Dell]
in a dramatic way, and that's what we're doing. And we're, we're finding, you know, as we take our data, as we

[Michael Dell]
reimagine the processes and simplify and standardize them, we can, uh, make them way more effective. So, you know, an example would be, uh, in support, we have incredible amounts of data. We have telemetry data that the machines are giving us all the time, right, about, uh, you know, soft errors and all these things that are going on, y- you know, in- inside the usage patterns from customers. We have warranty data. Uh, y- you know, we have previous call logs. We have all these knowledge bases. We have Jira databases. It's like millions and millions of documents. No human could ever interpret all this. And so we created this tool called Next Best Action, which takes all this data and understands what problem the customer's trying to solve, and it helps, uh, either the customer or the agent that's trying to help the customer

[Michael Dell]
get to exactly the best way to solve that problem in the fewest possible steps. And so the person helping them feels like, "Wow, I'm way better at my job than I used to be because now I've got this genius on my shoulders telling me exactly how to solve this problem." The customer's way happier. Uh, the problem's solved way faster, and the tool summarizes the call. So that saves a ton of time. And so everything gets way better. So you can take that same example, and, you know, software development with coding assistance. Our sales teams have access to incredible tools, and so we're doing this all over our business. And of course, our customers are doing it, and what is this doing? It's unlocking the power of data using compute and using all these models, which also happens to be, you know, uh... we're in the business of compute [laughs]-

[David Senra]
[laughs]

[Michael Dell]
... and storage and networking, so it's an enormous, uh, opportunity for- for- for Dell itself to be able to help all of our customers unlock the power of their data.

[David Senra]
You couldn't predict, like, the actual tools that were going to be invented. You just knew that now we have this new... there's g- there's this new technology, that it will transform every single, uh, process inside the business. We may not be a- we won't be able to predict, like, all the tools, but we just know that they're coming.

[Michael Dell]
If we didn't do that and our competitors did, we'd be, we'd be finished, all right? [laughs] And so we're not gonna do that. And, uh, you know, even if we did it and our competitors did it, uh, l- let's say it just neutralizes, you have to do it. Uh, y- you have no choice.

[David Senra]
Yeah, there's a line in, uh, Andrew Carnegie's biography that was really fascinating, 'cause, you know, he dabbled in a bunch of different businesses. He was pretty wealthy before he started the steel company. But once he realized that... you know, think about s- how important steel was at that time. It's like everything... this is the new, the new product that everything e- e- every other product is gonna be made out of, uh, from bridges to roads and everything else. Like, "This is the biggest opportunity of my life. I'm gonna go all in on it," to the point where he didn't even want any distractions. He sold all of his stocks 'cause he didn't wanna find himself looking at the newspaper wondering, like, what the price of stock was, like fully focused on the greatest opportunity of him entire life. He went into an existing business that was run by older gentlemen, right? He had this new way to do steel. I think it's Bessemer steel f- that he got from England. So he took that idea from England, imported into America, which it's kinda weird how often that is in the history of entrepreneurship, where it's like, "Oh, this idea is working in one geography. Will it work over there?" It's like, yeah, 'cause humans are [laughs] kind of the same everywhere. There's some c- you know, cultural differences, but, you know, our- our core motivations are, you know, uh, very similar. And, uh, they were very resistant to change. So they're like, "No, that's not the best process." And then they would ridicule him for investing in the newest technology. He was spending a ton of money. Every time there was a better machine, a more efficient machine, he would immediately rip out the old machine and input- and put in the new technology of his day. We wouldn't think about it as technology today. It's definitely technology back then. And when you read his autobiography, which, you know, is in the public domain, anybody could read it for free, it's- it's an incredible gift to humanity. There... I remember getting to this part of the biography, which is exactly what you just said. It's like, "Okay, even if this is gonna give us advantage over our competitors, if we don't do it, like, they will have the advantage." So even if we're on p- like, on the same level and the- the- the summary of what Andrew Carnegie was saying, these guys wind up not adopting this technology and they went out of business. So he says, "Invest in..." This is not a direct quote. This is me summarizing his idea. He says, "Invest in technology, uh, the savings compound. It can make the, uh... it gives you an advantage over, uh, your slower-moving competitors, and it can be the difference between a profit and a loss." If he didn't do that- that investment into the new technology that his competitors were dismissing the stupid young kid with his fancy machine, right? That wound up making- making his company profitable in a year or two, and their company unprofitable. And then slowly and slowly, they just... they kept losing money and then they went out of business. It's very fascinating how these, like, themes just keep reappearing-

[Michael Dell]
Yeah. Yeah, exactly

[David Senra]
... over and over again.

[Michael Dell]
You don't necessarily want everybody to know what you're doing [laughs] also.

[David Senra]
The maxim I have from this I use on the podcast all the time is that bad boys move in silence. And so you mentioned earlier that, uh, there's no... sometimes there's no book. You're on the cutting edge. And so I remember there's this great line in this biography of Steve called Becoming Steve Jobs, which I actually think is the best biography written about him. And Steve's like, "I don't even know what the business model of animation is."... and they start partnering with Disney. And he has this great line, he goes, "You can't go to a library and check out a book called The Business Model of Animation. There's only one company that's ever done it well. It's Disney, and they don't [laughs] want anybody else to know how lucrative it is." [laughs] One thing that was, it was hilarious, that your son Zach wanted me to ask about was what he calls Dad Terminal.

[Michael Dell]
[laughs] Yeah. So Dad Terminal is, is what he, he refers to as when he kinda taps in and, you know, wants to talk about a, a particular topic or has a, has a question. And it's one of my favorite times with Zach. You know, 'cause, 'cause, you know, we're, we're talking about solving problems or challenges inside his business. And, um, you know, I get to share the mistakes I made, [laughs] mistakes I saw other people make, lessons learned, and, uh, hopefully save him some, some pain and suffering and, you know, uh, steps from, you know, uh, learnings along the way.

[David Senra]
Yeah, he says instead of typing in the re- I was like, "Why is it called..." [laughs]

[Michael Dell]
[laughs]

[David Senra]
I was like, "Why is it called Dad Terminal?" [laughs] I didn't understand what that was. And he's like, "Well, Bloomberg Terminal." He's like, you know-

[Michael Dell]
Exactly.

