How I Built This with Guy Raz - Alienware: Frank Azor and Nelson Gonzalez

Episode Date: December 12, 2022

With no formal training in business or computer design, Nelson Gonzalez and his cofounders decided to do what almost no other company was doing in the mid-1990’s: make personal computers specifically for gaming. They started as a tiny custom shop in Miami, and eventually began building PC’s for avid gamers, who were willing to pay top dollar for higher speed, better graphics, and a brightly-colored chassis that looked like the head of an Alien. Despite ongoing challenges with sourcing parts and getting loans, Alienware became one of the fastest-growing private companies in the U.S. In 2006, it was purchased by Dell for an undisclosed amount, and remains one of the most popular gaming PC’s in the country.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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They're in Miami. They thought you were in something unsavory. Yes. And we're trying to run a business. We have to, you know, you have to buy parks. You have to pay rent. You have to pay services. And, yeah, they would hold the money for however long they wanted to hold it for because they thought the business wasn't legitimate.

Welcome to How I Built This, a show about innovators, entrepreneurs, entrepreneurs, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how two guys from Miami, with no formal education, reimagined what a gaming computer can do. They make it fast, they make it sleek, and they call it alienware. Up until the early 1990s, personal computer makers were focused on three general categories of users. office workers, students, and designers, not necessarily gamers. If you were a gamer, you could find thousands of games for computers, but they were fairly unimpressive. The best graphics were on consoles like Nintendo's or Sega's or at the arcade.

And then, in 1993, Intel came out with a new processor, the Pentium processor, that would eventually unleash a massive new market for PC makers, the gaming PC. That processor made video games look and sound much better on PCs than ever before. But even then, if you were a video gamer, computers weren't being built for you. And it was around that time, the early to mid-1990s, that video gamers started to get computers custom built. They'd order them with faster processors and better graphics and sound cards, features that weren't standard in the PCs sold by IBM or HP or Comback. This is a time when mom and pop PC makers started to spring up all over the U.S. and around the world.

These were small business owners that could build you a PC often for cheaper than the ones sold by the big players. And one of these personalized PC makers was a guy named Nelson Gonzalez. Nelson lived in Miami and hung out with a group of friends who loved playing games, video games, board games, Dungeons and Dragons, you name it. And by 1996, he decided to form a little business that would custom-make gaming PCs for hardcore gamers. Now, you might not think of Miami in the mid-90s as a tech hotspot, and it wasn't. But what Miami was and still is, is the gateway to the Latin American marketplace. And it meant that the city had warehouses filled with all kinds of computer components designated for export to South America. So at the beginning, Nelson had quick access to things like motherboards and computer cases and peripherals, the stuff you need to build a PC.

He called his little business alienware, in part because, well, he's fascinated by aliens. At the beginning, not a single bank would loan money to Nelson to get the business going, so most orders required you to pay up front. That small cash flow fueled a business that eventually became one of the leading. gaming PC companies in the U.S. And a story of how Nelson did it, with a small group of friends, mostly Cuban Americans, most of them broke none of them with college degrees.

How they managed to turn alienware into a force in the world of gaming has a lot to do with both timing and an understanding of a customer base that none of the big players were serving. Ten years after Nelson founded alienware in his Miami garage, the company was acquired

by Dell, and it's still part of Dell today. On today's show, we're going to hear about three of Alienware's founders, and we'll talk to two of them, Frank Azor and Nelson Gonzalez. Frank will come into the story a little later on. As for Nelson, he grew up in and around Miami in the 70s and 80s, the son of Cuban immigrants. His mom was a homemaker, and his dad painted billboards. When he was a teenager, his parents split up, and he went to live with his mom, and to help pay the bills, he worked at a grocery store. and as a janitor. I was very frustrated because even though we were lower middle class and now I would say lower class

because it was my mom and myself and, you know, she needed help even with welfare. Yeah. And I myself, you know, was just, you know, working in these stupid, you know, jobs that really didn't go anywhere. And I was like, wow, is this life? is this is going to be, you know, all that I can look forward to. So, you know, I kept my head up and I always aspired. I always had the confidence. And I think that my parents, especially my mom, gave me that confidence that I could do whatever I want.

And it wasn't, it was never something that, oh, you can't do this if you don't want to do this. So I always had that mentality, and I think it's very generic amongst Cuban Americans in Miami. It's, I don't know what it is, or our parents' generation, how. Just a hustle mentality. Yeah, you know, they would, you know, oh, I want to be in a, oh, sure, I want to be president of the United. Sure. Oh, come on. Yeah.

That's easy. Type of thing. So it's like a natural confidence that they would give you. So I always had that mentality of, you know, you know, know what I am going to get out of this. And I know when you were growing up, you spent a lot of time playing games and even video games, like going to the arcade. Right. But when did you start getting into computer games and how?

Like, did your friends all have computers at that point? There was one of our friends, Joe Pontillo, and he was the one, the first one that had a 386, I believe. And this was probably, gosh, 1990. That's when we were exposed to the PC for gaming, because we saw a couple of video games loaded up for the first time. At that point, I made friends with a gentleman, an Iranian gentleman that had one of those small mom-and-pop operations where they built PCs, and I started hanging out there.

And I started learning more and more. So I had him build a PC and as I told him, well, listen, you're going to build his PC, but I want to see how you build it if you don't mind. You ordered one from him. Yeah, yeah. And this was so you could play video games. Yeah, so I could play game and just, you know, just all around, just get on the Internet for the first time. You know, at this point, I was longing for that kind of stuff. You know, I wonder, so at this time, right, 1990, you could buy, obviously, a compact or, you know, or a variety, many, any number of dozens of these clones.

Right. No name brand off the shelf PCs. Why did you want it made for you at that time? You know, because I think that it was more expensive to buy an HP or a compact back then. It was cheaper to go to one of these mom and pop places and have them custom-builded for you? Yes, yes, absolutely. And you're watching him take all the components, obviously, the case for the PC and the motherboard and the graphics cars. I mean, today, you can go on YouTube and find out how to do this. I've done it twice with my kid. But back then, 1990, I'll tell you what, it was not easy.

And the other part of it is, you know, configuring the machine. so I could work with games back then was, you know, an art form onto itself. That's just wild. So you had this PC built for you, and then you'd go out and you'd buy the game on floppy disk, presumably. Yes, absolutely.

