Just after the major IPO of the history, founder of Alibaba Jack Ma is now among the richest people in China. He grew up in poor communist China. He made huge effort in life, and he is now worth ~$25 billion. It took a decade for Jack Ma to reach at such height, and making Alibaba (and affiliates) a pinnacle of growth. Jack Ma intends to help out small and medium enterprises and facilitate trade globally.
Lack of Employment in Early Days
In early 1990’s, after graduation, Jack Ma faced lack of employment opportunities. Before finding success in his internet company, Alibaba, he was rejected from dozens of jobs including KFC. But as we know it, rejected breeds success. He initially taught English at his local university and started translation-service business. In 1995, he visited US as a translator and got introduced to the internet.
Lack of Chinese Products on the Internet
He saw lack of Chinese products on the internet and started “Chinapage” that listed Chinese businesses and their products; he started to receive a great response all around the world. Jack Ma learned amazing power of connectivity, and internet’s influence on global trade and SMEs (Small to Medium Enterprises).
Ministry, Yahoo & Jerry Yang
Later, Jack Ma partnered with a government body to get funding for “Chinapage”, but rigid government bureaucracy subdued his ideal projects, made him frustrated; and caused his ultimate departure. During the second half of 1990’s he remained associated with ministry of foreign trade and economic cooperation. The connections he built there with influential people helped him in his business venture. He met founder of Yahoo, Jerry Yang who later facilitated in getting yahoo to invest $1 billion in Alibaba project in 2005.
Global Trade, & Foundations of Alibaba
After leaving ministry job in 1999, Jack Ma gave a second try at internet based business by making a team of 18 people. He started business from his home and laid the foundation of Alibaba with intention to promote global trade for SMEs. Alibaba was the result of Ma’s dream to provide a platform for Chinese SMEs and his frustration with government bureaucracy, where his recommendations to use internet to assist the trade of Chinese products were rejected.
Goldman Sachs & Softbank
Initially Jack Ma tried to raise funds in Silicon Valley in the US and Alibaba was criticized for his faulty business model by many. At last, he succeeded in getting funds from Goldman Sachs and Softbank. Subsequently, Jack Ma and his team launched a subsidiary of Alibaba, a website named “Taobao.com”. They made it a commission free website marketplace for millions of traders and challenged eBay, an e-commerce giant, with major market share in China. Ma and his team’s point of differentiation was their value added services (e.g. custom webpages for online traders) for small fees. Within less than five years, Jack Ma snatched Chinese market from eBay and forced it to withdraw from China.
Jack Ma with his effective and efficient strategy, reorganized Alibaba’s operations. During challenging international “dot com” boom period in 2003, Ma closed his international operations and strengthened the Chinese market. He then again expanded the Alibaba’s services and reengaged in the international expansion strategy by getting further $1 Billion investment from Yahoo.
Initial Public Offering (IPO)
2014 witnessed the largest initial public offering of the history, Ma and his group raised more than $20 billion for Alibaba by listing it in the US New York Stock exchange. Alibaba, a company with origins outside of US became one of world’s largest companies worth $200 billion. Jack Ma and his team is turning Alibaba to a giant conglomerate by acquiring small tech and logistic related companies.
Partnerships rather than Acquisitions under the supervision of Jack Ma
Jack Ma is of the opinion that he and his company should focus on forming great partnerships instead of gulping small companies. It did acquire some companies though which strategically matched this goal. He bought South China Morning Post. The vision in acquiring this was to create a small information highway which can tell the insider stories about china to its readers. So acquiring a newspaper made sense in the thought of having strong partnerships in future. But first they needed to put forward the right word. The Post now covers more topics then centred only around China.
Possible Twitter Deal
There are information bits here and there that soon we might see a bid from Jack Ma about buying Twitter. A lot of bets are on stake these days, as reports amounting to possible acquisition from Apple, Alphabet, and Salesforce. The reason being simple, in order to foster powerful partnerships, you have to have a powerful presence at all fronts.
Alibaba’s Affiliate, Ant Financial, has revealed that it is going to buy America’s payments company MoneyGram. The deal will amount to USD880 Million. MoneyGram handles cross-border money transfer. Alibaba has eyes on the information part of the information highway, and now it is eying specifically on the transaction part of this economy. If it can have a solid control then Jack Ma’s company reach will explode again. MoneyGram has a presence in more than 200 countries. It is like Facebook buying Whatsapp for USERS. But Alibaba is buying for MoneyGram for its presence and connections (for far less).
