The world is changing fast and to keep up you need local knowledge with global context.
One of my ancient forefathers, Robert The Bruce, is remembered – not just among Scots – for the lesson he learnt from a spider: it taught him to keep trying, trying and trying again. That force of character, that resilience runs strongly through the story of Jack Ma, founder and CEO of the Chinese e-commerce giant Alibaba. In this must-watch interview at the WEF with Bloomberg TV’s Charlie Rose, one of the world’s great modern day entrepreneurs offers a masterclass in entrepreneurship. But mostly the advice to never give up. Because it is to persistent tryers that the world truly belongs. – AH
When Alibaba went public with the largest IPO in history, we knew a lot more about him. I want to talk about his personal story. I want to talk about how many times he tried, failed, and what kept him going. I want to talk about where he is today, how he got here, where he is going, and how he expects to get there. If he gets there, what will it all mean for him and for the people that he wants to inspire? I’ll begin with this question, Jack. Why are you back at Davos?
It’s been a long break, for seven years. My last trip here was in 2008. I came in 2001, for the Young Global Leader for Tomorrow. I remember I’d never heard about Davos. When I arrived in Switzerland, so many young people were demonstrating. It was such a horrible scene and I asked them ‘why do you do it’, and they said ‘end globalisation’. I said that globalisation is a great thing. Why don’t people like it? We came all the way here for two hours. There was a machine gun, people checking us. We wondered if it was a film or a prison. When I joined the Forum at the Young Global Leader, I was thrilled by so many ideas. For the first three or four years, I learned what globalisation means, what cooperative citizenship means, and what social responsibility means – all these new ideas.
I saw so many great leaders, talking about leadership and I benefitted a lot. In 2008/2009, when the financial crisis came, I thought I’d better go back to work because we can never win the world by talking. I went back for seven years. Now, I came back and I thought that it’s time to do something in return. I learned so much 12 years ago, so why should I not be talking to the young global leader of today – sharing with them, how we go forward?
Let’s start with where you are today. Just how big is Alibaba? How many people come every day? How many people come in a week? How fast is it growing?
We have over 100-million buyers visiting our site daily and we created 40-million jobs for China – directly, and indirectly. We grew from 18 people to 30,000 people. We had 18 people in my apartment and now we have four big campers. Fifteen years ago, we were big but 15 years later, we are still a baby.
How big will you be, 15 years from now?
In the past 15 years, we grew from nothing to this size and 15 years from now, I want people to know about Alibaba because it’s everywhere. Fifteen years ago, we wondered what ecommerce was, why small business could use ecommerce, and Internet to do business across the nation. I hope that 15 years from now, people would forget about ecommerce. It’s like electricity. Nobody thinks its high tech today. Fifteen years from now, I don’t want us to walk on the street still, talking about how and why ecommerce can help people.
Let’s talk about the IPO. Did it exceed your expectations?
Well, it’s a small IPO.
Yes, the largest IPO in history. The Chinese Bank was #2.
Thank you. I remember that in 2001, we went to raise five million from venture capitalists (Dollars) in the U.S.A. and we were rejected. I said we’d come back, raising a little bit more. When we look at $25m, we look at how we can spend the money efficiently because this is not about the money; it’s about the world’s trust. They want to do better jobs and to help more people. They want to have a good return. Give me more pressure, because our market cap is bigger than IBM’s is. We’re bigger than Walmart. We’re one of the top 10/15 largest market cap companies in the world. I asked of my team and myself ‘is that true’. We’re not that good. Years ago, people said Alibaba’s model is terrible. It does not make money, etcetera. Amazon is better. EBay is better. Google is better. There’s no model like Alibaba in the U.S.A. I told people that we were better than people thought.
Today, being so big, I said ‘no, we are not as good as people thought’. We are just a company – 15 years old. The average age is 27/28 years for young people. We are doing something that human beings have never tried.
I want to talk about the future. Let me take you back to when you were born in Hangzhou where your headquarters still are, and the campus is there.
Don’t move your loot.
You grew up in the sixties (1964). That was the time of the Cultural Revolution.
Yes. It was the end of the Cultural Revolution. My grandfather was a tiny landlord. After the liberation, he was considered a bad guy. I know how tough it was when I was a kid.
You tried to get into three colleges. Each time, they rejected you.
