Synopsis/Summary/Review of Alibaba - The Inside Story Behind Jack Ma and the creation of the World's Biggest Online Marketplace
Chapter 4
Management
Ma soon began to feel that he was losing control. His employees directly under him were world-class professionals, but each felt that his management decisions were correct. To compound the problems, Ma had based Alibaba’s English language Web site in Silicon Valley. Only after this move did he discover that Silicon Valley’s employees were all “techies,” whereas what the Web site really needed was people who understood business. At the same time, Ma narrowed the focus of the company to its original goals and purposes.
SARS
Severe acute respiratory syndrome (SARS) is a highly contagious form of pneumonia. In the spring of 2003, this disease became a scare that swept throughout China. Few who lived through those days can forget them. Alibaba employees were quarantined for about eight or nine days, during which time they continued to work via computer and telephone. Alibaba came through the experience unscathed and with a sense of cohesiveness and esprit de corps that had been missing previously.
Maoist Management Practices
From 2001 to 2003, Ma promoted these Maoist management campaigns because he felt that they were effective ways to reform the company in this particular period. The first campaign, Yan’an Rectification, was intended to unify views and strengthen confidence; the second, Military and Politics University, was intended to cultivate a professional cadre of team managers. The third and final campaign was aimed at training sales people in the concepts and attitudes they should use toward customers.
Swordplay on the West Lake
One of the primary reality checks for Jack Ma in evaluating the direction of the IT industry and his own needs for funding has been a series of annual conferences called the Swordplay Conferences. The first conference convened on September 10, 2000. Ma believes that Internet enterprises have to develop a thick outer skin in order to grow and develop they have to disregard criticism and hold fast to their own mission. At the same time, they have to practice internal breathing techniques, particularly when cultivating management talent. He feels that all Internet companies have similar “internal breath” these include attracting top talent, keeping good employees, cultivating managers, and building a culture with common core values.
Second Swordplay Conference: Alibaba’s Changing Battle Array
The soft light over the West Lake in Hangzhou on October 21, 2001. Most of the previous attendees were there, plus two new ones. Louis Cha again attended, and Jack Ma again took center stage. In his opening speech, Ma emphasized the most significant quality of the Internet: change. He noted that the quality of that change itself had shifted, however, and that guerrilla tactics were now less helpful in meeting challenges; instead, he personally was building a standard army that could, as he said, “line up in a proper battle array.” In earlier years, one had to remain nimble and change fast.
Third Swordplay Conference: Giving Business Back to Business people
The third Swordplay Conference was held on November 3, 2002. Some of the old Internet masters were quietly gone, while others had taken their place. Attending were Tengxun’s CEO, Ma Huateng; the president of 3721, Zhou Hongwei; the CEO of Youcheng, Liang Jianzhang; and the president of Lianzhong, Bao Qiuqiao. The conferences were also helping define how China would participate in an Internet linked world, how the country felt about the sociopolitical impact of this empowering technology.
Fourth Swordplay Conference: Walking on Two Legs
The fourth West Lake Swordplay Conference began behind closed doors on the banks of West Lake on November 3, 2003. This year was the first time the conference had closed its sessions to the media, which piqued the curiosity of all, especially the press. Supposedly it was top-secret and yet everyone knew all about the fact that it was being held. Ma explained that many of the companies attending were in the midst of preparations to list on the stock exchange, and so it would be inconvenient for them to reveal much to the press.
Fifth Swordplay Conference: Cloud-Style Taijiquan
Jack Ma’s Chinese name is Ma Yun, which means “horse clouds.” In martial arts, cloud-style taijiquann is a form of movement that simulates the softness yet invisible power of clouds. Ma was glad to describe this movement one morning on November 4, 2004, to President Bill Clinton, who was attending a Swordplay Conference. Known for his loquaciousness, Ma appeared quite comfortable comparing himself to the master of Jin Yong’s novels. It is true that cloud-style taijiquan can serve as powerful mental training; it was also true that Ma was clearly considering when to make his move.
Alibaba’s Use of Human Resources
Ma feels that the question of whether Alibaba can realize its mission depends entirely on the overall abilities of its team. The social technology of this team is paramount, the way it is organized to work smoothly together. The first rule Ma has tried to inculcate at Alibaba is to be happy in what one is doing. Only if employees are happy can customers be happy. Only if customers are happy can the enterprise be profitable. This is another way of saying “customers first.
Using a “Happy Culture” to Attract Talent
Alibaba is considered to be a stingy company. It has assets in the hundreds of millions but puts very little money into advertising or publicity, and its employee salaries are low. One reason is that its funding initially came from venture capital and had to be conserved. Another is that Alibaba is not interested in attracting people on the basis of high promises; it wants to attract them on the basis of its corporate culture. A key part of the corporate culture that Ma tries to emphasize is a flattening of hierarchy, a lessening of the distance be-tween levels of command.
Using Charisma to Attract Talent
Charisma involves a kind of magnetic appeal, the indefinable ability of a leader to get people to do things for him. It takes charisma to make warriors charge into the breach, and also to get highly intelligent people to bow their backs to hard work for a common cause. Cai Chongxin’s entry into the company was undoubtedly evidence that there was something about Jack Ma that one could call charisma.
Mission, Values, Trustworthiness
By the year 2000, Ma and his team had determined that the mission of Alibaba was to “make it easy to do business anywhere.” All of the services, systems, and software of the company were being created in order for Alibaba to make business easy for customers. The mission of the One Hundred and Eight was to implement the dao [the Way] on behalf of heaven. No matter what happened, they were brothers in that endeavor. This reference was drawn from the historical bandit Song Jiang and his outlaw compan-ions from medieval times.
Trust
Ma has placed a strong emphasis on trust as the only effective way to do business in the long term. This trust does not mean some kind of touchy-feely faith in human nature. Quite the opposite: Ma has institutionalized trust by putting in place a series of measures for authenticating and verifying the background of any enterprise on Alibaba. He began this process in March 2002, with what he called a Trust Zone for China Suppliers. The process of supplying credit ratings and verification and authentication services allowed Alibaba to surge forward in its B2B business.
