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From the loser to the richest man in Asia – the biography of the founder of Alibaba Group, Jack Ma

The  reviewer studied the biography of Chinese entrepreneur Jack Ma, who had passed school and university exams with difficulty, failed to do a lot of interviews, but eventually created Alibaba Group and became one of the richest people in the world.

Early years of Jack Ma. University lecturer

Ma Yun, later known as Jack Ma, was born in Hangzhou in 1964. His parents were modest musicians and, it would seem, the boy had no special prospects. Sometimes there is information that parents were also political dissidents, but it is not officially confirmed. In addition to Ma, there were two other children in the family: his elder brother and younger sister.

Already at an early age, Yun was purposeful and unlike other children. At the age of 12, the future entrepreneur decided that he needed to learn English well, and chose for this not the easiest, but extraordinary and effective way. Every morning, for eight years cycling Yun went to the hotel in 40 minutes from home to communicate with foreigners. Weather and other circumstances on his plans did not affect. At the same time he listened to the radio broadcasts in English and did everything to quickly achieve his goal.

Having improved his English, Ma began to conduct free guided tours for tourist groups. By the way, it was one of the tourists who called the guide Jack, and this name entrenched the entrepreneur for life. Thanks to communication with foreigners, the young man got a broader idea of ​​the world.

In 1979, 15-year-old Ma met with an Australian family who came to China. For several days he played with the children in frisbee, and after their departure they began to correspond. In 1985, the Australians invited Ma to visit, and this trip changed his views. According to the entrepreneur, he was taught that China is the richest and happiest country, but, being abroad, he realized that everything is not as he imagined, and this changed his thinking.

With study from the future entrepreneur, things did not come off. Ma himself told methat he passed the basic test in junior school only from the third time. For examinations in high school, he took four attempts. In addition, Ma was not popular with classmates: they constantly mocked him, and it ended in fights. Despite the small growth and delicate physique, the teenager could stand up for himself and beat even seemingly superior rivals.

Upon admission to the university, Ma Yun passed the math exam for 1 out of 120 possible points, but this did not change his plans. The young man continued to make attempts and from the third time still entered the English language teacher. He graduated from the Pedagogical University in Hangzhou in 1988. Sam Ma says that this institution was considered the worst in his city. After completing his studies, he went to this university to work, for which he received about $ 12 a month. He liked teaching, and he quickly became one of the best employees in the university.

Ma has long dreamed of creating her own business and even told classmates that someday she would have breakfast in one country and dinner in another. In addition, soon after graduation, Ma married, and the teaching salary would not be enough to support the family.

In 1992, the future entrepreneur began to look for a better job. Attempts ended in about the same way as school exams: Ma passed all sorts of interviews, but he was denied everywhere. He was not recruited even in KFC – and this despite the fact that the remaining 23 candidates were interviewed. In 2001, Jack Ma said that he was not accepted 10 times at Harvard (at which stage of his life he tried to get there, it is unclear).

In general, looking at the young entrepreneur, hardly anyone would have believed that he was facing the future billionaire and one of the richest people in Asia. Ma was more like a loser without any special prospects.

To provide for the family, Ma decided to create a small business in which he used his main skill – knowledge of English. He organized a translation bureau and began to earn a little.

The first business of Jack Ma. Work for the government

The beginning of success was laid in 1995, and helped Jack all the same knowledge of English: he was included in the delegation of one of the Chinese companies that went to the US. According to another version, it was an official government delegation on trade issues.

In any case, in the US, Ma met the Internet and realized how far China is from him. According to the most popular version, he drove into the search engine the word “beer”, but the Chinese brands in the search results did not find. The next attemptwas the word “China”, but it also failed. So Ma realized that the Chinese Internet simply does not exist and his country is still separated from the rest of the world. It was a great opportunity to change something, but Ma did not understand anything on the Internet and programming.

If you believe the popular version, Ma, having returned to his homeland, was so obsessed with a new idea that he gathered friends and set out to show them what the Internet is. The download of one page took about three hours, but the goal was achieved: what Yun told so much about was true.

Prove the existence of the Internet Ma was much easier than running an Internet business in your country. The first project, according to some sources, the creator of Alibaba Group conceived, while still in the US. Taking a loan astronomical then the amount of $ 2000, he created the site China Pages – a directory in which Chinese organizations were gathered.

