How I Built This with Guy Raz - Dell Computers: Michael Dell (2018)

Episode Date: January 6, 2020

Before it became fashionable to start a tech company in your dorm room, Michael Dell did exactly that. In 1983, he began selling upgrade kits for PC's out of his dorm at UT Austin. A few months later he dropped out of school to focus full time on the PC business. At age of 27, he became the youngest CEO to head a Fortune 500 company. Today, Dell has sold roughly 700 million computers. PLUS in our post-script "How You Built That," we check back with Vanessa and Casey White, who turned their grandfather's pierogi recipe into Jaju Pierogi, hand-made Polish dumplings that are sold across the Northeast. 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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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.ca. Hey, and happy New Year, everyone. Okay, now just for a moment, think of yourself at the age of, say, 21 or 22. Maybe you're just out of college or you're in the first few months of a new job. You've got a roommate or two.

trying to save a bit of money, whatever. Okay, now think about Michael Dell. At the age of 21, he was already running a company that was making like $60 million a year, which every time I say this just still seems crazy to me. I mean, 21 years old, $60 million, and that was just the beginning for Dell computers. This story of how Michael built his company, it's a kind of thing that makes you feel like almost anything is possible. This episode first ran in January of 20,

You know, here I am supposed to be going to college, and I've got this thriving business in my dorm room. I was buying computers and souping them up with more capability and then reselling them. So I advertised. I bid on state contracts. How did you know how to do all that? You know, I don't really remember how I figured that out, but I somehow figured it out. From NPR, it's how I built this, a show about... innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how a college freshman turned a dorm room side hustle into Dell,

one of the biggest computer makers in the world. Long before anyone heard of the tech wonderkins like Mark Zuckerberg or Evan Spiegel or Katrina Lake, back before it was fashionable to drop out of college to pursue your startup, even before people used the term startup, Back in the ancient days of the 1980s, the dorm room miracle story you'd have heard of was Michael Dell's. Now, today, the company is enormous. It's beyond enormous worth billions of dollars. Dell has sold more than 650 million computers since Michael Dell founded it in 1984. And what's amazing about this isn't the money.

It's not even the idea. What's amazing about all this is, well, Michael Dell. Because he's not a back-slapping sales guy. He doesn't come across as particularly charismatic. He's actually on the quiet side, maybe even a little shy. Michael grew up in Houston in the 1970s, and this was just as digital technology was taking off in that city with companies like Texas Instruments and then later Compact.

His dad was a doctor, his mom was a financial consultant, and the expectation was that Michael would become a doctor, like his dad. But even from a young age, Michael Dell felt pulled in a different direction. He was into numbers. I mean, I remember when I was a small child, my dad had this adding machine. It was a Victor adding machine. This is before the electronic calculator. And I was just fascinated that you could add up numbers with this machine and really big numbers.

And so, and it would make this like mesmerizing sound every time you'd, did it. And I just kind of loved that. And then I remember when I was about seven or eight years old, I bought a calculator. It was the first semiconductor-based calculators. And I was fascinated that this small machine could do complicated math problems. So yeah, I got very interested in this stuff. it also turned out that about equidistant between my junior high school and our house, there was a Radio Shack store. And so when I was riding my bike home, I could stop by the Radio Shack store and see the early forms of the personal computer and hang out there until they kicked me out of the store. And were you, you know, like kind of entrepreneurial as a kid?

Yeah, I kind of liked business. And I had all kinds of businesses, you know, selling baseball cards. I had a stamp auction. I got a job at a gold coin and jewelry store. And I was to negotiate with people that were selling things and buy those things the lowest possible price because the owner gave me a percentage of the cut. And I read that you also worked for the local paper for first. some time. Yeah, so I got this job working for the Houston Post newspaper. It doesn't exist anymore. Now they

think they combined with the Houston Chronicle. And my job, along with hundreds of other, mostly, you know, teenagers, was to call random people on the phone and try to sell them a subscription to the Houston Post newspaper. Right. And I observed three things. The first thing, I observed is that if you sounded like the people you were talking to, they were much more likely to buy the newspaper from you. Like you put on a text, like a heavy Texas accent? Yeah, I'm not going to do it for you here, but I think you can use your imagination. Okay. So second thing I observed was that people that were getting married were much more likely to buy the newspaper. And then the third thing I observed is that people that were moving

into a new house or residence were also far more likely to buy the newspaper. Well, how did you know who was getting married and who was moving in? Well, you talk to them. You strike up a conversation. Do you just call people and say and ask them about themselves? I guess this was like, at that time, people were perfectly happy to tell strangers personal details, right? Yeah, and so I observed this. And what I figured out is that in Texas, when you, as this is true in many states, When you want to get a marriage license, you have to go to the county courthouse. Ah.

