In 1984, Michael Dell started a small company called PC’s Limited out of his dorm room at the University of Texas. Over the past 30 years, he has built the company that now shares his name into one of the world’s largest technology enterprises, with more than $50 billion in annual sales and more than 100,000 employees around the world.
Had he started today, though, would Dell – both the entrepreneur and the company – have had the same success? After all, the economy, by some measures, remains on shaky ground, and the country’s rate of business formation has slowed considerably in recent years. At the same time, the pace of business closures for those who do take the plunge has been accelerating.
Don’t let that deter you, Dell says.
“Today is a great time to start a business,” Dell wrote in e-mail during a visit this week to Washington. Compared to when he started, he added, “infrastructure for building a business today is much more mature. Entrepreneurs have better access to start-up capital and growth funding through banks, individual investors and [venture capitalists]. And the powerful technology that is accessible for entrepreneurs today, like cloud, big data and mobility, is much better.”
However, that doesn’t mean entrepreneurs couldn’t use some more support. Despite today’s advantages, he noted that most new companies still fail within the first year. In large part, he added, it’s up to – and would behoove – both corporate leaders and government officials to look for ways to “to help improve that rate of success.”
During his visit, Dell, who was recently appointed the global advocate for entrepreneurship at the United Nations Foundation, met with President Obama, Federal Reserve Chair Janet Yellen, House Majority Leader Kevin McCarthy, and other members of Congress to discuss some of the most important issues currently affecting technology companies large and small. He also spoke at to local business leaders at the Economic Club of Washington, D.C.
In our e-mail exchange, we asked Dell what exactly he believes world leaders can do to encourage entrepreneurship, which areas of innovation excite him the most right now, and why he recently decided to take Dell off the public markets. Here’s what he had to say.
Harrison: New research shows that the rate of new business formation is declining. Are there steps you think U.S. policymakers could take to help turn that around?
Dell: Well, I don’t think the list will be too surprising. It’s about what businesses need to succeed globally. We need free trade and access to global markets. Certainly, this is imperative for the U.S. to maintain its lead in high-tech. So we’re strong supporters of the president having Trade Promotion Authority. In our opinion, you’re not pro-tech unless you’re pro-trade and you’re not pro-trade unless you support TPA.
Another essential aspect for business is access to talent, and increasingly for the U.S., that’s an immigration issue. One of our most obvious problems is that we’re educating people here and then sending them back to their home countries to work and prosper. The STEM disciplines are where we see the biggest shortfall of talent, and I think a good start would be to staple a green card to every advanced degree issued by a U.S. university in the STEM disciplines. And we should do a better job of supporting R&D through a permanent and improved R&D tax credit.
Harrison: Let’s expand this to a global stage, considering your new post with the UN Foundation. Are there things that world leaders can do to better foster entrepreneurship around the globe – and should that be a high priority?
Dell: Entrepreneurs and small, fast-growing businesses create between 70 and 90 percent of the world’s jobs. This is where the next billion jobs will come from and what will propel forward global progress. So, we all have an obligation to encourage entrepreneurship, not hinder it.
For the public sector, this means promoting policies that give entrepreneurs access to capital, global markets, talent and technology. For the private sector, this can mean working with more entrepreneurial companies through partnerships or corporate venturing, like we do with Dell Ventures. My work with the UN Foundation is to ensure that entrepreneurship and job creation is promulgated as one of the UN’s Sustainable Development Goals in September.
If you really want to foster stability and hope around the world, I tell you what, instead of dropping bombs, how about we devote more resources to creating jobs.
Harrison: Can you tell me a little bit about your recent decision to buy out the company? And what did you learn about the public markets that might be useful for other entrepreneurs and business leaders?
Dell: The world today is increasingly afflicted with short-term thinking. Governments can’t see beyond the next election. Our education system can’t see beyond the next round of standardized tests. And public financial markets can’t see beyond the next trade.
In recent years, this was what Dell faced as a public company. Shareholders wanted short term results to drive returns and often innovation and investment suffer as a consequence. We needed to get out from under that 90 day shot clock so we could focus on a future way beyond the next quarter, or even the next year, looking five, ten years out at what our customers will need to succeed in the data economy.
This is not to say that the public markets are inherently bad. For Dell, public markets provided us with the capital that enabled us to grow and thrive for 25 years. And for growing companies especially, public markets can and do play an invaluable role in moving from start-up to scale-up to Fortune 50 company.
Harrison: What are some of the most exciting areas of innovation you see right now in the technology space?
When I look at the innovation taking place today, I know we have barely scratched the surface of that potential. The Internet of Things and the forces of cloud, big data and mobility are fundamentally transforming our lives, our businesses and our world.
The magnitude of progressive disruption will rival the industrial revolution in its scope and depth. We need to think boldly, take big risks, innovate and invest to make these powerful technologies accessible to the global population. We have the chance to lead a whole new era of progress and growth.