Dell Computers: Michael Dell Before it became fashionable to start a tech company in your dorm room, Michael Dell did exactly that. In 1983, he began selling upgrade kits for PC's out of his dorm at UT Austin. A few months later he gave up his plan of being Pre-Med, and dropped out of school to focus on the PC business. At age of 27, he became the youngest CEO to head a Fortune 500 company. Today, Dell has sold more than 650 million computers. PLUS for our postscript "How You Built That," how Hannah England turned a common parenting problem into Wash. It. Later. — a water-tight bag for soaking soiled baby clothes before they stain.
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Dell Computers: Michael Dell

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Dell Computers: Michael Dell

Dell Computers: Michael Dell

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GUY RAZ, HOST:

Hey, really quickly before we start the show - some of you have been asking about our Columbus, Ohio, show coming up on February 8 that's supported by American Express Open. That show is with Jeni Britton Bauer, the founder of Jeni's Splendid Ice Creams. The show was sold out but good news - we're going to be releasing a few more tickets. You can get them at nprpresents.org. All right, here's the show.

(SOUNDBITE OF MUSIC)

MICHAEL DELL: You know, here I am - supposed to be going to college and I've got this thriving business in my dorm room. I was buying computers and souping them up with more, you know, capability and then reselling them. So I advertised. I bid on state contracts.

RAZ: How did you know to do all that?

DELL: You know, I don't really remember how I figured that out but (laughter) I somehow figured it out.

RAZ: (Laughter).

(SOUNDBITE OF MUSIC)

RAZ: From NPR, it's HOW I BUILT THIS - a show about innovators, entrepreneurs, idealists and the stories behind the movements they built.

(SOUNDBITE OF MUSIC)

RAZ: I'm Guy Raz, and on the show today - how a college freshman turned a dorm room side hustle into Dell, one of the biggest computer makers in the world.

(SOUNDBITE OF MUSIC)

RAZ: Long before anyone heard of the tech wunderkinds like Mark Zuckerberg or Evan Spiegel or Katrina Lake, back before it was fashionable to drop out of college to pursue your startup - even before people used the term startup - back in the ancient days of the 1980s, the dorm room miracle story you'd have heard of was Michael Dell's. Now, today the company is enormous. It's beyond enormous - worth billions of dollars. Dell has sold more than 650 million computers since Michael Dell founded it in 1984. And what's amazing about this isn't the money. It's not even the idea. What's amazing about all this is, well, Michael Dell because he's not a backslapping sales guy. He doesn't come across as particularly charismatic. He's actually on the quiet side, maybe even a little shy.

Michael grew up in Houston in the 1970s, and this was just as digital technology was taking off in that city with companies like Texas Instruments and then later Compaq. His dad was a doctor. His mom was a financial consultant. And the expectation was that Michael would become a doctor like his dad. But even from a young age, Michael Dell felt pulled in a different direction. He was into numbers.

DELL: I mean, I remember when I was a small child my dad had this adding machine - it was a Victor adding machine - this is before the electronic calculator - and I was just fascinated that you could add up numbers with this machine - and really big numbers. You know, I would - and so - and it would just make this, like, mesmerizing sound every time it did it. And I just kind of loved that. And then I remember when I was about 7 or 8 years old I bought a calculator - it was of the first semiconductor-based calculators. And I was fascinated that this small machine could do complicated math problems.

So, yeah, I got very interested in this stuff. It also turned out that about equidistant between my junior high school and our house there was a RadioShack store. And so when I was riding my bike home, I could stop by the RadioShack store and see the, you know, early forms of the personal computer and hang out there until they kicked me out of the store.

RAZ: And were you, you know, like, kind of entrepreneurial as a kid?

DELL: Yeah, I kind of liked business (laughter). And I had all kinds of businesses, you know, selling baseball cards, I had a stamp auction, I got a job at a gold coin and jewelry store, and I was to negotiate with people that were selling things and buy those things at the lowest possible price because the owner gave me a percentage of the cut.

RAZ: And I read that you also worked for the local paper for some time?

DELL: Yeah. So I got this job working for the Houston Post newspaper. It doesn't exist anymore. Now I think they combined with Houston Chronicle, and my job, along with hundreds of other mostly, you know, teenagers, was to call random people on the phone and try to sell them a subscription to the Houston Post newspaper (laughter).

RAZ: Right.

DELL: And I observed three things. The first thing I observed is that if you sounded like the people you were talking to, they were much more likely to buy the newspaper from you.

