How Jack Ma Built a $150 Billion Dollar Empire From His Apartment
So, in the 1980s, a young student from Hangzhou, a city in Eastern China, applies to Harvard Business School.
A few months later, he receives a decision letter from Harvard.
“This is gonna be the one. This will be the one to change everything-”
We regret to inform you that-
He stops reading. This wasn’t any old letter, this was his tenth rejection letter from the Business school and he was done.
So, he enrolls in a teacher’s college. Fails the entrance exam three times and then finally passes. Maths was never his strong suit.
After graduating, he teaches in a university, and his salary is incredibly low. Like $14/a day low. He applies for other jobs, but no matter which positions he applies for, the outcome is always he same.
Across the world though, something incredible is happening, a new technology is being built and tested and built. A man called Tim Berners-Lee is hacking away at his computer.
At the time, Jack was dabbling in entrepreneurship — he was running a translation company with a friend, since and had studied the English language in university.
But he had also studied International Trade. Remember this detail. That’ll be important later on.
Jack Sees An Opportunity That He Can’t Refuse
In 1995, he goes to the US representing his city’s government, and while he’s there, he encounters the internet.
Jack finds it fascinating. He’s hooked. There’s just something … about it.
But could he risk it?
Jack, you don’t have anything to lose.
While in America, he searches the internet for trade information on China.
Nothing pops up.
Chinese beer?
How to get Chinese beer in America.
Chinese trade pages
Nope, got nothing for ya.
Weird, right? This is exactly what Jack’s thinking.
Even though China wasn’t the economic superpower it is today, made in China was still a thing. China was experiencing it’s first wave of economic transformation at the time.
Jack Begins Testing Out A Company Immediately - The Beginning of China Pages
So he does what any entrepreneur would do. He gathers some of his friends around and tells them his idea.
But most of them are skeptical. “Look, Jack, I just don’t think it’s gonna work. Let’s just stick to our teaching jobs, eventually, we’ll make it and -”
Jack is getting frustrated.
“Let me speak to him.” Another friend agrees, “Jack, listen you don’t know anything about computers. Stop being silly.”
“Jack, dude, what is this internet thing, sounds like a scam, my advice is -”
Jack tunes them out.
Behind closed doors, people start speaking about him, “Jack’s a little different… a little crazy. The thing he needs to understand is people like him don’t become successful.”
“He’s just not smart enough to pull this off. He’s always been a bit of a troublemaker.”
Get To Know Your Customers and Their Problems
This part reminded me of Brian Chesky and Airbnb’s origin story — it seems like every great entrepreneurship story involves doing some kind of manual labour — whether its consistently speaking to customers or packing orders.
He goes knocking door-to-door and gets businesses to sign up. He sits with business owners, takes pictures of their products and uploads them to the internet. But he’s just one man. And he can’t work fast enough.
China Pages gets bought out by the local Chinese government and is forced to merge with a local Telecom.
After all that labour.
And of course, Jack is forced to find a job. But he’s an entrepreneur at heart, and he decides that internet companies should not be run by the government. They should be private, so he starts over.
Don’t Be Afraid to Try Again
Jack knew what he had to do. China Pages was just the testing ground.
With all the knowledge he had, this new business was going to be the real thing.
In the morning he wakes up and applies for a $3000 bank loan. But remember how little he was earning as a worker before? Right. Every bank he goes to says — well, you can imagine what they say.
“Look, you seem like a good guy, but there’s just no way we can help you.” Back and forth, bank after bank it went on for 3 months.
Jack feels defeated.
Venture Capital Time
If he couldn’t get the money from a bank, where else could he get it from?
What about VC money? Venture Capitalists are always looking for investment opportunities.
He begins having meetings with every venture capitalist who will listen to him. But after a while, it’s useless. I mean, how could 40 of them say no?
“Look Jack, you seem-” An investor says.
He cut him off, there was no use. Most people would’ve given up at this point. But not Jack, Jack was intimate with rejection.
He had applied to Harvard. 10 times.
Job applications? 30.
Bank Loans? 3 months and no loan.
VCs? 40 and each one had said no.
But by now you’ve figured out that Jack was obsessed with this idea. The kind of obsession that makes the most successful CEOs.
The kind that involves singular focus.
Jack knew that with time, with focus and hard work they could make this company incredible.
And then a breakthrough happens, one founder agrees to put in a small amount. And then another founder. And then another. After some time, Jack and his team gather $50 000 across 18 VCs.
The Beginning of Alibaba
It is 1999 and it is time to build Alibaba. The team sets up shop in Jack’s and his wife’s small apartment in Hangzhou. They worked tirelessly, day and night.
Alibaba was up and running, but many people looked at it and thought the business model could be better.
The team expected the profits to come bursting through the roof, that they were going to be rich off this new technology called the Internet.
But the first year came and went, and the new company was in the red. Not a single Dollar in sight.
Had he been wrong?
No, he needed to prove to himself that he was right. Finally, after three years of blood, sweat and tears, Alibaba made a profit.
3 years.
Let that sink in.
This would be considered madness to some, but to Jack it was an itch he needed to scratch.
“Are you a millionaire?” A BBC journalist asks him in the 2000s.
The smile doesn’t leave Jack’s face. But I feel his pain in the grainy interview footage.
“Now? No.”
“Do you want to be?”
Trick question.
How Jack Knew He Was Right — And the Lessons For Entrepreneurs
So what was it that was driving Jack all along? What had possessed him?
He knew he was solving a real problem.
On a daily basis — Jack was receiving many customer emails. Customers saying thanks for doing this, thanks for starting Alibaba. We can’t pay you, but we want you to know…
What’s the most important part of the story for entrepreneurs ?
Work hard on the right thing, work with the right team, solve a real problem and keep talking to your customers.
It’s All Downhill From Here
In 1999, Jack and his team raise $5 million Dollars from an investor.
In 2000, they raise a round from Softbank — $20 million Dollars.
So Alibaba comes from the tale Alibaba and the Forty Thieves — and Alibaba’s success is really based on providing access to wholesale markets, they open a new world and act as a bridge between China and the rest of the world. And that’s just Alibaba — there’s still the value of Taobao and AliPay, subsidiaries of Alibaba, to discuss.
“Are you a millionaire?” A journalist once asked him in the 2000s.
No, he’s a billionaire.
Worth US$37 billion to be exact.
Today, Alibaba is worth more than Ebay, a company that once owned 40% f Alibaba, and has revolutionized how companies do business.
You can’t tell the story of China’s economic rise without telling the story of Jack.
And that’s the story of a teacher named Jack.
