Monday, May 23, 2011

Review of Alibaba – the inside story behind Jack Ma and the creation of the World's Biggest Online marketplace.

Written by:
Liu Shiying and Martha Avery. 

 
This book was rather disconnected and not so smooth in reading: For example after, at only the second last chapter was there a focus on Jack Ma's life and the last chapter was about the IPO of Alibaba Group. It was rather disjointed. There was also parts where the author just simply copied or summaried a report on China's internet development. It gave me a feeling of pure regurgitation that is exists in Chinese style education.

Last but not least, it was a book originally written in Chinese and now translated in English. Hence the flow was not natural and certain terminnology didn't help at all.

Of course, it was made worse by Jack Ma being an odd ball: His leadership principles and styles are all derived from Ancient Chinese martial ats and stories such as: leadership principles from Journey to the west, Maoism slogans to galvanise his team, storing cash to make TaoBao free initially as similar to gathering Qi.

Thus there was plenty of Chinese only terminology such as Swordplay and Jiang Hu which does seem inappropriate when translated into Chinese. However, this book still allows you to know much about Jack Ma and why he is truly different:

  • Jack Ma's first company was China Yellow pages. In his meeting among friends to raise money for his business, 23 out of 24 said no. Still he went ahead. Jack Ma feels that one does not measure success just by the results; instead he feels that the experience of doing something is a kind of success itself. “ You go out there and charge around.. and if it 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 on the same path, you will never get any where.”
    • That is where I am lacking. I am not trying and just doing it enough.
  • When Jack Ma went back from Beijing to Hangzhou to start Alibaba, he gave his talented team 3 choices: Get a recommentation to Yahoo or Sina and draw a decent salary , or the last choice was to go back and start over with him to Hangzhou and start over with only 800 Rmb. The team chose to go back with him.
    • Ah.. the feeling of a startup.
  • Unlike many others involved in internet business in China, Jack Ma did not grew up in elite circumstances. That is probably why his e-commerce business approach was so different. Alibaba did not focus on the 15 percent that was large corporations, but the 85 percent that was SME.
    • The feeling was he was serving the underdog and the mass population. He would have good standing if he stood as a politician.
  • Why was the name Alibaba chosen? Jack Ma knew the company would eventually be international, so he looked for a name hat was truly understood everywhere. He was so focused to the point that he spent $10,000 to buy the Alibaba domain name even though at that point, Alibaba was still a startup. Few could undestand his extravagance and attributed it to lifelong sense of idealism.
  • Similarly, in the early years, Jack Ma turned away 38 potential investors because he wanted Alibaba's first infusion to be more than just money, access to overseas resources.
  • Similarly, when he finally got an investment from Masayoshi Son, he actually rejected more the 30million that was offered to him and only accepted 20million. He actually rejected money!!! He felt that the team was still less than 60 people, and having more than 20 million was superfluous and would be detrimental to the enterprise.
  • Jack Ma: “It is better to execute a mistaken decision than it is to muddle around without any decision – what you learn in the course of implementation often gives you the opportunity to move ahead”.
  • Jack Ma's different approach to sales: “Most Enterprise are thinking of how they can take the five dollars from a customer. What we want to do is help the customer turn that 5 bucks into 50 then take our 5 bucks. “
  • Jack Ma started TaoBao whcih allowed users to conduct transactions for free, which totally handicapped Ebay China.
    • I wonder though if they are continuing with that now since the book is written.
  • Purpose of Tabbao's model is to shorten the chian between ultimate buyer and ultimate seller, including all those links along the way that take up the money.
  • Ma acquired yahoo! China because he felt that Alibaba lacked search capability in growing the e-commerce business and this lack was obstructing growth.
  • To Ma: wealth is incidental. Specifically, Ma want to change the history of China's e-commerce.
  • Since there is 32 million SME in China, supplying cost-savings services to them is in Ma's opinion, not only good business but also good for the entire economy of China. . Streamlining business links will result in extra funds to be more profitably put into innovation and a better world.
  • Reorganisation and IPO: reorganising the company to separate high – margin business from low margin ones had the immediate effect of gaining lots of capital. Also, it allow the Alibaba group to pursue its strategic goals of dominating e-commerce activites, by allowing its unlisted units to focus on market growth rather than profitability.

 

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