Executive summary of the book Alibaba - the house that Jack Ma built

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Alibaba – THE HOUSE THAT JACK
MA BUILT BY DUNCAN CLARK
Presented by : Anuranjan Kumar

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AUTHOR - DUNCAN CLARK

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Introduction – Alibaba Group
 Alibaba Group Holding Limited is a Chinese e-
commerce company that provides consumer-to-
consumer, business-to-consumer and business-to-
business sales services via web portals. It also
provides electronic payment services, a shopping search
engine and data-centric cloud computing services.
 It is the world's largest retailer as of April 2016
surpassing Walmart, with operations in over 190 countries, as
well as one of the largest Internet companies

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Jack Ma - Biography
 Ma Yun born September 10, 1964), known professionally as Jack
Ma, is a Chinese business magnate who is the founder and
executive chairman of Alibaba Group, a family of successful
Internet-based businesses. He is the first mainland Chinese
entrepreneur to appear on the cover of Forbes.
 Ma was born in Hangzhou, Zhejiang Province, China. Ma started
to study English at a young age and practiced English daily by
conversing with English-speakers at Hangzhou hotel. Ma
attended Hangzhou Teacher's Institute (currently known
as Hangzhou Normal University) and graduated in 1988 with a
B.A. in English .
 After graduation, Ma applied for 30 different jobs and got rejected
by all. He even went to KFC when it came to the city. Twenty-four
people went for the job. Twenty-three were accepted he was the
only guy who got rejected . In addition he applied 10 times for
Harvard and got rejected

5. + Jack Ma- Early Life
 In 1980, a scrawny Chinese teenager approached an Australian tourist
named David Morley in the southern Chinese city Hangzhou and asked to
practice English. The chance meeting would prove a pivotal one for Ma
Yun, who would later be known to the wider world as Jack Ma.
 Growing up in the Chinese province of Hangzhou, Ma used to cycle to the
Shangri-La hotel as a teenager just to speak to foreigners and improve his
English. Once he became fluent in the language, Ma got his first job as an
English teacher at the Hangzhou Institute of Electronic Engineering at the
age of 24.
 Author Duncan Clark explores how that early friendship helped prepare
Mr. Ma to found China’s largest e-commerce company, Alibaba Group
Holding Co., two decades later. Mr. Ma honed his English through years of
correspondence with the Morley family; his language studies paved the
way for his first trip to the U.S., where he discovered the Internet and was
inspired to start a web company.
 Jack Ma, the founder of the Alibaba group, was never a techie. He was
bad at math, failed twice in high school, and got his first computer only at
33. Ma’s route to becoming the billionaire founder of one of the world’s
largest technology companies came through English.

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Jack Ma – Life events
 For an assignment, Ma travelled to Seattle, US, in 1995 and was introduced to the world of
the Internet, where he famously typed in a search query for “beer”. There were no entries
for Chinese beer. Ma then searched for “China” and found no entries for the country either.
“Why don’t I make something about China?” he asked his friend Stuart Trusty, who worked
in Seattle as an Internet consultant. And that’s how Chinapages.com was born in 1995.
 The website did well, but the lack of a revenue model meant the company was short of
cash and vulnerable to takeovers. In 1996, a state-owned enterprise, Zhejiang Telecom,
took over the company. Ma lost control of his pioneering enterprise, and had to move back
to Beijing to take up a job in the ministry of foreign trade and economic cooperation, where
he built trade websites for the government. Buried under layers of bureaucracy was
frustrating, and in 1999, Ma left the ministry to start his new Internet venture, Alibaba,
which would cater to small businesses, and go on to become one of the world’s largest e-
commerce companies.
 After applying to several jobs, he finally got hired by a nearby university as an English
teacher!
 1995: First trip to the US and first experience with the Internet, after that he was
determined to make a Chinese internet company.
 Four years and two failures later, he persuaded 17 of his friends to invest in his plan for
“Alibaba

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Chapter 1 : The Iron Triangle
 Duncan begins this chapter by describing the events that occurred
on 11/11/2015 – a global shopping gala , Jack Ma stated that he
only wanted to display the power of the consumers . On that day ,
the sales crossed well over $14 billion , staggering amount that
were about times greater than the cyber Monday sales that were
launched in the US after a weeks .
 The Chinese rarely bought anything online , but Alibaba has
changed that over the years . For instance , household spending
drives about two –third of the US economy , but in china it didn’t
even amount to one –thirds . The Chinese spent very little and
saved their money . Further , Jack says that Alibaba was the result
of an accident . With no plan and money , the company had no
bright future , but thanks to its advantage in logistics , finance and
e-commerce (the company ‘s iron triangle ) the company finally
made headway.