If you’re a young person who wants to go to university, you have to take an exam, and I failed it three times. I failed at funny things. I failed a key primary school test twice and I failed thrice for the middle schools. In my city of Hangzhou, there’s only one middle school, which lasts for one year. It was changed from primary school to middle school, because no middle school accepted us as we were too back.
What effect did it have – being rejected?
Well, I think we have to get used to it. We’re not that good. Even today, many people still reject us. For three years, I tried the universities. I applied for jobs 30 times. I was rejected. I went for the police force. They said ‘no, you’re not good’. I even went to KFC. When KFC came to China, 24 people went for the job. Twenty-three people were accepted. I was the only guy who wasn’t. When five us of us went to apply at the police force, four people were accepted. I applied at Harvard and was rejected there – ten times.
They’re sorry now. Ten times, you wrote them and said ‘I’d like to come to Harvard’.
Yes, and then I told myself that perhaps I should go and teach there, one day.
I think that can be arranged. Richard Nixon came to Hangzhou and after that, tourists flooded the place, and that’s how you learned English.
Yes. When I was 12 or 13 years old, I suddenly fell in love with the English language and there was no place you could learn English at that time. There were no English books. I went to the Hangzhou Hotel (now called the Hangzhou Shangri-La Hotel), which received the foreign visitors. Every morning, for nine years, I showed them around as a free guide, and they taught me English. I think that changed me. I’m 100 percent ‘made in China’. I never received one day’s training, outside of China. When people talk to me, they say ‘Jack, how can you speak English like that? Sometimes you speak like the Western guys do’. I think those were the nine years. These Western tourists opened my mind because everything they told me was so different from the things I learned from school and from my parents. Now, I have a habit. With whatever I see and read, I use my mind.
Is that how Ma Yun became Jack Ma?
Actually, the name Jack was given by a lady in tennis. She’s a tourist who came here. She came to Hangzhou. We became penfriends. Ma Yun is so difficult to pronounce, so she said ‘do you have an English name’ and I said ‘give me an English name’. She said ‘okay, my father’s named Jack. My husband’s named Jack. What do you think about Jack?’ I said ‘good’, so I’ve been using that for many years.
Your first visit to America was in 1995.
Yes. I came here for a project – helping the local Government to build a highway.
You tried the Internet.
I tried the Internet in Seattle in a building, called the U.S. Bank. I don’t know whether the U.S. Bank is still there, or not. My friend opened a small office – only ten percent bigger than this room, which held many computers. He said ‘Jack, this is Internet’. I asked ‘what is Internet’. He said ‘search for whatever you want’. At that time, they used Mosaic – very slow. I said ‘I don’t use it. I don’t want to type’ because computers are so expensive in China. If I destroy it, I cannot pay. He said ‘just search it’, so I searched the first word – beer. I don’t know why. Possibly because it’s easy to spell. I saw beers from Germany, U.S.A., and Japan but there are no beers from China, so I typed the second word – China. No data. Nothing.
1995, No data about China. I asked my friend ‘why not make something about China’ so we made a small, very ugly looking paged, called China. It’s similar to what I did at a translation agency. We were listed on there. It was so shocking. We launched it at 9:40am. At 12:30, I got a phone call from my friend who said ‘Jack, you have five emails’. I asked ‘what is email’. He said these are the things that so excite people. Where are you? This is the first time I see a Chinese website on that. Can we do something together? I thought that this was something interesting, so we should do it.
Why did you call it Alibaba?
Well, Internet is Global. We should have a global name, and an interesting name. At that time, the best name was Yahoo! I’d been thinking for many days and suddenly, I decided that Alibaba is a good name. I happened to be in San Francisco that day. I had lunch and the waitress came. I asked her ‘do you know about Alibaba’? She said ‘yes’. I asked her ‘what is Alibaba’? She said ‘open sesame’. Good. I went down the street and asked 10/20 people. They all know about Alibaba and the Forty Thieves, and ‘open sesame’. I thought ‘this is a good name and it starts with an A’. Whatever you talk about, Alibaba’s on top.
You have said before that in creating Alibaba, you had to create trust because people in China were used to face-to-face. How did you create trust?