There was no such thing in the Internet that was starting up in the PRC, but the successes of the first undertaking of Ma are evaluated in different ways. Some sources note the success, because the entrepreneur was able to repay the debt, and the revenue reached $ 800,000. Others, on the contrary, tend to believe that the project developed slowly and did not bring much success .

It should be noted that in 1995, Elon Mask’s first project was launched – and thesewere the same “yellow pages”. That’s only Mask worked in the US, and therefore eventually sold the company for $ 307 million and earned about $ 20 million.

In the meantime, Jack Ma competed with China Telecom, a state-owned company and a monopolist in the provision of carrier services. Apparently, Jack successfully managed to resist it. After a while, the leadership of China Telecom went on negotiations, proposed the creation of a joint company and invested $ 185,000 in the deal. However, on the board of directors, China Telecom received five seats against the two remaining ones from Ma. He had to leave the company and think about a new business. There are also reports that the authorities nevertheless pressed the businessman, so he agreed to an investment and lost the company.

There is information that in the late 1990s, even before the launch of Alibaba, the entrepreneur, along with his programmers, worked for the government-mostly creating and running websites for them. After the development of the sites, from 1998 to 1999, Ma worked in the Ministry of Foreign Trade and Economic Cooperation of the PRC. There is information that he headed the department of international electronic commerce.

In the same period, the future creator of Alibaba became acquainted with the founder of Yahoo Jerry Yang. This meeting will play an important role in the history of both companies. By the way, Young is extremely positive about Ma and praises his entrepreneurial abilities.

Create Alibaba. Through competition and turmoil

For a long time to stay out of business Jack Ma could not: he knew that in China, a lot of goods are made much cheaper than analogues in other countries, and thought about creating an Internet site for small and medium merchants. The project promised to become profitable, but investment was needed.

Ma made a business plan and went to Silicon Valley, hoping that his ideas would be accepted faster. Immediately investment was not possible : the business plan looked risky and did not impress potential investors. There is a suggestion that since then, Jack Ma has refused to create business plans at all.

Returning to China, the entrepreneur went the other way: he collected friends (according to various sources, at the meeting there were about 17 people) and toldthem about his idea. Together they raised $ 60,000, which was enough to create the company. There is a version that the meeting participants were 23, but only 17 of them supported the entrepreneur. Each of these first employees received a share in the company.

The name Alibaba was chosen because it is associated with a fairy tale about the treasures locked behind the door with the help of a magic word. Ma’s biographers note that the entrepreneur has drawn a parallel with his business, which will open to small companies a door to the cave with treasures. In addition, Alibaba, according to Jack Ma, is a great guy and an entrepreneur. There are stories that the name of the company Jack Ma invented at a coffee shop in San Francisco and simply asked passers-by before approving it definitively.

The main feature of the new site was the refusal to copy Western projects. The Chinese entrepreneur understood that investors needed a clear model and the corresponding business plan, but he chose a different path and from the very beginning he was oriented to clients.

The first time the site was created was not commercially successful and the company suffered losses. At the office there was no money, and the future multi-billion dollar conglomerate was located in the apartment of Jack Ma.

Some researchers argue that it is impossible to launch a company connected with online commerce in China without government intervention. Indirect participation of authorities in the establishment of Alibaba is confirmed by the fact that Jack Ma previously headed the relevant department in the ministry.

In 1999, the company received investments from Goldman Sachs, which confirms that the case was worthwhile, even if it was based on connections. In 2000, Softbank also invested in the start-up. The total amount of initial investment was $ 25 million. Most likely, if the government interfered with the business, it simply issued the company with the appropriate permit. Sam Ma, by the way, not once pointed out that an entrepreneur should not get involved in politics.

Even after receiving investments, the company did not succeed. According to Ma, out of 18 people in the team, only three were versed in programming, and the rest, including Jack himself, were afraid of technology. Jack Ma was at first not only the executive director of the company, but also a tester. Perhaps, this largely predetermined its success: Ma rejected developments in which he could not understand, which meant that 80% of the population would not have coped with them either.

