This is Why You Need to BELIEVE in Your Ideas | Lessons from Michael Dell in 22 Minutes

Michael Dell founded Dell at age 19 from his college dorm room with $1,000 and sold it in 2016 for $67 billion. He went from skipping classes and dropping out of university after earning $18,000 a month selling custom-built PCs to having a net worth today of $150 billion. Need motivation?

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If you've been here before, drop a hashtag #believe in the comments below so I can feature you here in a future video. And if you're new, welcome to Believe Nation, the only channel that helps you believe in yourself daily, one video at a time. Okay, let's kick it off with rule number 1, embrace risk.

Why do you think there are more entrepreneurs in America than elsewhere?

I think there's something in the culture that, you know, is accepting risk, even embracing risk in a good way, right? That says, well, okay, if you try something and it doesn't quite work and you fail, It's OK. Try something else, right? And maybe that is not as accepted everywhere. I think there's a combination of factors, right? It's this risk acceptance. It's capital that will invest behind that. There's a history of other entrepreneurs that you can look to, that I look to and others look to and say, well, yeah, they did it, so maybe I could do it.

Did you think it was risky at the time? Did you ever have fear?

No, so if you have nothing, nothing to lose, right? So it didn't seem like a big risk. I mean, the risk for me was if it didn't work, I go back to college. So not that big of a risk. Now, obviously, you know, as the business grows, you're like, wow, now I've got, you know, hundreds of people working for me. I'm responsible for them. You know, some of them have families and they have kids. So every night when you sort of put your head down on the pillow, you're thinking, I've got a big responsibility now. I better not screw this up, right? All these people are depending on me. But I think there's also a lot of opportunity that is unrealized because people aren't maybe as willing to take risks. But I never really thought about it as, oh, I'm taking this massive risk, you know?

Rule number 2, model success.

Who are a few of the people that you study, you felt you learned from, or that influence like your thinking about how you're building, how you built your business?

You know, when I was a kid, I, you would read about entrepreneurs, you know, that were starting companies, Charles Schwab or Fred Smith, certainly Sam Walton, some of the early telecom pioneers. People that were doing it right then, like in the '70s. And those stories were also, were just super interesting to me. And I grew up in Houston, which was kind of a boomtown. You'd see these new companies being created and parents were talking about that. And so those stories were always just interesting and compelling and you want to understand, well, how did they do that? 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. You know, the idea just was in my consciousness from a very early age.

There's this great line that Jeff Bezos says where he's like, we don't choose our passions, our passions choose us. I think there's multiple, like my notes to myself in the margins, like, oh, he's compelled. He's like, this is coming through him. Like he's just like, he has no choice. This is 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?

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

Rule number 3, be curious.

You were very young and you bought an IBM computer and most people would kind of start to do computer things, but you took it apart instead. What did you, how did that happen? What did you see inside that computer?

Well, you know, you can't actually understand things unless you take them apart and know how they work. Yeah, I was very interested in electronics and kind of what was inside, right? And, you know, microprocessors, memory chips, and disk drives and power supplies. And I kind of wanted to understand all of this. And so I was curious and I was interested. And one of the things that I found was that the parts that were in this IBM PC was introduced in August of 1981, none of the parts were made by IBM. And I was upgrading computers.

But you were—

what were you, like 15 years old or something?

I was 16 years old.

16?

And how did you buy it? I mean, did you get some money from your parents, or you made your own money?

Well, I had— when I was 12, I worked in a Chinese restaurant and had a bunch of different jobs. I was like, you know— trading stocks and currency when I was 14. And I got a job at a newspaper, not delivering the newspaper, selling newspapers. And it just kind of had all these little businesses, right, to make money. And it was fun, right?

When you took it apart, the IBM, where were you? Were you in your room or? Living room or?

I was in my parents' house where I lived in my room. Yeah. So you get a screwdriver and you just screw it apart? Sure. Yeah.

But what did you see inside? What did you learn when you opened it?