[David Senra]
[laughs]

[Michael Dell]
Yeah, yeah.

[David Senra]
He's like, "You subscribe, you log in. If you have a question, and then, like, you type in, you get this really-"

[Michael Dell]
Yeah, yeah.

[David Senra]
"...advanced answer." He's like, "I don't use Bloomberg. I use my own." [laughs]

[Michael Dell]
[laughs]

[David Senra]
"I use Dad Terminal."

[Michael Dell]
Yeah.

[David Senra]
I was like, "Give me an example, like what is, what's the last query into Dad Terminal?" [laughs] And he goes, "Supply chain." He said it like it was, like, obvious. I was like, "I don't have a supply chain. I run a podcast, I read books." Like, "Explain it to me." Uh, he's like, "My- there's a handful of things." Not even a handful, he's like, "There's a bunch of things my dad is world-class at." And he's just like, "One of them is supply chain." Um, and, uh, I'm curious as to like why you think you're s- why other people describe you as really good at that. Uh, is that, is s- supply chain just r- related back to how we started this discussion? As just like another puzzle [laughs] for you to s- to like direct your curiosity to?

[Michael Dell]
It's definitely a, a, an important puzzle.

[David Senra]
Mm-hmm.

[Michael Dell]
And, and a critical puzzle. I mean, I think if we had not, uh, figured out how to do our sup- our supply chain well, um, you know, we, we would not be here today.

[Michael Dell]
It, it's as, as simple as that. So, i- it's a, it's a fundamental thing that is just super important in, uh, in our business.

[David Senra]
So, i- it's just you've thought more about this area? Over-

[Michael Dell]
And, and made, and made

[Michael Dell]
a ton of mistakes. And learned a ton of lessons. And, uh, sort of, you know, figured out what works and what doesn't work.

[David Senra]
Yeah, there's a line in the book, I think the first time you realize, hey, I ha- I don't like these ... Your whole thing is eliminating middle men, and like getting [laughs] as close to the source as possible. And, um, I, I think you're like ni- you might be 20 years old at the time, but you're taking your first trip to China, if I'm not mistaken?

[Michael Dell]
Well, so that would've been 1985. It, it really wasn't, y- you couldn't really go into mainland China at that point. There was nothing really-

[David Senra]
Mm-hmm

[Michael Dell]
... to do there. The- they weren't making anything.

[David Senra]
So where were- you were going to Asia.

[Michael Dell]
You're going to Asia. So yeah-

[David Senra]
Okay

[Michael Dell]
... I, I went to, I went to Japan, Hong Kong, uh, Taiwan and South Korea.

[David Senra]
Yeah, but what I love is just like how excited you were.

[Michael Dell]
Oh, yeah. [laughs]

[David Senra]
'Cause it's like, it's just like, it's something you said earlier. It's like you had a deep love for your business, and then now you get to keep peeling back the onion and getting closer and closer to how now it's like, oh, I'm like spending 16 hours a day, I'm sleeping in my office, I'm working. Um, we have customers, we have, or are hiring employees, we have revenue growth. But now I'm getting like deep, uh, deeper and deeper and deeper understanding. And like, so, as I read these biographies of people I try to like build like, you know, I ha- I think I have a good sense of like how you think and like what's important to you. And what I realized is like that instinct that you had as a 20-year-old man, or however old you were in, at that time. It's like that has not ... You, i- it's just never been alleviated. It's just like this constant, like, keep going lower and lower and lower to like seek com- like more, a deeper understanding of like the world around you, but also how your business, like, fits in that world and how you can build technology to like enhance everybody else around you.

[Michael Dell]
Yeah, of course. I mean, that's what you're supposed to do, right? You're supposed to understand things, right? [laughs]

[David Senra]
I have-

[Michael Dell]
And so- [laughs]

[David Senra]
You say of course-

[Michael Dell]
[laughs]

[David Senra]
Like, this is the fu- so th- this is another thing I told you when we had dinner, like-

[Michael Dell]
How else would you do it? I, I, I don't- [laughs]

[David Senra]
But to you, this is-

[Michael Dell]
I don't understand.

[David Senra]
This is why I think like writing the book and having a conversation like this is important because like there's so much shit in your head-

[Michael Dell]
Yeah

[David Senra]
... that is so unusual. And like, like just it's so valuable like getting it out and putting it i- i- like out into the world. Because I remember like-

[Michael Dell]
I wouldn't know any other way to do it. I mean- [laughs]

[David Senra]
I know! Because you don't understand how abnor- how abnormal you are. So, eh, we were ha- halfway through our dinner, I looked at you, and I was like, "Dude, I have this paradox in my head that I cannot reconcile." Between, like, the- your cr- the c- the crazy career that you've had. It's like I study uncommon people for a living. You are uncommon amongst uncommon people. All right? You have this- so the paradox I couldn't reconcile was bet- between this, this crazy ride that you've had that's described beautifully in your book. This four decade, you know,

[David Senra]
mission that you've, that you've been on, that you've re- relentlessly given a lot of your life energy to. And just how normal you are. Like, you're-

[Michael Dell]
[laughs]

[David Senra]
... you're like not ... I'm talking about like your affectation, your personality. Like, you're very polite and calm and measured. But it's just like, do you understand how rare this is?

[Michael Dell]
No. [laughs]

[David Senra]
I know! 'Cause you're like-

[Michael Dell]
'Cause I was-

[David Senra]
... well of course you're this, like, it's-

[Michael Dell]
I-

[David Senra]
... this is what I love. It's like, um-

[Michael Dell]
Just wake up every day and go do the thing.

[David Senra]
This is why you're great.

[Michael Dell]
[laughs]

[David Senra]
That's why, but that's, that's why you're great. So like-

[Michael Dell]
Seems pretty normal to me. [laughs]

[David Senra]
It's right, I'm... Th- there's nobody that reads this book, I'm like, "This guy's normal." No, it's not at all. So, th- there's... What I love about this and this is why it's so important, because, um...And I mentioned this on the episode I made on you, but there's this, uh, this engineer turned and, uh, turned, um, founder, uh, Sidney Harman. You know the, the company Harman Kardon?

[Michael Dell]
Yeah, sure.

[David Senra]
Yeah.

[Michael Dell]
Yeah, yeah.

