Finally completed the fairly un-put-downable book "The House that Jack Ma built" by Duncan Clark. here are my top 10 takeaways -
Loved the book to help us intricately understand the pre-Internet era of China commerce and economy. The domination of the state enterprises and resulting customer apathy, resulting in the whole-hearted adoption of the internet and freedom of choice and expression that the Internet provided is indeed remarkable.
A good section of the book relates to Jack's early life, including mention of his Australian penpal friend who taught him English and helped shape Jack's "global" outlook. Early career days, all his trials and tribulations, it helped me understand that Jack was indeed an "unlikely" success, not born with a silver spoon - but very resolute.
The early days of Alibaba is indeed SUPER enjoyable. Also, providing the background of other "early" dotcoms of China namely Sohu (earlier Sohoo.. like Yahoo), Sina, Netease - the B2C focused segments; the founder backgrounds, how they raised capital. Their IPOs and the fall thereafter - beautifully captured. How Jerry Yang met Jack Ma in Jack's days working as an employee in the state owned enterprise. Wonderful read.
This would also bring us to Shirley Lin, the amazing woman who was the youngest partner at Goldman Sachs and was one of the earliest champions of China internet story, back in 1999. Her cheque was crucial to Jack Ma, and she was fully aware of it - leading to some interesting negotiation tactics - which Jack eventually, later in his life, terms as the worst deal he had done and the one "big regret" he had. Of course, Goldman Sachs was a big name to have on your cap table back then, to differentiate from the plethora of me-too startups. But just the desperation with which Jack handled the conversation (apparently calling her daily to wire the funds) can help me imagine why Jack hates that part of his life now.
Joe Tsai, being a thoroughly US bred guy, willing to get his hands dirty with Jack, once he had got funded - just by Jack's vision is .. umm.. stupid? Hindsight is 20/20 and am glad it worked out really well for him.. but just taking that risk based on a heroic speech by someone with a grand vision was phew!
"Stinky apartment" - galore! Early days at Alibaba was HARD work and by just saying "Hard work" we aren't even doing justice. Imagine working 18 hours for 7 days a week and this straight on for MONTHS. And very lame work of data entry, creating directories, sorting by various categories, converting Mandarin to English .. ugghh! Special salute to the early employees who were with Jack in this!
Then SoftBank happened! Son's magic - he invested in a bunch of startups in the China internet space.. similar to his Valley style. Son and Ma really hit it off - talking more vision and 30,000 ft level stuff. Again, a large enough stake was taken by Son as has been his forte.
B2C with Taobao! After launching one of the largest B2B directories with about 3M merchants, the company's B2B orders platform was ready to take off - however traction internationally was limited and there was burgeoning supply from the merchants. Plus, even within the "sock" city, the "silk" city etc, you could just buy 2-3 units and unstandardised inventory. This gave rise to the idea of B2C - catering to local China market. In this regard, credit must be given to the acquisition by e-Bay in China - EachNet for a whopping $180Mn. EachNet was China's largest auction website similar to E-bay. E-bay's series of mistakes in China is well-documented and Alibaba's resolve to fight those with Taobao - not intending to charge merchants for a long time - was BRAVE indeed.
Yahoooo in Alibaba - pure gold - just describing Yahoo's tribulations in China and final decision to invest $1Bn into Alibaba spelling the death knell for Ebay China and the meteoric rise of Alibaba / Taobao / Tmall platforms thereafter.
I am out of points right now - but very quickly - the 2007 IPO on Hong Kong exchange, subsequent de-listing. Removing Alipay from the Alibaba entity to one controlled by Jack Ma and Joe Tsai - subsequent rifts with Yahoo, SoftBank; amazing IPO and the soon aftermath of scrutiny for fake reviews, fake GMV etc. Jack's efforts beyond company building to build Billionaire's club, philanthropic efforts - All in All One of the greatest reads to understand Jack's, Alibaba's and China's internet journey.
Well done Duncan Clark! PS - Duncan is the "D" in BDA Partners - a globally renowned investment bank.
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