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Michael Dell: grounding ego in reality

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Michael Dell started his first business at age 12 as a stamp collector who didn’t like paying auctioneers to buy and sell his stamps. Instead of using a middle man, the boy started Dell’s Stamps so he could do the job himself.

He’d find other collectors in Houston and sell their stamps by creating a catalog. The little business showed him how much a middle man could make and how much people could save by buying directly.

Soon the boy took an interest in computers. He talked his parents into buying him an Apple II, then tore it apart, leaving them dismayed that they’d paid $3,000 for computer parts. Dell realized that he could buy the non-proprietary parts for a fifth of the cost. Putting the machine back together helped him see how computers could easily be assembled and upgraded.

Dell was not the best high school student but had an unerring instinct for sales, coming up with $18,000 in newspaper subscriptions and winning a BMW and a computer.

His parents were thrilled when he enrolled as a pre-med student at the University of Texas at Austin. With potential customers all around him, though, he began building and selling computers along with studying for med school. Alarmed, his dad flew out to intervene.

“What do you want to do with your life?” he demanded.

“I want to compete with IBM!” his son replied.

In 1984, Dell founded a computer company with $1,000. The firm did $49 billion in sales in 2004, and despite some turbulent years since then, Michael Dell is worth about $17 billion today.

Lesson: It’s OK to confound those close to you if you can explain what you’re doing and make it happen.

—Adapted from Ego Check, Mathew Hayward, Kaplan Publishing.

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