How a Poor English Teacher Became the Richest Man of China
Tl;dr: whatever you want to do, don’t give up. Fight until the end.
As I was looking for more interesting content for this blog instead of random thoughts gotten straight out of my head, I set up on reading one of Jack Ma’s biography called “Alibaba: the house that Jack Ma Built” by Duncan Clark.
And since I have finished it, here are a couple of thoughts, lessons, and reflections on a guy so “simple” that we all need to learn from him.
Introducing Jack Ma
Who is Jack Ma?
He is not well known in the West since when I tried to get a picture of him to illustrate this article on the main free image databases, I have found none.
So…who is Jack Ma?
Well, I promise I’ll get to it in a minute because I want to tell you the most interesting piece of information I got from the book.
“Ma” means “horse” in Chinese, and Ma Huateng, the founder and CEO of the Internet conglomerate Tencent, chose for his English name…Pony Ma.
I laughed at this for 10 minutes.
Anyway, back to Jack Ma.
Jack Ma was born in a provincial city whose name is not relevant to this story.
He is the founder and CEO of four wildly successful companies: Alibaba, a website whose business is to help Chinese companies sell to foreign companies; Taobao, a website whose business is to help random Chinese people sell to other random Chinese people (like E-bay); Tmall, a website whose business is to help Chinese businesses sell to random Chinese people (a bit like Amazon). And finally, Aliexpress, a website whose business is to help Chinese businesses sell to random foreign people.
Today, Jack Ma has a net worth estimated at a modest 39 billion dollars.
The story, opinions, quotes, and thought process of Jack Ma are so out of the ordinary that it is difficult to know where to start, so let’s be classical and start at the beginning.
The tale of Jack Ma is a story of persistence and never giving up.
When he was a teenager, he discovered the English language and was keen on learning it, but since there were no English speaking people in his city, he decided to ride his bike every day to the main hotel where tourists were staying and to give them a free tour of the city just to be able to practice the language.
Meeting such an amount of people, he eventually befriended an Australian family that were frequent travelers to China and whose son was the same age as Jack.
They became friends and invited Jack to spend some holidays at their house in Australia later on.
Jack Ma’s parents weren’t rich so Jack had to get a job as a teenager to help them.
He was turned down from all the jobs he had applied to (including a job as a waiter) before getting one thanks to his father’s contacts.
Later on, came the moment for Jack to take that exam all Chinese students must pass to enter university.
The first time he took the test, Jack got a 0 for the math section.
After four trials, he eventually passed and was admitted at university to study a bachelor’s of English, paid by the Australian family because he couldn’t afford it (mind that at the time, China was really cheap and it didn’t cost much for the Australian family to offer Jack an education. After all, they were friends).
After his studies, Jack became an English teacher and as China was opening itself to foreign investments and trade, Jack sought a way to help Chinese factories find customers overseas.
Having noticed that the language barriers were a huge problem, Jack set up a translation company, which failed after three years.
It is during a trip to the US that Jack discovered the Internet.
Amazed at the future opportunities it would represent, Jack decided to use the Internet to promote Chinese companies abroad.
However at the time, China was not connected to the Internet, so Jack decided to partner with a company and set up the website in the US, a basic web page with addresses, items, and prices of goods sold by Chinese companies.
Jack was communicating through… emails with his US partner so that he could update the website.
When the Internet came to China, Jack set up his website directly in his city and called it China Pages.
As rumors were spreading that Jack Ma not only spoke good English but could build websites, the government asked him to build a local website for which Ma partnered up with a company that eventually bought a majority stake in China Pages.
Not able to freely manage his company, Jack Ma left China Pages and went to work for a government tech agency where he built a website to help…Chinese companies sell to foreign companies.
However, the workload and procedures to make the website work frustrated Ma so much that he decided to quit his job as a civil servant to launch his yet third venture with some of his colleagues from the agency.
This third venture was called Alibaba.
Jack went back to his native city and got to work with his team to build Alibaba.
Later on, Yahoo co-founder Jerry Yang and SoftBank founder Masayoshi Son invested in Alibaba.
As E-bay developed and entered the Chinese market, Ma decided to launch a rival website called Taobao and profited from several strategic mistakes made by E-bay to gain market shares.
Both Alibaba and Taobao quickly grew, as Jack Ma kept on developing services to facilitate e-commerce, such as the online payment service Alipay.
The rest of the story is not really interesting.
Alibaba grew, investors tried to take control of the company, politics got intertwined and it just shows how everyone tries to take you down when you get rich and acquire power and influence.
Jack, nonetheless, managed to navigate his company through the crises and problems, and the rest is history.
1. Persistence: the first lesson we learn from Jack Ma’s tale is the guy’s persistence.
Already as a teenager, he was biking about 15 miles to…give tourists a free tour of his city to learn English.
He applied to 20+ different jobs for which he got rejected every time.
He took the exam to enter university 4 times.