Chapter 5
Taobao: A New Weapon in Jack Ma’s Arsenal
In May 2003, a notice appeared on Alibaba’s internal Web site that seemed to warn employees about a fast-developing Web site called Taobao. In July, Alibaba announced that it was investing $12 million to create China’s biggest personal transaction site in China: Taobao. Only after this announcement did employees realize that Taobao was their very own child. Taobao started from a base of zero and in the short space of two years had become the number one online auction mart in the country. It was a gamble that could have taken Alibaba out of action: Jack Ma essentially mortgaged Alibaba in order to bring Taobao into being.
Bloodbath in the Advertising Arena
When Taobao was launched, Alibaba was therefore already fighting its way forward under the protective shield of a heavy advertising budget. The Taobao advertising strategy involved three stages. The first was to rely completely on word-of-mouth communication, which brought an early group of users into the site. These members were important in laying the foundation for the next stage in Taobao’s growth, that of the “farming villages surround the cities” strategy. The third stage came from the end of 2003 to the beginning of 2004, when Taobao was able to set up a cooperative relationship with MSN China. At the time, several other Internet companies bid more than Taobao for this alliance, but MSN chose Taobao for strategic reasons.
Taobao, Alipay, and Localization
The word in Chinese for localization uses the character for “earth,” and signifies “being of the local earth.” Only by being rooted in local circumstances in China can one hope to sweep away all obstacles, and make oneself invincible. Taobao knew the unique considerations in China and prepared for the challenge. To resolve the secure-payment-system bottleneck, Taobao developed Alipay. Just as Alibaba had incubated Taobao, so Taobao incubated Alipay.
“We Do Not Intend to Make a Profit for the Next Three Years”
Jack Ma went against this mainstream thinking with Taobao. He determined that Taobao would be a completely free service for at least its first year and would not expect any profits for its first three years. In China, as elsewhere, this was called “burning money,” and most people disapproved of the method. Only one who both saw farther down the road and had the resources to survive could play this game.
The Strategy Sounds Good; Will It Work?
In 2005 Ma began to test this idea. He led Alibaba’s buyers and sellers over to Taobao and encouraged Taobao sellers to put product on Alibaba. He was seeing if the companies could indeed break through the barrier between B2B and C2C, cross-fertilizing and thus increasing the total market. Jack Ma heard all this, and he must have smiled. He sat there biding his time, with a massive amount of cash in his back pocket. He knew that sometimes you had to be patient, but he was ready to take the gamble.
Forming Alliances: The Three Big Portals and the Three Big Auction Houses
Although Ma is independent by nature, he has never rejected the benefits of forming strategic alliances when it serves a business purpose. Ma is aware that forming an alliance is an art form: it requires matching up the synergies of appropriate partners and avoiding traps, but in this case, he had to take the risk, for others were recognizing the same logic. Since the early 2000s , the field of players has been shifting and reconfiguring: Sina allied with Yahoo! and NetEase came to an agreement with EachNet, while Sohu allied itself with Taobao.
Taobao and Sohu Link Up
On April 12, 2005, Sohu and Taobao announced that they too were forming a strategic alliance. Both enjoyed a large customer user base. They agreed to cooperate both online and off in promoting the advance of China’s Internet-based economy. Sogo, under Sohu, was one of the best-known Internet brands in China, with tens of millions of registered users and tremendous traffic; its contents and search capabilities were unique. Taobao also enjoyed superior brand recognition and premier technology.
Two Dragons Fight for the Pearl
In China, when there is talk about eBay, people generally mention Taobao in the same breath: despite their realignment, the two continue to be heated contenders for the online auction marketplace. At first, this seems to be comparing apples and oranges, for until recently Taobao has not come close to being in the same class as the global giant eBay. Any direct challenge against eBay would have been foolhardy. From today’s perspective, however, eBay seems to have been all but chased out of China, and Jack Ma can sit back and smile.
The Seemingly No-Move Move: Alibaba’s Competitive Advantage
In order to ensure that Alibaba users were satisfied, Ma brought over a new concept from the home electronics company Haier. This was called the “one piece of fabric” concept, and it was used successfully at Haier. When its servicepeople first started going into people’s homes to install an air conditioner or refrigerator, they would bring with them a piece of fabric with which they would wipe up their tracks before they left. This simple gesture of respect made people so happy that it became a very effective sales tool.
Chapter 6
Alipay: A New Milestone in E-Commerce
Alipay is currently the largest online payment platform in China and is similar in most respects to PayPal in the United States. It has more than fifty-eight million active users and over three hundred thousand merchants accepting the ser vice. It has close contractual relations with China’s largest banks. It is owned and controlled by the Alibaba Group. The company is in that new and nebulous region of Internet banking and finance that is witness to the rapid convergence of financial and information industries.
No Thieves on Earth: The Taobao Version
In 2004 and 2005, Taobao rode the wave of a popular television show in China called No Thieves on Earth. The plot involved a male thief and his female accomplice, and two pickpockets called Wang Bao and Wang Li. Jack Ma felt that the role of this Bumpkin was tailor-made for promoting Alipay. He invested some $1.2 million on a promotion campaign that linked the show’s celebrities with Alipay: ads connecting the two in people’s minds were everywhere. Taobao’s symbol was well placed in the TV show; later every prop used by actors in the show was sold at auction on Taobao.
Casting Off the Old Self Without Changing the Bones
Alipay split off from Taobao in the spring of 2005. Jack Ma had just returned from Davos, Switzerland, where he attended the World Economic Forum, held there every year. The idea of making Alipay an independent entity was implemented shortly afterward: the intent was to make it the online payment standard for the entire Chinese e-commerce industry. Ma recognized that for Alipay to become the gold standard, it had to differentiate itself and separate itself financially from Alibaba and Taobao. Otherwise, companies such as eBay-EachNet would be threatened by it and not use it. If, on the other hand, Alipay could become a generally used platform in the industry, the benefits that would bring to Alibaba in terms of business revenue would be huge.
Trade accomplished through Alipay exploded after this announcement. Cooperating with Alipay incurred costs for the banks, but Ma announced that Alibaba would be absorbing these for the time being. He had committed to three years of free service to Taobao users, “and so these intermediary fees naturally have to be borne by us.” This was an almost necessary concession.