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Chapter 2 : Jack Magic
 In this section , Duncan describes Jack Ma , the man who is
known as “alien” by his counterparts . Jack certainly doesn’t
look like an authority figure mainly due to his small frame and
owlish face with sunken cheeks . However, he has used his
face to his advantage . While other powerful entrepreneurs like
to boast their connections , Jack likes to talk about his humble
connections .
 What makes Jack succeed in his ability to cajole and charm
people . This quality , known as ‘Jack’s magic’ , has worked
well for Alibaba over the years . Taking his inspiration from
‘Forest Gump’ , Jack says that although everybody thought that
the lead character was stupid , he certainly knew what he was
doing . But , the very attribute that makes him the best is his
ability to communicate . With simple words , Jack ensures that
his message is clear and easy to understand . .

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Chapter3: From student to Teacher
 In this section , Duncan explored Jack’s early while growing up
in china . As a kid , Jack did everything to learn and then learn
some more. Today , he say that English helped him
communicate with the world and also made him understand the
vast difference between the rest of the world and china . Back
then , young jack struggled to get jobs and sent out at least 11
applications , but fortunately or unfortunately for him , all of
them including KFC rejected him
 Added to his troubles , was the fact that Jack was bad at math
.It’s mandatory for Chinese students to pass the ‘gaokao’- a
highly difficult test – to be accepted t prestigious universities ,
but Jack failed twice at it . However , he was accepted at a
local university that wasn’t considered the best .Jack continued
to study well and was financed by the Morley family .

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Chapter 4 : Hope and coming to
America
 As Jack turned 29 , he founded a translation agency known as
the Hangzhou Haibo . Haibo meant ‘hope’ and Jack hoped that
his agency would help old retired teachers to make some
money . These teachers had the expertise but they had no idea
how to talk to customer overseas .
 During the 1990s , Jack began thinking about quitting his
teaching career to build his business , but he , just like the
other Chinese entrepreneurs was worried . It was tough to give
up everything and become an entrepreneur in those days . As a
result , his agency sold flowers , gifts , books and other items –
a glimpse of what his company would do in the future .

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Chapter 5 : China is Coming On
 After his trip to Seattle , Jack returned to Hangzhou , but once he
realized that his future as a teacher couldn’t provide the future he
dreamed about , he immediately resigned . He now had a bigger
dream that didn’t include translating or teaching . He wanted to
build an online English index to help Chinese business receive
customers abroad . Although many people told him that his idea
wouldn’t work , he launched the china pages – a site that worked
online – and collected information on Chinese companies to
upload on the internet
 China pages was one of the first companies that were dedicated to
the internet in china . Jack faced quite a few adversities when
trying to boost the business , but once they were signed to host a
formula event , their business picked up . However there was one
major problem – there was no internet access in Hangzhou ,
where people didn’t even know what ‘online’ meant , Jack
continued with his quest to educate people about the internet

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Chapter6: Bubble and Birth
 After struggling with china Pages and Hope Translation , Jack
founded Alibaba in 1999 . However it took 2 years to get out of
China Pages and his government job. At this time, other
entrepreneurs marched ahead in full speed in china and people
were slowly becoming aware of the internet . China saw a flurry of
entrepreneurs and this was inspired by none than yahoo – a
company that was headed by David Flo and Jerry Yang
 Jack was frustrated and worried as the other gained incredible
momentum , but his meeting with Jerry Yang – the man who was
already a billionaire – changed his life . Thanks to government
contract , Jack was in charge of Jerry’s tour activities , and he
managed to be appointed as Yahoo’s exclusive sales agent in
china . Even after trudging ahead , Jack still late in the portal game
that was dominated by NestEase , Sohu and Siha . These portals
focused on individual users who came online , but Jack decided to
concentrate on small businesses that were still growing .

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Chapter 7 :Backers : Gold man and
Softbank
 China.com closed its first day at Nasdaq at $1.6 billion and this gave way
to many more dotcom companies that sprung up like weeds . With the
internet bubble gaining speed in china ,Alibaba had to fight to get its share
of attention . Jack visited many tech conferences and was recognized by
many as a powerhouse . Pretty soon , it was predicted that one would
make a lot of money by investing in Alibaba . This opened up Alibaba’s
doors to many international investors .
 By then , Goldman Sachs had also shown interest to invest in china where
the action was just taking off . However , with the locals unaware about
the internet and technology , it was pretty difficult to associate with
anybody even though they received thousands of proposals . Shirley ,
working for Sachs , met Jack and they finally agreed on buying 500,000
shares for $ 5 million . Jack had little choice but to accept . With 50% of
the company’s shares gone , he had to settle with fewer shares . Later ,
he would regret this decision and only half – joked when saying that it was
the worst decision he ever made .