[David Senra]
So he has a great line. He said that the founder is the guardian of the company's soul.

[Michael Dell]
Mm-hmm.

[David Senra]
That it's impossible to separate, you know, the, the, the creation from the creator. And I think over time, like the-

[Michael Dell]
I resemble that. [laughs]

[David Senra]
[laughs] Goddamn right, you do. This is also, again, how abnormal you are. I used to say it's like you need to build a business that's authentic to you. And then in this book, Lee was, you know, talking about he was only able to last four years, I think. Um, and he's just like, you know, "We're fighting IBM. We don't have any money." And he's like, "My back's hurting. I'm losing my hair. Like, I can't sleep." And he's just like... Michael's ecstatic. He's like t- tap dancing to the office every day, and he said a line that changed... like, really made me think about that. He's just like, he built a business that was natural to him. Of course, y- it's not abnormal to you because you built a business that's natural to you.

[Michael Dell]
Yeah, and if, if you've been doing it every day for 41 years, it seems pretty normal, right?

[David Senra]
On the last episode, during my conversation with Daniel Ek, he said one of the most important ideas that I've heard. He said, "I'm not obsessed about time. I'm obsessed about energy management. If you have time but you have no energy, you're not going to accomplish anything anyways." I signed up for Function long before they were a sponsor of this podcast, and when you sign up, they ask you what your health goals are. And my response, in all caps, was MAXIMUM ENERGY. All of the founders, CEOs, and extreme winners I have studied have excessively high energy levels. If you're going to be the best at what you do, you need to maximize your energy and output. And that is why I've partnered with Function. Function provides access to comprehensive blood tests and other lab testing to help you improve your health so you can perform at your highest level. Function has made it easy for me to monitor and improve my internal health markers so that I feel at my absolute strongest. As a member of Function, you get access to test over 100 of your biomarkers, from hormones to toxins, to markers of heart health, inflammation and stress. Function gives you a straightforward analysis of all your results along with advice from expert doctors on how to improve things like your testosterone, your stress hormones, how to reduce toxins in your body, and much more. The platform is absolutely beautiful and provides an easy-to-understand picture of your overall health. Once you try Function, you'll immediately understand why it's the fastest growing health platform in the country. To learn more about Function and to join, go to functionhealth.com/senra. Right now, Function is offering $100 credit to the first 1,000 people who sign up for a Function membership. To get this $100 credit, just visit functionhealth.com/senra. Again, that's functionhealth.com/senra.

[David Senra]
Lee Walker. Tell me how important, like, that was, finding a person. 'Cause you were relatively persistent in recruiting him, and you were like 21, I think, at the time?

[Michael Dell]
21, yeah.

[David Senra]
And he was 45 or something like that.

[Michael Dell]
Yeah.

[David Senra]
Like, what's the role that you feel he played at that point in Dell's history?

[Michael Dell]
Well, yeah, the company was, was, uh... I mean, it's like our rocket had sort of taken off, but, y- you know, it was, it was pretty fragile, right? And, uh, you know, we had some good ideas, but there was a lo- a lot of missing pieces. And Lee helped

[Michael Dell]
fill in those missing pieces, and, you know, sort of organize the, uh, uncontrolled chaos. And helped us sort of really, you know, scale, scale up the business.

[David Senra]
In like operations? Like, what do you think?

[Michael Dell]
Yeah, I mean, it wo- it was... Well, well f- well, first of all, w- we were growing so fast, we just, we just didn't have the balance sheet or, or the capital to support our growth. And so, he helped us, you know, get some, uh, credit lines. And, you know, that, that, you know, freed up capital. And then, like, you know, sort of organized some, you know, some of the operations, and stuff I didn't really

[Michael Dell]
know about or, or have a great interest in. You know, 'cause it wasn't the technology or, or, uh, the customers. [laughs]

[David Senra]
Yeah.

[Michael Dell]
And so, he h- helped sort of get all that stuff on the right path. And then, as we, as we needed even more capital, you know, with a private placement then going public, you know, he helped, helped sort of get all that going. And, you know, just basically, how do you, how do you scale this thing up to get it ready for 10X or 100X growth?

[David Senra]
One thing I thought was very fascinating that Lee Walker said, right, is you got to the point where, you know, you had that negative cash conversion cycle, where but you were selling to, like, individuals. So an individual is like, "Oh, I want a computer, Michael." "Okay. Give me your credit card." You're like, "Great, I got this money," which we'll talk about in a minute. But now you've moved up, and now you're doing enterprise. And some of these c- companies are huge, like Texaco, and like these giant companies. And I remember at one point in the book, it was something you were doing like

[David Senra]
60 million a year in revenue, and you had like 200 grand in your bank accounts or something. [laughs] It's like there's just no cash there. And what was smart is he went to the banks. And I was curious if... It sounds like he had relationships with the bankers. And I always have this maxim that relationships run-

[Michael Dell]
He did. Yeah.

[David Senra]
Okay.

[Michael Dell]
Yeah.

[David Senra]
So relationships run the world. You see that over and over again. And so, Lee had relationships with these, these bankers, uh, that I assumed in the book, and you just verified. But then what I thought he did was really smart. They're like, "Listen, we trust you, Lee, but we don't know this kid." And his whole point is like, "You don't have to even trust me or the kid." He's like, "Look at all the purchase orders. Like, do you think Texaco's gonna pay us or not?"

[Michael Dell]
[laughs]

[David Senra]
And using the, like, the brand and the prestige and the, you know, the, the, essentially, the value. Like, "Texaco is not going out of business. They're gonna pay the, pay them. Pay this kid that you say you don't know. Lend us against our receivables."

[Michael Dell]
Yeah.

[David Senra]
Like, that's a really good idea.

[Michael Dell]
... yeah, it was receivable-based financing.

[David Senra]
Yeah.

[Michael Dell]
The problem was that, you know, as, as a, as a 21-year-old, you know, starting a business with really no capital, uh, y- you know, in- infusion from, from the beginning, you know, $1,000, right? [laughs]

[David Senra]
Yeah. [laughs]

[Michael Dell]
You know, a banker looking at it, with no one, uh, known inside the business to trust, would sort of... Their, their general reaction would be, "Nah, I think I'll go do something else," right?

[David Senra]
Yeah.

