Hiring and Growth

5 Entrepreneurial Lessons from Alibaba’s Jack Ma

David Cheng Former Head of Content, Gusto 
5 Entrepreneurial Lessons from Alibaba’s Jack Ma

At Gusto, we are the biggest fans of entrepreneurs because they’re the crazy ones — the ones who are crazy enough to believe they can change the world (and do). As an ongoing series, we want to highlight a few exceptional crazy ones. This week, we draw our attention to Jack Ma, the founder and CEO of Alibaba.com.

When Jack Ma was in high school, he failed the national college entrance exam two times because of his poor math skills. Three decades later, Jack Ma and Alibaba, the e-commerce giant he founded in 1999 raised $21.8 billion in its IPO. This makes Alibaba one of the largest IPOs in history and values the company at an astounding $168 billion. On the dawn of Alibaba’s IPO, let’s examine 5 entrepreneurial lessons from Jack Ma.

Always keep learning

Jack Ma grew up in Hangzhou, China, a city southwest of Shanghai. To teach himself English, Jack would spend time at the nearby hotel and talk to foreign tourists. He even bought a radio so he could listen to the English broadcast.

When he graduated from Hangzhou Teacher’s Institute in 1988, he used his English language skills to get a job teaching English at a local university.

What can you do as an entrepreneur to keep learning? Don’t be afraid to take continuing education courses at places like General Assembly or online at Coursera. Top universities are also offering some classes for free. Check out the following free coursework:

Look for opportunities

While quickly becoming one of the most popular instructors at the Hangzhou Institute of Electronic Engineering, Jack dabbled on side projects including a Chinese-English translation service. But it was on his fateful first trip to the United States in 1995 that set Jack Ma down his current path.

Jack stayed with American Bill Aho, a fellow English teacher in Hangzhou, and his family in Seattle. There, he met with Bill’s son-in-law, Stuart Trusty, who was running one of America’s first Internet service providers, VBN. Jack famously searched on the internet for “China” and “beer” and nothing came up.

This led Jack to starting one of the very first Chinese web companies, called China Pages. While China Pages eventually failed, it gave Jack the experience to start Alibaba four years later.

As an entrepreneur, you need to be constantly on the lookout for opportunities, wherever they are. With Alibaba, Jack saw an opportunity to put the strength of Chinese manufacturing on the Internet, an entirely unproven business channel in 1999.

What new channels can you growth hack? Here are three other great growth hack stories about entrepreneurs leveraging a new distribution channel:

  • Yammer: Use corporate email addresses to get people to invite their work colleagues.
  • LinkedIn: Import your address book to invite others to join.
  • Airbnb: Leverage high quality photographs and the Craigslist community.

Empower your team

When Jack Ma founded Alibaba, he started it with 17 other co-founders out of his apartment. In the early days, Jack would even give equity to the high school students working with him. As one executive puts it: ”[Jack Ma] 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.”

By empowering his workers with an ownership mentality, Jack was able to get an incredible performance out of his team. With Jack, it was never just about him but the team.

How can you empower your team? Here are a few tips:

Don’t be afraid to take on incumbents

Alibaba started primarily as a marketplace for Chinese b2b vendors to find overseas customers. By 2002, Alibaba was already profitable. But Jack knew Alibaba could be more.

He decided he need to make a consumer-facing site. Most of his managers were against the idea. As then-CTO John Wu puts it: “We’re barely breaking even. And besides, every business school textbook says focus on what you do best. How can we create a second site?”

Nevertheless, Jack Ma started Taobao to take on EachNet, eBay’s Chinese partner. To compete, Jack Ma vowed Taobao would be free for years, whereas EachNet took a commission on its auctions. Using guerilla marketing tactics, Jack Ma and Taobao was able to secure 70% market share in online shopping by 2005.

Jack was confident he could beat eBay on his turf: “eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose—but if we fight in the river, we win.”

As Jack says in the book Alibaba: “I was scrawny when I was young, but I was a terrific fighter. I was never afraid of opponents who were bigger than I.”

The fact that Taobao’s mascot is the ant may give you some insight into how Jack Ma likes to compete.

Be true to yourself

Jack Ma is eccentric. He famously donned a blonde wig and wore lipstick in a 2009 rally for Alibaba’s 10th anniversary. It’s this passion and charisma that has made Jack so inspirational to the thousands of Alibaba employees and millions of people who make a living off his marketplace sites.

As Duncan Clark, chairman of BDA China and someone who has known Jack Ma since the 1990s, puts it: “He effectively represents millions of people who now depend on Alibaba for their livelihood. That’s a constituency. He’s a politician with a small ‘p.’  ”

Being yourself isn’t just crazy antics. It’s also being true to your vision. In a letter delivered to the company on the eve of the IPO filing, Jack Ma articulates his vision:

“We know well we haven’t survived because our strategies are farsighted and brilliant, or because our execution is perfect, but because for 15 years we have persevered in our mission of ‘making it easier to do business across the world’…”

How will you succeed in business by being true to yourself?

Updated: June 26, 2019

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