Continue of 7 Secrets of Jack Ma Entrepreneurship Lesson Part 1
This is a talk by Jack Ma, the former Chairman and CEO of Alibaba Group. Jack Ma shared his experience to the aspiring entrepreneurs who are joining “Win In China” competition, a reality show for aspiring entrepreneurs to win 10 million RMB for their business startup. In the 1st season, 3000 participants were selected to join the interview session and 108 participants will be selected to join the competition officially.
Jack Ma – Win In China – Part 2
4. Elephant Can’t Kill Ant
Jack Ma’s China Yellowpages business was competing with China Telecom. It was a very tough competition. His capital was 50,000 RMB and China Telecom’s capital was 240 million RMB.
“I think our competition with China Telecom was quite successful. Through the experience, I still believe that we shouldn’t afraid of giant company. Elephant won’t kill ant easily. You just need to hide smartly and having a good strategy. You will survive. After 8 months competition, China Telecom was unable to beat us while we also didn’t know how to beat them. After that, we had a joint venture.”
There were an interesting incident happened after the joint venture. It was actually a disaster. China Telecom invested 1.4million RMB in this deal and they have more members on board. During the board meeting, Jack’s suggestions were turned down by the board members.
“From my perspective, I can do so much with 1.4million RMB from China Telecom. However, from their perspective, they spent only 1.4million RMB to destroy Jack Ma’s venture. I got the fund, but I lost the most valuable thing, the venture that I execute well in the beginning.”, He mentioned.
5. Be The Role Model of Employee
Jack Ma founded his third company, Cofortune Information Technology. This is a successful company, making profit of 2.9 million RMB in 14 months. However, there was perception different among the leaders. Jack Ma’s believed that internet-based is the future of Ecommerce. However the other leader believed in EDI (Electronic Data Interchange).
“When your belief is different with the leader, remember, the leader is always right. If you cannot change him, you change yourself. Therefore, I decided to follow my belief and start over again. Although the company made 2.9 million RMB profit, I didn’t take any cent when I left.”
“I brought 6 people from Hangzhou to build Cofortune. The team has grown to 50 to 60 people. When I left, I didn’t get anyone to follow me. Remember, this is the rule of the game. When you decided the left the company that you have started, and you get the people in the company to follow you, one day later, your employee will do the same.”
“When I left Beijing to start over again, I met with the 6 people who followed me to Beijing in the beginning. I told them, if you are willing to follow me going back to our home (Hangzhou) to start a business again, I’ll give everyone only 500 RMB and everyone must rent a house nearby because I don’t have much fund for your transportation. We will work non-stop for 10 months. If we fail, we just look for a new job.”
Jack Ma offer 3 days to the team to think about the offer, but they came back after 3 minutes. They told Jack, “let’s go home, let’s start over again!”. Alibaba was started then, followed by Taobao.com and Alipay.
6. You Are The Parents and VC Is the Uncle of Your Business
Alibaba received investment from Son Masayoshi, who is also the 2nd richest man in Japan. Jack Ma mentioned that when dealing with Venture Capitalists, always show the respect in the eye.
“Both sides are equal, when VC asking you 100 questions, you should ask at least 99 questions too.”
“You must understand the belief of the VC when he/she investing and he / she investing in us. We should talk about the worst situation and understand each other’s role in this situation. However, many entrepreneurs only like to talk about how successful they can be.”
“Both side should write down the promise to each other. This is mutual, like a marriage agreement.”
“The communication with VC is very important. Don’t feel that VC is the grandfather. VC is always the uncle and you are the parents of your business. You know how to grow your child (business), and the uncle can offer you advice and money to buy powdered milk and clothes. The responsibility to grow the child is always in your hand. So, VC’s fund is to grow your business. It is not to save your business.”
“When should you raise fund from VC? Remember, it is not when you are poor, always raise fund when your company is having the best performance. One shouldn’t repair the rooftop during the raining day, but it should be done during sunshine day. Same goes to the company transformation, always do it when your company has the best circumstances”
7. Hire Smart People Instead of The Master
“We should find the suitable people to join our team.” Jack Ma don’t like to invite popular business people to join the board of director because these big man seldom spending their time in your small company.
“I hired a vice president for first time. We had only USD$5million budget and the Vice President request for at least USD$1.5million. It was because the Vice President had the annual budget with at least USD$40million previously. When he came to our company, the amount was too little for him, but I felt that the amount can do so much advertising activities.”
“Different people have different perspective. Find the right people according to your level and needs. Always remember small company shouldn’t hire the master.”
“When your company is small like a tractor, and you hire the master who has Boeing 747’s engine, your tractor (company) will break when the engine start. Therefore, please do not ask for gorgeous (popular) one when getting people to join your team. Small company should hire smart people with the right mentality.”, He said
Besides these key points, of course, there are more that we can learn from this sharing. For example:
“What an entrepreneur wants is the experience of building the business. In our life, we seldom regret with the things that we have done, but we will regret with this things with haven’t done when we are old. From the first day starting the business, we should already know it is not an easy way, but the experience will be the most valuable asset in life.”
“The best negotiator is always the best listener.”
“One must have a big heart to compete with the competitor in business. Competition is fun. If you feel struggle when competing with the other companies, there must be something wrong with your strategy. Although we have competed with many companies such as eBay, but in my heart, I never see them as my competitors.”
“The most valuable thing between you (entrepreneur) and employee is trust. You must trust them and I never hide any good and bad things from the employees.”
“I have seen some employer who did not know how to criticize the employee. When meeting with employee, the employer praised the employee before criticizing. In the end, the employee didn’t know what is wrong and remains the same. In this situation, we should act fast when we have the decision in mind. This is also our responsibility to the employee.”
This Article is provided by Ray Beh! The Founder of Frambie
Source of the Lessons: http://www.youtube.com/watch?v=BXwfLYgcZ9U