Alibaba - Duncan Clark  ## Metadata - Author: **Duncan Clark** - Full Title: Alibaba - Category: #books ## Highlights - “Teamwork” at Alibaba means regular group games, songs, and outings. These can come as quite a culture shock to employees joining Alibaba from firms based in Silicon Valley. But for those fresh out of college, the system of apprentices and mentors is well received, including the routine of holding regular meetings to “kick off in the morning and share in the evening.” ([View Highlight](https://read.readwise.io/read/01j9qn285hrzrkhd487th4wfxe)) - *China changed because of us in the past fifteen years.* *We hope in the next fifteen years, the world changes because of us.* —Jack Ma ([View Highlight](https://read.readwise.io/read/01j9mbd4vtxbkyfz0cqqp5bcaj)) - In its early years, he gave three explanations as to why the company survived: “We didn’t have any money, we didn’t have any technology, and we didn’t have a plan.” ([View Highlight](https://read.readwise.io/read/01j9mbse4n9wdjd34q277jy597)) - Tags: #entrepreneur #biography - *Come up with an idea, make it fun, and breathe something into it which otherwise is still just an idea. That’s Jack Magic.* —Jan Van der Ven ([View Highlight](https://read.readwise.io/read/01j9n4g97xwq6q1ffpzj7e365j)) - Fourteen years after founding the company Jack relinquished the title to become chairman. ([View Highlight](https://read.readwise.io/read/01j9n4qzmzbmqygd6tkt0w1mf4)) - One of his earliest foreign employees[3](private://read/01j9jerkb9x12rshagt4xssgj2/#ch2en3) summed up for me his qualities in two words: “Jack Magic.” In this respect, Jack shares a characteristic with Steve Jobs, whose charisma and means of getting his way were famously described by a member of the original Apple Macintosh design team as a “Reality Distortion Field.” ([View Highlight](https://read.readwise.io/read/01j9n53m2xcq5fcr34511x6nk2)) - A close inspection of all of his speeches reveals he has essentially been giving the same speech for the last seventeen years. Yet by subtly tweaking his message to match the mood and expectations of the crowd, he somehow manages to make each speech sound fresh. ([View Highlight](https://read.readwise.io/read/01j9n57jad2bpx3v2y72fn2v97)) - Jack is a keen reader, particularly of titles by the Hong Kong–born martial arts writer (Louis) Cha Leung-yung, known in China by his pen name Jin Yong. ([View Highlight](https://read.readwise.io/read/01j9p9y952j2cqcmgxra2jb1vt)) - A sense of subjugating one’s own needs for the interest of the customer is a cornerstone of Alibaba’s corporate culture. ([View Highlight](https://read.readwise.io/read/01j9pa1qrr6jq02tvnjry4ph2q)) - Jack presides as chief witness over a ceremony to celebrate recent weddings of company employees. Alibaba covers the lodging and meal expenses of the immediate family members who are invited to join. The photos of a hundred plus couples celebrating their matrimonials together at one company has inevitably invited comparisons to cults such as Rev. Sun Myung Moon’s Unification Church. ([View Highlight](https://read.readwise.io/read/01j9pa4y8m10sh9yfd1x14kx9a)) - Employees are discouraged from ever complaining—a pet peeve of Jack’s—and encouraged instead to shoulder personal responsibility, carrying out or delegating tasks rather than waiting for orders from on high. ([View Highlight](https://read.readwise.io/read/01j9paa2z5cxjs0ggnh9crt5hj)) - Alibaba has codified its own company values in something it calls the Six Vein Spirit Sword. The term originates in the work of Jack’s favorite novelist, Jin Yong. The sword he writes about is not an actual weapon, but the art of building up one’s own internal strengths in order to defeat any opponent. In Alibaba’s case, the strengths that form the Six Vein Spirit Sword are akin to those outlined in the “Mission, Vision, and Values” of Jack’s favorite corporate guru, Jack Welch, the former CEO of General Electric (GE). ([View Highlight](https://read.readwise.io/read/01j9pad3xr40zndbkagac0m31t)) - “Leaders make sure people not only see the vision, they live and breathe it.” ([View Highlight](https://read.readwise.io/read/01j9paemgn768ea8yphm7gh162)) - Most of Alibaba employees work in sales, a much higher proportion than the more technical bent of competitors like Tencent and Baidu. ([View Highlight](https://read.readwise.io/read/01j9pag6bd6c4mqx0kknwpfb3x)) - Face-to-face visits are a key part of Alibaba’s sales methods. ([View Highlight](https://read.readwise.io/read/01j9pagpwsnekvm79wwg0t8pwt)) - *Alibaba might as well be known as “1,001 mistakes.” But there were three main reasons why we survived. We didn’t have any money, we didn’t have any technology, and we didn’t have a plan.