RAZ: Like, you put on a, like, a heavy Texas accent?

DELL: Yeah. I'm not going to do it for you here, but I think you can use your imagination.

RAZ: OK.

DELL: So second thing I observed was that people that were getting married were much more likely to buy the newspaper. And then the third thing I observed is that people that were moving into a new house or residence were also far more likely to buy the newspaper.

RAZ: Well, how did you know who was getting married and who was moving in?

DELL: Well, you talked to them. You strike up a conversation.

RAZ: You just call people and say - and ask them about themselves - and I guess this is, like, at that time people are perfectly happy to tell strangers personal details, right?

DELL: Yeah. And so I observed this, and what I figured out is that in Texas when you - this is true in many states - when you want to get a marriage license, you have to go to the county courthouse.

RAZ: Ah.

DELL: And it turns out this is public information.

RAZ: Right.

DELL: And among the information that you give to the county court is the address that you want the license sent to. So with this information, I devised a direct mail program where I sent letters to all of the people that had applied for marriage licenses in a 16-county area surrounding Harris County, which is where Houston, Texas, is. And I hired a bunch of my high school pals, you know, to go out to all these county courthouses and type the names into small Apple II computers, and I sent, you know, a massive direct mail campaign to all of those people that were applying to get, you know, marriage licenses.

And there were also - at that time in Houston, there was a building boom, and there were these very large apartment and condominium complexes that were going up. And so I would go to these buildings under construction and sort of figure out who was in charge and say, hey, I'm from the Houston Post newspaper and, you know, we've got this great offer where your new residents can get the paper free for two weeks and all you need to do is to fill out this little form.

RAZ: You were a high school student when you were doing this.

DELL: Yes.

RAZ: How much money did you walk away with?

DELL: I think I was about 17 years old, and I made a little over $18,000 that year.

RAZ: This is, like, freakishly precocious of a high school senior. Like, it's just weird that you would even know to think of doing those things. I mean, don't you think?

DELL: I didn't really think about it like that, I just - just seemed like a good idea. So I was pursuing it and it was working. I did plenty of things that didn't work, but that worked so I kept doing it.

RAZ: Eighteen thousand dollars - what did you do with that money? I mean, that must have been more money than you'd ever seen in your life.

DELL: I bought a BMW...

(LAUGHTER)

DELL: ...Because I wanted a BMW.

RAZ: What did the other students think of you? Did you have this reputation as like the business whiz kid in high school, or, like, what did they think about you?

DELL: You know, I don't really know and I didn't really care. So I was sort of keeping to myself. And, you know, I had a few friends, but I wasn't the most social of kids.

RAZ: But you must have been somewhat social because you were going out and selling stuff to strangers.

DELL: Sure. Social enough to make the sale (laughter).

RAZ: Yeah. So you are on the one hand doing this entrepreneurial stuff and then I guess you were also just really into computers?

DELL: Yeah. You know, the original computer that I, you know, got my hands on at home was the same one everybody else had, which was the Apple II.

RAZ: The Apple II, yeah.

DELL: Yeah. And one of the beautiful things about the Apple II was that all of the circuits in the Apple II were discrete circuits that you could understand. So you could go in and start to, you know, play with those and modify them and reprogram the bios and upgrade the system and take it apart, put it back together. So, you know, when you would take apart the - and something happened here around 1981. IBM introduced the IBM PC, and that was sort of a very important moment because if you dial back the clock to the late '70s and early '80s, you know, this company IBM had a leadership of the part of the economy referred to as information technology unlike any other company at any other time in history.

RAZ: Yeah.

DELL: They were by far the dominant company. So when IBM introduced the IBM PC, this to me seemed to be a very important moment so I tried to understand everything that was going on about that. And so when you took apart this IBM PC that was selling for about $3,000, as far as I could tell it was about $600 worth of parts.

RAZ: Wait, you bought one and you took it apart just to check the insides out?

DELL: Sure, yeah.

RAZ: Yeah.

DELL: What else would you do?

(LAUGHTER)

RAZ: Yeah, I guess.

DELL: So you've got to take it apart.

RAZ: Yeah.

DELL: How can you understand it if you don't take it apart?

RAZ: But, like, most people buy computers to, like, you know, at that time to do basic, you know, accounting and word processing. You bought it to take it apart.

