I can’t run the numbers on Dell like I did previously, because Dell has, famously, gone private again. From a purely personal perspective, I think this was absolutely the right thing to do.
Why? Because Wall Street sucks.
The efficient market hypothesis is bollocks. People invest for all sort of irrational reasons, and fundamental value is a niche investing activity. It happens to work very well for those who are good at it, Warren Buffet being the most famous, but the majority of market activity is short term investments, usually algorithmic, high-frequency trading.
The average length of an investor’s tenure with a company is now under 3 months. That’s basically gambling. People used to invest in a company for an average of 7 years, back in 1966, but now they just hope to flip the stock in a few months to make a quick buck.
These sorts of investors are not your friends.
You can’t build a company that will be great if you have vultures like Carl Icahn pushing for immediate returns. Building something great takes quite a bit longer than 3 months, and I wish more directors and CEOs would tell people like Icahn to take a hike. Of course, they won’t, because it’s easier to just pay them off with board seats. Otherwise they risk law suits for not “maximising shareholder returns” which is not what companies are for anyway, other than the very specific case of a complete sale of the company.
So it heartens me to see Dell reject this bastion of modern capitalist excess and return to being a privately held company.
Private is Nimble
As a private company, Dell can make decisions that would raise the ire of investors. As a private company, Dell doesn’t have to worry about Icahn and his vulture capitalist cronies swinging by for a protection payment, dressed up as concern for shareholders.
What I would like to see from Dell is a whole-of-company focus. A vision for what matters to customers for modern IT. Something more than empty platitudes or silly catch phrases like “Disrupt the Now”. And that requires the singular, cohesive vision only possible from a small team, or an individual, like Michael Dell.
Because what Michael has done here is quite rare: he built a company from scratch, and made a lot of money. He took it public, and made a lot more money in the process. Unlike some other companies *cough*Amazon*cough* Dell actually turns a profit. He then took it private again, taking on a bunch of debt that will need to be paid off. His name is on the company, and he’s been at the helm the whole time. If it fails, he has only himself to blame, but if it succeeds, he will have done something very few other founders have done.
Dell Himself
I almost met Michael Dell, once. It was at Dell World 2013, in the media area. Dell arrived without fanfare or pre-announcement, and began to mingle with the assembled press hacks from the various firms that cover the company worldwide, your humble author lucky enough to be among them.
Dell seemed ill at ease. I remember noticing his shoes. They were scuffed, un-polished. Worn, but comfortable. The shoes of someone who is on his feet a lot, and needs something to go with his suit, but who isn’t that worried about their appearance. They weren’t fancy Italian loafers, just ordinary looking black lace-up leather shoes. These looked like favourite shoes. Shoes that he kept wearing because they were comfortable and known, and who has time to buy new shoes? And whenever you do, they never feel as good as the current, well worn and well known pair.
Dell seemed ill-at-ease with the press. Smiling politely, and acquiescing to requests for selfies with the great man from bloggers and press dazzled by the aura of money and success. I saw a man who was smaller than I’d imagined, and who was distinctly just a man. Human, and vulnerable. A nerd who built computers, and was no doubt a formidable businessman, but one who didn’t enjoy the limelight or the spectacle. He came to mingle with the press because his PR handlers told him he had to, not because he wanted to.
I didn’t meet Michael Dell because I felt sorry for him. I watched from nearby as people he didn’t know asked their friends to take photos of them standing beside Michael as he stared blankly, but with good humour, into the lens of some random person’s camera, posing like a trophy buck for some celebrity seeker’s album. It was a part of his job, I realised, but a part that he didn’t enjoy. It was like watching some caged animal, resigned to its fate, idly pacing the perimeter of its enclosure, stopping at regular intervals to see if the food pods had been replenished. Not this time. Maybe next time. Until then, just go through the motions, and soon it’ll be over.
Meeting him would have been selfish of me, and honestly, what benefit would there have been for either of us from a single, brief moment of forced politeness?
I hope Dell enjoys running his company again, and that it can make great products that customers love.