Jumat, 30 November 2018
Jumat, 23 November 2018
Synopsis/Summary/Review of Alibaba - The Inside Story Behind Jack Ma and the creation of the World's Biggest Online Marketplace
Chapter 2
Darkest Before Dawn
Ma himself says that he started the business because he wanted to be a better teacher. Ma realized that there was a need for translation when friends kept coming to him, asking him to translate things. To shore up income, Ma personally went out on the street to peddle things, anything by which he could turn a profit. Ma was generally considered a fool at the time. He himself acknowledges that he learned from his many mistakes. He did accomplish two things: he kept alive a translation house that provided a useful service, and he successfully organized Hangzhou’s first English Corner, a place to congregate for practicing the language. Today, Haibo is Hangzhou’s largest translation house. Its services have been indispensable in the foreign-trade component of the company Alibaba.
Ma Goes to America
Ma’s first contact with the Internet was during his initial month long trip to the United States in 1995. The Hangzhou municipal government was in the process of building a highway between Hangzhou, in Zhejiang Province, and Fuyang, in Anhui Province. An American investor had been talking to transportation department authorities, negotiating a deal, but talks had stalled and no money had appeared. Both sides felt that there must be problems in communication, and Hangzhou authorities thought of the excellent English-language capabilities of Jack Ma. Ma was chosen to serve as both interpreter and mediator in the business talks.
First Personal Contact with the Internet
Jack Ma’s plan was to be a professor of the English language. After 1995, it was to go out in the world and meet up with the Internet. Ma took a plane from Los Angeles to Seattle instead of going straight back to Hangzhou. He went in search of a small Internet service provider (ISP) named VBN. As Ma remembers it, the VBN people asked him what he wanted to look up on the Internet. He looked for other things Chinese—but “no data.” This interested him. He began to develop his idea of starting a company in China that was specifically related to the Internet and to things Chinese. Ma remembers distinctly that the Haibo page was finished at 9:30 a.m. He had a sense that the Internet would be changing the world, and he wanted to be in on it.
The Haibo Network
In China, there was no way to dial up and reach the Internet from Hangzhou, and it was hard from most other places. Beijing had started a connection from the Academy of Sciences, but information was strictly controlled. From the small beginning, the China Yellow Pages became one of China’s earliest Internet companies.
The “Trickster” and His Yellow Pages
Ma was regarded as a kind of trickster as he went around to businesses trying to get them to spend money promoting themselves on the Internet. He went out every day to sell his Yellow Pages, to get people to agree to be advertised on the Internet. By August 1995, China Telecom started an Internet service in Shanghai. Ma followed up with a Yellow Pages there too.China Yellow Pages began to make money. Soon it was set up in twenty-seven cities throughout China. Ma would initially be regarded as a swindler by people in any city that had no direct access to the Internet, but he kept at it.
Going to Beijing
As the Internet developed in China, Jack Ma found that competition was quickly entering the business. Several major competing Internet initiatives were launched just as his own China Yellow Pages was finally reaching respectable levels of income. Ma looked on all these developments with great interest, then decided to enter the major leagues by taking his company to Beijing. Shanghai had opened a dedicated line for the Internet in July 1995.
Media Promotion
Jack Ma returned to Hangzhou. In December, he resumed his “attack” on Beijing by attempting to mobilize a media campaign. He and his sales director took various materials up to Beijing and began asking friends and acquaintances to help spread the word. The experience proved to be an exhilarating success. Ma had never seen so many journalists in one place together at one time. He spoke for two hours and the journalists, though barely understanding, were wildly enthusiastic. They responded with a promise to publicize his company.
Getting the People’s Daily on the Internet
Based on the lucky chance, Ma was able to lecture twice at the People’s Daily. He spoke of how China was a latecomer to the Internet, the last train in the station. He spoke of how the best defense was an offense, that China had better get itself prepared. By the end, he was exhausted, not so much worried he had failed as because he had whipped himself up so much in the course of the speech. Ma had been successful in getting the People’s Daily on the Internet and he had done it within six months of first trying.
Failure, Success, and the China Yellow Pages
In order to save his China Yellow Pages from certain death, Ma decided to “draw close to a large mountain,” as the saying goes in Chinese. Everyone knows that when you are attacked, it is best to have a large presence right behind you. Ma decided to work together with Hangzhou Telecom. The year 1997 marked Ma’s first failure in business. To this day there are many rumors about why he left the company. The most likely reason is his strong sense of individuality and individual achievement.
“Let’s Go Home Together”
In the fourteen months that Ma had worked with this team in Beijing, he had never gone on an outing to the countryside with them. They worked all the time. He decided that before leaving the north, they should make an excursion to the Great Wall. The departure from Beijing was in 1999, and it marked the second time that Jack Ma had encountered what he considered a failure. Never one to look backward, he moved on. On the very day that another well-known Internet founder, Ding Lei, brought his company, NetEase, north to Beijing, Jack Ma moved his company and his team south to Hangzhou.
Setbacks
His experience with the China Yellow Pages and his departure from Hangzhou Telecom made him realize that if you want to make money on the Internet, you have to be very concrete.Fourteen months in Beijing had given him a sense of China’s macroeconomic policy. Working at this level, at the forefront of the Internet in China, had also allowed him to evaluate the coming wave of the Internet throughout China. He saw that the challenges ahead included, most of all, how to restrain himself and stick to a plan. Jack Ma had been through sufficient ups and downs to look further ahead and see where the next wave would be coming from, how to ride it, how to see the direction of the Internet’s greatest potential and hold on long enough to realize it.
Chapter 3
Two Small Enlightenments
The first of the two satoris that contributed to the dream came before Ma left Beijing, on the day he and his team scaled the Great Wall. In places, the wall has been defaced by graffiti—names and dates carved into the stone. Ma felt that carving one’s name into an ancient cultural monument was a despicable practice, but at the same time it made him wonder why people felt they had to do it. The satori came in recognizing that graffiti on the wall was an embryonic form of bulletin board systems, or BBS, on the Internet. The second satori came in February 1999, when Ma attended an e-commerce conference held in Singapore. In February 1999, Alibaba began its life quietly in the small residential area of Lakeside Garden, Hangzhou.
Alibaba Is Born
During the preparatory period of Alibaba, the usually strident Jack Ma was as silent as a rabbit. He kept his edge hidden. Soft, quiet, he disappeared from public view. He worked all day and night from his home, in rooms that sometimes had as many as thirty-five people working together. Resources were limited, but nobody cared. Neighbors probably thought the hours of these young people somewhat strange, but they waited and watched to see what the result might be. In March 1999, the Alibaba Web site was officially released. He knew that the company would eventually be international, and that it should have a name that was resonant in all languages and could be understood over the world.