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

And I sent, you know, a massive direct mail campaign to all those people that were applying to get, you know, marriage licenses. And there were also, at that time in Houston, there was a building boom, and there were these very large apartment and condominium complexes that were going up. And so I would go to these buildings under construction and sort of figure out who was in charge and say, hey, I'm from the Houston Post newspaper. And, you know, we've got this great offer where your new residents can get the paper free for two weeks. And all they need to do is fill off this little form. You were a high school student when you were doing this. Yes.

How much money did you walk away with? I think I was about 17 years old, and I made a little over $18,000 that year. This is like freakishly precocious of a high school senior. Like it's just weird that you would even know to think of doing those things. I mean, don't you think? I didn't really think about it like that. I just seemed like a good idea. So I was pursuing it and it was working.

I did plenty of things that didn't work, but that worked, so I kept doing it. $18,000. What did you do with that money? I mean, that must have been more money than you'd ever seen in your life. I bought a BMW because I wanted a BMW. What did the other students think of you? Did you have this reputation as like the business whiz kid in high school? Or like what did they think about you?

You know, I don't really know and I didn't really care. So I was sort of keeping it myself and, you know, I had a few friends, but I wasn't the most social of kids. But you must have been somewhat social because you were going out and selling stuff to strangers. Sure. Social enough to make the sale. Yeah. So you were on the one hand doing this entrepreneurial stuff. And then I guess you were also just really into computers? Yeah. You know, the original computer that I, you know, got my hands on at home was the same one everybody else had, which was the Apple II. The Apple II, yeah. Yeah. And one of the beautiful things about the Apple II was that all of the circuits were discrete circuits that you could understand. So you could go in and start to, you know, play with those and modify them and reprogram the bios and,

upgrade the system and take it apart, put it back together. So, you know, and something happened here around 1981, IBM introduced the IBM PC. And that was sort of a very important moment because if you dial back the clock to the late 70s and early 80s, you know, this company IBM had a leadership of the part of the economy referred to as information technology, unlike any other company at any other time in history. Wow. They were by far the dominant company. So when IBM introduced the IBM PC, this to me seemed to be a very important moment.

So I tried to understand everything was going on about that. And so when you took apart this IBM PC that was selling for about $3,000, as far as I could tell, it was about $6,000. worth of parts. Wait, you bought one and you took it apart just to check the insides out? Sure. Yeah. What else would you do? So you got to take it apart.

How can you understand it if you don't take it apart? But like most people buy computers to like, you know, at that time, I guess to do basic, you know, accounting and word processing. You bought it to take it apart. Well, I wanted to understand it. And, you know, to understand it, you have to take it apart. Huh. And I remember in 1981, I was 16 years old. I'd just gotten my driver's license.

And they had this thing called the National Computer Conference in the Astrodome in Houston. And I, you know, as soon as I got out of school, I would rush over there. And they had all of the computer companies of note in the world in the Astrodome. And they were showing off their computer equipment. I mean, that's an amazing coincidence because you went to that convention, which happened to take place in Houston that year. Just happened to be in Houston that year. And it just happened to occur like a couple of months after I got my driver's license. Yeah. So, yeah, I mean, there's definitely some luck involved here. Right. And that convention, not only were you there, but Rod Canyon went there too, who went on to start Compact. I mean, Compaq and Dell came out of that convention.

Yeah. Well, and. And I remember in my chemistry class in high school, the guy sitting next to me was telling me that his dad had just left Texas instruments to go start this new computer company. And, you know, he was one of the early guys at Compaq. Yeah, it's amazing. So you, obviously, you graduate high school and then you go to university to UT, Austin, right? Yes. I was a pre-med major. And, you know, some of this was the programming from my parents because, you know, my father was a doctor, my older brother was a doctor. And I always thought I'd be a doctor. And when I started going to school, you know, my parents weren't around all the

time, right? Because I'm in Austin there in Houston and you're pretty far away. So you got a lot of free time on your hands. So I start exploring this whole computer thing further. And one of the things that I noticed about the computer business was that it was very inefficient. It took a really long time for the technology to get from the people that made it to the people that were buying it. And it was actually rather expensive and slow to occur. And to me, that was sort of frustrating. So you are a, you're a student at UT.