DELL: Well, I wanted to understand it. And, you know, to understand it you have to take it apart. And I remember in 1981 - I was 16 years old, I had just gotten my driver's license - and they had this thing called the National Computer Conference in the Astrodome in Houston. And I, you know, as soon as I got out of school, I would rush over there and they had all of the computer companies of note in the world in the Astrodome and they were showing off their computer equipment.

RAZ: I mean, that's an amazing coincidence because you went to that convention, which happened to take place in Houston that year...

DELL: Just happened to be in Houston that year and it just happened to occur, like, a couple of months after I got my driver's license.

RAZ: Yeah.

DELL: So - yeah, I mean, there's definitely some luck involved here.

RAZ: Right? And that convention - not only were you there, but Rod Canion went there, too, who went on to start Compaq. I mean, Compaq and Dell came out of that convention.

DELL: Yeah - well, and I remember in my chemistry class in high school the guy sitting next to me was telling me that his dad had just left Texas Instruments to go start this new computer company. And, you know, he was one of the early guys at Compaq.

RAZ: Yeah, that's amazing. So you - so you - obviously, you graduate high school. And then, you go to university to UT Austin, right?

DELL: Yes. I was a pre-med major. And, you know, some of this was the programming from my parents because, you know, my father was a doctor, my older brother was a doctor, you know, a lot of my cousins were doctors, and I always thought I'd be a doctor. And when I started going to school, you know, my parents weren't around all the time - right? - because I'm in Austin. They're in Houston. And you're pretty far away. So you've got a lot of free time on your hands.

So I start exploring this whole computer thing further. And one of the things that I noticed about the computer business was that it was very inefficient. It took a really long time for the technology to get from the people that made it to the people that were buying it. And it was actually rather expensive and slow to occur. And to me that was sort of frustrating.

RAZ: So you are a - you're a student a UT. You're supposed to be doing pre-med training.

DELL: Right.

RAZ: And you start to think hey, the PC market, like, there's an opportunity here. Is that what you start to think?

DELL: So I was in this mode of buying computers and souping them up with more, you know, capability and then reselling them. And it was just sort of a fun thing to do, you know, a way to make some money. I loved the computers. And it was actually working out great.

RAZ: What would you do? You would go and find, like, second-hand computers and take them apart and rebuild them and then sell them to people?

DELL: No, no. I was buying new computers.

RAZ: OK.

DELL: And I would upgrade them with more memory. And actually the main business became putting hard drives in those machines. So back then, the original IBM personal computers had no hard disk drives. So what I would do is I would buy a couple of these disk drives and buy a controller card, write some software and make some cables and make a hard disk drive system that you would put inside an IBM computer. And then instead of 260 K or 320 K floppy disk drives, it would have a 10 megabyte hard drive - right? - which, at the time, was something amazing, right?

RAZ: Yeah.

DELL: Sounds ridiculous today, but 10 megabytes then was - that was, like, unbelievable.

RAZ: How long would it take you to upgrade one computer, for example?

DELL: Oh, it didn't take that long, you know, depending on what you were doing, maybe 30 minutes - 45 minutes...

RAZ: Oh, wow.

DELL: ...Something like that.

RAZ: So you could do a bunch of computers every day.

DELL: Oh, sure. Yeah, no problem - in between classes.

RAZ: But you really weren't studying. You weren't - there's no way you were doing your school work.

DELL: I was definitely slacking off on the school work...

RAZ: Yeah.

DELL: ...During that time, yes.

RAZ: But who would you - I mean, how did you find customers? There was no Craigslist. There was no - I mean, you were 18 or 19 years old, I guess. I mean, how did you even know who to sell these to?

DELL: I advertised in the local newspaper. I bid on state contracts.

RAZ: (Laughter).

DELL: And it's kind of funny. The state office that was responsible for buying computer equipment and everything else was about three or four blocks from my dorm room. So I could just, like, walk over there. And they would give you all the dockets for all the things that the state wanted to buy.

RAZ: How did you even know how to do that?

DELL: You know, I don't really remember how I figured that out.

(LAUGHTER)

DELL: But I somehow figured it out. And, you know, but my biggest customers were universities in the area, doctors, lawyers, you know, architects, things like that. Students weren't really buying computers at the time. And most of the students that I knew, they weren't really interested in computers at the time. That sounds, like, crazy right now, but this is back in 1983, 1984. There weren't very many people that had personal computers at the time.

RAZ: OK. I am hoping that I don't sound like a broken record. But I'm just thinking, Michael, like, here you are. You are an 18-year-old kid. I mean, you probably looked like a baby. And you were going around hocking computers. So, like, why would these architects or businessmen or lawyers have taken you seriously?