When you start doing business via the internet, I don’t know you and you don’t know me. How can you do things online unless you have trust? For e-commerce, the most important thing was trust. When I first went to the U.S.A. to raise money (talk to the venture capitalists), many people said ‘Jack, China does business via guanxi. How can you do business via the Internet’? I know that without the trust system, the credit system is impossible to do business. In the past 14 years, everything we do is about trying to build up the trust system. Charlie, I’m so proud today. Today, in China and in the world, people don’t trust each other. The Government, people, media, and everybody think ‘this guy’s is cheating’. Because of e-commerce, we finish 60-million transactions daily. People don’t know each other. I don’t know you.
I send products to you. You don’t know me. You wire the money to me. I don’t know you. I give a package to a person. I don’t know him. He took something across the ocean – across the river. This is the trust. We have at least, 60-million trusts happening every day.
You created it by creating an escrow account in the beginning and so, you keep the money until they got the product. Then you release the money.
That’s true. The escrow service is about how we pay. For the three years, Alibaba was just an e-marketplace for information. What do you have? What do I have? We talk for a long time, but don’t do any business, because there is no payment. I talked to the banks. No banks wanted to do it. Banks said ‘oh no, this thing would never work’ so I didn’t know what to do. If I start to launch a payment system, it’s against the financial legal laws because you need to have a license. If I don’t do it, e-commerce will go nowhere. Then, I went to Davos. I listened to a leadership discussion. Leadership is about responsibility. After I listened to that panel, I made a call to my friends/colleagues and said ‘do it now – immediately’. If something’s wrong and the Governor’s unhappy about that; if one body has to go to the prison, Jack might go. It is so important for China and the world to be able to trust the system.
If you do not do it properly (by stealing money or money laundering), I’ll send you to prison. People don’t like it. So many of the people I talked to at that time, for Alipay, say ‘this is the stupidest idea you’ve ever had’. I say ‘I don’t mind that it’s stupid, as long as people use it’. Now, we have 800-million people using this Alipay.
Alipay is privately held. It’s not part of Alibaba. You have never gotten money from the Chinese Government.
No, none. In the beginning, I wanted it. Later on, I didn’t want it because if the company’s always thinking about taking money out of the Government’s pockets, that company is rubbish. Think about it. How can you make money from the customers and the market, and then help customers succeed? That’s our philosophy.
No money from Chinese Banks.
No. At that time, I wanted it. Now, they want to give it to me, but I don’t want it.
What’s your relationship with the Government? Here’s what some say; that you have existed in an environment where they have restricted competition for you, and that’s a pretty good thing to do, for a private company.
I think the relationship with the Government is very interesting. I’d been working at a part-time job for the Government’s Ministry of Foreign Trade for five years (for 40 months, in 1997). I learned that you should never rely on a Government organisation to do e-commerce. I started the business. I told my people (the team) ‘be in love with the Government, but don’t marry them’. Respect them. Other people say ‘Government officers are about the Internet censorship, etcetera’. I think it’s an opportunity. Talking to them is a responsibility. Tell them how the Internet can help.
So you tell them we create jobs.
Yes. Many people debate and fight against them. In the first 12 years, I would sit down with anybody who came to my office and talk to them about how we can help the economy, how we can create jobs, and why China will improve via the Internet. At that time, the Internet was new to any government. If you can convince somebody, you have a chance. Today, I’m very talkative. This is probably why I talk to so many people.
So the Government comes to you and asks you to do something for them.
Normally, when Government says ‘Jack, can you do this project’, I say ‘no. I can introduce some friends who are interested in doing that for you’. If they continue to want me to do it, I say ‘okay, I’ll do it but I won’t charge’. Next time, I hope you won’t come to me again. Every Spring Festival, the train tickets are so difficult. Hundreds and thousands of farmers work in the same cities. During the Spring Festival, they go to the hometown but when they order tickets the other way, the whole system crashed for five years. I told my young people to go and support them. Don’t charge anything. I don’t want to see millions of farmers go back to the city, and then they cannot buy the tickets. It’s not something that’s for money or for the Government. It’s for the millions of people. They can buy tickets on a snowy night and they don’t have to wait. They just buy, using a mobile phone, and they’ll get a ticket online.
One way stop along the route to where you are and that big IPO was Yahoo! Gerry Yang invested $1bn. It turned out to be a pretty good investment for Yahoo! One time after another, you raised this money on your own – outside of China – with investors.