You're supposed to be doing pre-med training. Right. And you start to think, hey, the PC market, like there's an opportunity here. Is that what you start to think? So I was in this mode of buying computers and souping them up with more capability and then reselling them. And it was just sort of a fun thing to do, a way to make. some money. I loved the computers. It was actually working out great. What would you do? You would go and find like secondhand computers and take them apart and

rebuild them and then sell them to people? No, no. I was buying new computers and I would upgrade them with more memory. And actually the main business became putting hard drives in those machines so back then the original IBM personal computers had no hard disk drives so what I would do is I would buy a couple of these disk drives and buy a controller card and write some software make some cables and make a hard disk drive system that you would put inside an IBM computer and then instead of two 160k or 320k floppy disk drives it would have a 10 megabyte hard drive right which at the time was something amazing, right?

Yeah. Sounds ridiculous today, but 10 megabytes then was, that was like unbelievable. How long would it take you to upgrade one computer, for example? Oh, it didn't take that long, you know, depending on what you were doing, maybe 30 minutes, 45 minutes, something like that. So you could do a bunch of computers every day. Oh, sure. Yeah, no problem. In between classes.

But you really weren't studying. You weren't, there's no way you were doing your score. I was definitely slacking off on the schoolwork during that time, yes. But who would you, I mean, how did you find customers? There was no Craigslist. There was no, I mean, you were 18 or 19 years old, I guess. I mean, how did you even know who to sell these two? I advertised in the local newspaper.

I bid on state contracts. And it's kind of funny, the state office that was responsible for buying computers. equipment and everything else was about three or four blocks from my dorm room. So I could just like walk over there. And they would give you all the dockets for all the things that the state wanted to buy. How did you even know how to do that? You know, I don't really remember how I figured that out, but I somehow figured it out. And, you know, but my, my biggest customers were universities in the area, doctors, lawyers, you know, architects. things like that. Students weren't really buying computers at the time. And most of the students

that I knew, they weren't really interested in computers at the time. That sounds like crazy right now. But this is back in 1983, 1984. There weren't very many people that had personal computers at the time. Okay. I'm hoping that I don't sound like a broken record. But I'm just thinking, Michael, like here you are. You are an 18-year-old kid. I mean, you, you, you, probably looked like a baby and you were going around a hawking computer. So like, why would these architects or businessman or lawyers have taken you seriously? Well, I guess they figured I knew what I was talking about. Nobody ever said, well, I'm not going to buy from you because you don't look the part or something. So I think the early adopters of computers were

sufficiently technical and geeky that I was able to relate to them in a way that resonated. And so I didn't have any problem. And how much money were you making at the time? I was doing about $50,000 to $80,000 a month in business when I was in my dorm room. That, I mean, that's just an insane amount of money. I mean, did you tell your parents that you were making this much money? No, no, I didn't. Now, they eventually, going back to late 83, you know, they became very upset with me and said,

you have to stop this and focus on your studies. You've got to get your priorities straight, you know, what are you doing with your life and all that stuff? And, you know, I agreed to do that. You know, it was like going cold turkey or something. It lasted about 10 days, and I actually realized that this was more than a hobby or a nice way to make some extra cash on the side while I was going to school, but actually something I was very passionate about. So during those 10 days, I sort of mapped out the beginnings of how I was going to finish up my freshman year, but then launch this as a real official business. and I eventually made a deal with my parents that if it worked out, I would continue, and if it didn't, I'd go back to school.

I mean, I can just imagine how exciting it was. You're 18 and you're selling, you're starting a company, basically, without even realizing it, I guess. What was it that was more exciting? Was it all this money that was coming in, or was it just that you were just selling a bunch of computers? Well, it was probably a little bit of everything. I mean, the opportunity for, you know, what became Dell Computer Corporation was more and more apparent. And, you know, while you couldn't see out three or four years, you know, you could see far enough out that, you know, keep going. So you were, I guess, for the first couple years or at least for the first two years, you were just buying off-the-shelf computers and making them better? That's right. Well, we started upgrading other people's computers, and then we started making these hard disk drive upgrade kits. That became the main business of the company selling hard disk drive subsystems and memory kits to upgrade the computers. When you say, Michael, when you say we, who were the we? I mean, you started this by yourself in your dorm room, and then who did you bring on to help you?

