Alibaba's World (3 page)

ON THE SIDELINES
of an Internet conference, I told a friend about the difficulties I was having finding a start-up to join. Even if
the company had a good business model, I explained, the management styles seemed too top-down and regimented.

“Oh, I didn’t even know you were looking. I should introduce you to Alibaba. They are trying to build China’s first global Internet company and are looking for someone to
manage their international PR. You’d be based in Hong Kong but traveling to Europe, the US, and all around Asia.”

My eyes lit up. I’d known many US Internet companies that were coming into the China market and many Chinese
companies that were trying to become a local Internet
giant. But I had never heard of a Chinese Internet company that wanted to go global. It was about as big a dream as one could have, and the challenge appealed to me. Plus, I liked the idea of being
based in China but traveling worldwide. Even if Alibaba failed, I thought, surely more Chinese companies will be going global, and the skills would be great to have.

“Alibaba’s just raised a lot of money, and it’s building an international team. You should give them a look,” my friend advised.

A few weeks later I flew to Shanghai to meet Jack and his team. We attended a customer gathering Alibaba had organized to celebrate the opening of its new Shanghai office. As a taxi took me
along the overhead expressway to the Galaxy Hotel, the Shanghai skyline whizzed by. The entire town seemed to be under construction; cranes adorned the sites of new skyscrapers and office buildings
everywhere. Silicon Valley may be booming, I thought, but that was nothing compared to the changes going on in China.

I wasn’t sure what to expect at the party. I exchanged business cards with a few of the Alibaba members, manufacturers engaged in a range of businesses I didn’t really understand,
such as petrochemical fiber, ball bearings, and all sorts of widgets. There was an awkwardness in the room as people stood around waiting to see what would happen next. Then the doors burst open
and Jack Ma strolled into the room, followed by an eager entourage of young staff members. After shaking hands with some of the Alibaba members who had assembled, Jack jumped on the stage and began
to address the crowd.

“Thanks for coming, everyone. Although we see you online all the time, nothing replaces meeting face to face. Tonight I
want to lay out our vision. From the first
day we started Alibaba, we had three main goals. We want Alibaba to be one of the top ten websites in the world. We want Alibaba to be a partner to all businesspeople. And we want to build a
company that lasts 80 years!”

As Jack addressed the crowd, he seemed distracted by a blinding spotlight and jumped around from topic to topic. Although he clearly had vision and ambition, it felt a bit like watching a
first-time performance of a rock star wannabe at an open mic night. The crowd was growing impatient. One of the expats at my table leaned over and said to me, “They could use someone like you
at this company; these guys need some help.”

Jack wrapped up his speech, receiving a smattering of applause. Although the event wasn’t a slick production, the innocence of it appealed to me. Unlike a lot of the other companies I had
interviewed with, Jack and his team seemed to be driven by more than just money. It seemed like a fun adventure. Shortly after the speech Jack’s assistant motioned for me to come over and sat
me down with Jack.

“That was a great speech, Jack,” I said, being generous to the man who might be my future boss.

“Actually my performance wasn’t that great tonight,” he replied. “The lights were in my eyes the whole time.”

He asked me a few simple questions and then, with a smile on his face and glint in his eye, he said, “I’ve heard a lot of great things about you. So when are you joining
us?”

I guessed he hadn’t even seen my resume. We spoke for only about five minutes before he offered me a job. It was clear that Jack was someone who made decisions quickly, based on instinct
and gut. But he had a sort of mischievous charm about
him—I could tell that whether Alibaba failed or succeeded, working for him would be a great adventure.

I was invited to drinks at the Hard Rock Cafe with a group of expat managers who had recently been hired from a number of big-name companies, including McKinsey, American Express, and Oracle.
They had given up their large expat compensation packages for a chance to join the dot-com dream. With the euphoria of the Internet in the air, we drank and chanted “A-li-ba-ba,
A-li-ba-ba” all night and bar-hopped around Shanghai.

I woke up the next morning with a wicked hangover and stumbled down to the lobby for a meeting with Alibaba’s CFO, Joe Tsai. A graduate of both Yale undergrad and Yale law school, Joe had
given up a high-paying finance job to join Alibaba in October of the previous year. He was sharp, composed, and had a strong sense of purpose. With bloodshot eyes and a queasy stomach, I tried to
maintain a professional posture as Joe began speaking.

“Everyone is really impressed with you, and we’d love for you to join our team. We’re prepared to offer you a position, with a salary of $100,000 per year, plus stock
options.” I gulped and tried my best to stay calm. The amount was about 50 percent more than my current salary.

I wanted the job. But with my best attempt at a poker face, I bluffed, “Hmm . . . I’m pretty happy with where I am now. I’m going to have to think about it.”

“Well, you should consider that we are planning to go public in about three months. Based on current valuations that we are being given by Goldman Sachs, your stock options would be worth
$1 million when we IPO.”