DELL: Well, I guess they figured I knew what I was talking about. You know, nobody ever said, well, I'm not going to buy from you because you don't look the part or something. So I think the early adopters of computers were sufficiently technical and geeky that I was able to relate to them in a way that resonated. And so I didn't have any problem.

RAZ: And how much money are you making at the time?

DELL: I was doing about $50,000 to $80,000 a month in business when I was in my dorm room.

RAZ: Wow. That, I mean, that's just an insane amount of money. I mean, did you tell your parents that you were making this much money?

DELL: No. No, I didn't. Now, you know, they eventually, going back to late '83, you know, they became very upset with me and said you have to stop this and focus on your studies, said you've got to get your priorities straight, you know, what are you doing with your life and all that stuff. And, you know, I agreed to do that. You know, it was like going cold turkey or something. It just - it lasted about 10 days. And I actually realized that this was more than a hobby or a nice way to make some extra cash on the side while I was going to school, but actually, something I was very passionate about.

So during those 10 days, I sort of mapped out, you know, the beginnings of how I was going to, you know, finish up my freshman year but then launch this as a real, official business. And, you know, I eventually made a deal with my parents that I would do that, and if it worked out, I would continue. And if it didn't, I'd go back to school.

RAZ: I mean, it's - I can just imagine how exciting it was. You're 18, and you're selling - you're starting a company, basically, without even realizing it, I guess. What was it that was more exciting? Was it all this money that was coming in or was it just that you were just selling a bunch of computers?

DELL: Well, it was probably a little bit of everything. I mean, the opportunity for, you know, what became Dell Computer Corporation was more and more apparent. And, you know, while you couldn't see out three or four years, you know, you could see far enough out that, you know, you keep going.

RAZ: So you were, I guess for the first couple years or the - at least for the first two years, you were just buying off-the-shelf computers and making them better.

DELL: That's right. You know, well, we started upgrading other people's computers, and then we started making these hard disk drive upgrade kits. That became the main business of the company - selling hard disk drive subsystems and memory kits to upgrade the computers.

RAZ: When you say - Michael, when you say we, who were the we? I mean, you started this by yourself in your dorm room. And then who did you bring on to help you?

DELL: Well, I always say we because that makes it sound like there's more of us. (Laughter) But we - when I started, you know, we was just me. But I hired about one person a week every week, you know, for the first year or so, and then it became more and more.

RAZ: Yeah.

DELL: And remember one time, we had this customer who wanted to come visit us. It was Martin Marietta, which is now part of some much bigger company. And the guy wanted to buy, like, 150 of these kits, which was, you know, for us, a pretty enormous order. And he wanted to come to Austin and see our factory - right? - you know, operations, you know? And so this was a little bit scary because it sort of looked like a massive dorm room, you know? There was - it wasn't the most put-together place.

RAZ: Wait, this is - this was not an actual dorm room, right? Like, you had, by this point, rented out an office space.

DELL: Yeah. Yeah. We were growing quickly. And so we - you know, we tried to clean this space up and put on some semi-respectable business attire.

RAZ: Yeah.

DELL: So the guy is going through, and we're showing him, here's how we format the hard drives, and here's how we, you know, ensure the quality controls. And we're sure we can meet your demand for this order for 150 units. And he says, well, what are those? And I said, well, those are the computers that we have to format the hard drives. And by this time, we had actually been assembling our own computers just to format the hard drives because it became too expensive to buy them from other people. And he said, well, why don't you sell those? And I was like, oh, that's a great idea. I should've thought of that. We were so busy making these hard disk drive kits that we hadn't really thought to make our own computers.

(SOUNDBITE OF MUSIC)

RAZ: When we come back in just a moment, how that idea launched Michael down a path that would make Dell one of the biggest computer companies in the world. Stay with us. I'm Guy Raz, and you're listening to HOW I BUILT THIS from NPR.

(SOUNDBITE OF MUSIC)

RAZ: Hey, welcome back to HOW I BUILT THIS from NPR. I'm Guy Raz. So normally, at this point in the show, we start to talk about the slow and steady growth of a business and the early struggles and all the hard work that went into getting it off the ground. But in the mid-1980s, pretty soon after Michael hired his first engineers to start making the first Dell computers from scratch, they were selling so many computers so fast that they started to compete with the biggest name in computing, IBM.

