Alibaba's World (4 page)

However, Hong Kong’s “new economy” seemed to be dominated by the sons and daughters of a handful of established tycoons. As I walked around the room exchanging cards, people
chatted less about their company’s vision or business models and more about which tycoon was backing it or how much money they’d just raised. With cocktails flowing and people dressed
in expensive suits and party dresses, it felt more like a movie premiere than a gathering of tech start-ups.

Nevertheless Jack Ma’s first speaking event in Hong Kong had attracted a huge audience. In a city where money talks, Alibaba’s having raised $25 million from leading investors was
enough to bring out the Internet industry in full force. Dressed more casually than most of the other partygoers, Jack arrived and slowly worked his way through the crowd, set apart by his
diminutive figure and elfin features. After being introduced by the event’s organizer, Jack took the stage:

It seemed a mature point of view—he recognized his limitations and those of his cofounders and knew when to pass the baton. Jack continued: “So what is Alibaba? I remember I gave a
talk in Singapore, and the topic was e-commerce in Asia. And I looked around the panel, and all of the speakers were from the USA. And I thought that Asia is Asia and America is America. Asia has
its own way of doing e-commerce. So our goal with Alibaba is to be the top business-to-business [B2B] marketplace in the world. We will combine Asian wisdom and Western operations.”

The crowd clapped, both inspired and entertained. People were starting to warm up to Jack.

“Business-to-business websites in the West go after the big companies, the whales. But in Asia commerce is dominated by the shrimp. So we are going after the shrimp. It’s easy to
catch a shrimp. But if you try to catch a whale, you might get hurt.”

The crowd laughed. A hand went up in the audience. It belonged to an analyst from a major investment bank.

“That’s great, Jack, but what’s your revenue model?”

“Well, there are a lot of ways we can make money someday. But right now our website is totally free, because we want to
attract new members. Once our members make
money, we will make money.”

“But you didn’t answer my question,” the analyst followed up. “How will you make money?”

“If I told you, I’d have to kill you,” Jack joked. Both laughter and snickering followed his remark. Yes, Jack was funny. But he was trying to convince an audience full of
investors and bankers that they shouldn’t be thinking about making a profit at this point.

“We will make lots of money someday,” Jack continued. “But right now we are running too fast for revenues.”

The day after the event my colleagues in the Hong Kong office passed along an article that appeared on a leading industry news site, Internet.com: “Alibaba Running Too Fast for Revenues,
Says CEO Ma.” In an era when dot-coms were coming under increasing pressure to generate revenues, the highly critical article was not well received. And as the head of PR I was the first to
hear about it.

“Porter, what is this?” one of the newly hired directors asked. She had just left a major investment bank and generous compensation package to join Alibaba and didn’t seem
amused by her new boss’ style. “We really need to move beyond the Jack Ma story. He was a great founder, but we really can’t have him talking the way he does. No one will ever
take us seriously. We’re supposed to be a business-to-business marketplace.”

Another manager pulled me aside. “It’s really time for Alibaba to get Jack out of the spotlight and get the focus on our other, more seasoned, managers. Jack is totally
off-message.” There seemed to be a growing consensus among many of the newly hired Hong Kong executives that our own CEO was bad for our
image. I thought it strange,
but not too surprising, that some of the expat staff wanted to take charge and have the management handed over to them sooner rather than later. They had always worked for multinationals and were
used to managing the local staff, not the other way around. But in this case people seemed to be forgetting who had hired whom.

The comments from my colleagues were the second sign of a small fracture between the Hong Kong senior managers and the founding team in Hangzhou—a fracture that could easily become a
chasm. I decided I needed to get to the Hangzhou headquarters as soon as possible to meet the team in China. If the Alibaba iceberg began to calve off Hong Kong, I didn’t want to drift off to
sea.

Later that week I received a fax that offered me the welcome excuse to travel to Hangzhou. It was an inquiry from Justin Doebele, a journalist for
Forbes
who had just been assigned a
story about Alibaba for an edition of the magazine set to focus on B2B websites. He wanted to travel to the company’s headquarters to meet Jack and the other founders and get a sense of the
company. So I invited him to travel with me to the mainland, where the company had organized a retreat for the Hangzhou-based staff. I prayed the situation on the mainland would be much less
dysfunctional than what I’d seen in Hong Kong so far.

B
RIAN WONG AND
I paced around the arrival area of the Shanghai airport, killing time as we waited for Justin Doebele’s plane to arrive.

“Yo, Dawg, you’re lucky you joined the company when you did,” Brian said. “At least the Hangzhou team finally moved into a new office last month. I spent the whole winter
working in the Alibaba apartment. It was so cold we had to wear gloves while we worked.”

In the short time we’d worked together Brian and I had already developed a brotherly rivalry. Hence his ribbing about having been at the company back in the “tough times,”
before life at Alibaba had become more comfortable.

“Yeah, it must have been a lot tougher than living with your parents in Palo Alto,” I jabbed back. “You must have been jones-in’ all winter for a Starbucks
frappuccino.” Brian chuckled.

We picked up Justin and began the two-hour drive to Nanbei Lake, a lakeside resort area between Shanghai and Hangzhou. Justin, who is tall, skinny, and slightly bookish, had just been named the
Asia bureau chief for
Forbes
magazine. He was
based in Singapore and had traveled to Shanghai to write about Jack Ma and Alibaba.

For me, as the company’s new PR person, it was a bit of a gamble to bring the Asia bureau chief of a major business magazine along on my first trip to the Alibaba headquarters, as I had no
idea what the company was actually like. It was like bringing a restaurant customer into the kitchen. And it didn’t help that, because of a shortage of rooms, Justin had been assigned to
share one of the resort’s cabins with me, a notorious snorer. But I figured that, for a start-up company, any publicity was good publicity, and it was better to err on the side of
openness.