Being Coy: Attracting the Media with Silence
In May 1999, a Hangzhou publication put out an article called “Alibaba Refuses Visitors, While Wanting to Be a Global Trade Marketplace.” This coy attitude only whetted the appetite of the press. Soon overseas media began to show interest as well. The first to come to Hangzhou was the magazine BusinessWeek. Soon Alibaba’s—and Jack Ma’s—reputation was growing by the day in Europe and America. The hit rate from overseas began to increase, and the number of members in what was called the Alibaba Club at that time rose explosively.
Financing
In opening up the virgin territory of e-commerce, the fact that one needed both a market and also capital was brutally apparent: only by occupying a market and also having sufficient funding could Ma and Alibaba hope to succeed. By the end of 1999, money had become the company’s greatest problem. By July 1999, Alibaba’s strained circumstances were already forcing Ma to “borrow” by deducting money from employee salaries.
No Begging
Soon Ma was faced with an army of venture capitalists. Although in need of funding, he claims he was not seduced by their money. Most of them were domestic companies or individuals, wanting terms that he considered extortionist. He needed non-financial elements, such as access to overseas resources, as much as he needed raw funds. Because of this, it is said that Jack Ma turned away thirty-eight potential investors in the early years. Money continued to be scarce. The hard days were not altogether a bad thing, though, for Ma believes it helped in forming a kind of corporate culture, a consciousness of “who we are,” and a sense of values that kept the company intact as a team after Alibaba had become powerful.
Angel Funding from Goldman Sachs
The superheated atmosphere of the Chinese Internet in 1999 attracted the attention of many international investment banks and venture capital companies. They invested serious amounts of money in the Chinese Internet market. Goldman Sachs had previously looked only at traditional industries in China and had little experience in high-tech investing there, so Cai did not harbor great hopes. As a result of Lin’s recommendation, however, Goldman Sachs sent a man to Alibaba to look it over. As lead investor in a group of investment banks, Goldman invested $5 million in Alibaba in October 1999.
Masayoshi Son Takes a Liking to Alibaba
Masayoshi Son is of Korean cultural heritage but was born and raised in Japan. It is said that his family originally came to Korea from China and that his genealogy from generations past includes high officials in China’s diplomatic service. He even patented a device that eventually sold to Sharp Electronics for $1 million. With this investment, he imported video arcade games to Berkeley and placed them around the campus, which generated excellent cash flow.
Ma sent an e-mail to Son. “I hope to join hands with Mr. Masayoshi Son and enter the Internet together . . . [but] if our cooperation was not meant to be, then we should still be good friends.” Jack Ma received a response from Son. “Thank you for giving me a business opportunity. We will definitely help to put Alibaba’s name out in the world, help it become an Internet site on the level of Yahoo!” Son agreed to Ma’s suggestion: a Softbank investment of $20 million, with Alibaba’s management team still holding a controlling number of shares.
The Largest Private Offering in the History of China’s Internet
By 2004 Alibaba was considered to be the world’s largest B2B e-commerce Web site. On February 17, 2004, Alibaba announced in Beijing that it would be raising the large sum of $82 million in strategic investment. This was the largest private offering up to that time in the history of China’s Internet. By December 27, 2001, the number of members in Alibaba’s China Supplier Club had topped one million, making Alibaba the largest B2B Web site in the world in terms of membership. This was a critical moment for Jack Ma, for it began to lend credence to his idea that B2B e-commerce could indeed be profitable.
TrustPass
The company now undertook an initiative called TrustPass in order to facilitate its expanded vision. A way for businesses to rank the trustworthiness of partners, the TrustPass service authenticates and verifies documentation on an enterprise; it requires registration and various types of vetting. This service was marked by a little symbol that first appeared on the Alibaba Web site in March 2002. The TrustPass certificate was an important step in publicizing the value-added services provided by Alibaba.
A New Age of E-Commerce: Net Business
Jack Ma has long believed the Internet is transitioning from being an information gathering and social networking tool to becoming first and foremost a venue for online business. This has vindicated Jack Ma’s belief not only that the Internet is a viable tool for business but also that focusing on the small suppliers that make up 85 percent of business is a profitable business model. It has furthermore reinforced his belief that the Internet in general is moving into a new era. The use of Internet has changed over the years in China, with the predominant users of the Internet being classified first as “Net people,” then “Net friends,” and finally now “Net business.”
Hangzhou’s Role
Two trends had become evident over the years since the first e-commerce conference in 1999. One was the dominance of the city of Hangzhou in China’s information industries. Hangzhou is at the forefront of e-commerce and is recognized by many to be the Silicon Valley of China. It lies at the center of the core region of entrepreneurial activity in Zhejiang and is already known as the “capital of Chinese e-commerce.” A second trend was seen in the depth of the “China shockwave,” the degree to which China has become the primary supplier to the world. That wave has owed a certain amount to the use of e-commerce and the ability of China’s small companies to access world markets directly.
Alibaba’s Goals
Up to now, Alibaba has consistently been able to achieve the goals set by its founder. Under Ma’s constant pressure and his motivational management, Alibaba’s goals have been met. Ma had always felt strongly that Alibaba should be thoroughly Chinese, that in the end it would prove to the world that a Chinese company could be a premier multinational in the IT world. In order to attract global human talent, he set up a technology base in America and a branch in London, and then began the arduous process of finding global buyers by making himself into a kind of global sales machine.
The Astronaut
Ma’s efforts led to an explosive rise in club membership back in China, and revenues of Alibaba quickly rose. Such publications as Forbes and Fortune took note of Alibaba, and the company began to gain traction as a respectable enterprise. Ma recognized that the company had to be international at the same time it developed inside China. Ma held on to the dream that one day e-commerce would be a reigning reality, saving costs and allowing global effficiencies in use of resources. He believed that Alibaba would become a common asset to the world.
Chapter 2
Darkest Before Dawn
Ma himself says that he started the business because he wanted to be a better teacher. Ma realized that there was a need for translation when friends kept coming to him, asking him to translate things. To shore up income, Ma personally went out on the street to peddle things, anything by which he could turn a profit. Ma was generally considered a fool at the time. He himself acknowledges that he learned from his many mistakes. He did accomplish two things: he kept alive a translation house that provided a useful service, and he successfully organized Hangzhou’s first English Corner, a place to congregate for practicing the language. Today, Haibo is Hangzhou’s largest translation house. Its services have been indispensable in the foreign-trade component of the company Alibaba.