DELL: IBM, at the time, had a 6-megahertz 286 computer that they sold for $3,995. So, you know, we introduced a 12-MHz 286-based computer, and we sold it for $1,995. So our computer was twice as fast and was half the price.

RAZ: How were you able to do that?

DELL: Well, we still made a decent margin selling them. And I think one is, we had some clever engineers, and we had this great supply chain that we created. And so when we would sell, let's say, 200 computers in a day, you know, we would give that signal back to our suppliers who would, every day or every few hours, deliver parts to our factory. And then we would, you know, ship those computers out to the customer. So we had a unbelievably efficient supply chain that we created out of necessity because we had no capital. That also meant that we had the freshest parts at the best cost. And as the cost of the materials were coming down, we benefited from that, and we could get the latest technology to the customer faster than anybody else.

RAZ: And you didn't - you were direct-to-consumers company. You didn't - retail shops were not selling Dell computers, right? You had to call Dell or fax Dell and order a computer.

DELL: At the time, that's right, except most of our business wasn't to consumer.

RAZ: It was to business.

DELL: It was to businesses. But that's - what you just said is actually a common misperception. A lot of people thought, oh, only consumers buy from Dell.

RAZ: Yeah.

DELL: That's actually not what was happening. We were selling to all sorts of companies and governments and small and medium-sized businesses. And that was most of our business, even from the beginning.

RAZ: And at that point, like, the late '80s, what did you have in mind for the future? Like, what was - what were your ambitions for the company?

DELL: Well, we had some pretty big aspirations. The first one was, we said, we want to expand globally. It was pretty clear to us that, you know, if you were only successful in the United States, that wouldn't be good enough. The second was that we had to go after selling to big companies because if you didn't sell to the really big companies and the biggest governments in the world, well, you weren't going to be a relevant company. And then the third one was, we said we had to differentiate on the basis of service. And we created this thing called on-site service.

And today, it would be a very common thing, but back then, you know, if your computer broke, you had to put it in the trunk of your car, take it back to the computer store. And then they would take it, and then they'd ship it off somewhere, and you'd wait weeks and weeks, and you'd supposedly get it back.

And so we came up with this program where you'd, you know, call us on the phone. This is before the Internet. And if you had a problem, we'd help you resolve it on the phone. And if we weren't able to resolve it on the phone, we'd send a technician with parts to your location to fix your computer on-site. And we did that all across the United States. And, you know, we thought, the minute we announce this, our sales will double, you know, because it was, like, so much better than what we were doing before. And they didn't double instantly. But after about three months, they doubled, so (laughter)...

RAZ: Wow. I want to put this into perspective because, you know, we think about, like, really young entrepreneurs, and we think - many people think Mark Zuckerberg or the guys who made Instagram. You were 21 years old. I mean, you're - at that time, Dell was already doing, like, multiple - like, what? - 10, 20, $30 million in sales a year.

DELL: I think it was 66 million that year. And I was 21, yeah.

RAZ: Sixty-six million dollars. I mean, just for a moment, you know, have an out-of-body experience for a moment. And don't think about you. But think about this 21-year-old named Michael Dell who's running a $66 million company. I mean, it is unbelievable, right? I mean, it's almost implausible to imagine that happening.

DELL: Yeah, certainly, some, but I was more focused on the future and thinking about, how do we become three times larger or 10 times larger? What new products are we going to launch into? Do we have the right talent? How do we expand and, you know, get more salespeople? And, you know...

RAZ: What was your lifestyle like at that time? I mean, did it change? Were you still living like a 21-year-old? Or all of a sudden, did you start - did you buy a giant mansion? And how did it change the way you lived?

DELL: You know, I wouldn't say massive changes. I did buy a nice house. I wasn't, you know, wanting for things, but I didn't really have a lot of time to consume things and wasn't really focused on that.

RAZ: I mean, it sounds like you were so busy that you were just - your whole - everything that you were doing was this job. And I mean, I'm assuming you didn't even have a personal life at that time, probably. You were just working all the time.

DELL: Yeah, that's a valid assumption. I did, a couple years later, you know, take a little time off and, you know, managed to find a fantastic partner, and get married and, you know, have kids and all that. And that's been a amazing part of my life. And I was actually motivated to do this, in part, by Steve Jobs and Bill Gates.

RAZ: Really?