And finally, he built his Internet business at the third attempt, a business that wasn’t even financially viable until many years.
It is difficult not to recognize that despite his inability to understand computer science and math, he had a vision, a vision he tried to fulfill no matter what.
From the get-go, people told him it wouldn’t work, but that didn’t stop him.
His dream was to help factories sell their products and when he discovered the Internet, he understood it was a game-changer.
It is his persistence to work and will to achieve the vision that eventually got him where he is today.
2. People: when we talk about billionaires, we usually talk about individuals: Gates, Bezos, Buffett, Jobs, etc.
Yet, this is a huge misconception because billionaires simply never achieve their success by themselves.
Let’s take some examples. Richard Branson, the British founder of Virgin, first founded a magazine for students with his best friend and for which other students came to write later on.
Unlike what we think, Branson didn’t found Virgin, but co-founded the company, again with his best friend.
When they did so, they already had a whole team of people working for them which helped for a smooth transformation from writing a magazine to selling discs through the post.
Zuckerberg stole the idea of Facebook and enlisted several co-founders to create the company.
Bloomberg created Bloomberg with four other colleagues, as for SAP, they were five co-founders as well.
Bezos wouldn’t have been able to create Amazon without capital, his ex-wife and former colleague at the hedge-fund he was working at.
He managed to develop the firm only because investors believed in him as Amazon was losing money for a long time before becoming profitable.
Finally, Warren Buffett created an investment company with friends and family money that he later used to buy Berkshire Hathaway, subsequently transforming it into a conglomerate to buy other companies with partner Charlie Munger.
All of these people share the same characteristic that also made Jack Ma a billionaire, a secret ultimately not much talked about: creating wealth and value is not about creating wealth and value because very few people can create value by themselves.
Creating value is about getting a team of people and make them work together so that their own respective skills, once assembled, is massive value creation.
As such, Jack Ma is not the founder of Alibaba, but one of the 18th original co-founders of the company.
Each employee of the original team of Alibaba was a shareholder as Jack understood that if he was going to create Alibaba, the employees would have to be motivated and see what was in it for them.
When Alibaba IPOed for the first time in Hong-Kong, he told his employees to sell their shares to cash in and reward their families for the sacrifice they had made of letting their parents work 12 hours a day 6 days a week for three years.
Later on, when Yahoo China and Alibaba merged, the Yahoo employees were ill at ease to see Alibaba employees sing and jog after lunch.
Jack understood how to make his employees happy and dedicated, and how to cultivate good relationships with people.
When the co-founder of Yahoo Jerry Yang and Softbank founder Masayoshi Son were asked why they had invested in Alibaba at first, they both answered the same thing: the spark in Jack Ma’s eye and his confidence that he’d succeed.
It was ultimately, this central skill that allowed Jack Ma to get where he is today.
He was good with people.
3. Business: from the book, it seemed like Jack Ma always knew what business and value creation was.
It started with him offering free tours of his native city to tourists in exchange for…speaking English.
Jack Ma’s dream was to help businesses sell their products to foreign countries, first by creating a translation company and later on, by creating two websites.
The websites themselves were entirely free and Jack never wanted to have customers or companies to pay to be able to list their items.
Similarly, he always tried to protect the integrity of the company and fired employees when it was discovered that they were receiving bribes from fake companies to advantage them into the listing.
Jack Ma actually never acted nor formulated that he wanted to get rich.
What he wanted was helping people and offering value, and he did that for free, and he’s still doing it for free.
He understood that, paradoxically, the value of Alibaba came from the fact that the website was free to use.
As such, even with 9 million users, the website still didn’t make any money but was losing some.
The monetization came much later and was assured by external services the website would provide to premium customers.
Jack Ma understood that if one offers value first, one will receive payment later.
As such, he set out to offer the greatest value to the greatest number of people, and once he collected payment, he became very rich very quickly.
The Bottom Line
Jack Ma’s favorite character is Forrest Gump and it’s easy to see why.
Gump does not think much, he acts, does what he wants to do, and ends up rich and happy.
He takes reality as it is and makes the best out of it, while other characters in the movie keep on fighting and end up miserable.
In this regard, Jack Ma is very much like Forrest Gump.
When he wants to do something, he sets out to do it and perseveres until he can achieve his dream.
He goes further on the comparison by saying he is himself not a smart guy and that he still doesn’t understand how the Internet works.
It is obviously a joke.
Jack Ma may not be good with computers, or with math, but he managed to create the very first e-commerce website in the world in a country…that didn’t have internet.
He saw something no one else did.
While most of what was invented was invented by accident or for other ultimate purposes (Youtube and E-bay, for example), Jack Ma did not create Alibaba out of randomness.
He knew what he was achieving, he knew his end-product and the success it would have.
If he is not a genius, he is at least a visionary.
He is proof that when you take a step back to look at the bigger picture, when you believe and persevere, there isn’t much you can’t achieve.