New York Times DealBook: Jack Ma on Alibaba, Entrepreneurs and the Role of Handstands
From New York Times Dealbook, September 22, 2014
I spoke with Alibaba’s founder, Jack Ma, at a private luncheon on Friday, just an hour after his company had gone public. Mr. Ma is unlike any Chinese leader I have ever met. He is emerging as the face of the new China: a free enterprise entrepreneur working within the confines of a rigid government.
Alibaba’s stock had just started trading on Friday, and it immediately jumped in value. It ended the day up 38 percent, at $93.89, giving the company a market value of $231 billion. The company set the record for the largest initial public offering in history. Yet Mr. Ma was humble, preferring to talk about building a great company that helps its customers, creates jobs and serves society. “They call me ‘Crazy Jack,’” he said. “I hope to stay crazy for the next 30 years.”
China’s large and growing economy has made it an increasing economic force over the last two decades, but it had not produced global companies. Chinese businesses focused domestically and mass-produced products for international companies. Mr. Ma is taking a different approach. Alibaba has initially concentrated on China’s enormous markets, but he understands the Internet is a worldwide phenomenon that knows no borders. He believes that Alibaba can compete internationally and across sectors, and intends to serve the American, European and emerging markets. But he said he won’t stop there. He has plans to disrupt China’s commercial banking and insurance sectors as well.
Asked about his success, Mr. Ma shares his life story. He was raised in humble origins in Hangzhou in the 1980s, just as China was opening up to the West. Growing up, he overcame one obstacle after another. He was rejected at virtually every school he applied to, even grade schools, because he didn’t test well in math.
He persevered. From age 12 to 20, he rode his bicycle for 40 minutes to a hotel where he could practice his English. “China was opening up, and a lot of foreign tourists went there,” he said. “I showed them around as a free guide. Those eight years deeply changed me. I became more globalized than most Chinese. What foreign visitors told us was different from what I learned from my teachers and books.”
As a young man, he applied for jobs at 30 companies and was rejected every time. At Kentucky Fried Chicken, 24 people applied, 23 got jobs; only Mr. Ma was rejected. So he became an English teacher at Hangzhou Electronics Technology College. In 1995, he visited America for the first time. “I got my dream from America,” he said. “When I visited Silicon Valley, I saw in the evening the road was full of cars, all the buildings with lights. That’s the passion. My role model is Forrest Gump.”
Returning to Hangzhou, he and Joe Tsai, now Alibaba’s executive vice chairman, founded the company in Mr. Ma’s modest apartment. They called the company Alibaba because it is “easy to spell, and people everywhere associate that with ‘Open, Sesame,’ the command Ali Baba used to open doors to hidden treasures in ‘One Thousand and One Nights.’”
Mr. Ma focused on applying his team’s ideas to help businesses and consumers find hidden treasures of their own. Yet he was unable to raise even $2 million from venture capitalists in America. Once again, Mr. Ma persevered. Eventually he raised $5 million through Goldman Sachs. Later, Masayoshi Son of Japan’s SoftBank invested $20 million, making it Alibaba’s largest shareholder. That stake is now worth about $75 billion. Today, the Alibaba companies serve 600 million customers in 240 countries.
With Friday’s I.P.O., Mr. Ma became China’s wealthiest citizen, worth more than $18 billion. Yet when he asked his wife several years ago whether it was more important to be wealthy or to have respect from business people, he said they agreed on respect. Mr. Ma talks about building the Alibaba ecosystem to help people, a philosophy that is baked into the DNA of the company. At the founding of the company, Mr. Ma issued generous stock option packages to early employees because he wanted to enrich the lives of all involved in his venture. He insisted that Alibaba’s six values — customer first, teamwork, embrace change, integrity, passion and commitment — be placed on the pillars of the New York Stock Exchange the day of the I.P.O.
For all his success, Mr. Ma has retained his authenticity. He recognizes that leadership is character, and he is focused on building his team. His role model is a well-oiled soccer team where 11 players work together for the success of the team. He would rather hire entrepreneurs than seasoned business executives, who are always looking over their shoulders, trying to please their bosses rather than their customers.
His own commitment to a cause larger than himself has propelled him onward. “My vision is to build an e-commerce ecosystem that allows consumers and businesses to do all aspects of business online. I want to create one million jobs, change China’s social and economic environment and make it the largest Internet market in the world.”
American tech leaders like Steven P. Jobs, Larry Page, and Mark Zuckerberg have emphasized technology and product above everything. Not Mr. Ma. “I’m not a tech guy,” he said. “I’m looking at technology with the eyes of my customers, normal people’s eyes.”
Mr. Ma said this was not just about making money. “I’m just a purist. I don’t spend 15 minutes thinking about making money,” he said. “What is important in my life is influencing many people as well as China’s development. When I am myself, I am relaxed and happy and have a good result.”
His lighthearted nature has helped create a unique culture and fun atmosphere at Alibaba where employees are given cans of Silly String, encouraged to do handstands to bolster their energy during breaks, and participate in an annual talent show where Mr. Ma sings pop songs. He practices tai chi and uses the nickname “Feng Qingyang,” a reference to a Chinese kung fu guru who trained an apprentice into a hero. Mr. Ma called martial arts “the most down-to-earth way of explaining Confucianism, Buddhism and Taoism,” adding, “They cherish brotherhood, morality, courage, emotion and conscience.”
He said he worried that China lost an entire generation when Mao Zedong phased out Confucianism and other forms of spirituality. But he said he hoped to restore that sense of values and purpose to the next generation. “It’s not policies that we need, but genuine people,” he said. Asked about corruption in China, he said, “I would rather shut down my company than pay a bribe.”
He listed three worries: continuing to create genuine value for his customers, working cooperatively with the government and building his team of global leaders. What will he do with his fortune? His big dream is to found a university for entrepreneurs that can create the new generation of Chinese entrepreneurs.
Jack Ma is a force of nature. He may become the role model for the new generation of global leaders, not only in China, but also throughout the world. “Our challenge,” he said, “is to help more people to make sustainable money that is not only good for themselves but also good for society. That’s the transformation we are aiming to make.”