Friday, October 14, 2011

What if Michael Dell had been Chinese?

I received some feedback to my post about Apple after Jobs. Many of the writers fretted about how much of a visionary Steve Jobs was and how he transformed computing from an activity for geeks to something cool and user friendly. The tone of the response was very much from the gut. It reminds me of the companies built in China and other parts of Asia by visionary founders. My answer has always been that Apple is an American company and it is staffed by good people, all of whom are not named Steve Jobs.

This got me to thinking, what if Apple had been an Asian company? For a better example, what if Michael Dell had been a Chinese entrepreneur? I believe that Dell is a better example because Apple has re-invented itself several times over the years, while Dell has remained largely in the same business.

The story of Tycoon Michael
We all heard of the Michael Dell story. He started the business by selling computers out of his dorm room and built an empire. Let's imagine that he was a Chinese entrepreneur instead and call this fictitious person tycoon Michael to see how a Chinese entrepreneur might behave instead of the real Michael Dell.

Chinese entrepreneurs tend to seek opportunity wherever they can find it. Tycoon Michael might have gotten his start by selling computers out of his dorm room (thus Dell Computer was born).

Supposing Tycoon Michael had been quick to spot opportunity. He wouldn't have just stayed in the PC business but diversified into other unrelated businesses. As the Tech Bubble reached its peak and collapsed, he would have seen the opportunity in housing and diversified into homebuilding (Dell Homes). Perhaps he saw the Chinese boom and saw the opportunity in resource extraction and diversified into those industries (Dell Resources, or Dell Oil & Gas). As the Chinese boom continued, Tycoon Michael may have seen that while China began to own and control more resources overseas, one critical chokepoint in the supply chain was transportation, thus Dell Shipping was born. As the Chinese authorities began to clamp down on lending in order to slow their overheated economy, Tycoon Michael would have seen that there was money to be made in the shadow banking industry (Dell Financial).

You get the idea...

When Tycoon Michael shuffles off his mortal coil, his empire will collapse because there is no one at the top who is smart enough and connected enough to spot all the entrepreneurial opportunities that come along and have the financial resources to take advantage of all of them.

Do you think the same thing would happen to Apple without Jobs?

Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.

None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.

1 comment:

Bobster747 said...

Cam, I think it might take a while but Apple could succumb to this eventuality. Maintaining morale would be another thing.