The game that really got me going, the first time I saw it, was Doom. Doom, yeah. You know, you're a space marine in a Mars base. You're going through corridors, and all of a sudden, all of a sudden you got these halations.

monsters coming out from from the seventh level of hell or whatever and you're shooting them up and with a traditional gun and whatnot. So it was silly, but it wasn't silly. Yeah. So for us, this was, this world was perfectly acceptable, you know. All right. So you've got this kind of new obsession, which is, which is playing these PC games. And I guess one of the people who shared your love of gaming was a childhood friend. named Alex Aguila. And Alex is going to figure prominently in this story because he would become a founding member of Alienware. But at this point, I guess you guys are just hanging out, right? Right. And what he gets an idea to develop his own game or something like, but it wasn't a computer

game. It was a board game. What's the story? Yes. Alex had this idea for coming out with a board game. Okay. And the subject matter was pro wrestling. You develop your character and you roll a dice and basically you have certain moves and you put the move on the other guy.

And it's a tactical game. Yeah. And, you know, I kind of was like an artist. You know, I used to draw a lot. So he had me do the characters that, you know, we thought were really cool. These were wrestlers. Yeah, wrestlers. Like the ultimate warrior, you know, type of, you know.

But you were making up, because I think the Venn diagram of people who were into. pro wrestling video games and role playing games. It was probably, right, they all run that center circle, right? Yes. That was a comic, because they're character-based. Yes, yes. And it was a, it's a beer and pretzels game. It was a, in fact, we could play it today and have, I guarantee you, you got a group of people together.

I'm in. Yeah. I'll bring the pretzels. Yeah, absolutely. I'll bring the beer. Yeah, actually. That was, I would say that was. And how much, how much you guys charge, by the way?

Oh, geez. man, maybe it was like $14.99 or something. Maybe it got to $20. And do you remember, like, how much, how many you sold? Like, like, a hundred, hundreds? I would say hundreds. I would say, I would say, like, three or $400 at least. That's pretty good. Yeah, yeah, yeah.

All right, so you've got this successful, a relatively successful game, but what happened to it? Why didn't you guys decide to go big, you know, to sort of like, you know, see if you can get into, you know. Because I think real world dawned on us and slapped it across the face. And what was that? You know, 300 copies of this is not going to buy a house in Miami and support a family. Yeah. And that's the reality of it. Alex was at that time probably doing, if I'm not mistaken, I think he was doing

neurological diagnostic testing of some sort. And he was a technician. You know, he was doing that. I was already doing something else. What were you doing at the time? Well, at that time, I felt I needed more computing experience. So I interviewed for this job and my friends go, you're crazy. You know, again, here comes the confidence part.

I interviewed for this job to be an IT support guy or to manage a network, a small network for a post-production house. So I got the job. I don't know how I got the job because really, I, you know, I was a novice. computing, okay? I had no formal education. I really am not qualified for this. But I always felt that if given the opportunity, listen, I'll learn it and nobody's going to outwork me. There's no way. So I can do this. Sure enough, I got the job. I call Alex and I say, hey, ow, you know, I got, I got this job managing this network. What do you think? He goes, Nelson, you have no idea what you're doing. How the hell did you get this job? I go, I, I.

I don't know, but you know what, I'm going to do it. So he goes, you're nuts. I go, yeah, but something drove me to this. I didn't, I don't know what it was, but something was driving me. You know, I didn't lie. I really didn't lie in the interview, but I wasn't very truthful either because I didn't have the experience. I, you know, they thought I had. Yeah.

So, anyway, I got the job. I learned a lot. It taught me a lot about the components inside the PC, if you're going to have a PC network. And so I got a lot of exposure to the developers and a lot of smart technical guys that really knew their stuff. At this post-production house. All right. So you're working there. And it would be around this time when you would found a company, I believe, pronounced, Psyche.

Saki of Miami. Sikai. Sikai. Okay. And I'm just going to, from what I understand, this was a company which was like that, your Iranian friend. And you would do something similar. You would build custom to custom build pieces. Tell me about deciding to leave that job at the post-production house and starting your own business.

You know, we started doing it slowly. So, yeah, I'm on the side. So I ask Alex, Alex, I need a name for the company. So Alex is a big collector of war one, war, war, two, Korean War, ACEs. So there was this famous Japanese ace back in World War II. His name was Saburu Sakai, and he was shot. It spoke to perseverance. The guy was a heroic fighter pilot.

So we decided to name the company Sakai. But it was just you. It was me. It was me. It was myself and another gentleman that started with me. Actually, he would be the first one to start Amy Moore with, which was his name is Fabian Santi Esteva. And he works with Alex and Hector and all my friends.

So Fabian is part of our group already. So Fabian goes around town and when we get orders from different, I don't know, a little, you know, again, these were small businesses that were in need of a PC with a printer and blah, blah, blah, blah. You know, so we'd build a custom machine for them and I'd set up the whole thing. I did the whole network for them. And Fabian would go around and source the components that we needed to put the PCs together. And just to be clear, this was, you were kind of doing this out of your home, like in your garage. Yes.

And how would you find people who would order them from you? How would you identify any customers? Friends and family, really. There was no dollars dedicated to advertising or anything like that. It was like, oh, Nelson knows how to do this computer stuff. Nelson, you know about computers, right? Can you build one for my friend Joe over here? Exactly.

So I became that guy in the group. You know, the guy in the group? Yeah. That's the guy. He's a computer guy. He's the computer guy. He's the guy. He's the guy.

Yeah. So then what was interesting was, hey, can you build me a PC for gaming? Can we optimize it for? Yeah, why not? So I built a couple machines. One was for Alex's. father-in-law. Okay.

We built it for him, and we built one for Hector. And what did, they said, hey, I want a computer that can do, like, what was the difference between, just for people to know, like a gaming PC in 1995 or 96? What's the difference in that and just a regular PC build? Well, we tried, you know, we had a couple of friends that did have HPs and whatnot, and they just didn't work right. It was very cumbersome. I mean, you had, the video card.

was very important. It's always been very important, right? The video card and the motherboard and whatnot. I felt that there was more quality with the motherboards and the memory and all the components that I was picking. And even though people would say, oh, it's supposed to work together and, you know, whatever, it didn't exactly work that way. So. Like certain components just didn't work with other components. Yeah, I felt, I felt that there needed to be compatibility amongst peripherals. I kind of identified what those were for gaming so that they worked well in a gaming environment. Because, believe it or not, I mean, again, it's supposed to work together. It's Windows-based.

All the drivers are supposed to work together. That was not the case. Right. So I tried to make a system where it was dependable and it was fast. All right. So you've got this business. And by the way, I mean, there's a lot of labor that goes into. of that, you know, building a PC.

I mean, today, you know, you can build one in an hour. But then I'm assuming this was many, many hours of work per, you know, maybe days per computer. Right. But back then, especially the computer chassis were, man, they were, they were not built with quality, okay? And they were like, you know, they were cheap. And what happened was I would cut myself. I mean, it was like a constant.

I was fighting a demon every time I went into a computer and, you know, tried building. It was literally a fight for my life. There was blood. There was, you know, there was rituals. It was complicated. I mean, were you guys making any money? You and Fabian? Absolutely.

