How Jack Ma Went from Being a Poor School Teacher to Founding Alibaba | Hacker News Reader

How Jack Ma Went from Being a Poor School Teacher to Founding Alibaba

businessinsider.com

104 pointssayemm15 comments

"I was scrawny when I was young, but I was a terrific fighter," Ma recalls. "I was never afraid of opponents who were bigger than I."

He used to go to a local hotel every day so that he could meet people and learn English.

he never excelled at math

a captivating speaker who could make his big dreams infectious.

With a love of performance (probably inherited from his parents), Ma also helped create a quirky, fun atmosphere at the company.

13 minute audio profile of Jack Ma http://www.bbc.co.uk/programmes/b04gnhnq

I find it interesting that Ma and the other founders ended up selling so much of Alibaba in the process of creating and building it up. Just Softbank and Yahoo owned something like 80% to 85% of the company. I wonder if Ma regards that as a big early mistake (convenient hindsight), as I'm skeptical whether Softbank or Yahoo had fundamentally much to with Alibaba's success outside of the capital (and specifically that it's a steep amount of equity to have given up for that capital).

Guess it's the case of owning 100% of 1 or owning 10% of a million. They probably wanted to expand as fast as possible and took on as much capital as possible to fuel the growth. It's a gamble and he pulled it off big. Kudos to him.

Due to Chinese law not allowing foreign investment in several sectors (including online) Softbank and Yahoo do not own any of Alibaba. They own a percentage of a Cayman Islands holding firm that have contract(s) with Alibaba that stipulate voting and profit sharing. The Chinese Government could invalidate these contracts at any time should they decide the contracts breach the letter or spirit of their laws.

That's an over-simplification. Less than 8% of the group's assets are held by the Variable Interest Entity (VIE) which has the ICP licence:

http://www.chinaaccountingblog.com/weblog/alibaba-sets-the-v...

The remaining assets are presumably owned by companies whose beneficial owners are the shareholders in the Cayman Islands company.

Today Alibaba has more sales than eBay and Amazon combined. One important factor was Alibaba had enough capital to outrun competitors, considering it offered free service in its early years and how strong Tencent and Baidu were China. Jack Ma paid the cost to ensure the long term success. I wouldn't consider it is a big mistake, and certainly not early (Yahoo deal came at much later time).

I think this is always the question that everyone asks of founder stakes in their big companies. Noam Wasserman summarized is best in his book "The Founder's Dilemma": it is a conflict between control and wealth. You can't have both and you'll have to figure out which one you want to avoid pain later.

This is normal for any company that's been through a few funding rounds. Go here http://ownyourventure.com/equitySim.html and play with some numbers - a typical setup of 2 founders on 50% each will have both of them on 10% by Round 3. Alibaba has had 4 rounds, and the last one was huge.

In his case I think he gave up his personal stake for long term growth of the organization. He ended up still running the show there and I doubt he thinks about all the money he could have made if he keeps all those shares.

corporate pr never fails to make the front page on hn now days, 63 votes 7 hours 1 comment.

A number of Jack Ma stories have reached the front page in the past week. They're really kicking the PR into overdrive in advance of the IPO.

It could be that this man is news worthy because his enormous company is about to make its initial public offering.

How does being a teacher make one poor?

Being a teacher in itself doesn't make one poor. Getting paid $14/mo for said teaching makes one poor.

Reply on news.ycombinator.com