Ma Goes to America
Ma’s first contact with the Internet was during his initial month long trip to the United States in 1995. The Hangzhou municipal government was in the process of building a highway between Hangzhou, in Zhejiang Province, and Fuyang, in Anhui Province. An American investor had been talking to transportation department authorities, negotiating a deal, but talks had stalled and no money had appeared. Both sides felt that there must be problems in communication, and Hangzhou authorities thought of the excellent English-language capabilities of Jack Ma. Ma was chosen to serve as both interpreter and mediator in the business talks.
First Personal Contact with the Internet
Jack Ma’s plan was to be a professor of the English language. After 1995, it was to go out in the world and meet up with the Internet. Ma took a plane from Los Angeles to Seattle instead of going straight back to Hangzhou. He went in search of a small Internet service provider (ISP) named VBN. As Ma remembers it, the VBN people asked him what he wanted to look up on the Internet. He looked for other things Chinese—but “no data.” This interested him. He began to develop his idea of starting a company in China that was specifically related to the Internet and to things Chinese. Ma remembers distinctly that the Haibo page was finished at 9:30 a.m. He had a sense that the Internet would be changing the world, and he wanted to be in on it.
The Haibo Network
In China, there was no way to dial up and reach the Internet from Hangzhou, and it was hard from most other places. Beijing had started a connection from the Academy of Sciences, but information was strictly controlled. From the small beginning, the China Yellow Pages became one of China’s earliest Internet companies.
The “Trickster” and His Yellow Pages
Ma was regarded as a kind of trickster as he went around to businesses trying to get them to spend money promoting themselves on the Internet. He went out every day to sell his Yellow Pages, to get people to agree to be advertised on the Internet. By August 1995, China Telecom started an Internet service in Shanghai. Ma followed up with a Yellow Pages there too.China Yellow Pages began to make money. Soon it was set up in twenty-seven cities throughout China. Ma would initially be regarded as a swindler by people in any city that had no direct access to the Internet, but he kept at it.
Going to Beijing
As the Internet developed in China, Jack Ma found that competition was quickly entering the business. Several major competing Internet initiatives were launched just as his own China Yellow Pages was finally reaching respectable levels of income. Ma looked on all these developments with great interest, then decided to enter the major leagues by taking his company to Beijing. Shanghai had opened a dedicated line for the Internet in July 1995.
Media Promotion
Jack Ma returned to Hangzhou. In December, he resumed his “attack” on Beijing by attempting to mobilize a media campaign. He and his sales director took various materials up to Beijing and began asking friends and acquaintances to help spread the word. The experience proved to be an exhilarating success. Ma had never seen so many journalists in one place together at one time. He spoke for two hours and the journalists, though barely understanding, were wildly enthusiastic. They responded with a promise to publicize his company.
Getting the People’s Daily on the Internet
Based on the lucky chance, Ma was able to lecture twice at the People’s Daily. He spoke of how China was a latecomer to the Internet, the last train in the station. He spoke of how the best defense was an offense, that China had better get itself prepared. By the end, he was exhausted, not so much worried he had failed as because he had whipped himself up so much in the course of the speech. Ma had been successful in getting the People’s Daily on the Internet and he had done it within six months of first trying.
Failure, Success, and the China Yellow Pages
In order to save his China Yellow Pages from certain death, Ma decided to “draw close to a large mountain,” as the saying goes in Chinese. Everyone knows that when you are attacked, it is best to have a large presence right behind you. Ma decided to work together with Hangzhou Telecom. The year 1997 marked Ma’s first failure in business. To this day there are many rumors about why he left the company. The most likely reason is his strong sense of individuality and individual achievement.
“Let’s Go Home Together”
In the fourteen months that Ma had worked with this team in Beijing, he had never gone on an outing to the countryside with them. They worked all the time. He decided that before leaving the north, they should make an excursion to the Great Wall. The departure from Beijing was in 1999, and it marked the second time that Jack Ma had encountered what he considered a failure. Never one to look backward, he moved on. On the very day that another well-known Internet founder, Ding Lei, brought his company, NetEase, north to Beijing, Jack Ma moved his company and his team south to Hangzhou.
Setbacks
His experience with the China Yellow Pages and his departure from Hangzhou Telecom made him realize that if you want to make money on the Internet, you have to be very concrete.Fourteen months in Beijing had given him a sense of China’s macroeconomic policy. Working at this level, at the forefront of the Internet in China, had also allowed him to evaluate the coming wave of the Internet throughout China. He saw that the challenges ahead included, most of all, how to restrain himself and stick to a plan. Jack Ma had been through sufficient ups and downs to look further ahead and see where the next wave would be coming from, how to ride it, how to see the direction of the Internet’s greatest potential and hold on long enough to realize it.
Chapter 3
Two Small Enlightenments
The first of the two satoris that contributed to the dream came before Ma left Beijing, on the day he and his team scaled the Great Wall. In places, the wall has been defaced by graffiti—names and dates carved into the stone. Ma felt that carving one’s name into an ancient cultural monument was a despicable practice, but at the same time it made him wonder why people felt they had to do it. The satori came in recognizing that graffiti on the wall was an embryonic form of bulletin board systems, or BBS, on the Internet. The second satori came in February 1999, when Ma attended an e-commerce conference held in Singapore. In February 1999, Alibaba began its life quietly in the small residential area of Lakeside Garden, Hangzhou.
Alibaba Is Born
During the preparatory period of Alibaba, the usually strident Jack Ma was as silent as a rabbit. He kept his edge hidden. Soft, quiet, he disappeared from public view. He worked all day and night from his home, in rooms that sometimes had as many as thirty-five people working together. Resources were limited, but nobody cared. Neighbors probably thought the hours of these young people somewhat strange, but they waited and watched to see what the result might be. In March 1999, the Alibaba Web site was officially released. He knew that the company would eventually be international, and that it should have a name that was resonant in all languages and could be understood over the world.
