Monday, August 11, 2014

Decoding Alibaba

Paul Chen

In the last few months, Alibaba has been making a big splash in the media due to its hyped mega-blockbusting IPO.   China’s biggest e-commerce company may set the IPO value at $154 billion, according to the average estimate of five analysts surveyed by Bloomberg. The same analysts see the post-listing valuation as $198 billion.   Industry experts estimate that the IPO will allow the company to raise $20 billion. 

The CEO doesn’t code

At a Stanford talk, Jack Ma, the CEO of Alibaba, said that he hadn’t written a single line of code for the whole internet infrastructure.  He doesn’t even understand the magic behind the internet.  What he does appreciate is that it exists and that it works.  Even with such wealth and success, he still has great respect for the technicians and developers who works for his group.  He appreciates that technology has the power to change the world. 
However, he is not one to depend on technology.  To him, technology is only a tool to help others achieve their wishes and dream.  What he wants to do is to help others succeed and make it easier for others to become entrepreneurs. 
Jack Ma started from very humble origins.  Who knew that a English teacher from 20 years ago would become someone who would run a multibillion dollar business today? The difference between him and his colleagues? He tried something different and he worked damned hard at it. 

Trust and Relationships

Jack Ma also uses the old Chinese way of doing business which is building trust and relationships.  Without trust and relationships, no matter how great your product or service is, no one will buy it or invest in it.  Along with that, he focuses on the business side of the company.  He wants to build traction and make sure that people will use your business.  He said that having traction is better than the best business plan that a Harvard MBA can write.

Don't be Greedy

Jack Ma is also a believer that you should keep the door open.  He is proud of his success.  He wants to help others be successful.  He thinks being greedy is a bad thing. By spreading the opportunity, will there be faster progress in society.

One of the best movies to help anyone understand some of the thought process and the progression of events in China is American Dreams in China by Peter Chan.  In this movie, you will understand why Alibaba decided to list their company in America.  I would recommend this film to anyone who are thinking of initiating a startup or anyone who has a startup.

This movie is a good introduction to how China became where they are right now.  It has to do with being willing to do things that other people are unwilling to do.  It has to do with finding a way to get your customers to be able to digest whatever you are selling.  It has to do with how Chinese people can work under some of the most undesirable conditions. 

The movie also addresses the transition where China and its companies finds its own voice and become one that can stand up to their American counterpart.  Of course, some people will try to find faults in the film.  However, I believe that you shouldn’t focus on the small details. Just be able to tak in the overall message.  That message is,” China’s in da house, and you’d betta recognize!”

Another good film to understand Alibaba is Crocodiles in the Yangtze by Porter Erisman. 

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