Nothing. Nothing. Okay. I think it were. And you're going to say absolutely boatload. No, no. Zero dollars. If anything, we probably lost money.

of the support it's I mean I would routinely I would have to go to people's offices because what's the other problem here the other problem is that you know guess what the internet was very new the programs they were they didn't know how to use them correctly yeah they didn't know how to configure a network so therefore they had no idea what a network is and how it worked so there was a lot of troubleshooting. And I found myself going to a lot of these places and say, man, this is not worth it. This is not. This is not. You were the, because you were selling the PCs, but then you were the tech support, too, which you probably didn't realize. Absolutely. That was going to happen. They were calling you like, Nelson, my computer's down. What's going on? You're like, oh, you're building this other

PC. Now you got to stop and, like, help troubleshoot that thing for that person. Absolutely. Yeah. It was tough. It was tough. I got to tell it was real tough. Yeah. Yeah. But if the business wasn't making money, how are you going to make it sustainable? I mean, that's what I'm trying to figure out because you knew that you were probably losing money because, you know, you had to be competitive with your prices. You know, I think I got to admit something. I'm not that bright. You are very bright. No, no, no.

But anyway, keep going. You know, I kind of ignored the whole thing. And then, you know, I kind of ignored it. And then I, you know, I'm looking at Fabia and I'm punching. myself and I'm saying, man, there's got to be a better way. So I said, I, and I got to tell you, there was already a company around that was doing this already back, back in the day. What were they called? A Falcon Northwest. Okay. Falcon Northwest. Yes. We became very familiar with them. They became one of our competitors. But I also saw them advertising on one of the magazines.

I think it was Computer Gaming World or PC Gamer back then. Yeah. So at this point, I'm saying, man, you know, we did the creative gaming designs, which was pro wrestler, and we did it through mail order. Well, wait a second. Why don't we just, you know, put a little ad somewhere in a magazine like these guys do and saw our services of putting PCs together? And what did the ad say? Something like? Well, well, the ad was, it was strange.

I got to tell you, it was strange because I said, I said, I said. I said, I've got to appeal to the nerds like me and Alex and, you know, and all our friends. So the first ad we did was that of a weird-looking alien, okay, hovering over a PC with all the configuration of, you know, what parts we were going to use and the sum total. But I want to go a little bit, if you don't mind, I'll tell you a little bit, the funny story about how alien. where it came to be. Okay. I'm a big UFO guy. I'm a big UFO enthusiast.

I've always been. Yeah. Are they real? Do they exist? In my mind, you're, you know, you're absolutely 100%. There's a different episode that we'll do. Yeah, yeah, absolutely. The UFO episode of how about this?

So, and so is Alex. Alex is a big UFO enthusiast, even to the state. All right. I also knew, I kind of knew that I wanted my, like, the company name to start with an A, because that way we would be first in the yellow pages or that was right by the way this was a common thing my brother-in-law called this used the word american in his company because he'd be first in the binding business absolutely well i know yeah i want to know this story because i know that this is around 97 yes and you recruited you basically went to your friend alix aguila and you said okay i needed to join me well in kind of yeah so it It's already like 1990, yeah, late 97, early 98, I guess. And then, so I call Alex and I say, yeah. And he picks up the phone email.

Hey, what's up? Listen, I got this name for a company. And we're going to do the same thing, but we're going to use the model that we have for creative gaming designs. And let's just sell mail order computers. I saw this company called Falcon Do It, and they're in computer gaming. Well, they're a PC gaming. Why can't we do it? So he goes, yeah, what are he going to call it?

I go, how about alienware? He goes, wow, that's a pretty cool name. You know, and Alex and myself are pretty realistic. If he would have said, nah, I would have kind of like listened to that. You know, I would have taken it seriously. Yeah. But he, when Alex and myself say yes at the same time, it's dangerous because it really does mean it's going to be okay. I go, but here's the thing, Alex.

you're going to need to drop your job. You're going to need to leave your job. And you're going to have to bring, like, I don't know, $5,000. I don't know if it was $5,000 or $6,000 because I would put the other $6,000 in. You needed him to invest $5,000 in your company and join you. Yes. Yeah. Listen, it was credit card debt.

We didn't have any cash. When I say, hey, Al, you need to bring $5,000. He didn't, like, yeah, you don't have any cash. Yeah. So I call Alex, I tell me, this is the proposition. And he goes, dude, I'm there tomorrow. Wow. Oh, okay.

Let's do it. When we come back in just a moment, how Nelson and his team break into the PC gaming market and why their credit card companies start to suspect they're running a shady business. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1998 and Nelson's childhood friend Alex has agreed to quit his job and join Alienware.

And at this point, Nelson is looking to get the word out about his new gaming computer. And he manages to get it reviewed by a small publication, which is a pretty big accomplishment. Yeah, listen, I was, I was like stunned. I called Boot Magazine. I don't know who I spoke to. And I said, well, I got this company. I've got this machine and I want you guys to check it out. It's a game.

Oh, it's a gaming computer. Mm. And I think that's what got them interested. Because there were not that many gaming computers being made at the time. No, there was only Falcon. There was only, this is crazy. No, none of these big PC companies, IBM and Dell and HP and Compact were making gaming. They were only making PCs for basically office workers and students and, yeah, business.

And the consumer, the consumer. A consumer PC back then was probably Gateway Micron Compact, but they weren't optimized for, and they were doing big volumes and whatnot. So this was a completely under the radar thing. And yet there was this culture, subculture of magazines and gamers who were basically getting them built by their friends or these mom and pop shots. Yes, yes. They were there. We were there. You know? And then there was the software developer. that were introducing the world to 3D gaming.

And I just felt that, wow, man, this is so excited. You know, honestly, I didn't even care about making money. The overriding factor for me was more so, wow. You know, this is so cool. This is absolutely so cool. There's going to be, you know, maybe I'll have a customer or two out there, you know, maybe in Oregon or in Washington State or in New York or somewhere. you know, playing on one of my computers, a video game that that person's going to love.

You know, what greater joy is that, you know? Yeah. So I think you get a pretty good review in this one magazine and Boot Magazine. But I guess it's kind of a small publication, right? So from what I gather, you decide to send another computer to another magazine to PC gamer, which is bigger. And I guess this time you also take an ad out, right? like in the same magazine? Right.

So we sent the machine. The machine was like the most glorious piece of machinery. And, hey, yeah, we're going to do an advertisement. And the advertisement back then for a full page was $5,000. And how did you pay for that? That's a lot of money. They also gave us net terms, I think. I go, oh, wow, okay, cool, net terms.