Well, back then you could actually learn a lot because you didn't have these large chips that we have today that are amalgamation of lots of small chips. And so you could literally get a book that would explain what each chip did. And you could understand the circuits. And as I said, I was upgrading computers to make them do more, right? You know, more memory, more storage, make them go faster, right? And so what I found in this IBM personal computer was that none of the parts were made by IBM. And then I sort of discovered that that the cost that they were, you know, the price they were charging for the computer was roughly 6 times the cost of the parts. And so it didn't really seem like it was fair to me that it was that expensive.

IBM was the most valuable company in the world at that stage, and you were a 16-year-old.

They were the most valuable company in the world, and they were about 80% of the value of the sector called technology at the time. So, they were more dominant in their sector than any company, maybe in any time in history. I mean, are there any companies today that are 80% of one sector of the S&P 500? No, not even close. So, yeah, they were incredibly successful company.

What did you think at the time? Did you have any longer-term plans? What did you think?

Well, when you're 16 years old, you don't have long-term plans, right? And I didn't. I was just having fun with computers and upgrading them and went through high school sort of doing that. And I was programming computers and I was tutoring other kids on how to use computers and very interested in the idea that the personal computer was very empowering. You could program it to do things. And some of the parents of the kids I was tutoring said, well, you know, I'd like a computer. Can you help me get one? Like, sure, I'll get you one. I'll set it up for you and I'll upgrade it for you and I'll, you know, do all that. And so it kind of became a little bit of a business while I was going to high school.

Rule number 4, embrace change.

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 5 years from now, I love this so much. I stood up and told the company that 5 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 going to be faster, more efficient, and more capable, and they're going to put us out of business. And the only way that we're going to 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.

Yeah, exactly. So You know, when ChatGPT came out in November of '22, we're sort of looking at this and going, wow, this is a big deal. This is, this is pretty interesting. And you started to see the rate of improvement in the LLMs. And you, you know, in technology, you can, you can sort of look at the, the rate of improvement and the learning curve and you can sort of plot Well, where's this thing going, right? Where's it gonna be in a year or 2 years or 3 years? And you look at, okay, we're gonna 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 big, big deal here. We need to totally reset how we're thinking about the business and reimagine it, reframe it, and understand what the processes are going to look like in 5 years. And so you do all that and you say, if we keep doing what we were doing before, we're going to be in serious trouble. Because some new company's gonna come along and yeah, they're gonna have all these new tools. They're not gonna have this legacy of crap from the past, right? And old ways of doing things. And they're just gonna do it the new way. And so we have to change or we're gonna go outta business. You know, I also believe in this, idea that if you don't have a crisis, make one, right? You get people excited, motivated, and to drive the necessary change. I mean, in one sense, this is not a technology problem. The technology is there whether you use it or not. 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, you know, the ways people work together so that you can do it quickly? And 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, people don't like to change, but you have to. And so that's what we've been doing.

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I'll see you there.

Rule number 5. Follow your passion.

I was a biology major. I was supposed to be a doctor.

Because your parents wanted you to study pre-med.

My parents wanted me to be a doctor. My father's a doctor. My brother's a doctor. Many of my cousins are doctors. And so it was sort of the family business, you know, be a doctor. And strong encouragement from the parents. So I'm not in my parents' house anymore. I'm in the dorm room. I've got a lot of time, right? University of Texas is a big school. Some of the classes are enormous. If you show up or you don't show up, they don't really notice all the time, right?

So you didn't always show up.

So I'm kind of doing this computer thing and it's getting bigger and bigger. And my parents found out about it. They got very upset. They kind of made me stop. I stopped for 10 days. And that's when I decided that actually this was something more.

So how did it scale? How quickly did you scale it? Because growth rates in the beginning were tremendous, right?

So in early May of 1984, the company was incorporated. Dell Computer Corporation became a corporation. And it was about a week or two before my final exams of my freshman year. And so the first year, we had $6 million in revenue. And the second year was about $33 million. And we grew about 80% per year for the first 8 years, compounded. And then for the 6 years after that, we grew about 60% per year. So if you put any number in there and you do that kind of compounding, all of a sudden, you've got— tens of billions of dollars. And so that's what happened. We started originally making upgrade kits for the IBM computers, then designing our own computers, and then expanding geographically. We expanded from desktop computers into notebook computers, then into servers and storage and services. And here we are today.

Rule number 6, make the right choices.

