Compaq Beat IBM in Four Years. Then Dell Undid It All.

#Compaq #BusinessHistory #RiseAndFall #Dell The rise and fall of Compaq is the fastest climb in American business history, and one of the strangest collapses. Three engineers sketched a computer on a paper placemat in a Houston pie restaurant in 1982, and four years later Compaq was the youngest company ever to enter the Fortune 500. Nobody has ever done it faster. So why did Compaq fail? Compaq beat IBM with a weapon IBM could not match: an army of independent dealers who put its machines in front of every business in America. That network built the fastest rise ever recorded. It was also the reason Compaq could not survive Dell. When Dell started selling direct, Compaq could see the answer perfectly and was physically unable to copy it, because its own dealers moved the overwhelming majority of everything it sold, and they could retaliate. This is the story of how the exact thing that wins the first war becomes the thing you have to defend in the second, and of Ben Rosen, the venture capitalist who wrote the first cheque and then fired both of the company's CEOs. In this episode: How three Texas Instruments engineers designed the Compaq Portable on a placemat in 1982 The clean room: how Compaq spent about $1 million legally rebuilding IBM's BIOS with engineers who were forbidden to look at the code The record: 53,000 machines and over $111 million in year one, the biggest first year in American business at the time Fortune 500 in four years, $1 billion in revenue faster than anyone, and passing IBM in 1994 Ben Rosen removes founder Rod Canion in 1991, then removes Eckhard Pfeiffer in 1999 Why Compaq could not copy Dell's direct model, and what its dealers did when it tried Tandem, the $9.6 billion Digital Equipment deal, and the HP merger that ended the company Chapters: 0:00 The fastest rise in American business 1:15 Three engineers and a placemat 2:48 The clean room that picked IBM's lock 4:30 53,000 machines and a record 5:59 The army that became a cage 7:37 The board fires the founder 9:26 Dell sells direct, and the trap closes 11:14 Rosen fires a second CEO 12:36 $25 billion becomes $19 billion 14:06 What Compaq should teach you Subscribe to Toppled Empires for the rise and fall of a new empire every week. Was Compaq ever actually able to escape, or was it over the moment Dell picked up the phone? Tell us in the comments. And which empire should we cover next?