[Michael Dell]
But, you know, Lee had those relationships, he was trusted, and he was able to kind of explain it to them. And, you know, that helped sort of, uh, break open that logjam, and that, you know, gave us some of the capital we needed to continue to grow and expand.

[David Senra]
So can you explain how you stumbled upon the negative cash conversion cycle and why that was so powerful?

[Michael Dell]
Yeah. So, uh, y- you know, we, we didn't have any capital, right?

[David Senra]
[laughs]

[Michael Dell]
[laughs] And, and so, uh, you know, what, what we, what we figured out was that if we could dramatically, uh, shrink, um, our inventory and get paid from our customers faster and, you know, uh, maybe not pay our suppliers, you know, instantly, pay them a little bit later, then if you're growing and you have a negative cash conversion cycle, you actually generate a lot of cash. And so then you don't need as much capital to raise to be able to grow the company and you have a high return on capital. And so we started looking at the business that way, and of course we also, uh, there was this, um, really interesting thing where our competitors, who didn't really understand what we were doing, they had these elongated supply chains. They had distributors and dealers, and so they would have, you know, like, 90 days of collective inventory from the time that they actually made the, the product to when it actually got to the customer. And you could actually, uh, understand this because if you opened up the computers, the, uh, chips had dates on them that showed the weeks they were made.

[David Senra]
Whoa.

[Michael Dell]
So, you know, it would say, like, uh, 4292, and that meant it was, that chip was built in the 42nd week of the 92nd year. And so you could literally date how old the inventory was by opening these things up. But anyway, so they had, like, 90 days in their collective supply chain,

[Michael Dell]
and we figured out how to have, like, five days. I mean, it was crazy. It was like, it was like a massive a- advantage. Now, the other reason this is important is because

[Michael Dell]
it turns out that the price of electronic components generally goes down, right? [laughs]

[David Senra]
Mm-hmm.

[Michael Dell]
And, and, you know, it's, it's a pretty predictable thing. And so, uh, if our components are five days old and the competitor's components are 90 days old, well, theirs cost a lot more than ours do, right? And so now you've got this structural competitive advantage. Now, uh, another element of this is that, um, you also have the freshest and the newest and the best technology. You're not selling the 90-day-old fish or bananas, right? You're selling the f- the, the, the new chip, the, the-

[David Senra]
Yeah

[Michael Dell]
... the latest capability. And so now you've got even another advantage, right? [laughs]

[David Senra]
Yeah.

[Michael Dell]
And so, and then you've got this feedback loop because y- you're getting signal from the customers of, "Oh, I like this, I want that, change this," and so you're able to, you know, create this dynamic feedback loop. So that was what we created, and it worked, you know? [laughs] And we, and we kept iterating it and, and evolving it. The competitors, uh, you know, they, they, um, kinda dismissed it, and one of the best things was they, they just didn't understand it. They, like, m- they, like, misunderstood it, which was fantastic.

[David Senra]
How is that? So I, I, I don't-

[Michael Dell]
It's like, it's like you don't want them to understand what's going on.

[David Senra]
No for sure.

[Michael Dell]
You, you, you don't want to explain it.

[David Senra]
But how, how, how do you expl- how do you explain-

[Michael Dell]
[laughs]

[David Senra]
... their inability to...

[Michael Dell]
Now, now, now you can explain it-

[David Senra]
Yeah

[Michael Dell]
... but back then, you don't want to-

[David Senra]
No, yeah, yeah

[Michael Dell]
... you don't want them to know what's happening. You just want them to maybe not even see what's going on.

[David Senra]
So I have a funny story about this, and then I wanna get back to Compaq and IBM. So, uh, I had dinner with one of the wealthiest people in the world. He's 76 years old. He's been, uh, in the family business. He's the second generation of this privately held, like, dynasty. And, uh, he started working in the business since he was six. And it was, like, crazy stories. Uh, started on the shipping. They, they own one of the largest privately held shipping companies in the world. And he's this raconteur, he's, like, super charismatic and just, like, I was, h- it was an incredible dinner. But I had found out, same reason where you're like, "Hey, I'm writing this book because I want, you know, people who are coming to Dell to understand the history." They had commissioned, the family had commissioned a, a, a real author, right? I have some of these books at my house, not from this guy. Where these family businesses or, you know, these people who own book companies, they have, they'll hire, you know, an actual author, pay them whatever, a million dollars, write the book. And then th- they'll print it just like this, but there'll be no ISBN number on the back, 'cause it's not available for sale. So I have a couple of these in my-

[Michael Dell]
Hmm

[David Senra]
... home library that people have given me because of the podcast. But he was telling me this story. He's like, "Yeah, we, we had, we commissioned a biography of the patriarch who passed away a long time ago, and then we did one for me." And I was just like..."Dude, gimme those books." I, like, leaned in.

[Michael Dell]
[laughs]

[David Senra]
I was like, "I want those books." I was like, "I'll crush the episodes. The episodes will be great." Like, 'cause he had so many crazy stories. He, without hesitation, he goes, "Absolutely not." [laughs] I was, I was like, "Why?" He goes, "I have no desire to educate my competitors." [laughs]

[Michael Dell]
Yeah.

[David Senra]
So that, you-

[Michael Dell]
Yeah

[David Senra]
... you just nailed it. It's like, obviously if you have an edge, shut up about it. This is what I don't understand. So maybe IBM and Compaq are the two people, two main companies that are not understanding the advantage that you had at this time, right?

[Michael Dell]
Yep.

[David Senra]
IBM is a big old stodgy company. Okay, that makes somewhat more sense. Compaq was run by its founder. How do you think he deliberately misunder- like, how is that possible for him to not be able to accurately analyze? Do you think he was just dismissive of you? He didn't think you were a threat? Like, what was going on there?

[Michael Dell]
He, he's still alive. You can go ask him.

[David Senra]
[laughs]

[Michael Dell]
You know? [laughs] I, I, I, I, I, you know, I think, I think when you're, you know, you're in a, a bubble, you know, people tell you things are working and maybe you just don't wanna believe that there's alternate information and so you dismiss it.

[David Senra]
Did you read the new biography of Jensen Huang called The Nvidia Way? It's actually, it's a history of N- Nvidia, but he's heavily featured. Nvidia Way or...