Let me put a credit card on this or whatever. You know, I don't know. It was. That's a lot of money. It was a lot of money. But I told that we were, you know, I'm not a gambler, but I definitely gambled on that one. We gambled on that one because between the machine, the rent, the, the advertisement, I mean, we were clearly way beyond our means already. And by the way, you mentioned this beautiful PC.

I mean, obviously the chassis was off the shelf, but how did you make it beautiful? Like, what did you do to it? It was such a complicated machine. It had one 2D card, two 3D cards, 3D FX Voodoo cards and Sly. Yeah, yeah. It had two sound cards. Okay. It had two hard drives in Scuzzi.

Well, it had a raid controller for the hard drives and TAN to make them faster. Memory Up the Kazum. By the way, that machine cost us money. That was a big investment. Yeah, how much would that machine cost to 1997? I mean, back then it cost like $6,000, $7,000. Wow. And you could not buy a PC like this off the shelf in 1990?

No, there was no way. There was no way. There's no way. You had to be. It's amazing. It's just so amazing because there were big companies out there who just, this was happening under their nose. I know. All right.

So you build. this thing. Basically, you're just picking the best components. Yes. Just kind of cherry picking the best thing. Yes. And making like a Maserati PC, basically. A custom hot rod. Yeah. Like... Custom hot rod. It's a custom

hot rod. That's what you were doing. Oh, yeah. That's what it was. And these chop shops exist, right? You can get a custom hot rod today. Exactly. And Ford and Chrysler and you know, Tesla, they're not making custom hot rods because... Exactly. Exactly.

I mean, I was looking. I just was before this interview is just looking at prices for like an IMAQ at that time because you're talking about $5,000, $7,000 for what you were building Yeah An IMac was $1,299.

Yep. PCs, desktop PCs at that time were like 500 bucks. I know. So this was a premium product for a very specific kind of customer. This is not a mass product. Yep, man. It was a tough, you know,

it was a tough proposition. But only those that could appreciate it appreciated it. Yeah. Because they knew the power of this PC once they loaded up their favorite game. I mean, we would give them a range of things. Like, okay, you can only pick from these three motherboards. You can only pick, you know, and let's say, from these two manufacturers in terms of memory. But they had the ability to create themselves their own machine.

I mean, it is, it is, it is, it is kind of remarkable. Here, here's this, like, group of, like, Cuban-American kids, right? Yeah. Yeah. Not a tech center by any means, certainly at that time. Yep. Like, building these gaming PCs. And, like, yeah.

Crazy. I go back in time and I go, what, what were we thinking of? What's going on here? Yeah. And, and by the way, when that review came out in PC Gamer, how was it? Was it favorable? We got a great review. What did they say?

He loved the machine. He called it an 800-pound gorilla, and he says, I'm not going to give it back to them. There's no way. I love this machine. Because the guys are a gamer himself. Wow. And we had the ad, and then we got a couple of orders. And then we noticed, I already started getting a little proficient with the web stuff.

We noticed that there was some traffic. But back then, all we did was you could configure the machine on the machine. online, but you couldn't order it. You could go to the website and you could design what you want, but you couldn't order it. Correct. You could call in and say, this is what I want to do. Yeah, and Alex would be the sales guy. So Alex would answer the phone and take the order and all that good stuff.

And we did okay. We did like, I don't know, 15 machines that month, whatever. Wow. And that's like at $3 to $5,000 a pot. That's pretty good. Yeah, yeah. Yeah, no, actually, back then, it was, the machines were averaging closer to $6,000 or $7,000. Hmm.

Okay, so, so Nelson, up to this point, it was pretty much you and Alex and Fabian who are running Alienware. But we're going to pause for a second because this is when another key person enters the business, that is Frank Azor. And Frank is actually here with us. He's been sitting here listening to our conversation quietly and patiently. By the way, Frank, have you learned anything you didn't know listening to Nelson? Oh, yeah. I've learned a ton. This has been awesome, actually.

Awesome. Okay, so Frank, I think you were like, what, like 17? Like a kid, I shouldn't say a kid, I guess. We were a teenager, and this is the late 90s. And I believe what, you join this budding group of three guys called Alienware. Is that right? Yeah, it was 1998. I was 16 years old.

I was a junior in high school. And you grew up in Miami, too? Yeah, born and raised in Miami. Very similar upbringing to Nelson, Alex, and the whole gang. Cuban parents, immigrants or grandparents? Cuban parents. They came over a little later than Nelson's. They came in 1959.

And by the way, were you a good student? I mean, I think probably you were. I was not. But my father ran an experiment. My parents ran an experiment on me in high school, and they said, if you get straight A's, we'll buy you a car. And suddenly I realized that I could be a phenomenal student and I can get straight A's. And that's when I realized how coin operated I am. And how did you connect with these guys?

How did you even know what they were doing? So a mutual friend that we didn't know was a mutual friend, was a friend of my sister and her husband, my brother-in-law. Yeah. And one day I'm at their house. Again, I'm in high school. I'm a junior in high school. And he was there. I tell him I'm building computers now.

Almost exactly the same story as Nelson and Alex. I was building it for friends and family. And he told me that he was working with a few guys that started a computer company. And I go, oh, man, that sounds incredible. I'd love to, you know, get to meet them. And he's like, actually, they're hiring. So he handed me a, you know, like a post-it note with the name of the company, Alienware PC, and Alex Agla's phone number on it.

I still have that sticky note till today. And then I called, and we set up an interview for, I don't know, someday during the week. And they asked me to be there like at 12 or 1. I'm like, actually, can I show up at 3? Yeah, and right, because you were at high school. And what were they looking for? Did you know? Somebody who was older, mature, had a lot of experience, everything I wasn't.

So I walk in. and there's some guy with a long ponytail sitting to the right on a couch when I walk into this office, and then I see these two other guys. One of them is Nelson, one of them is Alex. Who is the guy with a ponytail? That was Fabian. Fabian, okay. Yeah.

And they look at me like I'm a criminal or something that just walked through the door. And Alex would admit to me later that that was the moment he realized they needed to start locking the front door, so weird strangers wouldn't walk in. And I said, hey, you know, I'm Frank, and, you know, I think Max talked to you about me. And they're like, oh, no, no, you're too young for this. We want somebody with a lot more experience. And I said, well, actually, I'm here already. And I'm willing to work for free.

So why don't you at least talk to me. Wow. Yeah. And it's funny because Nelson talks about confidence, right? And I don't know where all that confidence came. But like the confidence to walk through that door and to sit down, even though they were kind of pushing me out the door, it was just something that I had at the time.

And I think I got him when I offered to work for free. That was the killer line. But it worked out, and they called me the next day and asked me to join. And all right, and so this became your after-school job. Yep. I would leave school at 2.20 p.m. And I'd rush over to Alienware, get there before three, and then we would end every day at seven.