* —Jack Ma ([View Highlight](https://read.readwise.io/read/01j9t9qh8tdjqp7vm3p2f9pkbk)) - “American B2B [business-to-business] sites are whales. But 85 percent of the fish in the sea are shrimp-sized. I don’t know anyone who makes money from whales, but I’ve seen many making money from shrimp.” ([View Highlight](https://read.readwise.io/read/01j9wwzdnfnrdzhezhd93v0rae)) - Jack later explained why he turned down the larger amount: “Why would I need to take so much money? I didn’t know how to use it, and there would definitely be problems.” ([View Highlight](https://read.readwise.io/read/01j9xy44sfyj1xbcdwrydktn2t)) - Yet eBay didn’t just want to back EachNet; it wanted to buy it. The initial deal[15](private://read/01j9jerkb9x12rshagt4xssgj2/#ch9en15) gave eBay one-third of the company but also an option to take full control, which it did just fifteen months later, taking its total outlay to $180 million. Rebranded eBay EachNet, the company became a vessel for eBay’s China aspirations. The decision to own EachNet outright set the stage for Alibaba’s triumph, and eBay’s humiliation. ([View Highlight](https://read.readwise.io/read/01j9zhh697f5rbstk5atp7yfjw)) - “At that time, there were only two companies in China that understood online marketplaces, eBay and Alibaba. I was particularly concerned that eBay’s power sellers would grow their business to compete in the B2B space.” ([View Highlight](https://read.readwise.io/read/01j9zhr4x3mnsak87y719n2mdj)) - Jack encouraged the team to do handstands. As a child, he explained, looking at the world upside down had given him a different perspective on life. ([View Highlight](https://read.readwise.io/read/01j9zv12pqafgas5fy2n6nhjbx)) - In a letter to employees distributed that day, Jack’s ability to inspire the troops, and to keep them focused on the company’s goals, was on full display: “We care for each other and we support each other. We never forget the mission and obligation of Alibaba, in face of the challenge from SARS. Tragedy will pass, but life will continue. Fighting with catastrophe cannot prevent us from fighting for the enterprise we love.” ([View Highlight](https://read.readwise.io/read/01j9zv893m82xjkvp6g4t6s8nw)) - Although Taobao was launched on May 10, visitors to the website could not discern any connection with Alibaba. Taobao made a virtue of its start-up status by relying on word-of-mouth marketing to popularize the site, including postings on the many free bulletin board systems and other online forums popular in China at the time. ([View Highlight](https://read.readwise.io/read/01j9zvh7c9nxrv2sye1a5gnwq5)) - The following year, just before the new investment led by SoftBank, Goldman sold off its entire 33 percent stake. The bank had paid $3.3 million for it in 1999 and sold it for more than seven times that amount five years later. ([View Highlight](https://read.readwise.io/read/01j9zw0dxtmqwk9yxft5e9pb4b)) - After Bo stepped down, eBay struggled to find a replacement, going through a series of executives, from James Zheng to a Taiwanese-born American, Martin Wu, newly hired from Microsoft China, who would last only twelve months. Whitman today rues the loss of the entrepreneur who had founded EachNet: “What I would have done is left Bo Shao in charge and owned the thirty percent of China that we originally owned and let him do his own thing.” ([View Highlight](https://read.readwise.io/read/01ja0j9bncb6d2dwvkzabzbsy9)) - In November 2003, Yahoo acquired 3721 for $120 million (with $50 million paid up front, and $70 million to follow based on performance in the following two years). The deal boosted Yahoo’s China team, from 100 to nearly 300. But just as eBay botched its acquisition of local partner EachNet, Yahoo’s efforts to integrate 3721 rapidly fell apart. The culture clash was immediate. Former Yahoo CFO Sue Decker recalls, “Zhou reportedly felt that the original Yahoos were overpaid and lazy, whereas the Yahoo team felt bullied and believed Zhou wasn’t focused on the Yahoo operations.” ([View Highlight](https://read.readwise.io/read/01ja0ntdap27dyx14ry3wcckdx)) - Although Alibaba had demonstrated its ability to build start-ups—Alibaba.com, Taobao, and Alipay—the deal brought much-needed experience in mergers and acquisitions, something that would become increasingly important in the future. ([View Highlight](https://read.readwise.io/read/01ja122esa6h35qf6ks1rzs1nv))