Jack Ma of Alibaba steps down: a history of the Arabian night
Jack Ma, founder of e-commerce behemoth Alibaba, plans to step down as Alibaba’s chairman in September 2019. This will end the leadership of a company that has made the former English teacher $37 billion and led not only China but also the world in e-commerce beginning almost two decades ago.
After he steps down, Ma will continue to be a part of the “Alibaba Partnership,” a group of core managers and advisors.
Ma has also invested in a variety of different initiatives. Last year, Ma invested the US equivalent of $45 million in a philanthropic education project, and he invests in other technologies, including sports tech and facial recognition.
From being a manual laborer to non-technically educated English teacher to running one of the world’s largest companies, the story of Jack Ma reveals potential insight into China’s transforming economy, unusual successes, and one man’s vision for the world.
Early Life
Ma’s journey hadn’t always been smooth. The gaokao, literally the “high test,” was the single determining factor that decided whether or not you as a high school student would be allowed to go to a reputable college. Think if your precise SAT score determined the university you could attend and the job offers you could later attain.
Ma failed the gaokao badly, scoring 1 out of 120 in math. Devastated, he turned to menial labor, delivering magazines to a nearby train station on pedicab. In an interview at the University of Nairobi, Ma speaks about how he couldn’t even get a job at KFC, being the only person out of 24 applicants to be rejected.
English and Teaching
Ma was fascinated with English from a young age. He listened to Mark Twain’s The Adventures of Tom Sawyer on the radio and often practiced his English language skills.
In 1976, Ma rode his bicycle for 40 minutes every day to the Hangzhou hotel to Greek to give tours to tourists who met there. A Michigan lawyer named Bruce Thelen later recalled meeting Jack Ma on one of these trips. Ma said he may have given the people tours, but they taught him English.
It’s hardly a surprise then that Ma, ended up becoming an English teacher. He beginning teaching English classes at the Hangzhou YMCA after attending his day teaching lessons. His classes were well-liked because he spent more time engaging in conversation with his students rather than focusing on the minutiae of grammar or vocabulary, and he often stayed and chatted with his students, playing cards until late at night.
Risky Entrepreneurship Business
In the early days of Chinese economic reforms, entrepreneurship was seen as extremely risky and potentially illegal. Chinese entrepreneurs had been jailed or even executed before, particularly during the Cultural Revolution, for engaging in commercial ventures.
The first Chinese entrepreneurs, otherwise known as the getihu, weren’t leaving behind stable government jobs. Rather, they had nothing to lose. They were agricultural laborers and their status was low enough that they were willing to take the plunge.
The Province Zhejiang begins to be known for its’ success in entrepreneurship. Funding models that could distribute capital begin to emerge in the province Jack recognized the region strengths and decides to move there.
He starts a company in 1994 called Hope Translation. Business is rough. The failing agency begins to sell all sorts of goods, including flowers and plastic carpet, possibly foreshadowing Alibaba’s impressive range of goods
Later, Ma begins a company called China Pages, somewhat of a Yellow Pages for the new Chinese internet economy. The website was fairly basic, listing companies’ products for sale. This begins to bring in some revenue, but it’s still not enough for Ma to stay.
Hangzhou Dife Communication, the company that had worked with China Pages to build a government website, made a ploy to take over the company. Jack ended up with 30% stake, or approximately $70,000. He then decides to move to Beijing to find his fortune elsewhere.
Third Time
Thus we begin the story of Alibaba.
Jack himself likes to parallel this one with his third gaokao attempt, saying he is “Third Time Lucky.”
Ma started the company and decided to name it Alibaba, after the One Thousand and One Nights story Ali Baba and The Forty Thieves. It was a popular and well-known story among Americans, and the name was also familiar among Chinese people, “Alibaba is a Happy Young Man” being a popular song at that time.
The well-known name was beneficial to Ma throughout the growth of Alibaba, as the name sparked recognition of wonder and the thousand and one nights, pushing the company’s marketing forward.
Alibaba begins to attract investors, including Goldman and SoftBank. Alibaba arrives just in time for the Chinese internet boom, when “China.com,” a company making only $5 million a year and losing more, on its first day of trading in the Nasdaq ended the day worth $1.6 billion.
By 2000, Alibaba was signing up over 20,000 members per month. And from there, the company only continued to grow. For the Chinese shopping holiday Singles Day in 2018, a holiday where young people celebrate their pride in being single (apparently by buying consumer goods), Alibaba made more than $30.8 billion in the 24-hour time period.
The story of Jack Ma and Aibaba might be about overcoming hardship from humble beginnings. It might be about coming into a market at the right time. It could just be about someone who got lucky. Regardless, it is an interesting story, and whether Open Sesame was something you believed in, it’s one to follow.