Well, I always say we because that makes it sound like there's more. more of us. But when I started, we was just me. But I hired about one person a week, every week, you know, for the first year or so. And then it became more and more. Yeah. And I remember one time we had this customer who wanted to come visit us. It was Martin Marietta, which is now part of some much bigger company. And the guy wanted to buy like 150 of these kits, which was, you know, for us, a pretty enormous order. And he wanted to come to Austin and see our factory, right? You know, operations.

Yeah. And so this was a little bit scary because it sort of looked like a massive dorm room. You know, it wasn't the most put-together place. This is not an actual dorm room, right? Like you had by this point rented out an office space. Yeah. Yeah. We were growing quickly.

And so we, you know, we tried to clean this space up and put on some semi-respectable business attire. Yeah. So the guy is going through and we're showing him, here's how we format the hard drives. And here's how we, you know, ensure the quality controls. And we're sure we can meet your demand for this order for 150 units. And he says, well, what are those? And I said, well, those are the computers that we have to format the hard drives. And by this time, we had actually been assembling our own computers just to format the hard drives

because it became too expensive to buy them from other people. And he said, well, why don't you sell those? And I was like, oh, that's a great idea. I should have thought of that. We were so busy making these hard disk drive kits that we hadn't really thought to make our own computers. When we come back in just a moment, how that idea launched Michael down a path that would make Dell one of the biggest computer companies in the world. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. Hey, welcome back to How I Built This from NPR. I'm Guy Raz.

So normally at this point in the show, we start to talk about the slow and steady growth of a business and the early struggles and all the hard work that went into getting it off the ground. But in the mid-1980s, pretty soon after Michael hired his first engineers to start making the first Dell computers from scratch, they were selling so many computers so fast that they started to compete with the biggest name in computing, IBM. IBM at the time had a 6 megahertz 286 computer that they sold for $3,995. Yeah. So, you know, we introduced a 12-Mex computer. megahertz, 286-based computer, and we sold it for $1995. So our computer was twice as fast and was half the price.

How were you able to do that? Well, we still made a decent margin selling them. And I think one is we had some clever engineers, and we had this great supply chain that we created. And so when we would sell, let's say, $200. computers in a day, you know, we would give that signal back to our suppliers who would every day or every few hours deliver parts to our factory. Yeah.

And then we would, you know, ship those computers out to the customer. So we had a unbelievably efficient supply chain that we created out of necessity because we had no capital. That also meant that we had the freshest parts at the best cost. the costs of the materials were coming down, we benefited from that, and we could get the latest technology to the customer faster than anybody else. And you didn't, you, you were direct to consumer company. You didn't, retail shops were not selling Dell computers, right?

You had to call Dell or fax Dell and order a computer. At the time, that's right, except most of our business wasn't to consumer. It was to business. It was to businesses. Right. But that's what you just said is actually a common misperception. A lot of people thought, oh, only consumers buy from Dell. Yeah.

That's actually not what was happening. We were selling to all sorts of companies and governments and small and medium-sized businesses. And that was most of our business, even from the beginning. And at that point, like the late 80s, what did you have in mind for the future? Like, what were your ambitions for the company? Well, we had some pretty big aspirations. The first one was we said we want to expand globally. It was pretty clear to us that if you were only successful in the United States, that wouldn't be good enough.

The second was that we had to go after selling to big companies. Because if you didn't sell to the really big companies and the biggest governments in the world, well, you weren't going to be a relevant company. Yeah. And then the third one was we said we had to differentiate on the basis of service. And we created this thing called on-site service. And today it would be a very common thing. But back then, you know, if your computer broke, you had to put it in the trunk of your car,

take it back to the computer store. And then they would take it. And then they'd ship it off somewhere. And you'd wait weeks and weeks. And you supposedly get it back. And so we came up with a. program where you, you know, call us on the phone, this is before the internet. And if you had a problem, we'd help you resolve it on the phone. And if we weren't able to resolve it on the

phone, we'd send a technician with parts to your location to fix your computer on site. And we did that all across the United States. And, you know, we thought the minute we announced this, our sales will double, you know, because it was like so much better than what we were doing before. And they didn't double instantly, but after about three months, they doubled. So. Wow. I want to put this into perspective because, you know, we think about like really young entrepreneurs and we think many people think Mark Zuckerberg or the guys who made Instagram. You're 21 years old. I mean, at that time, Dell was already doing like multiple, like, what,