Being Coy: Attracting the Media with Silence
In May 1999, a Hangzhou publication put out an article called “Alibaba Refuses Visitors, While Wanting to Be a Global Trade Marketplace.” This coy attitude only whetted the appetite of the press. Soon overseas media began to show interest as well. The first to come to Hangzhou was the magazine BusinessWeek. Soon Alibaba’s—and Jack Ma’s—reputation was growing by the day in Europe and America. The hit rate from overseas began to increase, and the number of members in what was called the Alibaba Club at that time rose explosively.
Financing
In opening up the virgin territory of e-commerce, the fact that one needed both a market and also capital was brutally apparent: only by occupying a market and also having sufficient funding could Ma and Alibaba hope to succeed. By the end of 1999, money had become the company’s greatest problem. By July 1999, Alibaba’s strained circumstances were already forcing Ma to “borrow” by deducting money from employee salaries.
No Begging
Soon Ma was faced with an army of venture capitalists. Although in need of funding, he claims he was not seduced by their money. Most of them were domestic companies or individuals, wanting terms that he considered extortionist. He needed non-financial elements, such as access to overseas resources, as much as he needed raw funds. Because of this, it is said that Jack Ma turned away thirty-eight potential investors in the early years. Money continued to be scarce. The hard days were not altogether a bad thing, though, for Ma believes it helped in forming a kind of corporate culture, a consciousness of “who we are,” and a sense of values that kept the company intact as a team after Alibaba had become powerful.
Angel Funding from Goldman Sachs
The superheated atmosphere of the Chinese Internet in 1999 attracted the attention of many international investment banks and venture capital companies. They invested serious amounts of money in the Chinese Internet market. Goldman Sachs had previously looked only at traditional industries in China and had little experience in high-tech investing there, so Cai did not harbor great hopes. As a result of Lin’s recommendation, however, Goldman Sachs sent a man to Alibaba to look it over. As lead investor in a group of investment banks, Goldman invested $5 million in Alibaba in October 1999.
Masayoshi Son Takes a Liking to Alibaba
Masayoshi Son is of Korean cultural heritage but was born and raised in Japan. It is said that his family originally came to Korea from China and that his genealogy from generations past includes high officials in China’s diplomatic service. He even patented a device that eventually sold to Sharp Electronics for $1 million. With this investment, he imported video arcade games to Berkeley and placed them around the campus, which generated excellent cash flow.
Ma sent an e-mail to Son. “I hope to join hands with Mr. Masayoshi Son and enter the Internet together . . . [but] if our cooperation was not meant to be, then we should still be good friends.” Jack Ma received a response from Son. “Thank you for giving me a business opportunity. We will definitely help to put Alibaba’s name out in the world, help it become an Internet site on the level of Yahoo!” Son agreed to Ma’s suggestion: a Softbank investment of $20 million, with Alibaba’s management team still holding a controlling number of shares.
The Largest Private Offering in the History of China’s Internet
By 2004 Alibaba was considered to be the world’s largest B2B e-commerce Web site. On February 17, 2004, Alibaba announced in Beijing that it would be raising the large sum of $82 million in strategic investment. This was the largest private offering up to that time in the history of China’s Internet. By December 27, 2001, the number of members in Alibaba’s China Supplier Club had topped one million, making Alibaba the largest B2B Web site in the world in terms of membership. This was a critical moment for Jack Ma, for it began to lend credence to his idea that B2B e-commerce could indeed be profitable.
TrustPass
The company now undertook an initiative called TrustPass in order to facilitate its expanded vision. A way for businesses to rank the trustworthiness of partners, the TrustPass service authenticates and verifies documentation on an enterprise; it requires registration and various types of vetting. This service was marked by a little symbol that first appeared on the Alibaba Web site in March 2002. The TrustPass certificate was an important step in publicizing the value-added services provided by Alibaba.
A New Age of E-Commerce: Net Business
Jack Ma has long believed the Internet is transitioning from being an information gathering and social networking tool to becoming first and foremost a venue for online business. This has vindicated Jack Ma’s belief not only that the Internet is a viable tool for business but also that focusing on the small suppliers that make up 85 percent of business is a profitable business model. It has furthermore reinforced his belief that the Internet in general is moving into a new era. The use of Internet has changed over the years in China, with the predominant users of the Internet being classified first as “Net people,” then “Net friends,” and finally now “Net business.”
Hangzhou’s Role
Two trends had become evident over the years since the first e-commerce conference in 1999. One was the dominance of the city of Hangzhou in China’s information industries. Hangzhou is at the forefront of e-commerce and is recognized by many to be the Silicon Valley of China. It lies at the center of the core region of entrepreneurial activity in Zhejiang and is already known as the “capital of Chinese e-commerce.” A second trend was seen in the depth of the “China shockwave,” the degree to which China has become the primary supplier to the world. That wave has owed a certain amount to the use of e-commerce and the ability of China’s small companies to access world markets directly.
Alibaba’s Goals
Up to now, Alibaba has consistently been able to achieve the goals set by its founder. Under Ma’s constant pressure and his motivational management, Alibaba’s goals have been met. Ma had always felt strongly that Alibaba should be thoroughly Chinese, that in the end it would prove to the world that a Chinese company could be a premier multinational in the IT world. In order to attract global human talent, he set up a technology base in America and a branch in London, and then began the arduous process of finding global buyers by making himself into a kind of global sales machine.
The Astronaut
Ma’s efforts led to an explosive rise in club membership back in China, and revenues of Alibaba quickly rose. Such publications as Forbes and Fortune took note of Alibaba, and the company began to gain traction as a respectable enterprise. Ma recognized that the company had to be international at the same time it developed inside China. Ma held on to the dream that one day e-commerce would be a reigning reality, saving costs and allowing global effficiencies in use of resources. He believed that Alibaba would become a common asset to the world.
Jumat, 16 November 2018
Synopsis/Summary/Review of Alibaba - The Inside Story Behind Jack Ma and the creation of the World's Biggest Online Marketplace
Chapter 1
Put Up Your Fists!
Jack Ma was born on September 10, 1964, into a family that lived on the shores of West Lake in Hangzhou. Ma legend has it that his family was common and ordinary, but ordinary families do not live on the shores of West Lake. Ma’s mother and father spent their lives as professional performers of ping tan, a traditional style of storytelling and ballad singing performed in Suzhou, in southern China.
