Do you know how to convert a startup into a billion-dollar company? Learn it from Michael Dell

Founder and CEO of Dell Inc., Michael Dell started his entrepreneurial journey with a personal computer manufacturing startup out of his dorm room. His startup is now a billion-dollar company. This transition did not happen overnight.

Michael Dell has recently shared his experiences and lessons as an entrepreneur, scaling up his company, with ETtech. Here are some tips that might change your thinking too.

1. Scarcity of capital drives innovation: Dell believes companies with an abundance of capital have a propensity towards not doing too well. According to Dell, the worst thing can happen to a company is abundance of fund. “Scarcity of capital drives new thinking and abundance of ideas, while abundance of capital does not," he said.

2. Learning from one’s own mistake: Dell said learning from one's mistakes is crucial to grow as an entrepreneur. Dell admitted that he learnt plenty from his own failures. He recounts an incident from his initial years when during a transition in system memory chips, the company ran short of the newer chips due to an inventory management issue, thus creating a serious production issue. This provoked Dell to develop a mighty good supply chain that was flexible and more pull oriented; a situation that could lend itself to just about any product startup.

3. Make the most of the available resources: When an entrepreneur starts his venture, he does not enjoy any reputation. He has limited resources, so he should make the most of the resources available and should find some like-minded people who can work with him.

4. Value skills and hire right talent: There's always a dearth of good talent and Dell values skills and hiring the right talent suited for it above all. As for himself, he tackled this issue by hiring people with skills that he did not possess. "What are all the things that I don't know anything about? Now let's try and find people that can do those things; and surround myself with people that are very talented and knew things that I don't," reminisces Dell.


So be it a tumultuous transition from public to private through a $24.4 billion buyout deal — the largest technology buyout ever — or dealing with investors like Carl Icahn, Dell has been there and done that, with weathering the storms customary to the financial world.

(Image: Reuters)