10, 20, 30 million dollars in sales a year? I think it was 66 million that year and I was 21. 66 million dollars. I mean, just for a moment, you know, have an out-of-body experience for a moment. And don't think about you, but think about this 21-year-old named Michael Dell who's running a 66 million dollar company. I mean, it is unbelievable, right? I mean, it's almost implausible to imagine that happening. Yeah, certainly some, but I was more focused on the future and thinking about how do we become three times larger or ten times larger? What new products are we going to launch into? Do we have the right talent? How do we expand and get more salespeople? What was your lifestyle like at that time? I mean, did it change? Were you still living like a 21-year-old? or all of a sudden did you start, did you buy a giant mansion and how did it change the way you lived?

You know, I wouldn't say massive changes. I did buy a nice house. I wasn't wanting for things, but I didn't really have a lot of time to consume things. Yeah. And I wasn't really focused on that. I mean, it sounds like you were so busy that you were just your whole, everything that you were doing was this job. And I mean, I'm assuming you didn't. even have a personal life at that time, probably. You were just working all the time. Yeah, that's a, that's a valid assumption. I did a couple years later, you know, take a little time off and, you know, manage to find a fantastic partner and get married and, you know, have kids and all that. And that's been an amazing part of my life. And I was actually motivated to do this in part by Steve Jobs

and Bill Gates. Really? Yeah. And the reason I was motivated to do it because of them was because they were not married. And they were about 10 years older than I was. And having had the experience that I had as a child with my family, that's what I wanted. I wanted that family. I wanted that experience. And I didn't want to be a single guy in his 30s or beyond that didn't have that. I didn't have that. What would stress you out at that time? Because it seems like you're so even keeled that you don't actually sound like you get stressed out. But I have to imagine there were things that would stress you out. Well, we had plenty of stresses. I mean, I remember one time we got this letter from something called the Federal Communications Commission, the FCC. And apparently, you know,

computers fall under something called the Federal Communications Commission Class B device, which means they have to be approved by the FCC. So I did not know this. You know, they basically said you have to stop making these things. Wow, when was this? This was back like in 86, 87. So if we had followed their instructions, you know, we wouldn't be on this podcast today. You'd be out of business, yeah.

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

And make sure they comply, by the way. And so we did all that. And then he went to the FCC and said, hey, you know, these guys are honest, forthright people. They just didn't know. And now they filed their application. They want to do the right thing. And here's what we're doing. And we were able to work through it.

So, yeah, I mean, in the first three, four, five years, there were actually several things like that. I remember there was a thought at the time that, oh, wow, IBM's going to. take back this whole idea of the personal computer and it won't be an open ecosystem anymore. And, you know, we could all, you know, poof, be out of business. Well, that didn't really materialize. So you guys decided to go public, I guess, in 1988. You do an IPO and raise tons of money. And why did you decide to do that, by the way?

Because at that point, you, I guess, owned the entire company. Well, we needed the capital. We were growing at like 80% per year, and the company was only four years old, and we were expanding into all sorts of new countries. We were expanding into new product lines, you know, and we also wanted to be more of a peer with our customers. And being a public company, somewhat enabled us to do that because customers could look and see that we were, you know, a real legitimate company. that was helpful at the time. Well, here's what I think is hard for lots of people to wrap their head around, which is you were expanding by an order of magnitude every year.

There was huge amount of revenue coming in, but yet that wasn't enough cash and capital for you guys to expand. Sure, all the revenue is not profit. We weren't a software company, and so we did need some capital to finance the growth of the business and hire more people, open new office. offices, open new factories, build, you know, IT systems. You know, we absolutely needed some capital. And by getting that money, were you able to say, okay, now we're going to beat IBM. We're going to be bigger than IBM. Well, we definitely wanted to be the biggest. And I would say it changed a little

bit in that timeframe to, you know, competing with compact. And one of the things I think I learned along the way was that if you obsess on the competitors, you could be making a really bad mistake. And I think, you know, that was definitely true in the case of those two, in the sense that we had a better business model. And if we were trying to, you know, just look at them, we would miss opportunities by not listening to our customers. And how did we get from a company that started in a dorm room to having a half a billion dollars in sales?

