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Last week, at the Fortune Brainstorm: Tech Conference in Half Moon Bay, Calif., I caught up with Michael Dell, founder and chief executive officer of Dell Inc., the Round Rock, Texas-based computer hardware maker. He’s been trying to get Dell’s mojo back for over a year now, and in the past three months, things have started to come together, with sales, profits and the company’s stock price beginning to move in the right direction.

We had a wide-ranging conversation, one that covered everything from cloud computing to the likelihood of Dell entering the smartphone business to the advantages of being a founder. Below are edited excerpts from my chat with the eighth richest man in the U.S., who is as humble today as the day he started selling computers from his college dorm room.

On cloud computing

Om Malik: Will Dell ever start offering its own cloud services?

Michael Dell: Today, we sell to the guys who make clouds. We actually already have some services that we provide; you can think of them as software-as-a-service. For example, for managing your infrastructure, we purchased a number of companies recently like Everdream that are all services provided online. We’ve got a huge business in managing the computing infrastructure for large companies.

Om: What do you do as a company to become a leader in (cloud) client computers?

Dell: For the last eight years, here in the U.S., we’ve sold more computers than any company in the world. In fact, last quarter our lead kind of widened relative to the No. 2 company. Mobile Internet devices and smartphones are all part of our mobile computer business. Our focus is on the bull’s-eye of the volume, which today is notebooks, computers and laptops.

The interesting question is these “Internet-in-the-pocket” kind of things. Do those replace the notebook, or are they a compliment to the notebook? That is the kind of threshold question one would think about as you explore this.

Om: It is actually a complimentary device. But I think the bigger opportunity is in buying those devices because they can be replaced every six months.

Dell: No question, this is a large and significant opportunity and it’s one — I think you will see Dell move in that direction. But I think it will be sequenced in the right order relative to all the opportunities we have.

Om: What do you think is the biggest opportunity for Dell?

Dell: We have identified five big opportunities. When I say big, I’m talking about $5-$10 billion dollars each in terms of scale opportunities. They are the consumer business, mobile computers, emerging countries, enterprise, and small/medium business. We [have] reorganized the company around these key priorities.

On smartphones

Om: Any plans for mobile phones or smartphones?

Dell: We are certainly looking at the whole smartphone category, but I wouldn’t expect anything anytime soon.

Om: With the emergence of Google’s Android, and with Symbian OS and Microsoft Mobile already on the market, do you think that makes it easier for Dell to get into the phone business?

Dell: What you’ve got [are] industry-standard platforms upon which applications are being built and ecosystems are being created, and that kind of building-block architecture gives us all sorts of opportunities.

Om: You can be a big game-changer in this market, right? You can decide to work with Android or Symbian. Is there a desire on your part to work with one over the other?

Dell: We’re not ready to publicly disclose our plans there…we’re kind of working on that.

On being a founder

Om: From your perspective as a founder, what makes a founder/CEO different than a professional CEO?

Dell: The founder has special permission to make changes at a company. There have been two or three times within the history of the company where we’ve made some pretty dramatic changes; the last year and a half has been a good example of that. When I told our company that the direct model has been a great revolution for the industry but it’s not a religion, that was actually a pretty big shock to a lot of our people. Some of them thought it was a religion.

I think as a founder you get special permission to call into question things from the past, and it is up to you to figure out how to do that.

Om: So it’s almost like a political job in that sense.

Dell: I think there’s a lot of equity and trust that gets built up in the company over time. And when we’ve laid out the priorities in the organization — if we’ve done a good job and people see the results and they can see how their efforts apply to their success, and how they can realize their own dreams at the company — then they kind of say, “These guys know what they’re doing.”

On the future

Om: My impression has always been that your biggest competitive advantage was your supply chain; you fine-tuned it to such a level that others couldn’t compete. That has actually evolved over a period of time because others have started to think like the “Dell” way. What is the next competitive advantage going forward?

Dell: I think it’s true that we have had and have a supply-chain advantage. If you look at, for example, return on equity, you’ll see that our return on equity or vested capital [has been] massively higher than our competitors and still is today.

That advantage is very much intact in terms of the capital efficiency of the business. But I think that is really only part of the story. What informs that advantage is the connection we have with customers and the information that customers convey to us in the process. By knowing exactly what customers want and being able to build that and provide products and services tailored to customers’ needs and being able to personalize products — that creates significant advantage and significant growth possibilities for us.

Photo Courtesy of Dell Inc.

