I. Richard Attiyeh, Vice Chancellor for Research and Dean of Grad Studies
a. New UCSD School of Management
i. Technology focus
ii. International focus
II. Robert Sullivan, Dean of future UCSD School of Management
a. Kick-off event for public forums and partnerships across campus
i. Frieder Seible – New dean of Jacobs School of Engineering
ii. Larry Smarr – Director of Beyster Institute
c. Michael Dell
i. 1980’s developed Dell @ UTexas
ii. 2003 Dell revenues up quarter per quarter, now ~$10 bill.
III. Dell w/ Seible
Q: Explain “Customer First”
A: Inventor -> Standards -> Customer
Instead of working on technology, work on delivering value to customer’s demand
Work backwards from customer
Q: How to implement this?
A: Watch economic situation
Understand problems: productivity, entertainment, ease-of-use, etc.
Different users have different needs (home, biz, K-12, universities, etc)
Drive cost down through standards (printing is next)
Q: What can UCSD contribute?
A: Research for future technology products
Nanomachines, photonics, bioengineering, etc
Molecular materials for future
Wireless, routers, etc. tech is from research universities
In US technology promotes growth
Q: Shift from private research to university research – true with Dell?
A: Yes, need new ways instead of outdated AT&T/Bell Labs model
Firms have to cut costs from competitive pressure
But technology will still grow
Q: What are the two next breakthroughs
A: 1) Wireless
802.16, 802.20 100-400 Mb/s
2) Scale-out model w/ enterprise servers
Clustering, etc. grid computing
Democratization of computing power w/ clustering technology
3) Energy & Environment
No lead, etc.
Q: How many Dell employees?
A: 40,000 right now
Q: What does Dell look for in employees?
A: Self-starter, high standards, collaboration, likes to win, not complacent
Ready for ever-increasing challenges and change
Q: What can university do to train for employees?
A: Don’t keep students for too long – get accustomed to academic env
Teamwork/collaboration programs -- industry world is opposite of current academic style
Q: What’s 5-10 years ahead for Dell?
A: Higher-speed processors
More global – China, Japan, Brazil, India, etc. – countries with developed economies now or in the long term
Technologies will continue to commoditize
Dell will go after them one by one
Q: China & Europe: opportunity or competition?
A: Must view as opportunity b/c alternative is protectionism
China is a resource
Low-level R&D – also in Taiwan, India, etc
Europe is less willing to embrace change
Complacent with bad economy
“In Europe I find they are accepting of things that are not wonderful”
That’s why we’re all here in America
IV. Dell w/ Smarr
Michael Dell was role model to other students in Smarr’s MBA classes (Dell was his MBA student – Sullivan was administrator over Smarr at same time)
Q: What learned?
A: Great people more impt than perfect organization
Metrics on employees
Leaders who train leaders
Also learned from inventory problems
Q: How stayed around as a founder-CEO?
A: Can’t do everything yourself – need great ppl around you
Q: What is Michael Dell’s weakness?
A: Strength: strategy
Usually him and right-hand man are each correct about 80% of time
So both have to agree on big decisions
V. Floor opened to audience questions with Smarr interjections
Q: Houman Haghighi: How to revive PC industry?
A: Simple law of economics: Value will be rewarded
“There’s a lot of companies in our industry that don’t do anything valuable.”
“It’s all about delivering value.”
“I don’t necessarily think you can innovate your way out of a cost problem.”
Q: What software is needed next to add value?
A: Wide variety of applications to many markets
Allow customers to decide what software to add next – they must ask
Dell loads a variety of software
Dell does not limit customer ability to add extra software
Q: Bryan Barton: Advice to entrepreneurs
A: “Be ready to fail”
“Make a lot of mistakes”
Constrain of capital market makes you think deeply about most value
Try things and experiment – don’t wait for perfect thing to come along
Q: What would’ve done differently?
A: Take more finance and micro-econ courses – only took macro-econ
Develop more leadership
Outgrew people and organization or people got rich and retired
Q: Growth in Asia vs. Legend Computer etc.
A: Dell growing faster than Legend in China
Cost structure in China is same
Legend doesn’t have distribution, brand, customer relationships
Definitely an emerging competitor
Q: How get credibility as a startup?
A: Excellence awards and recognition
Hired prestigious IBM fellow
Developed great products and distribution
Closed loop system to get customer feedback w/o dealer in between
Q: How did Dell Direct happen?
A: No exact Eureka moment
Q: How did you know this business was the one?
A: Computers were about 6x more expensive than their parts and took 1 yr. development cycle to come to market
Did not anticipate Internet for distribution – planned on phone orders
Did anticipate growth in computer usage
Figured out efficient distribution along the way
Driven by economic principles, not particular culture – so translates well internationally
Q: Which industry will benefit from Dell Direct model?
A: Lots of businesses have costs b/c have to anticipate future needs
Must have high inventory b/c of imperfect information
Q: How did Dell approach and build relationships with suppliers
A: Industry was smaller
First went to distributors and later directly to manufacturers
Be persistent – waited 5 hrs. to see Andy Grove of Intel
Suppliers like high volume
Q: How do you fight commodity overcapacity when market matures?
A: Many say industry already like that, even in services now
Has caused industry wage deflation
Interesting fact: When Dell enters market volume increases, market capacity increases, revenues decrease
Not good for proprietary models
“If we didn’t do it, somebody else will”
Q: What could wireless Ethernet in 12 months mean for Dell?
A: We love wireless and support multiple standards
Q: Any company religion?
A: Go direct to suppliers
Save as much money to add most value
Q: Kevin Jung: How stay grounded personally?
Work hard, play hard
Remind self of better people – keeps copy of Fortune with Ken Olson on cover as best entrepreneur
Q: How use employee ownership?
A: Success sharing
Suggestions between employees