The Story of Jack Ma

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The initial title of this biography was ‘The Story of Jack Ma: From English Teacher to ECommerce Billionaire” but even that will not suffice now. Jack Ma is more than just an eCommerce billionaire. Forbes.com calls him the “symbol of China's rise to No. 1 in Internet and mobile phone users.”

Before 2014, I didn’t know who Jack Ma was. It was around that time Alibaba Group filed for an Initial Public Offering (IPO) in the United States, in what became the biggest IPO in the country’s history. Just recently, I sat down to watch a documentary titled ‘Crocodile of the Yangtze River’. The documentary, a narration of the Alibaba story from the mouth of Porter Erisman - a former Vice President at Alibaba, was a simple story of a man who found his niche, saw opportunities and took them smartly.

The Beginning of His Life

Jack Ma wasn’t always called Jack. He was born Mǎ Yún (Simplified Chinese: 马云) on Thursday October 15, 1964, in Hangzhou, China. His parents were traditional musician-storytellers. The number of foreigners that were coming to Hangzhou during Ma’s childhood years was enough to encourage him to start learning English. When he was 12 years old, he became interested in learning English. He said that every morning, for eight years, “I rode my bike for 40 minutes...rain or snow... to a hotel near the city of Hangzhou's West Lake district, about 100 miles southwest of Shanghai. China was opening up, and a lot of foreign tourists went there. I showed them around as a free guide and practiced my English.” It was during his encounters with the foreigners that he got the name ‘Jack’ because his traditional name was too difficult for them to pronounce.

Those eight years deeply changed Jack Ma. The things he learned from his experiences with the foreigners was different from what he learned from his teachers and books.

Photo Credit: Electronic Staff

In 1979, he met a family from Australia. Six years later, they invited him to their country for a summer vacation. He accepted their invitation and went there in July; he stayed with them for a month. About this, Jack recalls: “Before I left China, I was educated that China was the richest, happiest country in the world. So when I arrived in Australia, I thought, Oh, my God, everything is different from what I was told. Since then, I started to think differently."

A couple of years later, it was time for Jack to go to the university. He attempted to get into the university, three times, and he failed the first two time. He went on to attend the Hangzhou Teacher's Institute (now known as the Hangzhou Normal University) where he graduated in 1988 with a Bachelor’s Degree. During his time at the university he met Zhang Ying, whom he married shortly after graduation (The two of them started working as teachers). While in the university, Jack was also elected as student chairman. Later, he became chairman of Hangzhou’s Students Federation.

Upon graduation, Jack worked as a lecturer of English and International Trade at the Hangzhou Dianzi University. He earned between $12-$15 per hour.

His Early Career and Failures

Jack Ma always dreamed that he would join a business after his five years in the university. He says that in 1992, “the business environment started improving.” He started applying for many jobs but got none. He applied to 30 different jobs and got rejected. He wanted to join the police, but they said to him “You’re no good.” When KFC was to start at Hangzhou, Jack and twenty four other people applied for jobs. Of all of them, only he wasn’t able to get a job.

Because of his proficient English skills, Jack decided to become an interpreter. He founded a translating agency. This gave his a window of opportunity to work with many US firms in China, finding out more about their success stories in the process. It was during one of Jack’s trips to the US that he came in contact with a computer and the internet. He typed in beer on Yahoo, and got results. But when he tried to find information about China, nothing came up. He was fascinated with this and he decided he would start a business based on the internet.

Jack and the Internet Stalk

In 1995, with $2,000 borrowed from friends, he founded an internet company called China Pages with his wife and a friend. China Pages was as a form of online Yellow Pages. It offered English language directories and information for other companies. Jack set out to find companies to advertise on his site. He traveled to Beijing to try to partner with the government body responsible for controlling information in China, but they turned him down. He tried other agencies, but got no positive response. Nevertheless, within three years, China Pages brought in around $800,000.

The company competed with China Telecom for about a year before receiving an investment offer of $185,000 for a joint venture from the General Manager. The partnership didn’t work out as hoped, and Jack resigned. Later on, he accepted a job offer from the Ministry of Foreign Trade and Economic Cooperation. He was put in charge of an information technology company that was established by a department of that ministry. The company’s primary mission was to promote ecommerce in China. During this time, he met the co-founder of Yahoo, Jerry Yang.

The Trials and Triumph of Alibaba

“Today we are all here to discuss what we will do in the next five to ten years. So, what will Alibaba become in future?...Our competition are not in China, but in America’s Silicon Valley. So, first, we should position Alibaba as a global website, not just a domestic website. Second, we need to learn the hard working spirit of Silicon Valley. If we go to work as 8am and go home at 5pm, this is not a high-tech company, and Alibaba will never be successful.” 