[Michael Dell]
I haven't read the whole thing. No.

[David Senra]
Okay.

[Michael Dell]
No.

[David Senra]
I did an episode on it. I'll send it to you.

[Michael Dell]
Yeah.

[David Senra]
Um, but

[David Senra]
he has this whole thing where the threat comes from below. And his, I think he, he reduces everything to maxims. He's, like, a really good communicator. And so he, his thing is, like, we're gonna ship the whole cow because-

[Michael Dell]
Mm-hmm

[David Senra]
... the threat goes from below. And I think I mentioned this in the episode I did on, on your book where it's just, like, you at the time came out with a j- you just, it beautifully described, like, you're just stacking one advantage on another advantage on another advantage. You're like, "Okay, we have the latest technology. We, we have way better supply chain management than you. We are putting out..." I think you put out, uh, a computer that outperformed Compaq's. You- which you sold direct to the consumer for $795, if I remember correctly. It was faster than theirs and they, for th- they sold a worse computer for $1,500 and it was only through retail stores. It's like that exact, uh, the, the manifestation of all these advantages you had, you could just look at the market and be like... Uh, it's very curious to me how this founder could be like, "Hey!" [laughs]

[Michael Dell]
Yeah. And you-

[David Senra]
This, this-

[Michael Dell]
... you know, you kind of hope that they don't even see it.

[David Senra]
Yeah.

[Michael Dell]
Right? I mean, I think there's a human instinct to, to say, "Hey, look at me. I'm doing this great thing. Isn't this cool?" Right? But actually, in business, it's better if the competitor doesn't understand or doesn't see you. [laughs]

[David Senra]
So because you weren't in stores, the only way they would know that is if they were ordering directly from you, and they probably weren't doing that.

[Michael Dell]
Yeah. Or, or if they were sort of paying attention, you know? But, but, [laughs] but, but you, you kind of hope they don't notice and don't pay attention.

[David Senra]
I think this is tied back to the importance of following, like, your natural star and something you're just obsessed with because I didn't know that part where you could take these things and see, "Oh, this is the 42nd week of the 96th year."

[Michael Dell]
[laughs]

[David Senra]
That's insane. There's a line in the book, though.

[Michael Dell]
It's not that hard. The numbers are right there.

[David Senra]
It's not that hard to use. But- but what-

[Michael Dell]
The, the, the numbers are just sitting there.

[David Senra]
But-

[Michael Dell]
It's like they're st- They're, they're just staring at you. They're, they're, they're talking to you.

[David Senra]
I, I 100% agree with you. It's like, but this is the difference between somebody who's obsessed and somebody who's not. Like, that guy wasn't taking apart computers compulsively. There's a story in the book, and no disrespect to him, this is, I'm not trying to throw any shade at anybody. There's a story in the book where you guys are doing, I think, the private placement of the IPO and it is Black Friday happens. And I think Lee Walker walks in your office to tell you that, "Oh shit, we, there might be some trouble here. [laughs] There's trouble a-brewing in the capital markets at this point." [laughs]

[Michael Dell]
[laughs]

[David Senra]
And he said, "Michael was in his office taking apart another computer."

[Michael Dell]
That's what you do. You, you... [laughs]

[David Senra]
[laughs] That's what you do. That's, exactly. I think that's the biggest thing, man, is, like, it's an unfair advantage if you can direct your energy at something that you... There's no... We, we talked about this at dinner. We have a mutual friend in Sam Hinkie, and one of the things that's interesting about Sam is if you analyze who he keeps around him, they're, they're, they have different interests, you know? It's like this podcaster dude, this investor guy, this entrepreneur.

[Michael Dell]
Mm-hmm.

[David Senra]
This, like, athlete. And he's like, "What, what, what I'm drawn to, what all these people have in common that may not be obvious to you, David, is that there's no end to, like, you can't get to the end of what they're interested in." He, he, I think he used the analogy of, like, a, a cup. So you just pour and pour and pour, it's just like it just keeps going. Like, they can never get to the end of their curiosity. And I think you're a perfect example of that where if you look at other founders that are doing things for fame or status or whatever the case is, it's like, Jerry Seinfeld has a great line. He goes, "If you just do it for the money, you're only gonna go so far."

[Michael Dell]
Yeah, when it's, like, a, a passion or an obsession, there's, there's, you just, there's no end to it.

[David Senra]
Yeah.

[Michael Dell]
Right? [laughs]

[David Senra]
And you're, you're taking to work chips and analyzing like, "Oh, I have a 90 days, uh, advantage over here and I'm not worried about the capital markets 'cause we're just gonna keep serving our customers and, like, eventually that is going to change. There's not gonna be a depression forever, so what can I focus on? And can I just focus on understanding what I'm working on, what's in front of me, and then following this deep curiosity, you know, and, and, and, and actually taking the curiosity that comes from your head into, like, an actual product that makes somebody else's life better?" It's like the miracle of entrepreneurship.

[Michael Dell]
You got it. [laughs]

[David Senra]
[laughs] So, we, we were just talking about the fact that

[David Senra]
Compaq and IBM, they were al- almost like, essentially you got fuel from being underestimated. You've mentioned in the book that, like, you found it, I think you said something that's like a powerful motivate- motivating force. Can you recall why you felt that way?

[Michael Dell]
Yeah, it was, it was just, it was just like, okay, wow, this is gonna be a, a multiplier for us because they underestimate us.

[David Senra]
Mm-hmm.

[Michael Dell]
They, they don't understand what we're doing. And, and so, uh, they, they didn't see us coming because they were underestimating us, you know? Uh...I think, uh, the CEO of Compaq, you know, w- would refer to us as a mail order company or, you know, garage operation or what- whatever. You know, and you'd hear that and you'd go, "Oh, wow, this is, this is great." [laughs] It's like they have no idea what we're doing. All, all that was motivating. You know, anytime,

[Michael Dell]
y- y- you know, there, there was sort of a, a setback and the conventional wisdom or even whatever interpretation was, "Okay, you know, they're gonna fail. They're gonna go outta business," all that incredibly motivating.

[David Senra]
Is it still like that today?

[Michael Dell]
Of course. Yeah.

[David Senra]
[laughs]

[Michael Dell]
Yeah. Absolutely.

