Jack Ma has built Alibaba, a Chinese e-commerce company, into a global giant. But he’s hardly surprised.
When he launched the company in 1999, Ma intended to change the world. During his first planning meeting with a group of colleagues at his modest apartment in Hangzhou, China, he asked someone to film the gathering for posterity.
From the outset, Ma, 52, thought like a savvy strategist. He called his startup Alibaba not only because of its “open sesame” imagery, but also due to its easy-to-pronounce name in many languages. As a bonus, he wanted a name that started with the first letter of the alphabet.
Other strategic insights that drove Ma’s success:
Pursue the right niche. In 1999, many Internet startups sought to attract big companies as clients. But Ma chose to target small businesses.
A fan of the movie Forrest Gump, Ma noted that the main character builds a big business by fishing for shrimp. He called his main competitors—American e-commerce websites—“whales” while concluding, “85 percent of the fish in the sea are shrimp-sized.”
Ride a wave. Ma was smart enough to identify a business on the cusp of explosive growth. In early 1999, China had 2 million internet users. Six months later, that figure doubled. Just over a year later, 17 million Chinese people surfed online.
Find a wise mate. An exuberant communicator, Ma partnered with an investor who was more staid. When he met Joe Tsai in 1999, he found his ideal business cohort.
Unlike Ma, Tsai knew finance and practiced law. He understood how to raise money to sustain a company through its early stages; and he spoke in a calm, reserved manner that contrasted with Ma’s high-energy enthusiasm.
— Adapted from Alibaba, Duncan Clark, Ecco Press.