Yes. I’m very thankful for all the investors because in 1999/2000 and even at the Yahoo! time, many people said ‘this Jack is crazy. He’s doing something that we don’t understand’. Many venture capitalists give you money because an American model is already there. However, when they saw Alibaba they said ‘we don’t see this kind of model’. I remember my first time in Time Magazine. They called me Crazy Jack. I think crazy is good. We are crazy, but we’re not stupid. We know what we’re doing. If everybody agreed with me and everybody believed my idea is good, then we have no chance. We are very thankful for the money we raised. When our investors make lots of money, I feel proud and honoured.
As you know, in the United States, issues have risen about privacy – Google and Apple – and questions of whether the Government should have access to files. How do you handle that if the Chinese Government says ‘you know a lot about people? You have transactional relationships with lots of people’ and they say ‘we want to see your files’.
Well, so far I don’t have these types of problems around the Chinese Government. I told them ‘if any government comes here for the national security/anti-terrorism, we’ll work together. If it’s a criminal, we’ll work’. As for the rest of it, we are a business. The data is so precious that if we give it to anyone, it will be disastrous. Regarding privacy issues: just as it was hundreds of years ago, people say ‘I would rather put money under my pillow than put it in the banks’, but today, banks are special. They know how to protect money much better than you do. Privacy issues: we may not have all the solutions regarding security. We don’t have the answers but I believe that our young people have the solutions. In the next ten to 20 years, there will be a breakthrough on that and I have full confidence in that.
Your life is a testament to the idea that nothing is impossible, that if somebody says ‘no’, you say ‘it’s just the beginning’. Where does that come from?
When I was young, I said everything’s possible. Now I know not everything is possible. You have to think about something. You have to consider others. You have to consider the customers, society, your employees, and your shareholders. There are so many things. If you continue to work hard, there’s a possibility. I just feel that I’m enthusiastic about what we are doing. At the beginning, for the first five years, I just wanted to survive. Later, I thought ‘wow, so many people’s lives changed’. I was so excited. For the first three years, we made zero revenue but we were so excited to continue to work. Many times, I’d go to restaurants and have dinner. When I tried to pay the bill, the owner of the restaurant came to say ‘sir, your bill has been paid by someone’ and a small note, saying ‘hi, Mr Ma. I’m your customer of the Alibaba platform’.
‘I made a lot of money and I know you don’t make any money. I paid the bill for you’. One day, when I was sitting somewhere having coffee, somebody sent me a cigar. I don’t smoke cigars, but there was a note, saying ‘thank you very much. I’m your customer’. I remember the days I went to Shangri-La Hotel in Beijing. When I got in the taxi, boy at the gate opened the door for me. He said ‘Jack, thank you very much. I’m so scared. My girlfriend makes more money on your site than I do’. If you don’t do it, nothing’s possible. If you try to do it, at least you have hope.
The revenue comes from advertising and in a smaller amount, from transactional fees – most of it, from advertising.
Tiny, from advertising.
Tiny, from advertising. Tiny, from transactions because we need big mass. Now, we have more than ten million small business power sellers, selling our site everywhere. The transactions we have, is second after Walmart.
Second after Walmart.
Yes. Even though the money is tiny, it already makes us big. I remember one of the Senior Management of Walmart guys came to Hangzhou five years ago. He said ‘Jack, you did a great job’. I said ‘maybe in ten years, we’ll be bigger than Walmart’. He said ‘you have hope’. I said ‘we’ll make a bet. In ten years, we’ll be bigger than Walmart on sales’. If you want to have ten thousand new customers, you have to build a new warehouse, etcetera. For me, it’s two sellers.
What’s your market cap versus Walmart today?
I don’t know.
I think so. Maybe we should check later.
Where are you going? What does Jack want?
Alibaba is an Internet company that happens to be in China. We have the same entrepreneurial spirit, just as every great entrepreneur has in the world. I remember the day I started Alibaba. We had a mission. We wanted to make things easier for small businesses. Today, millions of small businesses are using our platform to sell things and over 300-million consumers buy things from our site – cheapest and efficient. What I’m thinking is how we can make Alibaba a platform for global small businesses. My vision is that, for example, we can help Norway small business to sell things to Argentina, and Argentinian consumers can buy things online from Switzerland. We can build up, what I called the WTO. The WTO was great in the past century, but the WTO helps so many big companies to sell things across the nation. Today, Internet can help small businesses sell things across the oceans and across the nations. I hope that we can serve two billion consumers.