By the way, when discussing projects on the boards of directors of Alibaba, Ma acts quite differently. If 90% agree with the idea, then the entrepreneur refuses it. The logic is simple: if everything is clear to everyone, then the niche is likely to be occupied.

Already in the early 2000s, Ma, whose company still suffered losses, sharply became interesting to the press. In 2000, he was on the cover of Forbes, becoming the first Chinese entrepreneur to achieve this success.

Preparing for large-scale integration, the entrepreneur opened an office in Silicon Valley, where it was supposed to work on the English version of the site. With this decision, Ma hurried, because the company still did not earn. By 2001, the US office had been closed and staff members had been dismissed.

Ma rethought his approaches, hired an operations director, and also found a way to help him out. The entrepreneur realized that most of the merchants on his site are willing to pay extra to be higher in the list of offered goods. Things began to improve. The next step was the so-called road show, which was supposed to attract new merchants to the site from all over China.

In 2002, the company became more active in the US market and finally became profitable. Sam Ma talks about this success: in 2002, the company had money for a maximum of 18 months of existence. The company earned a weak, despite a more or less stable influx of users.

In an attempt to find a way out of the situation, Jack Ma again bet on the US, allowing his platform to connect sellers from China and customers from the States. The yearended with a net profit of $ 1 – this result may seem ridiculous, but for a losing company it meant an exit into self-sufficiency. There is a version that it became possible due to the introduction of the commission from the sellers.

To celebrate the success, the head of the company gave out balloonists with serpentine and organized a party. Speaking about Alibaba Group, it is necessary to note the unique situation in the company. For example, among employees, talent shows are held every year, and in the process of creating Taobao employees have chosen to themselves nicknames in honor of fictional Chinese masters of kung fu from Jin Yong’s books – and it seems that they did not refuse from them. During the fight against eBay, an American conglomerate was officially declared war, and for one day all the employees changed into military uniform.

Jack Ma himself said that to promote the company you need to do crazy things and attract attention. He showed the rest of the example: at the celebration of the tenth anniversary, Alibaba dressed like a punk rocker, put on a wig and sang a song to the company’s employees.

Creating Taobao. War with eBay

One of the legends says that the same year a small team of developers settled in the same apartment where Alibaba Group started to realize the new idea of ​​Jack Ma – the Taobao trading platform, which would work on the C2C system. In its essence, it was like eBay, which at that time was already actively working in the Chinese market. In the spring of 2003, Taobao launched and, despite Ma’s fears, gradually began to gain an audience.

At the request of the developers and at the direction of the head of the company Taobao in everything from design to orientated on Chinese users. Ma three years did not charge a commission for transactions with users and did everything to make the site comfortable for Chinese citizens.

In response to the emergence of a local competitor, Americans purchased $ 1 millionfor one of the leading players on the e-commerce market of the PRC – EachNet. Thanks to this eBay received about 85% of the market and, it would seem, consolidated its leadership, but everything was not so simple.

One of Jack Ma’s retaliatory strikes in 2004 was the launch of the Alipay payment system. Ma thought about it after his first summit in Davos, where he learned about online payments. In China, they were banned, but the entrepreneur still started working out, and the government as a result did not interfere with it.

In addition to the actual payment functions, Alipay helps protect users’ money from scammers. Taobao has a number of other interesting tools like messenger, which simplifies the discussion of the transaction between users.

To understand the reasons for the defeat of eBay, you need to compare the size of competitors. Jack Ma once talked about the balance of power, comparing eBay with a shark in the ocean, and Taobao – with a crocodile in the Yangtze. The American company operated almost all over the world, it employed 6000 employees – Alibaba Group was a small company.

But Jack Ma was well versed in the Chinese market, and therefore understood what it takes to attract the audience. The eBay management in the meantime did everything to lose market share: the company charged commissions and adjusted the functionality to a common standard. The fatal mistake of eBay is usually considered so-called migration , when the user base of EachNet was decided to be transferred to the US.

The process did not go smoothly: at first EachNet about a year could not improve its product, trying to adjust to eBay, and then began a long agreement. This is a normal approach for corporations, but it quickly reduced the chances of winning against the flexible Taobao. In addition, after migration, the resource has become slower to work, and traffic has decreased by 50%. At this very time, Taobao was regularly updated, quickly loaded and attracted more and more audience. In 2006, the war was won: Taobao controlled about 60% of the market, and by 2007 this figure had increased to 82%.