And basically just building PCs. So Fabian would build them. And then when I joined, Nelson built a checklist of everything he wanted me to check on the computer to make sure that it was built correctly. And then I would load all the drivers on the computer. And what we would do would really cool. We would actually tell customers they could send us their games. They could send us their joystick, their game pads, whatever hardware they wanted pre-configured on the computer. they can mail it to us.

We would install and configure everything for them so that when they received the computer, they just turned it on and all the work was done. It was a fully turned key system. So, all right, Nelson, it's just the four of you guys still at this point. And I guess it's a sustainable... I mean, it's kind of... You can handle the workload, right?

Because it's like 98 and what, you're building two, three PCs, four PCs a week? Five, ten, maybe? Yeah, maybe eight to ten PCs a week. I want to just visualize the environment for once. Please, yeah, please. So it was a two-story building, tiny little office. How many square feet was it, Nelson?

It's tiny. 800 square feet. These decisions predated me, but somebody decided it must have been Nelson that we were going to build the computers on the second floor. And then we were going to walk them down the stairs. Keep in mind, these computers weighed 50, 60 pounds, yeah. Heavy. So this 16-year-old kid would walk down the stage. carrying this 50, 60-pound computer,

and then we would package it on the first floor. So we would put it in a box and then put, you know, foam and all that and then package it again. Well, Alex would be on the phone trying to sell computers, and Nelson would be on the other phone next to him trying to do tech support for customers, right? And then Fabian and I would be trying to package the computer, but the tape gun would make so much noise

as you were putting the tape on the boxes. Yeah. We had to wait until the two of them were off the phone so we could tape the box. And so we'd just be sitting on the couch waiting for the phone calls to end. Then we'd tape them. And then we'd, yeah, we'd ship them out every day. Yeah.

But one of the things that made life really interesting for us was we were a small company in Miami, taking orders that we would, you know, we'd at least book 50% of the order on the credit card. and the remaining balance when it shipped out. So, of course, the banks were all freaking out. What is this company doing? They're in Miami. Oh, God, the world's coming to an end. They thought you were in something unsavory.

Yes. So they would, oh, no, we have to keep the monies in reserve because there's fraud. What fraud? There's no fraud. I mean, we were, fraud was insignificant at our level because everybody was, I mean, they were seriously ordering the machine. And we would do our due diligence with the sale.

Yeah. But we also had the difficulties of dealing in Miami because, you know, nobody knew what was, you know, they didn't understand the business model. So imagine that one day you're not getting deposits in your checking account for your business. And you call the credit card companies and you ask them, why aren't you sending us the money? And they'd be like, oh, we have to hold it for 60 days to make sure this is legitimate. Wow. And we're trying to run a business. We have to, you know, you have to buy parts.

You have to pay yourselves. You have to pay rent. You have to pay services. And, yeah, they would hold the money for however long they wanted to hold it for because they thought the business wasn't legitimate. But, I mean, the model, if it did work, if you did get the money right away, was great because you got the money to buy. You didn't have to hold inventory, right? Correct. You would just get an order in, and then you'd go get the parts you needed and then make the machine.

For the most part, as our volumes began to grow, it was getting more and more challenging to source the parts. We used to do some pretty insane things to get parts. I remember a new graphics card had just launched, and we couldn't get any of them. And we sent every employee with their credit card to every electronics boutique in Miami and in North Broward, and we asked them to go buy the maximum amount of graphics cards that the retailer would sell them, and then we'd reimburse them on their credit card after they, you know, they brought the graphics cards back. But, you know, we were small. We were really small. We were arguably insignificant. And these parts were in high demand in many cases. And sometimes you'd be competing against the big companies like Adele or an HP for something like memory or for a motherboard or for a processor. We have an incredible story about when AMD launched the first one gigahertz processor, we couldn't get our hands.

on it. So Nelson Neurotics came up with the idea, just buy a bunch of gateways that have the processor in it. Wow. We'll take out the one gigahertz processor. We'll put a cheaper two or three hundred dollar processor that we can get. And then we'll put that one gigahertz processor inside our systems. I mean, we did crazy things like that. And what would you do with the gateway computers? We'd use them around the office for desktop for corporate, like for your workstation. You'd use it as your office PC. Yeah. You know, it's interesting. I'm just, what you were able to do, despite being tiny, a drop in the bucket right, early on, which was the big PC companies, they could make cheap PCs. You guys couldn't. You were not able to make cheap PCs. You didn't have the connections. You didn't have the supply chains. You didn't have the capital to scale that.

But you could make expensive PCs because that was possible to do and to charge a lot of money for expensive PCs, which is the big. PC makers, they were looking to reduce their prices. Exactly. What we were doing was selling four PCs and one. Yeah. They were fascinated by the fact that we were, you know, we were commanding that much money from those PCs. But if they keep in mind, what we were doing was providing the customer with the service

that the big companies really couldn't do. They were so configured for no customization or low personalization, let's call it that, and high rate of of manufacturing that what we were, we were configured completely opposite of that from day one. And that ultimately was, I think, one of the biggest competitive advantages that we had. And there was a lot of secret sauce in that. Like, you know, because we were smaller,

we were, we had access to certain components and ultra high tech and emerging technologies that weren't ready for mass scale and mass adoptions. So that we used our size to our advantage. Were you guys able in the late 90s to get a line of credit from a bank or any loans to just to shore up, you know, your supplies or to, or did you even try? Yes, we did.

There was one banker that we spoke to that got it. She got it. She was an older lady. We explained the circumstances. She came to the office. She saw what we were doing. She saw we were busy. We couldn't.

I mean, we're pulling our hairs. And she goes, you know what? Tomorrow you get the loan. She came. She drew up a check for $50,000. We signed the documents and, you know, we needed that money for the operational part of the business. So she was a godsend. She was the only one, really.

Wow. And what at what point, right? Because, Frank, you join in 98, and it's still the four of you. But obviously, that was not going to last because you had to, you would get in more orders would come in and you would need more than two people. people building PCs at a certain point. What was the tipping point? What happened? Like, was it a slow burn or did it all of a sudden just start orders to start to pour in that made it impossible for just the two of you to build the computers? Yeah, I think the inflection point was when we evolved the website so that customers could actually order it on the website instead

of just configuring it. Right. You know, and that is when things started going from like 20, 30 computers a month to 50, then 70, then 100. The challenge is, is the numbers still sound small, but you have to understand it's exponential growth. You're like doubling, like, one month to the next. Wow. You know, as a business grew and, you know, Nelson Alex started hiring more employees, we would outgrow

every single space. And then what ended up happening is by the time they were able to find the next parcel of real estate to keep up with our growth and we would build it out and move in.