Two billion consumers.
Two billion consumers. We can help small businesses outside of China.
Outside of China.
Outside of China. We help the American farmers in Washington State – almost 300 tons of cherries to China last year. Before, the Ambassador of the U.S. came to me and said ‘Jack, can you help us sell cherries’. I said ‘why not? Let’s try it’. When we start to sell cherries, the cherries are still on the trees, so we start a pre-order. Eighty thousand families ordered cherries online. We picked up the cherries and shipped them to China. Within 48 hours, we sell the cherries. The consumers are so happy and we got many letters of complaint after three days, to say ‘why only 100 tons? Why shouldn’t we get more?’ Two months ago, we helped Costco. We sold 300 tons of nuts to China. We’re also selling Alaska seafood to China. If we can sell seafood and cherries, why can’t we help American and European small businesses sell these things to Chinese consumers? China needs that. This is what I want to do. Two billion consumers in China, Asia, and the developing nations. How can we enable them to buy things globally?
Alibaba rode with the millions of people that went from poverty to the middle class, in China. You were right there, growing as they grew, and increased. When you look at the international markets, you’re doing well in Russia. How well?
We do rather well in Russia and Brazil. If we’re not #1, then we’re the second or third largest ecommerce in Russia. Last year, we had a campaign. The campaign was that many Russian girls and boys want to buy things from China. Do you know how long after a Russian girl waits to receive her product from China after she placed her order? Two years ago, it was four months. Even with that, people were still happy. Last year, with the campaign, it was done in one week. We crashed Russia’s whole logistics system.
You’re also seen in Hollywood. What are you doing in Hollywood?
I like the Hollywood innovation. I learn so much about the Hollywood movies, especially Forrest Gump.
You love Forrest Gump.
I love Forrest Gump.
Why do you like him?
It’s simple. Never give up. People think he’s dumb, but he knows what he’s doing. I was very depressed in the States when I could not find a way for the Internet. Then I watched the movie. When I saw him, I thought ‘this is the guy we should learn from’. Believe what you’re doing. Love it, whether or not people like it. Be simple. Like the phrase, life is like a box of chocolates. You never know what you’re going to get. I never knew I would be here, talking to you and talking to Charlie Rose. I never know, but today, I made it. Fifteen years ago, I told my people in my apartment, ‘guys, we have to work hard – not for ourselves. If we can be successful, 80 percent of the young people in China can be successful. We don’t have a rich father or a powerful uncle. We don’t have $1.00 from the bank. Just work as a team’.
So what do you worry about?
I worry about young people. Many young people lose hope, lose vision, and start to complain. Being rejected by so many people is not a good feeling. We also become depressed but at least, we later find that the world has a lot of opportunity. How do you see the world? How do you catch the opportunity? Hollywood gives me a lot of inspiration.
You’re out there for business. You’re out there because you want to make movies and sell them.
I want to make a movie for business. We are an ecommerce company. We have many products that need logistics, but movies and TV are things that don’t need a logistics system. Movies are probably the best product that can help young Chinese people to understand. One thing I told my friends is that In American movies, all the heroes look like a bad guy in the beginning. When terrible things come, they become heroes and finally, they all survive. In China, if you’re a hero, all the heroes die. Only dead people become heroes, so nobody wants to be a hero.
You want to change the Chinese definition of a hero.
Yes. I want to say that today we have so many heroes living in this world.
Are you still writing this Kung Fu novel, or just reading them?
I read them and I started to write something. Kung Fu is something you start to think about – something you can add to, but if you have some luck, if you continue to practice, if you have a good master and a good team, you can become an expert. When I’m tired and frustrated, I read a Kung Fu book.
You also travel with a Tai Chi trainer. What does that do for you?