[David Senra]
[laughs] I love that everything is, "Of course," [laughs]

[David Senra]
I mean, if it wasn't, um, I'd probably- probably be dead. I mean [laughs] I-

[Michael Dell]
[laughs]

[David Senra]
... I mean, I... And still caring about the company-

[Michael Dell]
Yeah

[David Senra]
... even from the grave. Um, it's, it's a common, I think, misconception, I'm curious to get your take on this, where people are like, "Well, you know, if you don't raise all the money at the beginning and your competitor does, like, you're automatically dead." And I hear that a lot. And, uh, I was like, I don't know, like Compaq raised 75, 100 million and you had $1,000 and a dorm room. Do you feel that, like, it is actually different today? Like, if you were advising, like, a younger entrepreneur.

[Michael Dell]
I think it's very, uh, situation specific-

[David Senra]
Mm-hmm

[Michael Dell]
... in terms of the company, industry, eh, et cetera. So I don't think you could give generic-

[David Senra]
Yeah

[Michael Dell]
... uh, a- advice there.

[David Senra]
Yeah, that's why I think, like, the generic advice is you have to do this or you're dead.

[Michael Dell]
[laughs]

[David Senra]
I'm like, "I don't... I'm pretty sure that's not the case."

[Michael Dell]
I don't think... You know, like I was saying, saying earlier, I don't think there are ever these absolutes. I think you always have to hold the, out the possibility that somebody is gonna figure out some clever, interesting way to do something that nobody's ever thought of that is different and, you know, uh, that's just gonna happen, right?

[David Senra]
Yeah. Th- that's actually an interesting area to go down, where it's like who else... Y- you figured out by accident, like, 'cause y- y- uh, uh, uh, n- you know, necessity is the mother of all inventions. Like, "I don't have capital so how do I get money? Well, I'll just ask my customers for the money." And then you- you- you accidentally discovered all these advantages and had a deeper understanding as you went along. Is there any other examples of, like, entrepreneurs or businesses that you've studied where it's like, "Wow, that's like a really clever way to do something effectively inexpensively"?

[Michael Dell]
Well, I mean, you think about, uh, some of the, some of the, uh, retailers, you know, [laughs] like, you know, Walmart and Costco. And Amazon, obviously, came up with, with, uh, super clever ways of, of winning i- in that space by, uh, you know, doing things inexpensively, taking out all kinds of cost.

[David Senra]
Yeah. I, the other one that came to mind was, um, Sam Zemurray, the Banana King. Uh, he essentially, you know, builds w- the second-largest banana empire. And at the time, uh, then later on overtakes the first, uh, largest, which is United Fruit Company. But I guess, like, one, one thing that he figured out... And he was actually your same age. He was 19 years old. He had no money and he was trying to figure out a product to sell. And so what he did, he's just like, "Well, I was working the docks down, I think, in Alabama at the time." And he's like, "All these fruit companies, they have these things called ripes," which are the bananas that are gonna go bad in, like, two days from now. And they just take 'em off the boat and throw 'em in the garbage because they can't get it fast enough to the store. And his idea is like, "Well, I can use this new technology of the day, which is the, the railroad. And I can buy this for almost nothing because they're not getting anything anyways. And I'm gonna put their ripes a- a- and get on the railroad with it and then sell it at every single stop." And then he was generating so much cash. And then he could start working down line all the way to-

[Michael Dell]
Mm-hmm

[David Senra]
... when he had his own banana plantations. Just, like, that idea was like it starts out with, like, this little nugget of like, "Oh, this is, like, an interesting opportunity." And now understanding as you pull and pull and pull and pull that it gets more and more. Like, you're, you keep stacking these advantages one, uh, one on top of another. Um, yeah, I gotta fi- I- I should organize and, like, look into, like, more examples of, like, is there another example of, like, what you had at the beginning of Dell. Because I think that's the key. Like, I think some degree it's, like, the easier, more path is just go and, like, sell part of the company or raise more money or, or find essentially, like... Solve the problem with money, where you solved it with, like, creativity and hustle and, like, intelligence. Uh, those, those ideas are, like, excessively fascinating to me. IKEA is another one where he-

[Michael Dell]
Mm-hmm

[David Senra]
... you know, same thing, where he was just selling mail order. He's a mail order company. Um, and he has a great line in-

[Michael Dell]
Yeah, there's that mail war thing again. [laughs]

[David Senra]
I know. I, I think it's, like, still [laughs]

[Michael Dell]
[laughs]

[David Senra]
So Boch. [laughs] Uh, he has that great line where he's like, "Expensive solutions to any problem are signs of mediocrity." So he was like, "You have to be more creative."

[Michael Dell]
We had this whole thing in the, in the '80s, and we called it beat the mail order stigma.

[David Senra]
Really?

[Michael Dell]
And it was sort of like as we were establishing our brand,

[Michael Dell]
uh, you know, sort of the conventional wisdom was

[Michael Dell]
mail order company-

[David Senra]
Mm-hmm

[Michael Dell]
... which was sort of like a-

[David Senra]
Pejorative

[Michael Dell]
... like an insult, you know? [laughs] Like-

[David Senra]
Yeah. Okay, okay.

[Michael Dell]
It's like, "Okay, it's a mail order company." And, and it's sort of like a stereotype. It's like, "Oh, you can dismiss it 'cause it's a mail order company," right? [laughs]

[David Senra]
Mm-hmm. Yeah.

[Michael Dell]
And all the press, you know, for years, they were like, "Mail order company Dell..." You know, the, [laughs] you know, "Mail order company Dell introduces server." You know? Th- it was like, "Wha- what?"

[David Senra]
[laughs]

[Michael Dell]
Oh, what? [laughs] It's like, "Okay, we have 30,000 patents. When are we not a mail order comp-" It's like-

[David Senra]
[laughs]

[Michael Dell]
... "What is this mail order thing?"

[David Senra]
Yeah.

[Michael Dell]
It's like so, so anyway, we had to, like, get rid of that. So-

[David Senra]
How did, how did you beat it?

[Michael Dell]
Just kept doing our thing.

[David Senra]
Yeah.

[Michael Dell]
You know? [laughs] And, and eventually people go, "I guess it's not really mail. I mean, it's internet, and it's not mail order." It's like- [laughs]

[David Senra]
That was a-

[Michael Dell]
... what? Nobody orders stuff in the mail. [laughs] What is it?