We were never able to move out of the last building that we were in because the business just kept growing so fast. So it was always an idea of we're going to move from this old building

to the new building. But by the time the new building was ready to move into, we were so big we could never leave the old buildings. And that basically

happened forever until... Well, the last one. until the last one that we finally got a ride. And all right, so, but really you were still, even in the early 2000s, under the radar, right? There was no, the big guys, the big players were not hard. In fact, I think at this point in the early 2000s, the big computer companies were in crisis because there was so much competition.

The price of PCs was so low. They, I mean, this is when IBM was thinking about and eventually did sold off its computer. division. Stop making computers sold to Lenovo. There was quite a bit of pressure back then for them, but they didn't understand our market. They had no idea that this market would grow so fast and that there were so many people that were closet gamers, if you will. There were moms and dads and kids of all ages and college grads, and we were appealing to a lot of people. It was a bit of a golden age because as we were coming up as a hardware provider to gamers,

some of the greatest games ever created were also coming up. You had obviously, you know, John Carmack at Id developing the Doom series and the Quake series. You had Tim Sweeney and Mark Rain at Epic creating Unreal. And then at the same time, you had Microsoft taking notice of, all of this and saying they're going to get into the gaming space with the Xbox. Yeah. And, you know, for a while, as much as that was a threat to PC gaming and the death of PC gaming was pronounced, it also was a huge opportunity because they spent billions on

marketing and advertising and they brought the Halo franchise, which was a first-person shooter game that was exclusively on the PC. All first-person shooter genre was pretty much always on computer gaming. they brought that over to console gaming for the first time. And suddenly this platform of consoles, which had tens of millions of gamers out there from Atari and even before Atari, were playing PC-level games. And that was a big inflection point as well.

But everything was happening all at the same time. You know, and there's another component to this. Aside from the gaming and the customization and all the good stuff, we poured a lot of personality into the PC. the only guys that were really doing something interesting with the PC that gave it a design, gave it a life, was Apple. Yeah, beautiful, right? When those colors came out in the late 90s or the early 2000s, yeah, it was game changer, those giant monitors that were blue and translucent. Yeah.

Exactly. So there was no PC maker out there that was really doing that. They were just boring, beige colored boxes. It was awful, awful. Yeah. So we made a decision. You know, we're going to do some cutting-edge stuff, not only inside the box, but outside the box. We're going to give this machine a personality like a car, like a Ferrari, like a Porsche.

So we started doing that with the PC. Doing what? Well, we started, first we had different color escapes of like plasma purple, Martian red, lunar white. And it was the color of the actual metallic chassis. Or it was like colors that were like lights? We had contracted a body shop that basically painted cars. Going back to the hot rod analogy we were making earlier, they were painting these cases and we did keyboard,

monitor speakers. So you would buy the cases that were off the shelf, but you would paint them. We would send them to a body shop in Miami. Or actually, initially we sent it to one in Minnesota. Okay. And then they would paint them. then we'd ship them down. Eventually, Alex was like, this is too expensive, shipping things back and forth because he was running

supply chain and operations. So we moved them down here, and they set up a body shop down here in Miami. Next to us. Next to us. Right behind the warehouse. Anywhere is still one of the few brands that has a personality behind it where you can cover up the logo and know immediately that that is an alienware product. And, you know, people don't buy it.

purely because of its function. They buy it because, okay, it performs a function, but it has a style. It represents me. It says something about me as the purchaser of that product. And that was very similar to Apple back then. Apple was, you know, very similar. Creative, creative people. Right.

The creative people, the rebellious people, the whole campaign they had around that. Alienware was the closest thing you had to something like that in the PC world, in the PC spectrum. I mean, obviously, you were getting attention for what you were doing. Certainly when you were one of the very few businesses doing this, but by the time this became clear, it was clear to, you know, Dell, for example, and other big computer makers that there was money to be made there. They got into this game. And you guys, I think, when Dell really got in 2003, you were, you know, you were probably doing, you know, 50, 60 million dollars a year in revenue, maybe a little bit more. So you were doing a significant amount, but not like Dell. No, no, no, no. Yeah, we were done, order nothing.

I mean, you had a brand, but now the big companies are coming in and building these really good gaming PCs that you could buy and they had a better distribution. Some of them were available at Best Buy and all these other places. That must have been a little concerning, even though you had a good brand, what, how were you going to, I mean, were you guys nervous at all? No, not at all. You were nervous. Okay. When Dell got in, we were. Okay.

Of course you're nervous. The only reason I said Dell was because Dell, we mimicked Dell's business model. We didn't reinvent the wheel. Right. You built, Dell's model was you ordered a custom-made PC and they would send it to you. Yes. But, hey, we also, you know, we were also growing. So I always felt that, hey, you know, if given the right funding and we could

you know, get some good hires and make and develop a supply chain with, which is the hard part with the East, then, hey, we really do have a chance. When we come back in just a moment, Nelson and Frank keep an eye on their biggest competitor, which, as it turns out, is watching them too. Stay with us. I'm Guy Raz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2004, and Alienware has become one of the fastest growing private companies in the U.S. It's doing over $100 million in revenue and has like 500 employees.

But that kind of growth can be really hard. It was pretty tough. I got to tell you, I mean, we talk about growth as being, oh, it's great. Yeah. You remember that UPS commercial where you saw that ticker of the orders started coming in? Well, that's a problem too, right? I mean, if you don't have the infrastructure, then you could blow that brand away. I mean, it's going to, you're going to have bad service.

All sorts of bad things happen. One of the things that we did was the little that we managed to keep for ourselves, we always reinvested in the business. We never, we were never top heavy. We didn't, we took, you know, average salaries. We didn't give ourselves big bonuses. We sold the notion to the employees also that, hey, there'll be time for that. That will happen, but I need you guys to do it with us.

Yeah. So, you know, but we were pretty successful managing the expectation and the growth. Well, tell me about the relationship between the four sort of original people involved. I mean, obviously you're still friends with Alex and the two of you are friends. and you haven't worked together for a long time. We're going to get to that in a moment what happened to alienware. But did you all kind of,

everybody kind of have their lane and focus on that? And was there ever any tension or, you know, different views about where to go and which directions to take? What I learned was that I was not, I was not your typical CEO because I just didn't have the training or the business acumen or whatever. But if there was a disagreement, if there was debate, then fine. Actually, I welcomed it a lot.

I wanted to hear all the bad stuff first and, you know, all the negative news first. And then let's focus on how we get better. Yeah. You know, so we, and everybody for the most, they knew it was a lot of work. There was a lot of work involved, especially us, that we just didn't have the typical tools that a, perhaps an MBA, coming out of school would have. But we figured it out. And then we were smart enough

to hire people that were smarter than us. But you mentioned contention. I think one of the greatest assets that we had at Alienware is how different Nelson and Alex are and were and how much they debated

every issue. They rarely ever saw eye to eye. And the beauty of that was that we would see almost every angle of a challenge or a decision that we had to make because they saw it always differently. And finally, they would debate it out.

