How Dell Helps Entrepreneurs Get Hardware Solutions To Market

For some hardware companies, strategic partners like Dell are the new angel investors.

How Dell Helps Entrepreneurs Get Hardware Solutions To Market

Entrepreneurs have known for a number of years that it is very challenging to attract investors to startups that involve hardware. I wanted to know if the appetite for investing in hardware solutions has changed. It has not.

  • “As an angel investor, my view about investing in companies involving hardware technology innovation is that they are more complex, more involved and have more points of failure. It is not that we have not invested in hardware projects but just didn’t have any luck with it.” Rajesh Setty, Foresight Plus
  • “My view (and the view of a lot of other angels) about investing in companies involving hardware technology innovation is that it generally carries higher up front capital risks, can be more expensive to pivot and can add complexity and challenges not generally found in software investments.” Gary Jinks, Managing Director, South Valley Angels

For some entrepreneurs, there may be a solution to this challenge. The entrepreneurial spirit is alive and well at Dell. This spirit is driven by Dell’s founder, chairman and chief executive officer, Michael Dell. While he may lead a $65 billion company, he’s never lost his passion for entrepreneurs and the value they bring and create in the marketplace. Ingrid Vanderveldt, Dell’s Entrepreneur-in-Residence, was brought on board to work with the Dell executive team to keep entrepreneurship top of mind at Dell across the globe.

Here’s the paradigm shift: strategic partners are the new angel investors. Let me explain.

At the 2012 Dell World in Austin, I learned what Dell is doing to help entrepreneurs manufacturer, finance, and expand their companies domestically and globally. You’ll learn about two customers, SoloHealth and Pivot3, and how Dell Financial Services (DFS) and Dell OEM Solutions are playing a vital role in their businesses.

Founded in October 2007 by CEO Bart Foster, SoloHealth, a healthcare technology company, provides consumers free and convenient access to healthcare by developing and deploying interactive health and wellness kiosks. The FDA-approved kiosks, located in high-traffic retail locations, help to empower consumers about their health through awareness and education, which leads to prevention and lower healthcare costs.

At this point, SoloHealth has 1500 kiosks installed in Sam’s Club, Walmart and Safeway and expects to be at 4000 by the end of the year. Any retail location that offers a pharmacy is a candidate for the kiosks. Major retailers love this kiosk as it drives people and even entire families into the store.


The SoloHealth kiosk is an interactive, self-service station that gives consumers free and convenient access to healthcare by allowing them to screen their vision, blood pressure, weight, and body mass index (BMI)–or any combination of the four—in seven minutes or less for free. Data for each patient is stored in the cloud. It is possible for a registered user to monitor improvements and changes in their health. SoloHealth is now working with the Clinton Global Initiative to explore how to expand this capability globally.

SoloHealth’s ramp is not only impressive but requires substantial capital and expertise to support such a ramp. Bart had conversations with Dell Financial Services and learned about Dell OEM Solutions which helps global companies deliver their IP to end users leveraging Dell hardware and services. Dell and one of its partners provides tested, turn-key kiosks to SoloHealth. Level 1 customer service for the kiosks is provided by NCR, a firm that already has established relationships with the major retailers.

SoloHealth monetizes its business via ads, leads generation and clinical trial recruitment. These monetization mechanisms allow SoloHealth to pay the DFS leases for each kiosk.

SoloHealth’s core capabilities include developing and enhancing their technology, building and sustaining relationships with retailers and monetization partners in addition to providing Level 2 technical support. Bart and his team aren’t burdened to manage manufacturing, a complex supply chain nor fund their growth. They focus on their passion. As of this date, SoloHealth is interacting with 70,000 people a day and providing a critical health risk assessment to which they may not otherwise have access. Individual data is sanitized to ensure confidentiality.

Pivot3 offers a converged storage solution featuring high performance, high storage, and high reliability. Pivot3’s designs presently support virtual desktop integration and high-definition, multi-channel video monitoring 24-hours per day, 7-days per week for security and surveillance. A couple of minutes of normal video recording can be 200 MB. Imagine how much data is created in a single channel of high-definition video for 24 hours. Imagine you need 30 or more days of video retention per video channel. Image you have 24 or more channels. That’s a huge amount of data being created that needs to be stored. A typical Pivot3 customer requires about 100 terabytes of storage.


Pivot3 doesn’t want to be in the hardware business yet they need to offer a turn-key solution. Originally, they were leasing equipment from DFS to support testing needs. They have now turned to Dell OEM solutions to manufacture their configure-to-order hardware systems and to also have access to Dell’s global supply chain, engineering talent, service and support. They are looking to expand their relationship with DFS who will provide leasing of the systems to Pivot3 customers and further accelerate growth.

Richard Bravman, President and CEO, tells me Pivot3 is able to offer a turn-key solution but maintain the balance sheet of a software company yet have global reach via Dell. How appealing is that to potential investors?

I interviewed Bill Wavro, President, Dell Financial Services, and Darren Fedorowicz, executive director, business development, to learn more. Dell Financial Services is providing access to capital that angel investors and venture capitalists won’t and neither will most banks.

DFS manages a $5 billion portfolio in the U.S. and Canada and has a long-term strategic vision to provide direct financing solutions to Dell customers around the globe. DFS has plans in place to expand its direct financing capabilities to western Europe later this year and has financing partnerships in place with third-party providers today to serve Dell’s customer needs in Latin America and Asia Pacific. DFS started expanding its work with Dell OEM customers a couple of years ago with a focus on building strategic partnerships.

DFS looks beyond the balance sheet and profit and loss statements to assess the veracity of the opportunity. This enables DFS to better support Dell OEM Solutions’ customers and is driving global expansion. DFS wants to be a strategic partner and not merely consider only the financial aspects. And, DFS has the ability to access the expertise across a $65 billion corporation to aid customers and initiate growth opportunities.


For example, SoloHealth would not qualify for financing from traditional funding sources due to its unique business model. DFS takes a bigger view in trying to assist entrepreneurs. DFS sees its essential mission as helping Dell and Dell’s customers facilitate and enable transactions. It’s easy for funding sources to say “no”—saying “yes” requires extra effort and a bigger vision. To mitigate downside risk, DFS understands and stays close to each business as a strategic partner. The entrepreneurs I spoke with appreciated this and didn’t see it as onerous.

Dell OEM Solutions can support any design, manufacturing, supply chain, quality assurance, special configuration needs, etc., that customers might need, along with dedicated OEM specialists that help them speed their product to market. The simplest modification might be custom product packaging for the hardware or shipping containers. I spoke to one customer who specifies every aspect of the servers he buys right down to the BIOS and chip set level. They can work on high-volume/ low configuration mix or low-volume/high configuration mix. The flexibility Dell OEM Solutions offers is impressive. They have 15 years experience working with global companies that want to drive innovation and new revenue streams. Dell offers a Dell OEM Total Cost of Ownership (TCO) Calculator to assist companies in understanding their supply chain costs.

Finally, entrepreneurs should be aware of two additional sources of start-up funds from Dell:

To recap, Dell offers entrepreneurs deep product capability, product financing, and other assistance with capital.If you make the connection, I’d love to hear about your success.

Dave Gardner can be reached on Twitter and via his website at Gardner & Associates Consulting.


[Image: Flickr user Robert Parviainen]

About the author

Dave Gardner is a management consultant, speaker, blogger and author based in Silicon Valley. He's been in the front row for the birth and evolution of Silicon Valley, the innovation capital of the world