From a $15/month teacher to $500B (Alibaba)

$15/month - this was the salary of Jack Ma back in 1999. He worked as a teacher at a university.
$500 billion dollars - that's how much Alibaba, his company, is worth 20 years after he quit teaching.

How did he manage to achieve this?

1. From 12 till 20 Jack rode his bike for 40 minutes every morning, rain or snow, to a hotel where a lot of foreign tourists stayed. He offered himself as a free guide to practice his English and expand his mindset beyond what China preached.

2. After school, he tried to enter the city's worst university and failed ... 2 times. He was accepted only after the third attempt.

3. After he graduated, he was assigned to teach at a university for $15 per month.

4. In 1992, he applied for 30 jobs, but nobody wanted him, even Kentucky Fried Chicken.

5. In 1995, he went to Seattle, USA, as an interpreter, where he saw the Internet for the first time. He discovered that there was no data about China on the Internet. So he decided to launch a website "China Pages".

6. He borrowed $2,000 to set up the company, knowing nothing about computers - he had never touched a keyboard before that.

7. His friend created an "ugly" website related to China. He launched the website at 9:40 AM, and by 12:30 PM he had received emails from some Chinese investors wishing to know about him. This is what happens when you are first in a super hungry market.

8. In April 1995, Ma, his wife Cathy and a friend raised $20,000 and started their first company "China Pages".

9. Within 3 years, the company had made $800,000 by creating web pages for Chinese companies.

10. Then a huge competitor invested $185,000 to do a joint venture. Ma accepted but ended up having no control and the company was killed.

11. Ma took up a government job, working at the Ministry of Foreign Trade to promote e-commerce. In this role, Ma encountered Jerry Yang, a co-founder of Yahoo. The two became friends, and Jerry would eventually secure a Yahoo investment of $1 billion for Alibaba in 2005.

12. On 4 April 1999, Jack Ma gathered 17 friends in his apartment and pitched the concept of an e-commerce platform. His friends invested $60,000.

13. Because of their location - Hangzhou, that was far from big cities, the biggest problem for a lot of local graduates was the lack of employers. That allowed Alibaba to hire employees for $50/month and require working 7 days a week, 16 hours a day.

14. Soon they launched Alibaba marketplace. It allowed small/medium businesses to sell their stuff online. In order to grow fast, Alibaba offered their services for free. They were the first to solve a huge problem + they were free. It made them grow like crazy.

15. When government officials approached Alibaba for help solving a crashing ticket vending system, Ma and his team offered to help fix the problem free of charge. In exchange, government agencies tended to leave them alone.

16. Jack Ma carefully selected several potential VC investors from Silicon Valley, arrived there and pitched them one by one.

17. In October 1999, Goldman Sachs invested $5 million in exchange for 40%.

18. In January 2000, SoftBank invested $20 million more for 34%.

19. Jack Ma made crazy claims to the press about how fast the company would grow. That trick gave him a lot of free advertising in the press.

20. Alibaba sent out a large sales force to fan out across the country, visiting factories one by one to show them how they could use Alibaba to sell stuff online.

21.1. By 2002, they had only enough cash to survive for 18 months. By this time, Alibaba made $0 and didn't know how to make money.
21.2. So, they developed a product for China exporters to meet U.S. buyers online. This model saved Alibaba. They started to make money.

22. In 2003, Ma and his team launched an online auction site named “Taobao.” To beat eBay, they charged zero commission. To make money Ma and his team began offering peripheral value-added support services (such as custom web pages for online merchants) for a small fee. Taobao eventually won over eBay.

23. They grew so rapidly, that in 2005, Yahoo! invested $1 billion in Alibaba in exchange for 40%.

20 years after it was founded Alibaba is worth $500 billion.

Source: en.wikipedia.org


Cheers,
Charlie Patel ;)



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