Compaq

“When you bought a computer from Dell and from Compaq, if you open them up, Intel processors, Seagate disk drive, also from US, you know, like all, and so they were really not competing on who could Buy those parts and put them into a gray or beige box more qui…”

“Michael Dell starts to come with a thousand dollars. Compact starts at twenty five million. And then they raised, I think another seventy five million.”

“Compact had no price advantage. Their operating costs were 36% of revenue as contrasted with our lean and mean, 18%.”

“In 1998, with over twelve billion in sales, we surpassed IBM and Apple to become the second biggest PC company in the world. Only Compaq now stood above us, and we had them in our sights.”

“You know, he started with Dell with a thousand dollars, no venture capital, a thousand dollars. And his main competitor was compact who started with like twenty-five million of venture capital and Michael Dell is super competitive, but nice.”

“Steve Jobs was looking for someone to hire and saw his resume and like saw the IBM track and was like, oh, weird, big company guy, probably not a fit. Then saw that he had taken this job at this little startup, and was like maybe this guy's actually different …”

“Compaq was the fastest startup to ever hit a hundred million in revenue, then the youngest firm to break into the Fortune 500, then the fastest company to hit a billion in revenue, and by 1994, Compaq was the largest PC maker in the world.”

“They start the company in 1982, and within the first year, they do a hundred and eleven million dollars of revenue of selling IBM PC clone hardware.”

“You know, because I think that it was more expensive to buy an HP or a Compaq back then.”

“They had the Windows Monopoly, but what they did in tying the browser to it and threatening Compaq with revocation of the Windows license if Compact Shift Netscape as the default browser was illegal, and they got convicted for it.”

“So we sold our company for three hundred million in cash. Actual cash, like not, no stock, no, they would not give us stock.”

“The VAT in the UK runs on DEC mini computers. DEC has not existed since it was bought by Compaq in, I think, 1998 or 99.”

“The three of us, none of us had any money to invest, so what we did was we saved up money, and the idea was we'll give ourselves a runway length of six months to come up with an idea and go get funding.”

“We went in to, ah, meet with John Doerr, and we spent a good morning, probably three or four hours, being questioned, and sure enough, ah, about a week later, ah, we got a call that they were willing to invest, and so it was a go.”

“28 pounds.”

“One of our key engineering talents was to build it so that it, when you dropped it would survive.”

“You know, we had reverse engineered the ROM following advice from top notch intellectual property lawyers. So we were very careful around that. Their product was not protected by patents in any other way.”

“We sold one hundred and eleven million dollars worth of compact computers.”

“They, you know, in February of 1984, IBM introduces their own portable into the market. Now, our order stopped because before it actually was introduced, they were showing it to dealers and customers, and they just stopped ordering ours.”

“Compaq sold about 53,000 computers. And that same year, IBM, they sold 750,000 computers.”

“When that filled up, we borrowed space in friends' parking lots around the town, and by mid-February, we had about 20 of these trailers full of computers sitting around Houston.”

“I think by the end of the year, we were outselling it, ah, seven or eight to one.”

“And, ah, we tripled to three hundred and twenty-nine million in our second year.”

“They could have easily put us out of business if they had come out with a real comparable product.”

“The thing that took us from six hundred million in 86 to 1.2 billion in sales in 87, we came out with our own desktop, which was, ah, essentially three times faster than IBM's desktop for about the same price and began to establish ourselves as not only the po…”

“Radio Shack tried to buy us in late 86 and early 87, and so that was going on, and at the same time all this was happening.”

“The chairman of the company, Ben Rosen, thought we ought to move very quickly and so quickly that, in fact, we ought to go buy a product from a Taiwanese or a Japanese or a Korean supplier. And my argument was, look, it's not what it seems. We can get to marke…”

“And just because you started the company doesn't give you any right to continue to run the company. You know, it needs to be run by somebody that can make good decisions and can manage that complex an operation.”

“If I had been there, if I had been leading the company, we would never have sold. We would have figured out a way to solve the problem.”

“If you had asked me that in the eighties, let's say the late eighties, I would probably have said it was 90% intelligence and insight and work and 10% luck. But to tell you how perspective changes with time, I would say today it was the other way around.”

“And I knew that the IBM PC Was relatively unprotected. It would be a challenge, but it could be reverse engineered legally, and we could make our computer run the same software.”

“I mean, it was very quick from the ninth of January to when the idea came up to the 22nd of January when we met with the venture capitalists. We basically put together a very short, a four-page business plan and prepared to meet and discuss it with them.”

“So we basically flew out to Silicon Valley, and we went in to meet with John Doerr, and we spent a good morning, probably three or four hours, being questioned, and sure enough, about a week later, we got a call that they were willing to invest, and so it was …”

“You had to be exactly the same in order to run the software from an internal standpoint, and so they came to work for us right away and began first reverse engineering the product and then designing our own.”

“You know, it never crossed my mind that we wouldn't succeed, and as I look back now, I think, wow, that was such a long shot. You know, our expectations were very low. What did succeed mean? It didn't mean become the industry leader. It didn't even mean become…”

“So we started the company February the 16th, and from, ah, March until early June, ah, we had our first prototype ready.”

“No, they had no idea, and nor did they care. I mean, even after we began to sort of get some positive results and getting into stores, remember we were portable. They didn't have a portable. So, initially it was very easy for them to ignore us because we were …”

“It was listed for 29 95 for a single floppy.”

“They, you know, in February of 1984, IBM introduces their own portable into the market. Now, our order stopped because before it actually was introduced, they were showing it to dealers and customers, and they just stopped ordering ours.”

“Compaq sold about 53,000 computers. And that same year, IBM, they sold 750,000 computers.”

“We're going to keep building these things. We're going to store them and wait for the orders to come. If the orders never come, yeah, we're in deep trouble, but you know what? We're in deep trouble anyway if the orders don't come.”

“By mid-February, we had about 20 of these trailers full of computers sitting around Houston.”

“I think by the end of the year, we were outselling it seven or eight to one.”

“We tripled to three hundred and twenty-nine million in our second year.”

“IBM maybe underestimated us. They didn't really study what had made our product successful. They could have easily put us out of business if they had come out with a real comparable product.”

“The thing that took us from six hundred million in 86 to 1.2 billion in sales in 87, we came out with our own desktop, which was, ah, essentially three times faster than IBM's desktop for about the same price, and began to establish ourselves as not only the p…”

“Because this thing not only didn't run all the software, it didn't run any of the software.”

“Radio Shack tried to buy us in late 86 and early 87, and so that was going on, and at the same time all this was happening.”

“The chairman of the company, Ben Rosen, thought we ought to move very quickly and so quickly that, in fact, we ought to go buy a product from a Taiwanese or a Japanese or a Korean supplier. And my argument was, look, it's not what it seems. We can get to marke…”

“I guess under the stress I was under and kind of gotten into this frame of mind where I need to get away, the disagreement over the low-cost speed to market was just the catalyst that, that allowed it to happen. I almost guided it to the point where I was goin…”

“And just because you started the company doesn't give you any right to continue to run the company. You know, it needs to be run by somebody that can make good decisions and can manage that complex and operation”

“The leaders of those companies maintained enough control to make sure that it never got into the hands of somebody that looked at it just purely from a financial standpoint. If I had been there, if I had been leading the company, we would never have sold. We w…”

“If you had asked me that in the eighties, let's say the late eighties, I would probably have said it was 90% intelligence and insight and work and 10% luck. But to tell you how perspective changes with time, I would say today it was the other way around.”

“I use a MacBook Air and an iPad. Pro and iPhone.”