We arrived at Nanbei Lake and found Alibaba staff members, about 100 young men and women, excitedly buzzing between the resort’s small cabins. This was the company’s first off-site
retreat and an opportunity for the company to catch its breath after growing so quickly without a break. None of the expats had made the trip up from Hong Kong to attend the retreat, which I
thought was strange for an all-hands outing, as I felt they were missing an important opportunity to bond with their local counterparts.

First we headed to dinner in a large dining hall with round tables. Filled with excitement and anticipation, people settled in for a long meal, laughing and chatting while course after course of
local dishes was set on the table. Lazy Susans spun, and staffers picked off delicious local food with chopsticks while clinking their beer glasses at toast after toast.

I was struck by the warmth of the gathering. It didn’t feel like a typical company. It felt much more like a family. Justin and I were invited to join a table full of my new colleagues.
They were almost all in their mid-twenties and came from a range of
backgrounds. The sons and daughters of farmers, factory workers, and businesspeople, most had joined
the company in the four weeks since I’d signed my contract.

As I chatted with the staff, I was struck by how much all this meant for them. Several years earlier, even Chinese with college degrees would have been assigned to jobs by the government, with
little choice about their future. The options for young people were terribly limited. The best they could hope for was to get a job in a state-owned enterprise, with the government, or—if
they really dreamed big—with a multinational company. Compared to the opportunities available to the expat staff in Hong Kong, few places in China allowed young people to forge their own
paths. Alibaba represented hope for them.

Thinking about all this made me feel a little guilty. Here I was, an expat making nearly 50 times more than many of the local colleagues who had hired me. Yet they were welcoming me with open
arms. My earlier concern about money began to melt away as the full significance of Alibaba’s mission dawned on me. If we could make Alibaba a true success story, it could reshape the future
for this bright young team.

After dinner we were sent into a dance hall, its drabness dressed in velvet drapes and sparkling with multicolored disco lights. The room was at full capacity, and the walls were lined with
chairs. We sat along the perimeter facing each other. Jack took the stage and addressed us over the strong reverb of the karaoke machine.

“Wow, when we started Alibaba, I never imagined we would someday have this many people. It’s hard to believe how quickly we’ve grown. I’m so happy with our progress so
far. Alibaba has got about 200,000 registered members and businesses joining
us from almost every country now. That’s a good start, but it is really only the
beginning of our dream. I know people think it is crazy, but we need to do everything we can to reach our goal of having one million Alibaba users from around the world by the end of the
year.”

The crowd applauded.

“We’ve all been working very hard these days, and so I’m really happy that we finally have our first staff outing,” Jack went on. “We’ve now got an office in
London, Hong Kong, Silicon Valley, and so many great new managers and staff from all around the world joining Alibaba every day. They couldn’t all come today, but we do have a couple
laowai
[foreigners] here in attendance. So why don’t we invite Porter, who is heading our company’s international PR, to the stage to say a few words. Porter?”

The crowd grew silent and stared as I walked toward the stage. For Jack Ma the English teacher, interacting with Westerners was natural. But most of the staff had never worked with a foreigner,
and I was pretty sure that many had never even spoken to one. So I felt a bit of pressure to set the right tone and bridge the gap.

In my less-than-perfect Chinese I reached into my limited quiver of jokes to break the ice. “I apologize, as my Chinese is not great and there may be some people here who don’t
understand what I’m saying. But let me reassure you, this is normal. Even I don’t understand what I’m saying.”

The crowd broke into laugher and applauded. Whew, I thought, ice broken. I went on.

“On behalf of all the foreigners who just joined the company, I want to say that we are really looking forward to being
a part of the team. We are chasing the
biggest dream of all—building a global company from China. I and the other foreigners on the team really look forward to working together with everyone.”

The crowd gave a warm round of applause. Even though my Chinese wasn’t perfect, I’d always found that just making the effort went a long way in building rapport. My words were well
received. But in the back of my mind I couldn’t help but worry a bit about the sizable gap between the expats in Hong Kong and the staff in mainland China.

Jack said a few more words and wrapped up the evening’s events. “Just remember, everyone. We will win. We will make it. Because we are young. And we never ever give up.”

It seemed so simple, even a bit naive. I looked around the room and wondered, Is this really the right team to stand up to the US Internet titans? Yet their optimism was somehow infectious. It
made you want to believe.

The next day we drove two hours to Alibaba’s new Hangzhou offices, stopping along the roadside to uproot bamboo shoots, which the staff wanted to bring back to their families for dinner
that night. The office was housed in a drab building on the outskirts of Hangzhou, but inside it was popping with activity. With Justin in tow we strolled around the busy halls. It wasn’t
quite clear whether people knew exactly what they were doing, but they certainly seemed to be having fun.

At one end of the office we came to a solid door. Curious, we opened it, revealing a dark room of bunk beds filled with napping engineers. The stench of bad breath and dirty socks filled the
air, punctuated by periodic snoring. Brian had told me that it was common for Alibaba’s team to sleep on the floor at
the Alibaba apartment, and it looked like this
quirk of company culture had carried over. It seemed a good indicator of just how hard the team had been working.

I parked Justin outside Jack’s office and went in to brief Jack before the interview. This was my first time prepping him, and I wanted to make sure he recognized the significance.
“Jack, this is
Forbes
magazine. It’s the oldest and one of the most influential business magazines in the US. So it’s pretty important. They are doing a big story about
B2B companies. And they are even considering making Alibaba the cover story.”