And, you know, I remember that my first day on the job, I could hear them screaming downstairs, and I'm a brand new employee, and I look over to Fabian, and I go, what's going on? And he goes, don't worry about it. It'll all be over in a few minutes. But it was that contention and that debate and those different perspectives

that helped us arrive at really good decisions. And ultimately, I think, had we not had that, We probably wouldn't have been as successful as we were. All right. You guys are obviously, you know, you built this thing in a garage, you know, or, you know, in your house. And less than 10 years in, you consider going public. But ultimately, you get an acquisition offer from, from Dell, from your biggest competitor, from the evil empire, obviously. And he's, Michael Dell's been on the show.

But, but you must have been like. they were your competitor. You probably saw them as an evil competitor. No, I didn't. No, you didn't. I saw them as my long-lost brother. You know, the Romulans and the Vulcans. If anybody can understand that out there.

You know, they were, we were very similar. We had the same model. So the first time XPS comes out. Their XPS. Their XPS. Yeah. And 2001 or two or two. Yeah.

Maybe 2000. Well, maybe this was closer to 2003, Frank. Yeah. Okay. Yeah. Well, I sent a note to Michael. This is to Michael Dell, the founder of the company. Right.

Thinking I'm never going to get a response. I said, okay, Michael at Dell.com, sure enough, whatever. Maybe I shouldn't have said that on there. That's right. It's not hard to figure these out. Yeah, yeah. So I sent him an email. And I did this one on my own.

I just said, you know, man, I am a little bit concerned. I'm a little bit concerned because this is a big guy and he's in our space. And I should be, I should be concerned. But I said, I'm going to be very cordial about this whole thing. Hey, Michael, this is Nelson. I just want to welcome you on board. You're giving a lot of visibility to the gaming market. I appreciate it, blah, blah, blah.

Oh, so you're welcoming him into your space. You were like, you jerk, you're coming out. You were like, hey, welcome, you know. Keep your friends close, but keep your enemies closer. I mean, so I said, okay. So we exchanged email, by the way, he responded within minutes. And you don't keep in touch with them. That was it.

It was just a cordial exchange. Exactly, exactly. We exchanged maybe a couple of emails about a couple things, but we don't, nothing, nothing major. So 2006 comes around, I think what happened was, and I don't want to speak for Michael, but we probably got wind of us growing and us going public. And at that point, he sent me an email. Hey, do you want to meet? You know, in Orlando, I go, sure.

And he goes, bring Alex. Let's sit down and talk. So we met Orlando and he goes, guys, I want to buy you out. And I'm like, okay, I'm thinking, why do you want to buy us out? You know, what's going on? But he goes, well, I think that you guys are doing great. I've always admired your company and you're doing the right thing. He recognized the value in the brand.

And this came out of the blue. You had no idea. No idea. No idea. No, you were not soliciting this. No. He just was like, I think I want to buy you guys. Yeah.

Did he put a number on the table at that time? He put a number on the table that it worked. I mean, the number didn't. Well, the funny thing is that we come to terms. He, he sends his guys over. They start doing the due diligence. Then a month or two into it, all of a sudden Michael sends, you know, calls me and says, hey, we're going to have to pull out.

Wow. You're going to pull out now after knowing everything we're doing and how we run our business and books. Are you crazy? I didn't say anything. I kept my mouth shut. I kept cool. I said, okay, you got to do what you got to do.

And I got to do what I got to do. Yeah. Why did they pull out? Well, I guess he wanted to, you know, he presented it to the board. You know, I'm sure the board said, gaming, what is gaming? Are you guys crazy? Your enterprise. you know, you don't need this, blah, blah, blah, blah.

You know, that typical board stuff. Yeah. And he was, he really did love us. He really, you know, I almost felt like he was one of our customers. But I'm saying, well, whatever it's meant to be is meant to be. We're going to go now. We're going to percent. And we're going to go public.

That's it. I get a phone call, unknown caller. I'm driving to dinner with my wife. This is 2006. This is 2006. I get this call from unknown. I know unknown means Michael. So I get the phone call and then we start talking, talks about a number.

I say another number. He says, okay. I says, hey, this time we have a deal, right? Then he goes, yes, absolutely. And we made the deal happen. Then he asked me, he asked me, what do you want to do, Nelson? Do you want to stay, you want to be incorporating to the Dell machine? Or do you want to, you know, be your own, you know, entity?

and pick from us what you need when you need it. The challenge was I wanted to make anywhere a little bit bigger, so no, I want to incorporate. I want to incorporate into your supply chain mechanism. I want to, you know, get in there so that we can grow the eatingware business. So it presented with challenges and stuff, it's hard. I mean, it's, but honestly, they did a phenomenal job of preserving the brand. when that came to you, obviously we're going to make a lot of money.

The founders are going to make a ton of money. This is going to be an undisclosed acquisition, but I can imagine what it was given what your revenue is. You do some calculations and figure out roughly how much you got. Was in your view at that time, because I think I probably would have done that, was it part of it was it like, okay, I'm just, I'm tired. I've been doing this for so long. I just need a break. Was that part of it, too? No.

No, no. I was ready. I was ready for the next. I was, I was gearing up for the next level. So to you, it was Dell was going to be with their supply chains, with their, you know, marketing no chops, with their massive scale. You were thinking, we're going to use their resources to grow even bigger. And now we're going to be part of Dell, but we can only do this if we have access to massive resources, like the resources they have. Exactly, exactly. But what I soon found out, that I'm not a corporate guy.

Yeah, because you were hired to be a Dell employee now. Now you're the CEO of a Dell portfolio company. Yeah. And I, you know, Alex and myself, especially Alex myself, couldn't, we weren't going to fit in. You weren't, you weren't, you weren't, you weren't, you weren't, you don't want to go to the meetings. You don't want to. Yeah, there was a lot of corporate, you know, like request and a lot of, uh, decisions that would take a long time, because there was a lot of analysis that had to be done, understandably slow. So it was a public company, and I understand that. But, man, I kind of wanted to move at the speed of light, and they just, they're an aircraft carrier, and we're like a little PT boat. Yeah.

So, you know, one of the things that Alex, Alex was tired, Alex was, you know, did do a lot of work. He was very tired. I was tired as well, but I was ready for the challenge. But Alex said, listen, man, I don't think I could do this. And once Alex says that, I'm like, I'm not going to do this without Alex. It's going to be very, very difficult. And I just don't want to do it. So that's where it ended.

Yeah. So Nelson, you left. You and Alex left Alienware, I think, roughly the same time. And, Frank, you stayed on. In fact, you stood on in a leadership role at Dell, I think until just a few years ago. But, I mean, Nelson, back then, I mean, I think it was. This 2007 when you left Alienware. And I wonder, did you go through a period of just like sadness or, I don't know, depression?