Well, we did it because we listened and we learn. So I guess by the year 2000, end of 2000, so 2001, Dell computers, PCs becomes a number one brand by sales, by market share, more than compact, more than IBM. Yes. What did you, do you remember finding that out? Yeah, you know, we sort of have this celebrate for a nanosecond, you know, sometimes a little longer. But, you know, we were focused on how do we keep growing? How do we expand into servers and storage and services and software? And how do we solve the next unsolved problems?

And 2001, we would have been thinking a lot about China. know, in India and the emerging markets. Yeah. So there wasn't a lot of dwelling on any particular success. So, I mean, the company, you know, the story of Dell is just pretty remarkable because it seems like from the moment you started selling PCs out of your dorm room until 2001, it's just success after success after success. Like there was no moment of failure.

There was no real struggle. Is that true? Is that right? No, that's not right at all. There were plenty of struggles. And certainly if you go back and look at the history there, you'll find all kinds of missteps along the way and dead ends and mistakes. What was the dumbest mistake you made? Because it doesn't, I mean, Michael, I'm being honest with you, it doesn't sound like you made any mistakes. It sounds like you were preternaturally gifted as a high school kid to understand business. And then you understood communication. computers and then you just started this successful company. So what was a, what was a mistake you made? Okay. So 1989, we created something called Dell Unix. Which was a, which was a software? Yeah, yeah. You know, this, this was sort of prior to the whole Linux wave. Yeah. And Unix was a well-used

operating system in mid-range computer systems. You know, turns out we were really early that and that was a really bad idea and it was a kind of a horrible misadventure. Did it cost the company money? Did it affect a stock price? Sure. Yeah, all that. You know, around the same time, we also had a wildly ambitious engineering program that our team had cooked up and it was too big of a technical leap and the project failed. It was a project called Olympic. We had problems with our inventory control early. on. You know, we had all kinds of mistakes. Fortunately, none of them were fatal. And one of the things I learned a long, long time ago, you know, when you find a problem, fix it as fast as you find it.

And look, when you're pioneering in a new area with a new business model, there's no playbook. There's no, you know, you have to just learn by doing. And you have to intuit and experiment your way through the problem. I'm curious about 2004, because you step down as the CEO of Dell. I mean, the company is just, it's obviously a Fortune 500 company, had been already for more than a decade, huge revenues. Did you just think, okay, I've made it, I'm 39, time to move on and start a different phase in my life? Not really. You know, I didn't really think about it as stepping down. I had this partner in the company, Kevin Rollins, who was the president of the company. He and I were running the company together. And I decided, okay, you'd be CEO for a while. I'll be chairman.

I'll still be very involved. And after about two years, you know, the industry started changing pretty rapidly. And the board, you know, came to me and said, you know, hey, we think you should go back to being CEO. Yeah. I mean, what happened during that time? Because by all accounts that I've read, there was a decline. I mean, 2004, Dell starts to lose market share. And then a couple years later, HP becomes the number one PC seller. And then you come back in 2007. So what was going on in those three years? Well, I think the market was changing. I think there were new things starting to emerge the cloud, you know, what people call the cloud today, you know, was starting to show up. I think we weren't being aggressive enough in changing the business, given the shifts that were

happening. Yeah. You know, it's a change or die business. It's a quicker dead business. And the board asked me to come back into the CEO role. And I was happy to do it. But I've read that, that like around that time, the quality and the service of Dell was in decline. Like the company was getting a lot of heat. And I'm sure you saw that criticism. So how did you, how did you deal with that? Look, I think you can in any anecdote, you know, extrapolate. But there were definitely some areas where we could have been investing more in innovation. And we, you know, changed the focus of the company starting around to the,

2007 to understand, you know, what we needed to do to be, you know, an important and relevant company in the future. And so, look, I felt then and feel now a deep sense of responsibility and commitment to the company and I'll care about the company after I'm dead. What does that mean? I'll care for the company after I'm dead. It means that, you know, this is a lifelong pursuit for me in terms of, you know, helping the company reach its full potential. And certainly my dream is that the company persists well beyond my lifetime, which, you know, I'm still pretty young guy. So I think that's many years away. I wonder, Michael, how much of your success has to do with, you know, your hard work and your

brains and, you know, intuition? And how much of it is luck? Good question. I don't really know. You know, I'm sure there's some, you know, element of luck there. I've probably been lucky a lot. You know, I feel like I was really lucky to be born in the United States. That's probably the biggest stroke of luck right there. Because I think in the United States, when you're 20 years old and you show up and you want to sell something to somebody, you know, they don't look at you too funny. So I think that was my biggest stroke of luck was just being born here in this country