[David Senra]
I think, uh, you just made me realize something, um, that I didn't understand when I read the book.... when you were talking about how important it is to, like, not squash ideas and that, you know, ideas can come from anywhere and they can, like, m- you know, they, they seem small but they can have huge impact. I think Dell was, like, one of the first companies to sell on the internet, right?

[Michael Dell]
Yeah. Well, so we, we were selling direct, right?

[David Senra]
Yeah.

[Michael Dell]
We, you know, like, people would call us on the phone and we used to have these rooms with, like, a gazillion fax machines and they would send us their orders on faxes. [laughs]

[David Senra]
[laughs]

[Michael Dell]
It was crazy. And we had catalogs, right? And so then, uh, you know, the World Wide Web comes along and you have websites. You know, like, "Oh, you mean we can create a website and people can go on there and like, the catalog is there and they can, like, press a button and order the thing?"

[David Senra]
Yeah.

[Michael Dell]
"That's the coolest thing ever. We gotta do that." Right?

[David Senra]
Yeah.

[Michael Dell]
And so

[Michael Dell]
in my first book, you notice on every page at the bottom it said, "www.dell.com." [laughs] So like-

[David Senra]
I read that other, I read that book too

[Michael Dell]
... we were just, like, obsessed with getting people to the website-

[David Senra]
Yeah

[Michael Dell]
... because it just became like the, uh, easy way to interact with people.

[David Senra]
And that book came out in '97, right? '99?

[Michael Dell]
I think '98, yeah.

[David Senra]
'98, yes.

[Michael Dell]
Yeah, so-

[David Senra]
So yeah, you were-

[Michael Dell]
... I think it was '98. Um, but yeah, we started, we started, you know, with, with, with one of the first websites. I mean, there aren't, there weren't many websites. I, I remember when there-

[David Senra]
It, it was a small number.

[Michael Dell]
I remember when you could, like, go to all the websites.

[David Senra]
[laughs]

[Michael Dell]
Like in the whole world, you know? [laughs]

[David Senra]
Yeah, I'm done for the day.

[Michael Dell]
[laughs] Like, there's no more websites. There's like [laughs] kinda, it sounds crazy now, but there, there-

[David Senra]
[laughs]

[Michael Dell]
... there used to be not that many websites.

[David Senra]
Yeah.

[Michael Dell]
And you could like go to them and like, "Okay, I'm done." Like- [laughs]

[David Senra]
[laughs]

[Michael Dell]
... it's just there's nothing g- noth- nothing else to see. That obviously changed quickly.

[David Senra]
So how the hell do you even build a store? Like you were collecting cre- do they have to like call a number in? 'Cause I remember like taking credit cards online. Well maybe not 90, if you were doing... Do you remember what year you launched the site? '97 probably? '96?

[Michael Dell]
I think it was probably 90s, '96.

[David Senra]
You had to build all this stuff-

[Michael Dell]
95, 96.

[David Senra]
You had to build all this stuff custom.

[Michael Dell]
We had to build, we had to build the whole thing.

[David Senra]
Okay.

[Michael Dell]
Yeah.

[David Senra]
Yeah, and it's, it's funny. Uh, I, I forgot about the fact that dell.com is on the bottom of e- every page. But what's fascinating is if you read Bezos' shareholder letters, it's not, he never refers to it as Amazon. Every single, uh, shareholder letter up until, you know, you don't have to do it anymore. And then every single interview, it's amazon.com, amazon.com, amazon.com. Then it turns into Amazon 'cause [laughs] you're just like, "We gotta push you guys to-"

[Michael Dell]
Yeah

[David Senra]
"... this new thing called the internet [laughs] where you can buy things." It's such a fascinating, like, thought, like how, uh, novel it was. But you kinda saw, like right away, like this just, we should just do this 'cause it's cool.

[Michael Dell]
We had experimented with how do you create an electronic version of the catalog?

[David Senra]
Mm-hmm.

[Michael Dell]
Even like, we're gonna send you a floppy disk or a CD-ROM-

[David Senra]
[laughs]

[Michael Dell]
... and you put it in your computer-

[David Senra]
Yeah

[Michael Dell]
... and you load it up and the catalog is there.

[David Senra]
Yeah.

[Michael Dell]
Right? Th- those are some of the ridiculous things that happened before the internet, [laughs] before the World Wide Web, I should say.

[David Senra]
Did you ship that?

[Michael Dell]
Yeah. Yeah, we did.

[David Senra]
So you just, you kinda like what A- remember AOL and they just m- like essentially carpet bomb the entire country-

[Michael Dell]
Yeah, we didn't do it-

[David Senra]
... with their CDs?

[Michael Dell]
... like that, but-

[David Senra]
Okay

[Michael Dell]
... but we, you know, it was more targeted.

[David Senra]
Yeah.

[Michael Dell]
But y- you know, you wanted to make it easy for the customer to understand your offerings and then the World Wide Web just made that, you know, kind of infinitely accessible to, to anyone.

[David Senra]
Yeah, so the idea of s- mailing out a floppy or a disc [laughs] of a catalog [laughs] is just like a, a hilarious idea.

[Michael Dell]
But then people were, were surprised when people started ordering computers online. And I, I, I remember, you know, we sold like a server for $50,000 online. People were like, "No way." You know, it's like, [laughs] it didn't happen as fast as, as some of the things that are happening now.

[David Senra]
Yeah.

[Michael Dell]
But, uh, obviously for a business that was selling directly to businesses and, uh, you know, individuals, you know, all over the world, it was just total rocket fuel.

[David Senra]
How l- soon into Dell were you starting to sell, like targeting institutions over individuals?

[Michael Dell]
You know, it's really interesting. If you go back to the very, very beginning, like the first full year, like over 80% of the business was to businesses.

[David Senra]
Okay, so go, it's sort of like doctors and dentists, right? Or, or lawyers were some of your first. But they were using them for business purposes.

[Michael Dell]
An individual doctor, dentist-

[David Senra]
Yeah, yeah

[Michael Dell]
... I would think of them as, as-

[David Senra]
Individual, okay

[Michael Dell]
... as more like an individual. But, uh, well first of all, let's, let's level set here. So if you look at all technology spending, uh, roughly 75 to 80% of it is businesses, not consumer. [laughs] And so that's kind of been

[Michael Dell]
the thing for a long time.