It is significant that the head of eBay Meg Whitman in 2005, still in the process of struggle, invited Ma to the US, offering him a deal and cooperation. Jack Ma refused. He already knew that the deal was taking a positive turn for him, and in addition, a deal was made with Yahoo !, which for 43% of Alibaba paid $ 1 billion and added a stake to Yahoo! China, which was estimated at $ 700 million.

Negotiations were difficult, both sides doubted and did various maneuvers. Analysts will even consider that Yang was mistaken, although later Alibaba Group will become the main asset of the American conglomerate.

After the deal, Jack Ma had the opportunity to implement all the ideas and start competing with other giants, and so the deal with the losing eBay looked hopeless. Looking ahead, it is worth saying that the deal with Yahoo! also was not the best solution, as it seemed to Ma.

There is information that Ma has been thinking through this deal for a long time because he received information about the American company’s assistance to the authorities, which made him think about the further behavior of the new partner. However, there is information that officially Ma supported the position of the American company in this matter.

Thanks to the money received, Ma was able to put a spectacular point in the competition with eBay, which rapidly lost market share: in 2006, he announced that Taobao users may not pay the commission for another three years.

In 2007, Alibaba suddenly found itself embroiled in a small scandal. People from all over the world accused the company of making money from products made from animal products. Ma responded to the whole world, which prohibits the sale of products on their websites from sharks. It is unlikely that this has changed something globally, but the public has calmed down.

Creation of new services. Fighting Yahoo!

In 2008, the advertising service Alimama was launched (the name itself was registered back in 1999). The project was created for marketing support of companies on Alibaba services and before a wide launch was tested for a long time.

Another new project of the time – T-Mall, which was originally called Taobao-Mall. The site was created as a response to all who argued that Alibaba’s resources sell some cheap goods. T-Mall works on the B2C system: only registered companies can trade here, and the potential trader needs to confirm the availability of the necessary documents.

Soon this site included famous brands like Adidas, GAP and Meizu. In 2011, T-Mall was separated from Taobao in a separate service. According to various estimates, now on the site there are more than 70 thousand licensed traders representing brands from around the world.

In 2009, there was a new chapter in the relationship between Alibaba and Yahoo! The American conglomerate was replaced by the CEO, and the place of loyal Jerry Yang came Carol Bartz, who managed almost immediately to spoil relations with Jack Ma.

The reason was banal: she did not like the collapsed Yahoo China, and she demanded that the Chinese entrepreneur remove the name of the American conglomerate from the name. Carol voiced her desire in a harsh form, and even in the presence of Alibaba’s top management. Order tired of Yahoo! Ma decided to withdraw the American conglomerate from among the shareholders.

The first step was the removal from the conglomerate company Alipay – she moved to another company, most of which owned by Ma. This was done without prior discussion with other shareholders in the face of Yahoo! and Softbank, which caused their discontent. In addition, Jack Ma got from the press: he was credited with almost fraud and manipulation of foreign capital.

According to some reports, managers of Yahoo! Were especially unhappy, but Softbank did not really resist. Sensing the slack, Ma began to pressure them, promoting their interests among shareholders and trimming the powers of foreign investors. In 2011, Bartz was dismissed from her post. Ma cautioned that she had to do something for her company before criticizing him.

To the Board of Directors of Yahoo! Investor Daniel Leb, who started a corporate war against some other members of the council, entered. In the process, he hired a new CEO, Scott Thompson, and he unexpectedly agreed to Ma’s offer to buy 20% of the shares. The deal amounted to $ 7.1 billion. Young was against and even left the board of directors. According to another version, Young left before the deal was made.

Interestingly, the co-founder of Yahoo! has retained a place on the board of directors of Alibaba and, according to some sources, gave there quite sensible advice on how to crack down on the American conglomerate. True, Yahoo! management and he cope with the destruction of his company, and as a result, its only valuable asset was the very 23% of Alibaba Group. There is evidence that even the arrival of Marissa Mayer was not to save the conglomerate, but to provide him with a stable state in the IPO process of the Chinese giant.