I love Tai Chi. Tai Chi is a philosophy about Yin and Yang. Tai Chi is about how you balance and how you work. When I compete with eBay, people say I hate eBay. No, I don’t hate eBay. It’s a great company. Tai Chi is like ‘you fight there and I’ll go over here. You’re at the top, and I’ll go down’. It’s a balance. You are heavy and I’m small. When I’m small, I can jump. You’re heavy. You cannot jump. Tai Chi is about a philosophy. I use Tai Chi philosophy in the business. Calm down. There’s always a way out and keep yourself balanced. Business is a competition. Competition is fun. Business is not a battlefield where you die or I win. Even if you die, I may never win. It’s about fun. Tai Chi gives me a lot of inspiration.
But you want your life and you want this company – Alibaba – to change the world. You’re changing the world if in fact, you provide a forum for buying and enable people to earn a living. In addition, you believe that Alibaba ought to change the lives of women, so what are you doing?
Many years ago, I wanted to change the world. Now, I think that if we want to change the world, we have to change ourselves. Changing ourselves is more important and easier than changing the world. Secondly, I want to improve the world. Changing the world may be Obama’s job. My job is to make sure that my team are happy. If my team are happy, they make my customer happy. My customers are all small businesses. When they are happy, we are happy. One of the secret sauces of Alibaba’s success is that we have many women.
What percentage of women are employed?
Two months before we were an IP, an American journalist came to our company. She asked me a question. “Jack, I’ve seen so many women in your company”. I asked ‘what’s wrong’. Forty-seven percent of our company’s employees are women.
Forty-seven percent of our company are women. We actually had 51 percent because we acquired some companies who have more men, so we balanced that.
These are women in top-level positions.
Thirty-three percent of the management are women and 24 percent of the very top level, are women. Our CEO, CFO, and CPO are women. I think it’s so comfortable working with them. In this world, if you want to win in the 21st century, you have to make ensure that you are empowering people who are better than you are. Then you will be successful. I find that women think about others more than they think about themselves. Women think about the kids, husband, and parents much more than the men do and they’re friendly.
A couple of things I want to talk about before we go because at best, we have a couple of minutes. China today: are you worried that the economy’s slowed down?
No. I don’t worry about it. I think China slowing down is much better than keeping at nine percent. China today, is the second largest economy in the world. It’s impossible to keep nine percent of the growth. If China still keeps nine percent of the growth of the economy, there must be something wrong. You would never see the blue sky. You would never see the quality. China should pay attention to the quality of the economy. If we have a lot of influence such as horror movies and sports etcetera in the GDP, we’d be much better. As with a human body, this body can never grow, grow, and grow. At a certain time, your body’s growth will slow. Make sure you grow your mind. Grow your culture. Grow your values. Grow your wisdom. I think China is moving in that direction.
Did you see Modi in India?
Not yet. I’m looking forward to that.
Oh, you’ll go to India. Finally, there’s this: you’re one of the world’s richest people. Your company is one of the world’s richest companies. What do you want, beyond Alibaba?
Well, in the past three months, I was really, not happy when people said ‘Jack Ma is the richest person in China’.
Global celebrity, they said.
No, I’m not.
Maybe I am now, but 15 years ago, my wife was one of the 18 founders. I asked her ‘do you want a husband to be a rich person in Hangzhou or do you want your husband to be a respected person’. She said ‘of course – respected’ because she’d never believed (as I didn’t) that we’d be rich people. We just wanted to survive. I believe that when you have $1m, that’s your money. When you have $20m, you start having problems. You worry about inflation and what stock to buy, and so the headaches come. When you have $1bn, that’s not your money. That’s the trust society gives to you. They believe you can manage the money, and use the money better than the Government and the others could. Today, I have the resources to do more things with the money and influence we have; we should spend more time on the young people. I would say ‘someday, I’ll go back to teaching’. I’ll go back to school, spend time with the young people and sharing with them what I’ve done. The money’s not mine. I just carry it happily, and having these resources, I want to do a better job.
Just tell them your story.
Yes. Tell them the story. I don’t think that in this world, many people would be rejected more than 30 times. We never give up. We’re like Forrest Gump. We keep fighting. We keep changing ourselves. We don’t complain. Whether you are successful or not, I find that when people finish the job – whether they make a mistake or fail – they always complain to others. ‘This guy will never come back’. If the guy only checks himself, for example ‘here’s something wrong with me’, that guy has hope.
Jack, on behalf of everybody in this audience and our television audience around the world, thank you for taking your time to be with us.