Jack Ma, the president the CEO of Alibaba has shared his thoughts on the ecommerce in china, the 12 year journey that he has been with Alibaba in the China 2.0 conference. I would like to share with you guys today as in my opinion, it was quite interesting talk.
Jack said that Alibaba got no chance that it can survive today, it is really lucky company. Jack had no good background or backup like a rich father or rich uncle, etc. In 1999, he came to Silicon Valley looking for venture capitalists. He talked to a lot of them and they all rejected. They looked at him: “Alibaba? What are you talking about?” So there was no money from any venture capitalists, nobody wanted to invest in him, in the business. So he went back to China, no money, but he was full of confidence. He saw the American dream.
At that time, people asked how you can do B2B in China. Normally B2B focused on big companies, focused on buyers. But he saw no big companies in China. Big companies in China several years ago were only SOEs, and SOEs, they did not need ecommerce, they only need government policy. So he focused on small businesses because he believed small businesses would be the future of China. B2B in the US, focused on the buyers, helped buyers to save the cost and save the time. But for Jack, he said “do not teach small businesses to save the cost because they know much better than you do. We should help them to make money”. So his focus was on helping small businesses to make money, to sell things abroad.
That model didn’t sound sexy, compared to Baidu, Alibaba didn’t make that much money. It didn’t make money on online gaming. But he can sleep well at night because the company helped small businesses to survive, to have opportunity and Jack felt proud of that. He didn’t proud of how much money he made and the company made, he was proud of how much impact that Alibaba can help the small businesses. Before the history of the internet, nobody could help more than 50 millions SMEs. Today the company is trying. And He was very proud of that.
For Taobao, he said when he created that business; everybody said it was competing with Ebay. Why not? At that time everybody said it had no chance. But if you never try, how do you know that you have no chance? “If Ebay is the shark in the ocean, we are crocodile in the swamp of the river. It was difficult at that time, but it was a lot of fun.” At the beginning, Ebay got around 90% of the market share. Today, Taobao got 90% of the market share for C2C business. He felt it was very lucky, just lucky.
People often write about the successful story of Alibaba, but he didn’t think that he was smart. The company has made so many mistakes. “We were so stupid at that time.” In the future, Jack said he would write about Alibaba, 1001 mistakes. These are the things that people should learn. If we try to learn about other people successes, on their successful stories, it is very difficult because there are a lot of lucky things out there. But if you want to learn, you should learn how people fail, because the reasons why they fail are almost the same. That really matters.
For Alipay, at first people say to that how he can do ecommerce in China? The logistics were terrible, not very good credit system, banking system etc. Jack replied that yes, because China didn’t yet have good logistics system, credit systems and banking systems, that’s why entrepreneurship was needed. If there was no such thing, you should build it up so that would become the standard of China. He believed China needed that. A lot of people several years ago said Alipay was stupid escort services. If John wanted to buy things from Steven, John didn’t want to wire the money to Steven and Steven didn’t want to send the products. So Alipay opened the account and said: “wire the money to us. If you’re happy, we would wire the money. If you’re not happy, return the products, we would return the money.” People said how stupid the model was. But Jack didn’t care whether it was stupid or not. He just care whether the customers want it or not. After 07 years, it has more than 600 million users in China. So even if it’s stupid, if you improve it every single day, it would become very smart.
The colleague of Jack said to him one day and said 03 things: “I never know that in my life, I can do that much.” Second, I never know in my life, the things that I’m doing are that meaningful. Third, I never know that, life is damn that hard.” The company has helped a lot, a lot of people and small businesses. Years ago, if you had the good record, lots of trust but you weren’t rich yet. Today if you have good record on Taobao, you would get rich. He believed in teaching the consumers to be smart. People often come to him and say “Jack, I bought something so cheap in Taobao, is that a fake product?” A cost of wine bottle was $9 on the site but was $300 in the street. Why? Because of channel, advertisement, TV shows. Why consumers have to pay that much? He said it was not because Taobao was selling cheaper, but because the shops was selling too expensive.
Jack didn’t believe in trying to make a lot of money. As for him, if anyone has $1 billion, it is not his money, it is the society trust on him, it was the shareholders, the people that believe that he can spend that money smarter than other people. The challenge is how he can treat that trust well. He shared his thinking: “If you want to be a successful company, you have to learn how to solve the problem of the society, instead of catching one or two opportunities.”