Or, you know, like, what do I do now? Yeah, I was depressed for like two years. It was tough. I was going 100 miles an hour and every day. And then all of a sudden, you know, because, you know, Alex could adopt very well because he's got so many hobbies. and he, Alex is like a machine. He just, he's got a million things going on. But I am very singularly focused.

Your hobby was your job. My hobby was my job. Yeah. And that's amazing. See, people don't, people are saying, wow, you get all this money. People are probably thinking that about you. Yeah. Yeah.

You're loaded. You've got, you've got everything set. You're set for life. And here you are, you're actually depressed. Yeah. You know, I, uh, I was brought up from, pretty humble beginnings. Money obviously is important for everything,

but it's never been the most important thing in my life. I felt that I was contributing something to people, and that's what I, that's what drove me. Nelson is a creator. He used to create the Alienware ads. Most of the product, if not all the product innovations that you saw at Alienware, the industrial design, was all really being fed from from Nelson's mind and you know that creative outlet was was now gone it wasn't it wasn't there anymore

But I mean everything you still see to today I mean the industrial design characteristics of alienware as they've as they're still carried through There's components and elements of all of that that that came from he was the visionary behind all of these things But it's it's it's in a lot of ways you know alienware is is is Nelson. Gee, thanks, Frank. I should hire you to speak for me. So, Frank, you, you stayed on for a long time. You only left Dell in 2019. Yep. And then when you left, you were the vice president, the GM for premium consumer brands.

You did a big, big, massive job at Dell. So you really, I mean, and you kind of oversaw the growth, the explosive growth of. I mean, to the point where now, it's not just PCs and laptops. It's like they make gaming chairs and headsets. The gaming chairs thing still boggles my mind that that's a whole thing. But, I mean, really, like, you oversaw this, this massive growth of this brand for the next, what, how long will be there? Almost 15 years. 14 years. Yep, long time. It goes by fast. And tell me what, I mean, is it, I mean, is that what happened with Dell's resources and, you know, it's kind of platform, you were able to take Alienware to the next level? It wasn't that easy. Initially, when Dell acquired Alienware, we were still competing against XPS gaming, because XPS was their gaming brand. Yeah.

So mission number one was to survive that. With the hope that they wouldn't shut you down and just take your technology or take your people. Correct. Correct. You know, the PC industry is extremely challenging. It's very competitive. You have hyper-competitive people. And you had two, you know, sets of people now trying to win against the same customer, trying to win the same customer. Wow.

So you're internally competing with your colleagues now? Yes, and we are dependent upon them because, to Nelson's point, right, we immediately recognized the benefit of leveraging their supply chain and their operations. And the competitor piece was definitely awkward, but the cultural differences were so stark. You know, Alienware was all about just, we got to do whatever we got to do to get the job done. And going to a large company, that was 50,000 employees by the time I had joined, was a complete. different world with tons of analysts and all this research and all these well-educated professionals and enormous experience and just this carefulness and this thoughtfulness to

every decision that's made. And that was very different, a completely different environment. And it was extremely intimidating, very, very scary, very uncomfortable. Suddenly I felt like I was back in kindergarten almost, like starting at Grandkids. where I had to learn a big company, and I had no experience with that. And it was a different language. It was everything, everything was different about it. Then it became, okay, once it was pretty clear that we were going to survive, then how did we shift from surviving to thriving?

And that took a little bit of time to go off and figure out. And we figured it out. I mean, but the whole time, you know, what I'd say is we built this thing. You know, Nelson Alex, and more than anybody, I built this baby, if you will. And you don't want to let it die. You don't want to let it not prosper and see it recognize its full potential. Yeah. When you guys think about this journey, right?

You know, this thing that started in 96, 97, a garage sold for, you know, who knows how many millions of dollars to Dell, but a lot. and you built a brand that is really enduring. You know, certainly, you know, one of the most prominent, you know, gaming brands in the world. How much of that do you attribute to how hard you worked and your skill and intelligence and how much do you think has to do with luck? First to you, Frank. I think it has to do almost entirely with the people that were involved in all of it. that was the secret sauce of alienware was the differences in opinions and the respect that everybody had for one another and all of that.

Was there luck? There was an enormous amount of luck. So many other things could have gone wrong. And a lot of things went wrong. This was not a perfect journey by any means. I mean, there was an enormous amount of obstacles that were presented along the way. And hard of work had to overcome those obstacles. but I think it's the people and it was the luck of those people coming together that were really the driving forces from my perspective. Nelson? You know, interesting you say about, you know, you talk about work. I think if I had to give one piece of advice to an entrepreneur is if you're not smarter than they are, then I'll work. if you have a tendency of saying, hey, these people are smarter than me, my competitors, my whatever. But, you know, I'm pretty smart too, and I cannot work them. So I'm going to work hard.

I think that's one of the biggest things that we all had in common. We worked really, really, really hard because we just did not have the formal training that we needed. But beyond all things, I think that. without passion, we're nothing. And I think if you take that approach as an entrepreneur and look at business that way, and not do it just solely for the money, but for whatever else drives you, you know,

I think you'll be okay. That's Nelson Gonzalez and Frank Azor, two of the co-founders of Alienware. Frank is now an executive at AMD, a company that makes processors and a whole range of gaming devices. In a while back, both he and Nelson were appointed to the board of yet another gaming company, GameCraft. So for the first time in like 15 years, they're working together again. Before I let you go, Nelson, you said you believe in aliens, right?

Oh, yeah. So here's my question. If they come, if they arrive to planet Earth, are you going to run out of your house, your arms open to the sky, saying, yes, take me welcome. Or are you going to, like, run to the hills with your ammo and shotgun and hide? I am not one of those believers that aliens are just entities from another galaxy or another world. You're ruining my story. My scenario.

Okay, keep going. Okay, so if I had to leave with them, if they gave me an option, I would definitely, you know, give me five minutes. Let me talk to my family, but I'm gone. You're on that ride. Yeah. Even if they poke needles in you and dissect you, you just... It depends where they poke the needles at. Yeah.

But you had to check out that ride. You're like, you know what? I have to check out the ride. Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is hibt at ID.wondry.com. And if you want to follow us on Twitter, our account is at how I built this, and mine is at Guy Raz. And on Instagram or... at How I Built This, and I'm at Guy. DotRaz.

This episode was produced by Carrie Thompson with music composed by Ramtin Ariblui. It was edited by Neva Grant with research help from Sam Paulson. Our production staff also includes J.C. Howard, Casey Herman, Liz Metzger, Alex Chung, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. Our intern is Susanna Brown. I'm Guy Raz, and you've been listening to How I Built This.