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Published on: 3/1/2009
Last Visited: 3/29/2009
Jack Ma had the ability to recognize the direction of technology and the determination to
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Jack Ma said recently that Alibaba Group's pageviews "are already bigger than eBay and Amazon globally".
All this has not gone unnoticed by the media and the FT (video), Barron's "Top 30 CEOs", Business Week ("25 Most Influential People on the web" and Asia Top50), CNN Business 2.0, NYT, at Davos etc. have all shown their high esteem for Jack Ma in one way or another.
Last month's book release, Alibaba, The Inside Story Behind Jack Ma and the Creation of the World's Biggest Online Marketplace (ebook), has provided more insights.
Not only did Jack Ma not have his success handed to him in a platter, his circumstances had it such that almost at every turn he had to overcome many obstacles and handicaps to scramble through against all the odds.
On this road he expected problems as par for the course and was pleasantly surprised to have a day without any.
Of the 18 original employees working off a capital of 60,000 US dollars, squeezed together in one room, a few of them still hold positions of high responsibility in a company whose IPO in November 2007 was the second biggest in Internet history, valuing the company at US$ 36 billion, it's IPO being second only to Google's.
His statement in January 2009 that Taobao sales in ten years will beat Wal-Mart's world sales cannot be seen as preposterous.
He focuses on ways information technology can make small companies more competitive and profitable.
Since four-fifths of business in
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Jack Ma has enabled millions of small companies around the world to use the Internet as a primary business tool.
From his base in Hangzhou, near Shanghai, he has had the biggest impact of anyone on the development of the Chinese Internet culture promoting and nurturing Internet functions inside China to evolve to what they are in the West, if not beyond.
Through his provision of several Internet tools, he has effectively leveraged China's ability to trade; over the past several years, this has changed the weighting of China on the world's stage.
In these tough times and with great prescience, especially given that Chinese exports fell dramatically in February 2009, Jack Ma last October initiated a Mohamed-Yunus-like loan scheme allowing over 600,000 small Chinese companies to access a credit fund of up to US$ 800 million that otherwise would not have been available to them.
His innovative payment system Alipay that has been key in his success had provided credit previously on a smaller scale.
Jack Ma draws often on stories and incidents from Chinese history to illustrate the values and ideals he wants to encourage.
His somewhat atypical approach can be seen in one speech that was paraphrased as "Laziness is not, of course, stupid-lazy.
If you want to be able to work less, you have to think of ways to do it, clever ways to be allowed to be lazy.
You have to have a lazy style, a lazy state of mind".
It must be noted that he tries to create a dynamic, open and flat-hierarchical company culture, which may not be the typical culture of his environs.
For Ma results, execution and performance are key, even more so than having a good idea, though he has had many good ideas along the way.
Jack Ma has attracted key investors in the network include Softbank's Masayoshi Son and Jerry Yang of Yahoo! in the United States.
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The founders of those companies have been central to Jack Ma's vision of creating a global company-but one that is owned by and managed by Chinese nationals.
Jack Ma also has been able to manage intricate interrelationships with government, e.g. Alipay enjoyed the full support of a China first regulatory policy in the area of payment Government supported systems.
This was a factor in their victory over eBay.
Furthermore, he has been able to create strategic alliances with companies such as Sohu.
Ma realizes that Chinese companies exist in a society that must benefit from their activities and by nature he pays attention to cultivating that society.
Jack Ma has made several television appearances on CCTV's Winning in China as a judge, China's equivalent of Trump's The Apprentice.
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While those that had studied abroad knew well the overseas buyers perspective, Ma who had stayed at home and learnt much of Western culture through contact with those foreigners visiting and living in Hangzhou, had the advantage of fully understanding the changes in his own homeland.
From the young age of 12 he practiced English with visiting tourists, curious to know more about life outside China.
Many years later after leaving his teaching position, the Hangzhou authorities, recognising his high-level of English, sent him to the US to negotiate with a late-paying investor who kept him hostage for a few days in a Las Vegas hotel while refusing to pay.
This journey had the end result of bringing him into contact with the Internet which he recognized as a future way of doing business, though shortly afterwards many in China thought of him as a trickster as he tried to sell them the idea of the then inaccessible Internet.
Business Model
Jack Ma sees as one of Alibaba's strengths, its corporate cohesion and degree of secrecy unknown to most organisations.
He considers organizational structure to be a part of the company's technology and its reason for success.
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Ma's reorganised before the IPO to allow the lesser-margin businesses be kept outside the financials of the list company allowing them to look long-term without the need to worry about upcoming quarterly earnings reports and be more innovative and capture market share.
Another example of Jack Ma's innovation and concern for SMEs was the establishment of Alisoft which develops, markets and delivers Internet-based business management solutions targeting small businesses across China ("Cloud Computing").
Through its Software as a Service (SaaS) model, Alisoft provides small businesses with low-cost, user-friendly enterprise and financial management tools.
It commands more than 40 percent of the Chinese SaaS market.
Philosophy
Jack Ma admits to having had an overly-ambitious international expansion in 2000, which necessitated a retrenchment back to China.
However the bursting of the dot-com bubble didn't make things any easier.
Guan Mingsheng, who became COO in January 2001, was brought in to do this after sixteen years of experience at General Electric.
With Guan's assistance, Jack Ma was able to turn the company around. Cai Chongxin role as CFO was also critical in the eyes of Jack Ma and Alibaba.
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A number of the senior management team at Alibaba have been with Ma for the whole length of Alibaba's history.
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"Like me," Ma has said, "they are not necessarily the most absolutely intelligent people, but we have all matured over these years."
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Technorati Tags: Alibaba, Alipay, B2B, B2C, China, CNNIC, ebay, entrepreneur, entrepreneurship, Hangzhou, innovation, Jack Ma, Ma Yun, Taobao, Yahoo, Yahoo China
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