DELL: Yeah. And the reason I was motivated to do it because of them was because they were not married, and they were about 10 years older than I was. And having had the experience that I had as a child with my family, that's what I wanted. I wanted that family. I wanted that experience. And I didn't want to be a single guy in his 30s or beyond that didn't have that.

RAZ: What would stress you out at that time? Because it seems like you're so even-keeled that you don't actually sound like you get stressed out, but I have to imagine there were things that would stress you out.

DELL: Oh, we had plenty of stresses. I mean, I remember one time, we got this letter from something called the Federal Communications Commission, the FCC. And apparently, you know, computers fall under something called the Federal Communications Commission Class B device, which means they have to be approved by the FCC. So I did not know this. And, you know, they basically said, you have to stop making these things.

RAZ: Wow. When was this?

DELL: This was back, like, in '86, '87. So if we had followed their instructions, you know, we wouldn't be on this podcast today, so...

RAZ: You'd be out of business, yeah.

DELL: Yeah. So fortunately, I had some pretty smart, you know, guys who sort of said, well, what you need to do is call this lawyer in Washington, and he's going to help you fix this. So I called up this guy, and he'd been one of the prior commissioners of the FCC. And he said, OK, here's what you need to do. You need to go down to this test range, you need to test your computers immediately, and you need to submit an application right away, and make sure they comply, by the way, you know?

And so we did all that. And then he went to the FCC and said, hey, you know, these guys are honest, forthright people. They just didn't know. And now they filed their application, they want to do the right thing, and here's what we're doing. And we were able to work through it. So yeah, I mean, in the first three, four, five years, there were actually several things like that. I remember there was a thought at the time that, oh, wow, IBM's going to take back this whole idea of the personal computer, and it won't be an open ecosystem anymore. And, you know, we could all, you know - poof - be out of business. Well, that didn't really materialize.

RAZ: So you guys decide to go public, I guess, in 1988. You do an IPO and raised tons of money. And why did you decide to do that, by the way? Because at that point you, I guess, owned the entire company.

DELL: Well, we needed the capital. We were growing at, like, 80 percent per year. And, you know, the company was only four years old, and we were expanding into all sorts of new countries. We were expanding into new product lines. You know, and we also wanted to be more of a peer with our customers. And being a public company, somewhat enabled us to do that because customers could look and see that we were, you know, a real, legitimate company. You know, that was helpful at the time.

RAZ: Well, here's what I think is harder for lots of people to wrap their head around, which is you were expanding by an order of magnitude every year. You - there was huge amount of revenue coming in, but yet, that wasn't enough cash and capital for you guys to expand.

DELL: Sure. All the revenue's not profit. We weren't a software company. And so we did need some capital to finance the growth of the business and hire more people, open new offices, open new factories, build, you know, IT systems. You know, we absolutely needed some capital.

RAZ: And by getting that money, were you able to say, OK, now we're going to beat IBM; we're going to be bigger than IBM?

DELL: Well, we definitely wanted to be the biggest. And I would say it changed a little bit in that time frame to, you know, competing with Compaq. And one of the things I think I learned along the way was that if you obsess on the competitors, you could be making a really bad mistake. And I think, you know, that was definitely true in the case of those two in the sense that we had a better business model, and if we were trying to, you know, just look at them, we would miss opportunities by not listening to our customers. And how did we get from a company that, you know, started in a dorm room to having half a billion dollars in sales? Well, we did it because we listened, and we learn.

RAZ: So I guess by the year 2000 - end of 2000 - so 2001 - Dell computers, PCs, becomes the No. 1 brand by sales, by market share. You become No. 1, more than Compaq, more than IBM.

DELL: Yes.

RAZ: What did you - do you remember finding that out?

DELL: Yeah, you know, we sort of have this celebrate for a nanosecond, you know, sometimes a little longer - but, you know, we were focused on, how do we keep growing? How do we expand into servers, and storage, and services and software? And how do we solve the next unsolved problems? And, you know, 2000, 2001, we would've been thinking a lot about China, you know, and India and the emerging markets. And so there wasn't a lot of dwelling on any particular success.

RAZ: So, I mean, the company - you know, the story of Dell is just pretty remarkable because it seems like from the moment you started selling PCs out of your dorm room until 2001, it's just success, after success, after success. Like, there was no moment of failure. There was no real struggle. Is that true? Is that right?

DELL: No, that's not right at all. There were plenty of struggles. And certainly, if you go back and look at the history there, you'll find all kinds of missteps along the way and dead ends and mistakes, you know.