Struggle against competitors, scandals and over-the-top IPO Alibaba

Among the enemies that Jack Ma managed to make to himself, not only Yahoo !, but also entrepreneurs from China. One of the most stubborn is Robin Lee, the founder and head of the Baidu search engine. Lee was annoyed with Ma’s decision that users of his sites better use internal search, and the ensuing blocking of Baidu users from Taobao and T-Mall in 2009. Robin Lee tried to create his own platform for Internet commerce, but without much success.

In 2014, a new round of struggle has begun – now against the union of Tencent, Baidu and Wanda Group. These companies are headed by the trio of the richest people of the PRC. Together they invested $ 814 million in the creation of an online platform, which was supposed to crush Alibaba Group, but so far there is no significant news about this fight.

Ma talks about her opponents in a positive way. For example, he noted that Tencent is more innovative than Alibaba Group, and praised its development of WeChat.

In 2011, there was a major scandal directly related to Alibaba Group: about a hundred managers of the company created fake firms, gave them the status of premium suppliers and allegedly sold electronics, but actually deposited money in their pocket without sending anything to customers.

The internal investigation found about 2300 fake shops. Damage of $ 2 million was not significant for a multibillion-dollar company, but its reputation suffered. When Ma estimated the losses, the company flew in the company. In addition to direct scammers, Jack fired some top managers to restore the public’s confidence in the brand and show what will happen to those who do not fulfill their duties.

In 2013, Alibaba was preparing for the IPO. At the same time, general attention was drawn to Jack Ma. First, he resigned from the post of head of the company, explaining this desire to do charity. At the same time, Ma retained the post of chairman. The company he divided into seven areas, each with 25 divisions with its own head. This decision was caused by Ma’s desire to keep the startup atmosphere in the conglomerate.

Secondly, in 2013, Jack Ma gave a resonant interview, in which he said that he supports the government of the PRC, including restrictions on the use of the Internet. Previously, an entrepreneur in this area did not intervene, so Chinese users felt that the image change is caused by fear.

At this time in the PRC, the businessman Zeng Chengze was secretly executed – as they say, without a thorough investigation and realistically proven guilt. So this move from Ma was accepted calmly and practically justified. The entrepreneur himself in 2015 noted that he does not conduct business with states, but not against bilateral communication and considers it important.

In 2014, the IPO of Alibaba Group finally passed: the company raised $ 21.8 billion on an exchange valuation of $ 241 billion. Ma himself, who owned about 8.9% of the company’s shares, earned $ 867 million. Of course, the IPO of the Chinese giant was recognized as the largest in the world stories.

A few months earlier, Ma established a charity fund with a registered capital of $ 4 billion plus a 2% investment of Alibaba Group. The Foundation is engaged in supporting health, education and environmental protection.

In addition, since 2010, 0.3% of the annual revenue of Alibaba Group is sent to the fund for the protection of nature. In addition, Ma is the chairman of the Committee for the Protection of Nature of China and actively donates money for the preservation of the environment. The Chinese businessman is not limited to his country: in 2015 he purchased a part of the Adirondack park in New York with the aim of creating a nature reserve there and, possibly, building a villa for himself.

Personality of Jack Ma, his entrepreneurial views and new beginnings

Unlike many other billionaires, Jack Ma is practically devoid of pathos and egocentrism. Since childhood, he used to work for success. He has been doing this ever since the day he went to study English at the Hangzhou Hotel. According to Ma, it is important to always be attentive, hardworking and ambitious. Ability to preserve these traits is an important element for achieving further success.

According to Ma, the company should focus not on money, but on a mission. Ma believes that there are two types of entrepreneurs: some want to earn more quickly, while others set themselves global goals and objectives. The latter often become much more successful and have the opportunity to truly influence the world.

As can be seen from the biography, Ma never gives up. He could not go to Harvard, but he tried ten times. At first he could not find an investor, but he ran around the whole Valley and, despite the failure, eventually achieved the goal.

Jack Ma does not seem to like the concept of “corporate culture” and negativelyspeaks about both Western and Eastern variations. According to the entrepreneur, it hurts rather than benefits, and forces employees to concentrate not on those things. For Ma, a startup is preferable, when everyone in the team actively interacts with each other and is not constrained by any framework.