- Jack Ma (1999, Quote from: Jack Ma’s first session with Alibaba’s first team, shown in Crocodile of Yangtze River documentary)

Photo Credit: CCTV-America

In 1999, Jack Ma gathered a group of 17 friends in his apartment, and together, they designed a plan that would help them go toe-to-toe with the internet giants from the US. Jack borrowed $60,000 and used the money to found Alibaba, a B2B marketplace website. They targeted small and medium business, and hoped to make business easier for them. The vision for Alibaba, at the time, was to let the world know about China’s exporting companies and their products. In the beginning, Alibaba was making no money, but the joy derived from the vision kept driving the team on.

In the words of Jack Ma, Alibaba survived because they had no money, no technology and no plan. He said, “Every dollar, we used very carefully... We [only] expanded when we raised money from Goldman Sachs in 1999 and then Softbank Corporation in 2000.”

In 2001, when the dotcom bubble burst, Alibaba was affected. The company had expanded too fast and so had to layoff staff. As much as this affected the laid off staff, it also affected Jack. H started to doubt himself, calling Porter Erisman (his VP at the time) to ask if he thought he [Jack]] was a good person. This period also came with a media storm, as one press feature after another included journalists doubting Alibaba and Jack Ma. But the company was ready to weather the storm.

Alibaba eliminated their marketing and advertising budget and brought their business back to China, after earlier moving to Silicon Valley. This episode made them reevaluate a lot of things, including clarifying their mission, vision and values. It became a “grow or die” affair and Alibaba had to find a way to start generating revenues.

In 2001, the company launched a premium service to allow exporters build premium storefronts on Alibaba’s international website. With time, the company broke even and became profitable. In 2002, the website hit one million users. Alibaba has not looked back since then.

Many years later, when Jack’s wife Zhang Ying asked him how much the company had made, he raised up one finger. “10 million Yuan” she asked, to which he replied “no”. “A hundred million?”, she asked again and he said no. “One million”, he said. “A day.”

Jack the Ecommerce Giant Slayer

Ebay had become one of the most successful and fastest growing companies in US history. The company looked invincible. And it was coming to China, Alibaba’s turf.

Ebay bought a stake in Eachnet.com, an auction site in China. This prompted the creation of Taobao, after weeks of brainstorming by Jack and a small team in his old apartment. The website was an opportunity for small businesses to open online stores to cater to the Chinese people. Eventually, Ebay acquired the rest of Eachnet. This meant war.

Alibaba employees pulled a publicity stunt to announce war on eBay by dressing in army uniforms and acting out a war scene. The event was covered by the press and gave Taobao the publicity it needed. Jack and Porter also traveled round the US, with Jack appearing in several interviews, but they were met with skepticism.

Taobao customized its website and strategy to appeal to the local market, while eBay linked their China website to their global website. Taobao offered users a freemium model, and live chat and message boards. This attracted more users from eBay. Ebay’s 72% market share started to fall, while Taobao’s share started to rise. But Jack was out to make a point. The plan was to push them out of China.

In response to the falling market share, eBay called Jack to their head office to discuss a partnership. Jack felt the CEO at the time, Meg Whitman, did not share his vision for ecommerce in China. He turned down the offer.

In 2005, Yahoo bought a 40% stake in Alibaba.com for $1 billion. This made Yahoo Alibaba’s biggest investor. The move was designed to kill off eBay in China. The terms of the agreement also meant Alibaba would take over Yahoo’s China operations. It gave Alibaba the needed ammunition to knock eBay out in China.

(Note: The partnership between Yahoo and Alibaba in China came with serious baggage for Alibaba. You can find out more about this on Google)

The final blow was dealt to eBay in China. Taobao was made free to users for three more years and the group publicly called on eBay to join them. But eBay responded by saying “free is not a model,” playing into Alibaba’s plan. Jack organized a press conference where he announced Taobao’s intention to create 1 million jobs. Ebay eventually gave in to the pressure and switched to the free model for the Chinese market.

In 2006, eBay closed its China business. In 2007, Alibaba listed on the Hong Kong Stock Exchange. In 2014, it listed on the New York Stock Exchange. Alibaba had a market cap of $145 billion as of September 2015.

Life Lessons from Jack Ma

Photo Credit: Screenshot from YouTube

This is from Inc.com:

1. The lessons I learned from the dark days at Alibaba are that you've got to make your team have value, innovation, and vision. Also, if you don't give up, you still have a chance. And, when you are small, you have to be very focused and rely on your brain, not your strength.

2. What is important in my life is that I can do something that can influence many people and influence China's development. When I am myself, I am relaxed and happy and have a good result.

Net Worth

Forbes.com ranks Jack Ma as the 33rd richest man in the world with a net worth of $22.7 billion.

To find out more about Jack achievements and awards, check out this website.

What about Jack's life inspires you? What do you think you can/have learn(ed) from him?