RAZ: What was the dumbest mistake you made? Because it doesn't - I mean, Michael, I'm being honest with you. It doesn't sound like you made any mistakes. It sounds like you were preternaturally gifted as a high school kid to understand business, and then you understood computers, and then you just started this successful company. So what was a mistake you made?

DELL: OK, so 1989, we created something called Dell UNIX.

RAZ: Which was a software.

DELL: Yeah. Yeah, you know, this was sort of prior to the whole Linux wave.

RAZ: Yeah.

DELL: And UNIX was a well-used operating system in mid-range computer systems. And, you know, it turns out we were really early at that, and that was a really bad idea. And it was kind of a horrible misadventure.

RAZ: Did it cost the company money? Did it effect the stock price?

DELL: Sure, yeah, all that. You know, around the same time, we also had a wildly ambitious engineering program that our team had cooked up, and it was too big of a technical leap...

RAZ: Yeah.

DELL: ...And the project failed. It was a project called Olympic. We had problems with our inventory control early on. You know, we had all kinds of mistakes. Fortunately, none of them were fatal. And one of the things I learned a long, long time ago, you know, when you find a problem, fix it as fast as you find it. And, look, when you're pioneering in a new area with a new business model, there's no playbook. There's no...

RAZ: Yeah.

DELL: You know, you have to just learn by doing. And you have to intuit and experiment your way through the problem.

RAZ: I'm curious about 2004 because you stepped down as the CEO of Dell. Your - I mean, the company is just - it's a - obviously a Fortune 500 company - has been already for more than a decade - huge revenues. Did you just think, OK, I've made it, I'm 39, time to move on and start a different phase of my life?

DELL: Not really. You know, I didn't really think about it as stepping down. I had this partner in the company, Kevin Rollins, who was the president of the company. He and I were running the company together. And we did everything together. And I decided, OK, you be CEO for a while. I'll be chairman. I'll still be very involved. And after about two years, you know, the industry started changing pretty rapidly, and the board, you know, came to me and said, you know, hey, we think you should go back to being CEO.

RAZ: Yeah, I mean...

DELL: And...

RAZ: I mean, what happened during that time? Because by all accounts that I've read, there was a decline. I mean, 2004, Dell starts to lose market share. And then a couple of years later, HP becomes the number one PC seller. And then you come back in 2007. So what was going on in those three years?

DELL: Well, I think the market was changing. I think there were new things starting to emerge. The cloud - you know, or what people call the cloud today, you know, was starting to show up. I think we weren't being aggressive enough in changing the business given the shifts that were happening.

RAZ: Yeah.

DELL: You know, it's a change-or-die business. It's a quick-or-dead business. And the board asked me to come back into the CEO role, and I was happy to do it.

RAZ: But I've read that, like, around that time, the quality and the service of Dell was in decline. Like, the company was getting a lot of heat. And I'm sure you saw that criticism. So how did you deal with that?

DELL: Look, I think you can, in any anecdote, you know, extrapolate. But there were definitely some areas where we could have been investing more in innovation. And we, you know, changed the focus of the company starting around 2007 to understand, you know, what we needed to do to be, you know, an important, relevant company in the future. And so, look, I felt then and feel now a deep sense of responsibility and commitment to the company. And I'll care about the company after I'm dead.

RAZ: What does that mean - I'll care for the company after I'm dead?

DELL: It means that, you know, this is a lifelong pursuit for me, in terms of, you know, helping the company reach its full potential. And, you know, certainly my dream is that the company persists well beyond my lifetime, which, you know, I'm still a pretty young guy, so I think that's many years away.

RAZ: I wonder, Michael, how much of your success has to do with, you know, your hard work and your brains and, you know, intuition and how much of it is luck.

DELL: Good question. I don't really know. You know, I'm sure there's some, you know, element of luck there. I've probably been lucky a lot. You know, I feel like I was really lucky to be born in the United States. That's probably the biggest stroke of luck right there because I think, in the United States, you know, you have an opportunity to start a business. And when you're 20 years old, and you show up, and you want to sell something to somebody, you know, they don't look at you too funny. So I think that was my biggest stroke of luck - was just being born here in this country and having the opportunity and the freedoms that that's afforded me.

RAZ: That's Michael Dell. And lest you think of a Dell computer as the nerdy John Hodgman character in those PC-versus-Mac commercials, Dell computers have actually been used by the good guys in the "Jason Bourne" movies, in "Spider-Man," "Captain America," even "Mission Impossible." In fact, in 2016, Dell was the No. 1 brand featured in movies - more than Sony, more than Mercedes-Benz or Adidas and, yes, more than Apple Macs.