You said something that terrified me unintentionally, that most entrepreneurs and founders that you've known were never taken out by competition, that they sabotaged themselves. Can you say a little bit about that?

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

What do you think are some of the causes of mistakes? You have obviously smart, talented, competitive people, right? Charlie Munger has this great line where it's like intelligent people are taken up by 3 things: ladies, liquor, and leverage. So like, have you seen any common like causes for somebody to sabotage themselves or to not live up to what they should have?

Charlie's right about those 3 things. You know, we stay away from those. Yeah. I sort of go back to understanding things and curiosity, and it's like, you gotta know why something is, working or not working. And if you're in the middle of a super competitive endeavor and you don't really completely understand what's going on, well, you're going to make mistakes, right? And so, you know, when I look at the competitors that are no longer around, Yeah, they, they, they, you know, had either overzealously expanded or made, you know, design, you know, errors, or they failed to understand the competitive landscape. I mean, there's lots of ways to fail.

Rule number 7: Understand your point of impact.

You have to think about the point of impact. If you're running a business with 100 people, the point of impact for the leader is very different than if it's 1,000 people or 10,000 or 100,000. And so that's the frame of reference that I've always used, is to say, okay, if I'm leading this organization, what are the things that actually I can do to cause it to be successful? If it's 1,000 people, it's very, very different than it is for me today. Today, I'm a lot more focused on strategy because that's the point of impact on a 110,000-person company. On a 100-person company, you're sort of doing any job in the organization. You're doing every job in the organization potentially, and that might be okay at that point.

Number 8: Develop partnerships.

If you just dissect the IT sector, look at the whole thing, you've got roughly a $3, $3.5 trillion industry. And there are about 10 companies that have more than 1% of the $3 trillion. We have 2%, but nobody has like more than 5 or 6%. So it's a, actually quite fragmented space. So we work extensively with partners across the ecosystem And it's a big part of how we evolve rapidly, go quickly, reach new customers, gain access to the latest ingredient technologies, whether it's in semiconductors or software ingredients. And so the partnerships and alliances are incredibly important part of how we grow.

Number 9, build a culture.

In our situation where we were creating a new way of doing business, that was actually part of our culture as well. And as we wanted to attract people from, let's say, related spaces, we didn't actually want them to bring, you know, the culture of the other companies. We might want some insights from their experience and that sort of thing, but we had to be very explicit about what the Dell culture was really all about, what the values are, particularly as we expand around the world. We say, no, these aren't necessarily American values. These are the Dell company values, and this is incredibly important, and this is the way we operate our business.

And rule number 10, the last one before a very special bonus clip, is be resourceful.

When I was 16, I got this job working for a newspaper in Houston, and my job was to sell subscriptions to the paper on the telephone. And I realized two things when I was doing this. I realized that people that were buying the newspaper generally had two things in common: either they were moving to a new residence or they were getting married. And it turns out that you could go find information about both of those things in enormous quantities. So, in the state that I lived in, in Texas, when you want to get a marriage license, you have to file with the state and it's public information, particularly the address that you want the license sent to once it's issued. So, I hired all my friends and went to every county in the surrounding 16 counties in Houston, captured the addresses of all the people that applied for marriage licenses, and sent them a direct mail offer to offer them the newspaper for a free trial and then a subscription. And I ended up making a fair sum of money for a teenager. We have this, this Tell Dell process that we use internally where everyone in the company anonymously participates in a survey, and that gives us great insights into how well is our strategy understood, are people getting the right feedback, you know, about their ability to advance, and do they believe they have opportunities inside the company, and gives us a lot of insight into the effectiveness of our leadership. That kind of mechanism is incredibly important in having open feedback about how we're, how we're doing. We're also pretty explicit when someone is thinking about joining the company in explaining, hey, look, this is what you're going to be in for. We're changing rapidly. It's agile. It's flexible. We're doing new things. We're doing different things. Get ready for a lot of excitement and change. And if that's not what you're into, then this is not the right place for you.

And congratulations, you're one video closer to who you're meant to be.

Believe.

For 10 more amazing rules from Bill Gates, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you there.

I think for Microsoft to be successful, even though we were the first, we— and we had a broader concept of software than the other companies— we needed to be what I would call hardcore and