Dell Founder Michael Dell Says It's Hard to Succeed Without Making Mistakes, as Failure is the Best Teacher
Michael Dell: Failure is a teacher but do not repeat
Dell founder Michael Dell stated that it is difficult to achieve great success without making mistakes, as failure is the best teacher. He added that it is more important to learn from mistakes and not to repeat them.
The two points are linked. The first allows for trial and error, while the second disqualifies the repetition of mistakes. He did not specify any particular product or acquisition, discussing the relationship between success and failure, rather than a specific news item.
Dell started in 1984 in a dormitory at the University of Texas, using upgraded computers and direct sales to bypass dealer inventory. In 2013, he privatized the company with Silver Lake for about $24.9 billion, citing the pressure from public shareholders on quarterly performance as a reason for the transformation. In 2016, he completed the acquisition of EMC for about $67 billion, and in 2018, the company went public again.
This period of privatization is often used by him to illustrate that the public market immediately prices the cost of mistakes into stock prices, and the restructuring was to allow for a longer correction time. The direct sales model itself was developed from mistakes in dealer inventory, assembling computers to order rather than stocking them in advance.
The speech did not include new financial reports or products. It defines "failure" as a teacher and "repeating" as disqualified. Internally, it can be understood as allowing the first deviation but not allowing the same deviation to enter the next procurement or production line.
The buyers are companies and investors who can turn a mistake into a process, while the sellers are teams that repeatedly price the same error. The event is driven by the speech. Capital will not reward stagnation from not making mistakes, nor will it reward expansion from repeating mistakes; those who benefit are operators who correct channels and payment terms and do not return to old paths, while those under pressure are projects that treat failure as a story and repeat the same next quarter.
Source: Public Information
ABAB AI Insight
At 19, Michael Dell registered his company with $1,000, turning IBM-compatible upgrades and mail orders into direct sales, avoiding layers of dealer markups. In the 1990s personal computer price wars, Dell gained market share through build-to-order production and negative cash cycles, while Compaq and HP struggled with channel inventory. After the growth of personal computers slowed in the 2000s, the company missed the mobile device trend, which he later wrote about as a structural issue that needed to be addressed outside of quarterly reports.
The capital path was to first privatize and then acquire storage. In 2013, he privatized Dell with Silver Lake, and in 2016 used this control to acquire EMC and its stake in VMware, shifting the company from computer assembly to enterprise infrastructure. When going public again in 2018, personal computers were still present, but pricing power was no longer solely in assembly.
A comparable situation is Steve Jobs bringing the NeXT system back to Apple after leaving, and IBM selling its personal computer division to Lenovo. The current position is not Dell looking for the first failure, but rather he has written "not repeating" as the second condition for operators. Privatization provided a window for correcting mistakes, and the acquisition of EMC was the actual action within that window.
Structurally, this represents a transfer of pricing power. When public, shareholders price mistakes quarterly; privatization temporarily recovers pricing power for the founder. If failure can correct channels and product mixes, it is tuition; if the same inventory and quarterly pressure return, tuition becomes losses. The speech did not announce new deals; the mechanism remains the same one he used in 2013: exchanging control for correction time, then using results to prove that old channels were not revisited.
ABAB News · Law of Cognition
Failure can be a teacher, but repetition is just cost.
Those who do not want to make mistakes cannot buy the corrected structure.
Privatization does not buy silence, but an unpublicized correction period.