Gaps in the technical knowledge of Jack Ma entered the legends: a businessman does not have a clue about the features of the Internet, writing code, and practically does not understand the technologies his company uses, and does not even try to figure it out. The entrepreneur himself usually notes that for this he has a team of professionals. In Ma’s opinion, if the head of the company understands technological nuances better than employees, then he simply typed the team incorrectly.

The main force of Jack Ma – in the ability to understand their customers. For each innovation, it fits like a regular user, and therefore knows whether users will accept it or whether something needs to be changed.

The success of Ma was greatly influenced by his wife, who is called Zhang Ing. They met while still students and married after graduating from the Pedagogical University. Then both worked together as teachers, and when Jack started his business, his wife supported him and for a time even worked for the company.

One of Ing’s functions was and remains to motivate her husband for great achievements: she says that even at the beginning of the meeting, she appreciated the character of Ma and his potential achievements. Until 2002, Ing worked in Alibaba, and later, at the request of the spouse, she began to deal exclusively with children.

Judging by the statements of Ma, his company has never been harassed by gender, including when hiring. In 2014, before the IPO, an American journalist glanced at the head of the company for an interview. Among other things, he wanted to know how at work in Alibaba there were so many women.

Surprise reporter can be understood: technology companies rarely boast of an equal ratio of men and women. At the same Alibaba it turned out 52% of women, and in the top management, they accounted for 23%. Since then, the share has slightly decreased due to the purchases of companies, but the situation is really interesting. Ma calls the number of women in the company another reason for her phenomenal success and stresses that the world situation will improve significantly when many countries are headed by women.

Alibaba Group head office in Hangzhou

Jack Ma and company employees are a separate topic for conversation. At the dawn of Alibaba’s existence, he mistakenly decided that it was better to invite outsiders to managerial positions, and the first employees should remain simply managers without special career growth. As a result, the success of hired professionals turned out to be controversial, and they did not stay in the company, but the first employees, in whom Ma did not believe, brought real benefits. Since then, Ma has learned to be guided not only by logical arguments, but also to trust his own intuition.

Another feature of the entrepreneur is the ability to get rid of unnecessary personnel. About dismissed top managers because of the scandal with fake companies already mentioned above. Not so long ago, Ma said that he trusted young professionals. The words were backed up by the case: in 2015, top managers, born in the 1960s , weredismissed .

Young employees born in the 1990s, the Alibaba Group now has about 3,000, and they have many hopes. Taking people to work, Jack is guided not only by the qualification of the candidate – for him it is important to have original and even crazy ideas. According to Ma, people need to be united not around the individual, but around a single goal, and then the company will work in a unified direction.

Despite the status of the richest man in Asia with a fortune of $ 33.3 billion, Jack Ma remains a modest man and does not make luxurious purchases. The biggest money he paid for real estate: in particular, he owns a house in Hong Kong at Victoria Peak at a cost of $ 193 million. Another expensive toy of a businessman is a personal plane, but he was bought because of the need for frequent flights. Even the iPhone was bought by Jack’s wife, and he has nothing to answer to questions about gadgets or expensive novelties.

Much more willing to talk about his company. For example, he announced that the company is going to achieve sales of $ 1 trillion by 2020. The goal is extremely ambitious, but Ma repeatedly confirmed that he knows how to achieve his goal.

In everyday life, Jack Ma is quite unpretentious, and even his hobbies look unremarkable. In his free time, the businessman reads stories about masters of kung fu, meditates or deals with Chinese gymnastics taijiquan, which, incidentally, together with actor Jeut Lee tries to popularize. Of more or less ordinary entertainment Ma can be called poker.

In 2015, Jack Ma unexpectedly purchased the oldest Hong Kong newspaper, South China Morning Post. The argument for this was simple – the expansion of the audience at the world level. The deal amounted to $ 266 million. Next, the entrepreneur refused to pay content to expand the user audience.

Ma before that was invested in the media business. The entrepreneur owns stakes in the eBussines Review, Huxiu business blog, China Business Network online news publication, and a number of other projects, including streaming services and film production.

Ma does not put up any grave goals and does not seem to influence public opinion. The entrepreneur believes that the joint work of Internet companies and media can bring benefits. In addition, with the help of media, it is possible to establish successful promotion of small companies, which in the Alibaba Group are huge.

 

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