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How Did Alibaba Founder Jack Ma Start Up Alibaba Group?

By ESC Editorial Team, over 5 years ago People
How Did Alibaba Founder Jack Ma Start Up Alibaba Group?

On 15th October, 1964, Jack Ma was born into an ordinary family in Hangzhou. Since middle school, he had been particularly interested in English, so on every Sunday he would go to the West Lake in Hangzhou to chat with foreigners. From middle school to high school Jack Ma came first in almost all the English exams, but scored poorly in other subjects. When he participated in the College Entrance Examination for the first time he received top marks in the English exam. In contrast, his math score came bottom.

After failing to enter university, Jack Ma, together with his cousin, tried to apply for the job of a security guard in a hotel. The handsome cousin was hired while Jack Ma was rejected because of his weak appearance and physique. He had to find another job, which was to send books for magazine agencies. Heavy work thus distracted him from dwelling on those painful experiences.

At this time his father encouraged to him to have one more try to take the exam, and said, “You are not even tired after 20km on the road every day, so why not just try for the exam one more time.” So, after the second and third attempt, he was finally admitted to study English at the Hangzhou Normal University in 1984. After graduating he became a college English teacher.

In 1995, regarded as the ‘best English speaker in Hangzhou’, he was sent to America to dun for a debt on the commission of Zhejiang government. Although he went there and did not receive a cent, he discovered a hidden treasure – the internet.

Being aware that the internet might be something that can create a fortune, immediately after his return to China he borrowed RMB20,000 from his parents and set up a B2B e-commerce website – China Yellow Page. However, two years later, Jack Ma’s first start-up came to nothing.

In 1997, he was employed by the Ministry of Foreign Trade and Economic Operation, responsible for developing the official website and a webpage for Chinese commodities online trade. The following year he resigned from the public office, and founded Alibaba, the start of his second exploration in the business world.

Jack Ma’s co-founders not only included his wife, colleagues and students, but also many elites that were attracted by his charisma, one of whom was Joe Tsai, the CFO of Alibaba. He gave up the position of vice president in an investment company with annual salary of $750,000 and volunteered to work for Jack Ma. 

Jack Ma said, “What we will build is an e-commerce company. Firstly, I hope it is going to last for 102 years. Secondly, we will serve all the middle and small-sized enterprises in Chinese. Thirdly, we will make it the biggest e-commerce company in the world and a top ten global website.”

The goal was ambitious and inspiring but the reality was rather different. They were facing the biggest difficulty - capital shortage. Jack Ma started to look for some investors and, in spite of the tight pressure of funding, he carefully selected the candidate and rejected 38 VC providers. Finally, Jack Ma decided on several fund companies, including Goldman Sachs, who had injected $5 million to help Alibaba through the dilemma. 

Jack Ma had not expected Alibaba to be noticed by some more powerful investors but at the end of October 1999, Masayoshi Son, the CEO of Softbank and also the richest man in Asia, arranged a meeting with Jack Ma. He went straight to the point by asking how much money Jack Ma needed, but Ma replied that he did not need any money. When Son asked back why he came there if he didn’t need any money, Ma just replied that he was asked to come there. 

Son remembered that within 5 minutes of the meeting he had decided to invest $40 million. But Jack Ma only accepted $20 million, which he thought was enough. 

With the financial support from VC companies and consistent effort of the whole team, Alibaba gained remarkable growth and by 2011, its total revenue had reached ¥6 billion. And its subsidiary e-commerce websites, including Taobao, Alipay and Juhuasuan, provides thousands of customers with online services on shopping and payment. 

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Book Recommended:
Never Say Never – Stories of Jack Ma building the Alibaba Group

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