Ma was not the kind of child who liked to talk much or have anything to do with achievement. Like many boys his age, he was regarded as a rebel: stubborn, naughty, incorrigible,the kind of boy who had to be disciplined repeatedly, but even that discipline did not change him. Much of this striking out against others may have had to do with his status as a social outcast. The Cultural Revolution in China began shortly after Ma was born, and he grew up in an environment of extreme social tension.
Mathematics vs. English
People say that if you want to change the world, you should first change yourself. Ma seems to have done the opposite: he changed the world but preserved himself much as he was. He started out small and unremarkable, which he remains, and while he initially struggled with math, he was a whiz in English—and this is still true today.
Different from other children from the beginning, he was not particularly charming or adorable, and he got terrible marks, generally failing math. The strange thing was that he had unbelievably fluent English: in the 1970s and 1980s, when math and engineering trumped humanities, this was not the way teachers thought things should be. In middle school, he was fortunate to have a likeable young woman as his geography teacher. Once she told a story that benefited Ma for years to come, to the point that he believes it actually changed his whole life.
The story was quite simple. One day, the teacher was walking along the shore of West Lake and some foreigners asked her to tell them about Chinese geography. Her English was good enough that she could respond intelligently. “You all have to study geography,” she told the students, “but even more important is for you to study English. For when foreigners ask you something and you can’t answer them, you will make all Chinese people lose face.”Ma went home to pick up some money, and on the very same day spent six mao, around two U.S. dollars at the time, to buy a radio. He used this to listen to the English broadcast every day.
Ma Goes to College
Jack Ma took the college entrance examination three times and failed the first two. The first time Ma took the college exam, he got a mark that signified total defeat. Head hanging down, he went to work as a hired laborer. One day, Ma was hired to help copy documents at an institution called the Zhejiang Dance Troupe Association. Here, he got hold of a book called Life, by the author Lu Yao. It so influenced Ma that it changed his thinking in short order and helped guide the future course of his life.
Now Ma decided that he would try again to get into college. He began preparing a second time for the exam. China’s college entrance exams were given once a year. As an indication of how hard it was to get into college, the following statistics from the Ministry of Education are illustrative: 6.1 million people registered for the exam in 1978, 5.8 million people took it, and of these millions, a total of 402,000 people were admitted to institutions of higher education. So it is not surprising that many excellent candidates were rejected including Jack Ma.
For the next year, Ma worked days and studied at night, and spent every Sunday in the library at Zhejiang University. Three days before the third exam, one of Ma’s professors, Professor Yu, said to him in a somewhat discouraging way, “Ma Yun, your math is dreadful. If you pass this time, I will start writing my name upside down.” This had the salutary effect of making Jack Ma angry, but it added to his determination to actually pass math; it was something he remembered for many years.
He took the exam for the third time, and this time he passed. On the morning of the exam, he had chanted aloud the ten basic mathematical formulas, and during the exam he applied them, one by one. Coming out of the exam, he compared answers with his classmates and knew that he definitely had come up to the mark. This time, his math grade was 79—not high, but enough to squeak through.
College and a Dream
Both the English language and the idea of teaching fit him perfectly. Spoken English was his strong suit, and he took to college as a fish takes to water. With the simple opportunity to go to college, Ma began his quest for the outstanding in life. From the day he entered college, fate began to smile upon him. He found the classes easy and realized that he did not need to spend all his time studying. As a result, he began to involve himself in the student union and was soon elected its president. Later, he was elected president of the entire League of Student Unions of Hangzhou. To a student from the lower tier of colleges, this was something of a miracle.
When Ma graduated, he was the only one among five hundred graduates of the ben ke program to be placed as a teacher in a higher institution. The others were placed in middle or high schools. He was appointed to teach at the Hangzhou Electronics Technology College. There he spent the next five years, conscientiously teaching English to young people. He would not have lasted that long had he not made a promise to one of his mentors, an older man who came to visit him early in his career. This leader from a local institute knew that Ma, restless and ambitious, might be inclined to head out on his own, as many of his peers were doing. Jack Ma felt that commitments were binding. He took to heart the request by his elder and promised he would stay for five years, and he did.
Chapter 1
Put Up Your Fists!
Jack Ma was born on September 10, 1964, into a family that lived on the shores of West Lake in Hangzhou. Ma legend has it that his family was common and ordinary, but ordinary families do not live on the shores of West Lake. Ma’s mother and father spent their lives as professional performers of ping tan, a traditional style of storytelling and ballad singing performed in Suzhou, in southern China.
Ma was not the kind of child who liked to talk much or have anything to do with achievement. Like many boys his age, he was regarded as a rebel: stubborn, naughty, incorrigible,the kind of boy who had to be disciplined repeatedly, but even that discipline did not change him. Much of this striking out against others may have had to do with his status as a social outcast. The Cultural Revolution in China began shortly after Ma was born, and he grew up in an environment of extreme social tension.
Mathematics vs. English
People say that if you want to change the world, you should first change yourself. Ma seems to have done the opposite: he changed the world but preserved himself much as he was. He started out small and unremarkable, which he remains, and while he initially struggled with math, he was a whiz in English—and this is still true today.
Different from other children from the beginning, he was not particularly charming or adorable, and he got terrible marks, generally failing math. The strange thing was that he had unbelievably fluent English: in the 1970s and 1980s, when math and engineering trumped humanities, this was not the way teachers thought things should be. In middle school, he was fortunate to have a likeable young woman as his geography teacher. Once she told a story that benefited Ma for years to come, to the point that he believes it actually changed his whole life.
The story was quite simple. One day, the teacher was walking along the shore of West Lake and some foreigners asked her to tell them about Chinese geography. Her English was good enough that she could respond intelligently. “You all have to study geography,” she told the students, “but even more important is for you to study English. For when foreigners ask you something and you can’t answer them, you will make all Chinese people lose face.”Ma went home to pick up some money, and on the very same day spent six mao, around two U.S. dollars at the time, to buy a radio. He used this to listen to the English broadcast every day.
Ma Goes to College
Jack Ma took the college entrance examination three times and failed the first two. The first time Ma took the college exam, he got a mark that signified total defeat. Head hanging down, he went to work as a hired laborer. One day, Ma was hired to help copy documents at an institution called the Zhejiang Dance Troupe Association. Here, he got hold of a book called Life, by the author Lu Yao. It so influenced Ma that it changed his thinking in short order and helped guide the future course of his life.