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Chapter 8 : Burst and back to China
 By 2000 , Alibaba had more than 1000 members sign up each day
.It was great progress but there was immense competition from
other companies like Meetchina and Global sources .Jack realized
that he had to step up his hiring to match the speed of his
competitiors .at this point , there was a lot of talk of going public ,
but the other three giant online portals had hit a block the Chinese
government’s fear of giving up control was increasing by the day .
 However , thanks to a compromise between the government and
sina , the IPO was launched and the remaining two portals
followed suit .But , trouble soon reared its ugly head as the
companies couldn’t manage things once they went public . This
was because the bubble had burst and y eipo doors were shut for
many Chinese internet companies including Alibab .Jack saw this
as an advantage since his competitors woud stop getting funds
and began hiring foreign nationals and travelled extensively .

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Chapter 9: Born Again : Taobao and
the Humiliation of ebay
 With the three portal pioneers launching their IPO , Jack knew that
they were ahead of him , so he invited them to a business
conference with a Martial Arts theme . Later , wo companies that
were leading the Internet helm were felled due to their own
problems , leaving only Jack and Charles Zhang from Sohu to
continue with their companies .At this point , eBay was gaining
recognition as a top company due to its IPO valuation that had
grown from $2bn to 30bn in 2000
 Almost everybody wanted to start a company that resembled eBay
and shaoYibo , the man who founded Each net , surprisingly raced
ahead of the others , competing against Alibaba that was also
planning to take the eBay route .However Jack had finally met his
match in Shao Yibo who had just returned from Harvard school .
But , Each net soon discovered that they had to sell out to eBay
itself if they ever hoped to become the eBay of china

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Chapter 10: Yahoo’s Billion Dollar
Bet
 This chapter begins with a peek in to the life of Jerry Yang who
cofounded Yahoo along with David Flo .Like Jack , Jerry also
began with modest conditions , but his hard work on Yahoo
made him a billionaire within no time .With Jerry at the forefront
, the company had a lot of expectations in china . Luckily , the
site was a big hit in china , drawing signed up with Founder – a
company that had good connections with the government .
 After a while , Yahoo realized that they were failing in china ,
even though they had Founder alongside them . Founder’s
connections with the government didn’t prove to be as
successful as they thought it would be , and yahoo struggled
miseravly with poor content hosted on site . This failure opened
the floodgates to upcoming companies like Alibaba , Baido and
Tencent .

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Chapter 11: Growing Pains
 After eBay left Chinese market Taobao’s sales had increased
from $2bn to 30 bn , and this definitely spelt good news for
Alibaba. The Chinese economy also increased by 14 % giving
Alibaba a great opportunity but although other successful
companies had their IPO , Alibaba was yet to go public .While
others questioned their decisions , Alibaba was busy making
changes by hiring top executives from companies like Pepsi
and Walmart . Although Taobao was going great , it was still a
business that offered free listings , and they were yet to figure
out a way to monetize it . Therefore , Alibaba decided to only
list Alibaba.com in its first IPO . As the largest internet IPO in
entire history after Google , Alibaba was valued at $9 billion .

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Chapter 12 : Icon or Icarus
 Duncan ends with a quick summary of the challenges that lie
ahead of Jack Ma and Alibaba, including counterfeit products and
the rise of new and diverse competitors, namely Ten cent and its
wildly popular WeChat app, which recently snatched the title
of China’s most valuable tech company from Alibaba. Still, Clark
ends on a positive note, calling Jack Ma “the ultimate pragmatist”
and betting on Ma’s ambition to overcome future challenges
 Alibaba rose to glory and almost touched $ 300 billion , but soon it
plummeted hard , falling 50% below the initial price . The shares
had fallen mainly because of a dispute between Jack and a
member of a government agency . However , despite all odds , the
employees of Alibaba didn’t give up hope .Jack continues to
brainstorm new ideas today and even though Alibaba is treading
into dangerous waters and facing criticism each day , Jack’s
enthusiasm for life hasn’t reduced even a bit .

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CONCLUSION
 The rise of Alibaba, amid the booms and busts of the last two
decades, makes for gripping reading who wants to understand the
mechanics behind Alibaba’s success, is curious about why foreign
companies fail in China, or is generally interested in China’s tech
scene,
 In the most fascinating chapter of the book, we read about
Alibaba’s battle with eBay. Even as Alibaba launches a website—
developed in complete secrecy and called Taobao.com, with the
tag line “There is no treasure that cannot be hunted down, and
there is no treasure that cannot be sold”—eBay goes on to make
one tactical blunder after another. It gets the culture wrong,
sending in an American Chinese from San Jose in California, US,
to occupy key positions, leading to demoralization among the local
management
 The book works because it tells a business fairy tale, set in a little-
known land that everybody wants to know more about, where the
young hero, rejected several times by Harvard, creates such an
admirable enterprise that he is invited years later by the same
American institution as a speaker