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RAZ: And please do stick around because in just a moment, we're going to hear from you about the things you're building.

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RAZ: Hey, thanks so much for sticking around. And before we jump into this installment of How You Built That, just a quick warning - if you are a parent of small children, you are about to hear about poop and barf because those two things are at the very heart of Hannah England's business. She has two small children of her own, 3 and 8 months. And if you've ever wondered what happens inside one of those family changing rooms at the airport, well...

HANNAH ENGLAND: I walked into the bathroom. And there were two moms. One was at the changing station, and her baby had just had a blowout, like, major, like up the back, all the way to the neck kind of a thing. And this is going to be a situation that every mom gets themselves into.

RAZ: And by the way, every dad. I mean, I've been there. And here's the thing - once you've cleaned up your kid, what are you supposed to do with all those soiled and disgusting clothes, especially when you're not at home?

ENGLAND: You know, you kind of just cringe when you have to stick that in your diaper bag. And then when you have to open it after a full day, I mean, it is not pleasant.

RAZ: Not to mention, after the clothes have festered in your diaper bag for a day, it may become impossible to get the stains out of them. Anyway, all of this got Hannah thinking.

ENGLAND: I came up with this idea when I was putting my 3-year-old to bed. And I came out to the living room, and I just started describing to my sister-in-law and my husband this bag - the soaking bag. And I kept filling in the blanks. What if we could - and what if it had this? And then they looked at me, and they were like, well, it sounds like you just invented it.

RAZ: And what Hannah envisioned was a watertight plastic bag that you could keep in your diaper bag. It would have a soap pod in it, kind of like the pod that goes into your dishwasher, so that when your kid pooped or barfed all over her clothes, you would just throw it in the bag, add water, and voila, the clothes would soak in soapy water while you went about your day.

ENGLAND: And then I kind of just hit the ground running because I thought, I need this in my life.

RAZ: So about a year ago, she started calling around to different manufacturers. They sent her a bunch of samples of plastic bags, and she and her husband began to test them.

ENGLAND: We'd immediately fill it with water and seal it and hang it upside down in our living room and kitchen to look for drips and leaks because we want these things to be able to hold up in a mom's diaper bag, and that's like going to combat.

RAZ: But in those early days, nothing worked. The bags would break, or the zippers would come undone and water would get everywhere. So Hannah kept calling around until she found one manufacturer in Wisconsin who seemed to know exactly what she needed.

ENGLAND: And he goes, well, I think we're going with this seal that's actually really aggressive for your utility. And I said, exactly, I want it to be aggressive.

RAZ: A seal so aggressive that you would have to use scissors to get it open. And then Hannah found another manufacturer to make a very gentle soap pod. And finally, she designed the outside of the bags with classy black-and-white stripes.

ENGLAND: I wanted the design itself to not scream, like, OK, this is a bag for soiled poop.

RAZ: She then launched a Kickstarter campaign to raise about $12,000. And for a while, it looked like she wasn't going to make her goal. But then kind of an amazing thing happened. The accounting software company QuickBooks found out about her. And QuickBooks has this program where it supports small businesses. And so someone from QuickBooks sent her a message via Kickstarter that basically said, hey, we're going to back you for the rest of the way.

ENGLAND: It just showed up on our Kickstarter thing, and my husband, of course, was going nope, this is some weird fraud thing. And I laughed at him. And I'm like, what kind of fraud puts money into your bank account? Normally, they take money out.

RAZ: Hannah was right - it was not a fraud. And just a few weeks ago, she shipped her very first production run - about 5,000 bags - to those Kickstarter backers. And if you want to find out more about Hannah and her company Wash. It. Later., check out our Facebook page. And, of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're building. And thanks for listening to our show this week.

If you want to find out more or hear previous episodes, you can go to howibuiltthis.npr.org. Please also subscribe at Apple Podcasts or however you get your podcasts. You can write us. Our email address is hibt@npr.org. Our Twitter address is @HowIBuiltThis. Our show is produced this week by Rund Abdelfatah. Ramtin Arablouei composed the music. Thanks also to Neva Grant, Sanaz Meshkinpour, Thomas Lu, Dayana Mustak and Jeff Rogers. Our intern is Nora Cuzzi (ph). I'm Guy Raz, and you've been listening to HOW I BUILT THIS from NPR.

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