[David Senra]
So within the first year you got to the same, similar percentages.

[Michael Dell]
Similar percentage, yeah. There, there would [stuttering], you know, there were companies, universities that were buying five, te- 10, 20, 50 machines at a time.

[David Senra]
One final thing that I wanna talk to you about that I think is like one of the most important ideas in your book, uh, especially when you're

[David Senra]
trying to like push these stories down the generations. So I, like I see it in a lot of the biographies and I think it's like a- another misconception how we just talked about the misconception machine. Like entrepreneurs know, beware of experts and like how they can kill new ideas. Where like a, a normal person would revere them, right? So there's like this, this, this difference of understanding between that. Another one that I would say is like the importance of ego and self-belief and self-confidence. And my, you know, general society might say, you know, uh, "You should generate evidence and then be confident." And I hear this a lot, which is perplexing to me because in the books it says, "No, you have that direct..." Completely backward, backwards. Belief comes before ability. And so I would go back to this part in your book that I think is super important when you're 19 years old and your dad's like, "What do you wanna do with your life?" Like, and you're like, "I wanna compete with IBM." [laughs]

[Michael Dell]
[laughs]

[David Senra]
And you sit there and like, again, I, I don't think you should be reading these books quickly. This is like, there's no test at the end. Like, sit with the ideas and really think about what's happening on this page. And I think it's one of the most important pages in the book. I can actually see the page in front of me. And-... and what you realize, y- you say on that- that page where it's just like, "Was I a little full..." You know, the idea is like, "I have $1,000 in an U- UT dorm room. I'm gonna take on the biggest company in the world." And you said, "Was I a little full of myself at 19? Sure I was. I think you have to be to do anything important." Can you explain that mindset?

[Michael Dell]
Yeah. I think, I think it's a combination of- of, uh, naivete, all right? [laughs]

[David Senra]
[laughs]

[Michael Dell]
Which is an important element. It's like you don't know enough to know that maybe this won't work, okay? [laughs] Uh, and confidence, um, but y- you know, you never sort of wanna g- go over into the arrogant zone.

[David Senra]
Mm-hmm.

[Michael Dell]
'Cause that's really, I think, a dangerous place to be. So it's like, okay, uh, I have not been in this industry for a long time, and so, uh, you know, all these reasons why it won't work are unknown to me, okay? So that's the naive part, right? Um, and that could actually be sometimes a good thing, right? Because you're not sort of bound by those conventional thinking, uh, th- that- that- that- that maybe are no longer as relevant. Or maybe you come up with some clever new way of doing it. And then, you know, the confidence piece is, all right, I'm gonna go

[Michael Dell]
make it work. I'm gonna go figure it out, right? Um, but

[Michael Dell]
y- you know, there's always that little voice in your head that's like,

[Michael Dell]
"Well, what if it doesn't work?" And, you know, "What about this? What about this?" And so you ne- y- you know, you never wanna, you know, sort of assume, "Okay, this is absolutely gonna work no matter what." 'Cause then you're gonna ignore those little voices about, "Well, what about this? What about this?" So [laughs] so-

[David Senra]
Yeah

[Michael Dell]
... so- so yeah. It's sort of I- I think a combination of naivete-

[David Senra]
Mm-hmm

[Michael Dell]
... being real here, conf- and confidence.

[David Senra]
I think a perfect illustration of that would be your reluctance, initial reluctance to name the company after you. 'Cause it was PCs Limited, right? At the very beginning.

[Michael Dell]
It wa-

[David Senra]
And-

[Michael Dell]
It was- it was- it was officially Dell Computer Corporation-

[David Senra]
Yeah

[Michael Dell]
... doing business as-

[David Senra]
Business as-

[Michael Dell]
... PCs Limited. Right.

[David Senra]
Yeah.

[Michael Dell]
Right.

[David Senra]
For the... Yeah, but then you realized, like, why don't we just do Dell? And then that's when I thought of the Osborne thing 'cause you're like, "Wait a minute. This guy-"

[Michael Dell]
[laughs]

[David Senra]
"... he named his company after that." Like, there's no way to go-

[Michael Dell]
Yeah, what if it doesn't work? [laughs]

[David Senra]
Yeah, what... but- but it's interesting 'cause you just said, just like, "Yeah, I have a lot of confidence in being able to do this," but the doubt never goes away.

[Michael Dell]
Yeah. A- and- and, uh, you know, fear.

[David Senra]
Thank you. That's actually the- the last thing I wanna talk to you about. When we... One of the first things when- when we saw each other last month, we talked about. We were, like, walking around, uh, Zach's office. And I don't know how it came up, but it came up almost immediately. And it wasn't a surprise to me 'cause I feel the exact same way. But y- fear of failure, in my experience, e- from studying all these history's greatest entrepreneurs, but y- I think you said the same, is just like the fear of failure to this day is a bigger motivator than, like, the love of success.

[Michael Dell]
Yeah. Totally. [laughs]

[David Senra]
Yeah.

[Michael Dell]
100%. Uh,

[Michael Dell]
yeah. Y- you know, you don't- you don't wanna fail. Although failing is- is how you learn. Uh, you know, pain is the best teacher. And [laughs] and so y- y- you know, you have to have some- some little failures along the way. But th- uh, that fear of, uh, you know... you can't have it paralyze you where you're- you're- you don't wanna make any decisions 'cause you're af- afraid to fail.

[David Senra]
Has that happened to you?

[Michael Dell]
Not really, no. I- I- I... [laughs] you know, um... You know, what you wanna do is- is- is sort of be incremental. And again, it's back to iterating. It's like, "Okay, uh, we're not sure if this is a good idea. Let's try it," right? [laughs] "Let's- let- let's experiment. Let's get started. We'll figure it out." And we're not, you know, betting the whole company on this decision. We're just experimenting. [laughs] And if it doesn't work, great. We learned something. We move on.

[David Senra]
That's perfectly said. Thank you for writing the book. Thank you for the time. I really appreciate it, Michael.

[Michael Dell]
Thank you, David.

[David Senra]
I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.