There are a lot of different words that can be used to describe the venture capital community and its relationship with entrepreneurs. Many of them, however, cannot be printed. For example, I once heard a VC say to an entrepreneur: “It would be easier to build a nuclear reactor at [UC] Berkeley than to execute on this idea.” And I once heard an entrepreneur say of a VC: “If I ever see that guy in a parking lot, I will speed up to hit him.” You get the idea.

The Sand Hill Road crowd does have a reputation. In an unscientific opinion poll, the collective sentiment was probably best described by a friend of mine this way: “Let’s just say you probably don’t want to grab a beer with a venture guy, or want your sister to marry one.” Yikes, I am a VC. No one wants to have a beer with me? Where did this rap come from? I think it all starts with the clumsy poker that gets played out in pitch meetings.

VCs are trying to get big returns for their limited partners. That’s all. If they can save the world or cure cancer in the process, even better — but that’s not their goal. Entrepreneurs, on the other hand, are trying to convert their dreams into reality. We all have deeply “vested interests” and all these intents converge in the pitch meeting, where everyone shows their proverbial “poker face.” (According to Joe Navarro, a former FBI counterintelligence agent and author who specializes in decoding nonverbal communication, “double-thumbs” is the “tell” for a player happy with the cards he’s seeing.)

Pitch meetings go something like this: Entrepreneurs bound into a conference room, show their PowerPoint deck, bear their souls, ask for a few million dollars and leave, not quite knowing where they really stand. And so they wait. And wait. And wait. Some receive the big checks to get their company off the ground, but more often than not, they wait only to be rejected. Worse, they never hear anything at all. Big checks are rare, so this scene of deafening silence is played out a hundred times a day in the venture world.

But from what I’ve observed on my end of the table, VCs can respond to a pitch in one of three ways — each of which is fraught with peril:

• Enthusiasm: If the VC is excited about the idea and the prospects for the company, the entrepreneur believes the money is sure to come. If the company is funded, hallelujah, but if the money doesn’t come, the entrepreneur feels betrayed and led on — pins in the proverbial VC voodoo doll.
• Criticism: When a VC tries to make recommendations or give feedback, it can be like telling the entrepreneur the baby is ugly. Often there is a sense that the VC, who probably doesn’t know much about this business, just criticized the best idea since alligator clips.
• Stoicism: If the VC doesn’t say much or react at all, the assumption is that the VC didn’t pay attention and doesn’t care., prompting the entrepreneur to think, “What a waste of time, money and stress.”

It’s a quandary that every VC has to deal with. Other than handing over a term sheet straight away, any response risks damaging the VC-entrepreneur relationship. Can you blame us for sitting still and saying little?

Even Warren Buffett once famously said: “When the phone don’t ring, you’ll know it’s me.” Of course, even if the phone don’t ring right away, it doesn’t mean we’re going to say no. But saying as little as possible is still the most efficient, and benign, option we have —which is why it’s the response most entrepreneurs get, most often.

So, in your next pitch meeting, expect the VC poker face. We might appear indifferent, or stoic, but don’t read too much into our immediate reactions. (Except maybe those double thumbs.) Like the old saying goes, “Patience is a virtue.” And champagne gets better with time. Meanwhile, I will be careful in parking lots.

Richard Moran is a partner at the VC firm Venrock in Menlo Park, a former Accenture consultant, and the author of “Nuts, Bolts and Jolts: Fundamental Business and Life Lessons You Must Know.”

Profits may not have arrived for online video, but venture capitalists are still happy to pick up the bill. More and more U.S.-based, venture-backed online video companies are attracting more and more financing each year, according to Dow Jones VentureSource. Some $460.5 million was invested in such startups in 2007, up from $266.9 million in 2006. And already, in the first quarter of 2008, another $217.3 million rained down on the category. NewTeeVee has the exclusive.

Swedish broadband service provider, Tele2 has come up with this fantastic promotion featuring a Beatboxing Bassel Hound.

The connection to broadband seems tenuous but what the hell, it is a nice way to waste a few minutes, especially on this April Fool’s Day, when most of the jokes/pranks seem to quite lame. This campaign is in Swedish, so I don’t know what it really says, but it shows that non-US phone companies have a sense of humor. [via]

The Indian cell-phone boom isn’t showing any signs of slowing down. Indian mobile operators are adding around 8 million new subscribers a month; February’s tally of 8.46 million brings the total to 246 million, making the country second only to China. Sure the ARPUs are low compared to those in the West, but I find it amazing how quickly the market has grown. I remember going there in 2004 and being amazed by the mobile frenzy. At the time, there were 34 million subscribers and hopes of hitting the 100 million-subscriber mark. They are clearly way past that. I wonder, how long can this growth continue? What is the natural limit to the market? Any theories, people? [via Unstrung]