Excerpt from "Riding on the Coattails of Genius" - Streamlined and Built for Speed

Updated: Jan 30, 2019


Dell was already a powerhouse company when I joined. Through the turn of the century and on into this millennium, Dell ran roughshod over its competition. Michael’s company made good solid products, and without the drag of a traditional supply chain, Dell’s Direct model meant our computers were about half the price of those our larger competitors such as HP and IBM were selling.


Early on, I took a tour of Dell's new factory which was just down the road from our headquarters. I remember standing on an interior balcony with a panoramic view of the entire facility spread out before me, marveling at its efficiencies.


Trucks were backed up to a dozen large bays on my left, disgorging their contents straight onto long assembly lines that pretty much covered the floor. I knew the parking lot beyond was full of semis from different vendors. The ones I was seeing had just won the bidding war for that day, earning them the right to pull up to our doors and unload their products, be it processors, memory sticks, hard drives, or other common components.


The average length of time we held any part in inventory before it moved onto the production line? About four hours. Michael called it his "just in time" inventory system.


As soon as each system was built, it was loaded into one of the racks of testing bays that ran along the entire right side of the factory floor. Just beyond where all those newly constructed computers were being burned in, another dozen large doors were open revealing truck beds being loaded with well-engineered, high quality, fully tested systems that had just been boxed for shipment to our customers all over the country.


How good were our prices and products back then? I remember one customer who called and told me, "I'll buy fifty laptops if you can get me a ten percent discount".


I had to respond, "Neither I, nor my manager, are allowed to discount our systems". The truth was we didn't need to provide additional discounts to sell our products. If quality was important to a customer, there were simply no better deals than the ones they received in the mail from what the media was calling, "That little catalog computer company in Texas".


As Dell salespeople, we were all pulling in big bucks back then. There were a hundred of us on the floor taking orders as fast as we could, with typically fifty to a hundred customers in the queue waiting to talk to us from the beginning to the very end of our day.


Our parking lot was full of luxury vehicles, and I remember more than one employee bemoaning the ultimate cost of a new kitchen floor or patio deck because Dell stock had split so many times since they sold their shares to finance that home improvement. In fact, so many employees got rich in the 1990s the media took to calling them "Dellionaires".


Bill Gates himself showed up at one of our annual meetings in the Austin Convention Center. One of his slides showed how well Microsoft stock had done over the years. Then he threw up another slide showing Dell stock's meteoric rise in value next to Microsoft's steady but comparably slow uphill climb, and he told us Dell was the one stock they couldn't compete with. The truth was, he admitted, they couldn't even come close. That brought him a thunderous roar of applause from the mere five thousand of us that made up Dell in those halcyon days.


HP, IBM, Compaq, Packard Bell, even copycat companies like Gateway and Micron couldn't match the efficiencies of the Dell model or the quality of our desktops and laptops. Gateway and Micron faded from the computer manufacturer scene over the years. HP and Compaq stumbled into each other's arms. Even mighty IBM eventually ended up selling off its x86 business and retreating to its mainframe roots.