and having the opportunity and the freedoms that that's afforded me. That's Michael Dell. And if you still think of a Dell computer as the nerdy John Hodgman character in those PC versus Mac commercials, Dell computers have actually been used by the good guys in the Jason Bourne movies

and Spider-Man, Captain America, even Mission Impossible. In fact, a few years ago, in 2016, Dell was the number one brand featured in movies. More than Sony, more than Mercedes-Benz, or Adidas, and yes, more than Apple Macs. Hey, thanks for sticking around because it's time now for how you built that. And today we're updating a story that first ran about a year and a half ago,

about two sisters in Lynn, Massachusetts, who had perfected a family recipe. I make the stuffings. That's Casey White. And I make the dough. And that's her sister, Vanessa. And the dough and the stuffing, they are for pierogies, those Polish dumplings. filled with cheese and potatoes, sometimes sausage. Their grandfather used to sell them at the family deli in western Massachusetts.

In middle school, I would go there on Saturdays and help pinch pierogies. And we always had them in our freezer, kind of like our craft macaroni and cheese, except we just had frozen farrokeys. And when Vanessa and Casey went off to college, their mom would bring them coolers full of pierogies from the deli. And by the time they graduated, they were still eating them, and their friends were too. And sure, they could get parochies at Trader Joe's or wherever, but who wanted those? There wasn't really anyone making parogis like family used to make.

And we finally said it was one of those ideas where you're like, someone's definitely going to do this. And then we realized after a while that maybe we should do it. Maybe they should make pierogies and sell them. Okay, so at this point, it was 2015, and Vanessa and Casey's grandfather was no longer alive. but he had written all of his recipes out by hand. So they went to the deli and they got them. We brought them back to my house and caked my table in flour. And so began the pierogi making for 10 hours every Sunday.

Vanessa would do the dough. It should be not too thick, not too chewy. And Casey would do the fillings. We started with three flavors, potato and cheese, the pineapple and cheese, and sweet potato caramelized. Wait, I do not believe they grow pineapples in Poland. It is very strange. Yes, definitely not something you would find back in the old country, but it actually was one of their grandfather's recipes.

Anyway, every weekend, Casey and Vanessa would make the parochies, freeze them, and then sell them at the farmer's market in Melrose, Massachusetts. To our first farmer's market with about 50 boxes and sold out in an hour and realized that there was a market. And one reason they were selling so fast? I think dumplings are the ultimate comfort food, whether it's ravioli or it's empanadas or it's Asian dumplings. It's a very nostalgic food. So anyway, all that year, Vanessa and Casey would make and sell pierogies on the weekend and then go to their office jobs during the week. But there was a point where we had to go to the next step because we were just making only, you know, we could only make so much in that long 10-hour day. We couldn't grow it unless we kind of took the leap of faith.

So we quit our jobs. And after taking that leap, the sisters moved their parogi operation from Vanessa's house to a commercial kitchen in Gloucester, Massachusetts. They hired a few people to help them make more pierogies, but Vanessa, she is still doing the dough. Stretching it out, running it through the dough sheeter, and then cutting those circles, thousands of circles a day for the rest of our staff to fill and pinch. Vanessa and Casey call their company Jaju Parogi's. Jaju is the Polish word for grandfathers. father. And since we last talked to them, they've shifted their business from retail to wholesale, which means they're focusing on large distributors like stadiums and grocery stores. In fact, they're about to launch in their first grocery stores next month, with fingers crossed on a possible

contract with a stadium coming up. And by the way, that pineapple and cheese stuffing, they no longer make it. Apparently people don't like pineapple with their cheese. Like we went to Poland a few years back and neither of us saw pineapple on any menu. If you want to learn more about Juju Parogi's, head to our podcast page, how I Built This.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to the show this week. You can subscribe at Apple Podcasts or wherever you get your podcasts.

And while you're there, please do give us a review. You can also write to us at hibt at npr.org. And if you want to send a tweet, it's at How I Built This. or at Guy Raz. Our show was produced this week by Rund Abdelfata with music composed by Runtina Arablui. Thanks also to Candice Lim, Julia Carney, Neba Grant, and Jeff Rogers. Our intern is Sequoia Carrillo. I'm Guy Raz, and you've been listening to How I Built This.