Jack Ma, the founder of Alibaba, a 15 year old Internet commerce company, today stands at the top of the billionaires index. With the listing of its IPO this month, he raised USD 21.8 Bn at a market cap of USD 231 Bn. And now it is ready to expand further in Europe and US as well as for investing in upcoming startups.
Founded in Jack Ma’s apartment 15 years ago, Alibaba has grown into the largest ecommerce company in the world’s most populous country, one that dwarfs its U.S. counterparts. The Wall Street Journal has reported that the combined transaction volume of its Taobao ecommerce marketplace and another Alibaba-run shopping site called Tmall reached $240 Bn last year. That’s triple the size of eBay Inc.,and more than double the size of Amazon.com Inc.
Ma has cult status in China, where he’s seen as the equivalent of Steve Jobs, Jeff Bezos or Bill Gates. He is a former English teacher, and founded Alibaba in his apartment in 1999 with 17 friends and $60,000 they had raised.
Sounds great, doesn’t it? But, why only Alibaba? Here are 10 things early stage entreprenurs can learn from Jack Ma and Alibaba.
Have belief in your vision
When Ma started 15 years ago, the Internet was at its peak. He saw the enormous potential it has, convinced 17 of his friends and pooled in USD 60,000 to lay down the infrastructure. Now after 15 years, he has already raised USD 1.1 Bn, with each round getting bigger from the previous one, proving his belief, and has continued making others believe it too.
Keep an eye on others’ mistakes
At present, Alibaba makes much higher profits than eBay or Amazon combined! The reason? Ma avoided the existing pitfalls in China, studied closely the mistakes done by other US companies and created a better business model offering more advantages over the existing ones.
For example: Where eBay charges money from sellers and has policy of compulsory pre-payment, Taobao gives it for free, allows payment on receipt and earns from advertising and additional services.
Internet commerce, mainly refers to holding inventory or selling goods. Alibaba thought of a different business model and became a middle man – it provided a platform for the suppliers and earned revenue through annual fees, commissions and advertisements. Jack states,
You should learn from your competitors, but never copy them. Copy and you die.
Build in trust and passion
Jack Ma, in his recent letter to investors before the IPO launch, highlighted that with Alibaba, he not only tried to push the technological boundaries, but also built an ecosystem imbibing trust and passion among the participants about the system they are a part of and its future.
We believe that only by creating an open, collaborative and prosperous ecosystem that enables its constituents to fully participate can we truly help our small business and consumer customers.
Cut revenues today, have benefits in the long run
According to Porter Erisman, Ex-VP of Alibaba.com, sometimes you have to break a successful model that works, in order to make way for the next model. For Jack, it was never a difficult decision to make when it comes to deviating from existing working revenue model, if he realized that the new model could lead to long term success in future.
TRY, TRY MORE, TRY HARDER
Make this your Mantra of life. There would be times when you will feel discouraged by rejections. Most tend to give up under such circumstances, but not Jack Ma. He used it as a motivation factor and come back with more hard work and better results.
One such example is described by Porter. In 2000, Jack had to give one speech in an auditorium with a capacity of 500 people. However, by the time his number came, he was left with only a 3 member audience. Instead of losing his confidence then, he gave his 45 minutes speech and then said to his fellow associates that by the time he would visit Berlin for his next speech, this room would be entirely full.
Never stop learning
Learning new things never fails you. In order to learn English, Jack Ma used to talk to foreign people in a nearby Cafe at Hangzhou, China. Later he used the same skill to get a job at a Local University. So, if you are looking to go far with your business model, you must try to learn new concepts, take short term courses consistently and keep yourself upgraded to lead your team better and keep in sync with rising competition.
Empower your employees
At Alibaba, prioritization follows as “put customers first, employees second, and shareholders third.” Jack firmly believes that a company which does not have satisfied employees will not have satisfied customers. And without satisfied customers, it could not possibly have satisfied shareholders.
For example: He initially started with 17 co-founders and have even granted equity to high school students working with him. This strategy worked well giving employees an ownership mentality and making them to give excellent performance. As said by a company executive to New York Times, “He wasn’t the type of person who starts a business keeping 90 percent of the equity for himself and really hoarding all of the wealth and riches.”
Create opportunities for others
Follow this, and success will automatically follow you. Generating money from your venture is entirely different from making it a part of the society you are flourishing in. Alibaba is one such platform which has made entire towns in China depend solely on itself for doing their business. They’re called “Taobao Villages.” As said, trucks small and large wove in and out all day and night with deliveries as shop owners couldn’t pack boxes fast enough to ship across China.
Challenge yourself and your team
Setting tough goals and almost impossible targets, might initially build a pressure on you But, in long term, it will make your team to work harder and even achieve beyond that. Also, as stated by Porter, Jack Ma being a man of high expectations, used to set a goal and then triple it. “We always surprised ourselves that we could achieve it.”