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A lot is being said and a lot will be said about Michael Dell’s decision to take the company he started in 1984 in his college dorm room private (with some cash from Silver Lake Partners, Microsoft and other investors.)
People are also going to point out that karma is a bitch. Others will say that the cloud will prove to be the ultimate undoing of Dell, and that mobile is Roundrock, Texas-based company’s Achilles heel. I would agree with some if not all of those assessments. I would also be hard pressed to ignore the harsh reality of tech-land — turnarounds rarely turn.
And despite knowing all that, I cannot help but applaud Michael Dell, the founder.
Dell is doing what few people do — putting both his reputation and his fortune on the line in order to save and perhaps revive the company with whom his name and legacy will always be intertwined. This is high-stakes poker: he is putting millions of dollars of his own money in addition to investment from his investment firm, MSD Capital, on top of kicking in his stake in Dell.
He doesn’t need to do any of this. If someone else made the very same offer he is making for the company, he stands to be a few billion dollars richer. Dell is filthy rich and his empire is spread wide and far. There is a lot he can do with his time — politics for example. (If HP alums Carly Fiorina and Meg Whitman can think about political careers, why not Michael as governor of Texas.) The fact is that the next three to four years are going to be hell for Dell.
While the company has made some bets on cloud technologies, and there are ways (as Derrick Harris spells out in his article) out of this gloom, Dell is not on the sunny side of the street by any means. The big infrastructure buyers like Google and Facebook are looking to upend the server business. The battle for Dell is not just Lenovo and Hewlett Packard, but it is also Amazon, Microsoft, Cisco and Apple.
This is Dell’s Battle of Britain. This could be his finest hour or it could be him and his ego, like Butch Cassidy and the Sundance Kid’s last stand against the Bolivian army. Who knows.
So why do it? My explanation — you don’t really have a rational choice, so you make an emotional choice. As a founder whose name adorns the shingle outside the door, Dell is playing a high stakes poker to literally save his good name. Just the idea that some faceless Asian company would own “Dell” the brand and his name is anathema.
Every so often people say that its not personal, its business. Nonsense! It is always personal and it will always be personal. If you spend your lifetime nurturing and growing a startup, it is nothing but personal. Outsiders will never understand — for a founder, failure, defeat and ignominy are always personal, just as success and fame. For founders, our identities are intertwined with the companies.
Think of it this way — when you start a company and spend about 15 hours a day on the company, that is more time you spend with your family. I have more memories of my startup than I have of my own life. I can’t remember a single birthday over past seven years, but I can tell you who said what and when and why. And that is just us, a tiny little company. That is why I disagree with the theory offered up by the otherwise admirable Ashlee Vance at BusinessWeek on why Dell is doing what he is doing:
The worst-case scenario for Michael Dell would have occurred if an activist shareholder had gotten into the mix. Dell would have faced the prospect of being kicked out of the company that bears his name. I’m certain this is why Dell went private. Dell, Silver Lake, and Microsoft get a company that pumps out enough cash to keep all parties happy, while Michael Dell shields himself from being berated by analysts, investors, and the media. Best of all, he gets to keep his company.
Admittedly, my explanation is tinged with bias of a founder whose name hangs on the door of his shop. And yes, it is a bit of an emotional explanation, but I get it.
And that is why I want to applaud Dell and welcome him back to the founder fold — this is where it starts. Good luck… for you’ll need heaps of it on your mission impossible.