Now Ma decided that he would try again to get into college. He began preparing a second time for the exam. China’s college entrance exams were given once a year. As an indication of how hard it was to get into college, the following statistics from the Ministry of Education are illustrative: 6.1 million people registered for the exam in 1978, 5.8 million people took it, and of these millions, a total of 402,000 people were admitted to institutions of higher education. So it is not surprising that many excellent candidates were rejected including Jack Ma.
For the next year, Ma worked days and studied at night, and spent every Sunday in the library at Zhejiang University. Three days before the third exam, one of Ma’s professors, Professor Yu, said to him in a somewhat discouraging way, “Ma Yun, your math is dreadful. If you pass this time, I will start writing my name upside down.” This had the salutary effect of making Jack Ma angry, but it added to his determination to actually pass math; it was something he remembered for many years.
He took the exam for the third time, and this time he passed. On the morning of the exam, he had chanted aloud the ten basic mathematical formulas, and during the exam he applied them, one by one. Coming out of the exam, he compared answers with his classmates and knew that he definitely had come up to the mark. This time, his math grade was 79—not high, but enough to squeak through.
College and a Dream
Both the English language and the idea of teaching fit him perfectly. Spoken English was his strong suit, and he took to college as a fish takes to water. With the simple opportunity to go to college, Ma began his quest for the outstanding in life. From the day he entered college, fate began to smile upon him. He found the classes easy and realized that he did not need to spend all his time studying. As a result, he began to involve himself in the student union and was soon elected its president. Later, he was elected president of the entire League of Student Unions of Hangzhou. To a student from the lower tier of colleges, this was something of a miracle.
When Ma graduated, he was the only one among five hundred graduates of the ben ke program to be placed as a teacher in a higher institution. The others were placed in middle or high schools. He was appointed to teach at the Hangzhou Electronics Technology College. There he spent the next five years, conscientiously teaching English to young people. He would not have lasted that long had he not made a promise to one of his mentors, an older man who came to visit him early in his career. This leader from a local institute knew that Ma, restless and ambitious, might be inclined to head out on his own, as many of his peers were doing. Jack Ma felt that commitments were binding. He took to heart the request by his elder and promised he would stay for five years, and he did.
Jumat, 09 November 2018
Title : Alibaba - The Inside Story Behind Jack Ma and the creation of the World's Biggest Online Marketplace
Writers : Liu Shiying & Marta Avery
Pages : 251
Publisher : HarperCollins
Jack Ma's work allows millions of small companies to use the internet as their business instrument and in turn support China's ability in world trade. Various difficulties must be overcome by Jack Ma from Jack's lack of knowledge about the internet and also limited facilities of internet in China at that time. Most of his friends rejected Jack Ma's ideas when he founded his initial company, China Yellow Pages. Jack Ma continued to move forward and tried although he was lack of support.
“You go out and charge around . . . if it Darkest Before Dawn doesn’t work, you can always bow out. But if you just think over thousands of things at night and in the morning keep on walking the same old path, you never get anywhere. You don’t grow. You might as well try.” (page 24-25)
Also how Jack Ma convinced prospective of customers who were still confined to the traditional mindset to switch their marketing products on the internet. When Jack Ma decided the name Alibaba for the company he was going to establish, he bravely wasted 10 thousand USD just to buy the Alibaba domain.
In 1997, China began changing policies and opening up to the internet use and now there are hundred millions of internet users in China. The Chinese government also supports the construction of fiber backbone infrastructure that allows most internet users in the country to connect with broadband fast connections that have led the country to the digital era.
Jack Ma idolizes Louis Cha (Jin Yong) and describes his business strategy as wuxia with various terms obtained from Jin Yong's novel. Incidentally, Jin Yong and Jack Ma were born in the same province, Zhejiang. Jack Ma read "The Smiling Proud Wanderer" repeatedly compared to other books he had read. He really admired Feng Qingyang's figure.
This book does not only tells about Jack Ma's life journey from zero to the success of his business. But it also tells how the Chinese government's policies and the rapid development of internet and telecommunications infrastructure helped accelerate China's economic miracle.
There are many interesting things in this book. Hopefully Jack Ma's life story is able to inspire Indonesian people about the development of cheap, fast and accessible internet network infrastructure to the wider community which in turn will have a positive impact on the progress of society.
Writers : Liu Shiying & Marta Avery
Pages : 251
Publisher : HarperCollins
Jack Ma's work allows millions of small companies to use the internet as their business instrument and in turn support China's ability in world trade. Various difficulties must be overcome by Jack Ma from Jack's lack of knowledge about the internet and also limited facilities of internet in China at that time. Most of his friends rejected Jack Ma's ideas when he founded his initial company, China Yellow Pages. Jack Ma continued to move forward and tried although he was lack of support.
“You go out and charge around . . . if it Darkest Before Dawn doesn’t work, you can always bow out. But if you just think over thousands of things at night and in the morning keep on walking the same old path, you never get anywhere. You don’t grow. You might as well try.” (page 24-25)
Also how Jack Ma convinced prospective of customers who were still confined to the traditional mindset to switch their marketing products on the internet. When Jack Ma decided the name Alibaba for the company he was going to establish, he bravely wasted 10 thousand USD just to buy the Alibaba domain.
In 1997, China began changing policies and opening up to the internet use and now there are hundred millions of internet users in China. The Chinese government also supports the construction of fiber backbone infrastructure that allows most internet users in the country to connect with broadband fast connections that have led the country to the digital era.
Jack Ma idolizes Louis Cha (Jin Yong) and describes his business strategy as wuxia with various terms obtained from Jin Yong's novel. Incidentally, Jin Yong and Jack Ma were born in the same province, Zhejiang. Jack Ma read "The Smiling Proud Wanderer" repeatedly compared to other books he had read. He really admired Feng Qingyang's figure.
This book does not only tells about Jack Ma's life journey from zero to the success of his business. But it also tells how the Chinese government's policies and the rapid development of internet and telecommunications infrastructure helped accelerate China's economic miracle.
There are many interesting things in this book. Hopefully Jack Ma's life story is able to inspire Indonesian people about the development of cheap, fast and accessible internet network infrastructure to the wider community which in turn will have a positive impact on the progress of society.
Langganan:
Postingan (Atom)