Jack Ma, and few other highest influential investors have teamed up to form a fund for cleantech companies. It is called Breakthrough Energy Ventures (BEV). It is investing in new and innovative ways to live, eat, travel, and build. There are four criteria which Jack Ma and others have sorted out to select companies for investment. These are relating to those companies which have a climate impact, which can show that they are being invested by non-BEV funds, which can demonstrate the scientific viability through the proof of concept, and which can demonstrate that they are unique.
Here is Bill Gates telling about the cleantech.
Ma’s 10 Rules
1- Accept rejections
He got rejected for 30 times. There were so many rejections he went through. He applied to Harvard 10 times, and got rejected. So truly he was used to it.
2- Keep your dream alive
Jack Ma believes that the secret to success is keeping ones dream alive. There are times when one feels that their venture is now over, failed, or flopped, but if they truly believe that they can make a difference, and work out the things, they can still move forward.
3- Focus on Culture
When he was asked, what is his company core competence is, he told that it is the culture. He says value, and mission matters. And technology is just a tool. Tools will keep changing but values and mission should get mature and progress. Even with high-end technologies many companies die, it is because they have bad culture.
4- Ignore the littleman
When you start to develop some idea. During its implementation, many people will come to you and will say that your idea is so stupid. Jack Ma simply says it is better to ignore them. Don’t get dragged by their negativity. Remember if you are getting few users then it means there is a need for your idea. If you are getting growth then it means there is some promise. Create your space as well.
5- Learn from those who inspire you
Jack Ma gets its inspiration from anyplace from where he can get. Sometimes he quotes books which are highly impressive. Sometimes he quotes movies e.g. Bodyguard where he mentions he learnt how to make a good speech.
6- Be focused what you are doing
Everybody know focus is important. But he says context coupled by focus is pivotal. He receives many proposals on how to expand and make more money but he rejects based on what his mission and focus is. Mission should not be simply to make money. But it should be solid and concrete which should be built into your company.
7- You brand should have a good name
His mantra is that the name that you should choose should be global. That is why he chose Alibaba, as everybody knows what is the story behind Alibaba or what it refers to. Google, Yahoo, Microsoft, Salesforce etc are really good global names.
8- Give highest priority to customers
Jack Ma has given three levels to priorities. He gives customers the priority number 1, employees the priority number 2, and shareholders the priority number 3. He says it is like his religion, and it is the customer that pays us the money, so the customer should be number 1. He also focuses on the fact that customers, and employees have a huge tendency to stay, but shareholders have a very little tendency to stay (because when in profit they come, when in loss they tend to fly away).
9- Don’t complain, but look for opportunities
Jack Ma believes that instead of complaining, it is better to change ourselves. People do get agitated when they get setbacks, but behind every setback, there lie opportunities. Always look for those opportunities.
Drive yourself with passion. That is what is being practiced by Jack Ma from the beginning. He has passion to excel and he makes people embed passion in them to excel. The fuel of every human being should be passion to move forward. Here is the first pitch from Jack Ma. He was passionate, and he remains so far.
Jack Ma’s vision for 2020
Jack Ma wants to go into trillion by using multiple fronts by 2020. Alibaba envision itself to be equivalent to world’s fifth richest nation. It will double its Gross Merchandise Value to reach a trillion. He laid out the plan to do that in the mid of 2016. After few acquisitions, and reaching out for bigger partnerships it seems like the plan is in motion. Currently USA, China, Japan, and European Union are the 4 largest richest, in terms of GMV, countries. In 2020 we might see Alibaba group in the same list.
Retail or Data Business
Jack Ma has now set the tone that Alibaba Group is not a retail business, but it is a data business. It own Aliyun, which is a cloud computing and big data front. Similarly it owns Alipay, and it manages huge logistics. So it is essentially a data business instead of retail business, it was once known for. So we can see that the vision is getting broader. And this is the guy who knows how to do that, and he is doing it.
Here is a video interview which he gave in Davos 2017 (It starts from D. Trump meeting, so be patient).
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