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CEO and founder of Dell, Michael Dell, says one piece of information killed Compaq.
And they had it printed on every chip they shipped.
He cracked open their machines and read the date codes.
"If you opened up the computers, the chips had dates on them that showed the weeks they were made."
Compaq carried 90 days of inventory between factory and customer. Dell carried five.
Component prices fell every quarter. Compaq's 90-day shelf was a 90-day price loss. Dell's five-day shelf was a five-day discount.
Same machines. Same components. Half the overhead.
"It was crazy. It was like a massive advantage."
Compaq's CEO called Dell a "mail-order company." A "garage operation." He never read the date codes.
"One of the best things was they just didn't understand it. They misunderstood it, which was fantastic."
Dell is worth over $90 billion. Compaq does not exist.
The number was sitting on their own warehouse shelves the entire time.
— Michael Dell (@MichaelDell) on David Senra's (@davidsenra) Founders podcast
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