Jack said that Alibaba got no chance that it can survive today, it is really lucky company. Jack had no good background or backup like a rich father or rich uncle, etc. In 1999, he came to Silicon Valley looking for venture capitalists. He talked to a lot of them and they all rejected. They looked at him: “Alibaba? What are you talking about?” So there was no money from any venture capitalists, nobody wanted to invest in him, in the business. So he went back to China, no money, but he was full of confidence. He saw the American dream.
At that time, people asked how you can do B2B in China. Normally B2B focused on big companies, focused on buyers. But he saw no big companies in China. Big companies in China several years ago were only SOEs, and SOEs, they did not need ecommerce, they only need government policy. So he focused on small businesses because he believed small businesses would be the future of China. B2B in the US, focused on the buyers, helped buyers to save the cost and save the time. But for Jack, he said “do not teach small businesses to save the cost because they know much better than you do. We should help them to make money”. So his focus was on helping small businesses to make money, to sell things abroad.
That model didn’t sound sexy, compared to Baidu, Alibaba didn’t make that much money. It didn’t make money on online gaming. But he can sleep well at night because the company helped small businesses to survive, to have opportunity and Jack felt proud of that. He didn’t proud of how much money he made and the company made, he was proud of how much impact that Alibaba can help the small businesses. Before the history of the internet, nobody could help more than 50 millions SMEs. Today the company is trying. And He was very proud of that.
For Taobao, he said when he created that business; everybody said it was competing with Ebay. Why not? At that time everybody said it had no chance. But if you never try, how do you know that you have no chance? “If Ebay is the shark in the ocean, we are crocodile in the swamp of the river. It was difficult at that time, but it was a lot of fun.” At the beginning, Ebay got around 90% of the market share. Today, Taobao got 90% of the market share for C2C business. He felt it was very lucky, just lucky.
People often write about the successful story of Alibaba, but he didn’t think that he was smart. The company has made so many mistakes. “We were so stupid at that time.” In the future, Jack said he would write about Alibaba, 1001 mistakes. These are the things that people should learn. If we try to learn about other people successes, on their successful stories, it is very difficult because there are a lot of lucky things out there. But if you want to learn, you should learn how people fail, because the reasons why they fail are almost the same. That really matters.
For Alipay, at first people say to that how he can do ecommerce in China? The logistics were terrible, not very good credit system, banking system etc. Jack replied that yes, because China didn’t yet have good logistics system, credit systems and banking systems, that’s why entrepreneurship was needed. If there was no such thing, you should build it up so that would become the standard of China. He believed China needed that. A lot of people several years ago said Alipay was stupid escort services. If John wanted to buy things from Steven, John didn’t want to wire the money to Steven and Steven didn’t want to send the products. So Alipay opened the account and said: “wire the money to us. If you’re happy, we would wire the money. If you’re not happy, return the products, we would return the money.” People said how stupid the model was. But Jack didn’t care whether it was stupid or not. He just care whether the customers want it or not. After 07 years, it has more than 600 million users in China. So even if it’s stupid, if you improve it every single day, it would become very smart.
The colleague of Jack said to him one day and said 03 things: “I never know that in my life, I can do that much.” Second, I never know in my life, the things that I’m doing are that meaningful. Third, I never know that, life is damn that hard.” The company has helped a lot, a lot of people and small businesses. Years ago, if you had the good record, lots of trust but you weren’t rich yet. Today if you have good record on Taobao, you would get rich. He believed in teaching the consumers to be smart. People often come to him and say “Jack, I bought something so cheap in Taobao, is that a fake product?” A cost of wine bottle was $9 on the site but was $300 in the street. Why? Because of channel, advertisement, TV shows. Why consumers have to pay that much? He said it was not because Taobao was selling cheaper, but because the shops was selling too expensive.
Jack didn’t believe in trying to make a lot of money. As for him, if anyone has $1 billion, it is not his money, it is the society trust on him, it was the shareholders, the people that believe that he can spend that money smarter than other people. The challenge is how he can treat that trust well. He shared his thinking: “If you want to be a successful company, you have to learn how to solve the problem of the society, instead of catching one or two opportunities.”
