How Alibaba's Jack Ma Became the Richest Man in China
By Steve Tobak, entrepreneur.com
Alibaba's Jack Ma |
English teacher and Internet entrepreneur Jack Ma founded Alibaba
15 years ago in his tiny apartment in Hanzhou, China. On Friday, Ma
became the richest man in China on the heels of the biggest IPO in U.S.
and possibly world history.
With a market cap of $231 billion, the online retailer is nearly as
valuable as Wal-Mart and bigger than Amazon and eBay combined.
And this is just the beginning. Alibaba plans to expand aggressively
in America and Europe and has already invested nearly $1 billion in a
host of U.S.-based startups, including Uber, Lyft, ShopRunner, Fanatics,
Tango and Kabam.
Every current and aspiring entrepreneur and business leader should
learn from how a Chinese English teacher turned a vision, a group of
friends and $60,000 into untold riches and the world's most valuable
Internet commerce company. It will no doubt be studied in business
schools for generations.
Start here, go anywhere. Recognizing the importance
of English, young Ma would ride his bike to a nearby hotel and guide
foreigners around the city just to learn and practice the language. His
passion for entrepreneurship in many ways parallels Masayoshi Son who
grew up poor, followed his dream to Silicon Valley and graduated from
U.C. Berkeley before founding Softbank. As chairman of Softbank and
Sprint, Son is now the richest man in Japan.
He had vision … and he had help. Ma saw the
Internet’s enormous potential to bridge businesses across China’s huge
population early on. So he and his wife brought 17 friends together and
pooled $60,000 to start the company. That formed the basis for the
company’s dynamic partnership structure and unique culture designed to
drive collaboration, diminish bureaucracy and promote accountability for
long-term growth.
Go big or go home. Even if crowdfunding existed when
Alibaba was founded, I doubt if Ma would have gone that route. He’s
simply not a “dip your toe in the water” kind of guy. Instead he and his
friends went all in, raising a $5 million angel round, $20 million from
Softbank in 2000, $1 billion from Yahoo five years later, and $1.6
billion from Silver Lake Partners and DST Global in 2011. That’s how you
make it big.
Big problems lead to big opportunities. China’s lack
of brick and mortar infrastructure has always been an insurmountable
hurdle for the enormous nation’s small business merchants. Alibaba
solved that and now accounts for 80% of the country’s ecommerce – a
whopping $248 billion last year and more than twice that of Amazon.
Innovation comes from unique individuals who think and act differently.
Everyone talks about changing the world and making tons of money these
days, but those who actually do it are exceptional individuals with
breakthrough ideas, uncommon vision and a passion to do great work.
Disruptive innovation comes from people who break from the status quo
and carve their own path.
Stand on the shoulders of giants ... but learn from their mistakes.
Like Amazon and eBay, Alibaba is an Internet commerce company, but
that’s where the similarity ends. Alibaba does not actually hold
inventory or sell goods. It’s a middleman that collects annual fees and
commissions from larger merchants and advertising fees from smaller
ones. The result is one of the most scalable and profitable business
models on Earth. >>>
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