I gulped again. One million dollars? All I ever wanted was enough money to put a roof over my head and have time to travel, and this would make it possible. Could I
actually become a millionaire in just three months?

A few days later I signed my contract and prepared to move to Hong Kong. With a month between jobs I decided to take a couple weeks to lie on the beach in the Philippines and relish the new
opportunity ahead. Not only would I have a new job I loved, but I also might get rich along the way.

Before I left, I sat down at my computer and pulled up a blank Excel file. At the top of the spreadsheet I typed “Countdown to Millionaire” and saw that I’d be able to retire
in just four years, once all my stock options had vested. But of course the stock market had other ideas.

I
UNPACKED MY
flip-flops and sunscreen and settled into my beachfront hotel room in the Philippines. Outside I could hear the waves crashing as music drifted in from the
beachfront bar. After a year of being at the beck and call of my clients in Beijing, I could finally enjoy a guilt-free vacation, with no projects hanging over my head or client calls to disturb my
peace. There was only the shining promise of the next exciting chapter in my career and life.

Before heading out to the beach for a sunset drink, I decided to turn on CNBC to see the latest news about Internet stocks. Crash! Bust! It was clear that the market correction that had begun in
March 2000 was continuing into April, creating a Wall Street train wreck.

“The Nasdaq tumbles for a fifth day in a row. . . . Stocks headed lower again. . . . More troubles for tech. . . .”

For the next few days I hardly left my room. My eyes were glued to the TV screen. And as the ticker scrolled relentlessly, I watched my Internet dreams slowly fade away.

I
STOOD AT
the base of Hong Kong’s Citibank Tower and scanned up the building until its glassy facade met the clouds. It was a far cry from the dusty streets of Beijing,
where I’d been living in a drab Communist apartment block on the city’s outskirts and scrimping to save enough money to pay off my business school loans. Although I’d come to like
the gritty vibe of Beijing, moving to Hong Kong to join Alibaba was a welcome return to the modernity and convenience of a global business center.

As I walked into the building, I felt a bit like a kid on the first day of high school. I was excited to start something new but wondered how I’d fit in with the big kids. I’d been
working for two years in Beijing and had gotten used to mainland China’s raw form of entrepreneurship, which stood in stark contrast to Hong Kong’s polish and style. This was the big
leagues.

When I reached the twenty-eighth floor, I strolled down the quiet hall and buzzed my way into Alibaba’s new offices. In the corner office I found Todd Daum, my new boss and Alibaba’s
vice president of marketing. Even though I hadn’t known Todd
before joining the company, I felt a certain level of familiarity with him; he had a marketing
background and was a fellow alum of the MBA program at Northwestern’s Kellogg School of Management.

“Welcome aboard,” said Todd, shaking my hand before leading me through the office. “We’ve already got a lot of big things brewing, and we’re happy you are here to
get started on them.” Working for Todd was one of the reasons I’d joined Alibaba. Unlike the dictatorial managers I’d encountered in my interviews at Chinese Internet start-ups,
Todd was down to earth, friendly, and seemed willing to include me in the marketing team’s strategic decisions. Before joining Alibaba he had worked at American Express, and I saw him as
having a lot of experience, someone I could learn from.

After chatting with Todd, I was introduced to the newly hired executive team, made up of international managers with a dazzling mix of pedigrees from the world’s top universities,
consulting firms, and investment banks. It was clear that Jack Ma had assembled his dream team, and I had no doubt that the management section of our IPO prospectus would be attractive to any
investor.

I took my seat in a cluster of cubicles in the office’s interior, a sort of kids’ table for the senior and middle managers. It was perfectly fine—this hodgepodge group seemed
like a lot of fun. There was David Oliver, a former New Zealand sheep farmer who had somehow found his way into China’s tech scene, working for a start-up in Beijing before joining Alibaba in
its Hangzhou apartment as one of the company’s first Westerners. Then there was Brian Wong, a Chinese American who’d been working as an assistant to San Francisco mayor Willie Brown
before
joining Alibaba as a business development manager. And Brian’s good friend and former classmate, Emily Fong Mitchell, a Hawaiian with a sunny personality and
sharp wit who worked with me on the marketing team. While our kids’ table lacked professional experience, we quickly formed a common bond over the hardship and adventure of having previously
studied and lived in mainland China.

After settling in, I sat down for a meeting with Todd. “So what’s the status of the IPO?” I asked, wondering if it was still on track. “Things have changed,” Todd
said. “It doesn’t look like we’ll be having an IPO any time soon. Not in this market.”

With these words I realized I’d have to recalibrate my expectations. Many things had attracted me to Alibaba. The adventure. The possibility of changing the world. The chance to pioneer
something new. But if I’m totally honest with myself, the idea of becoming a millionaire didn’t hurt. Now that my “Countdown to Millionaire” timeline had been extended
indefinitely, I’d have to get my motivation from these other goals.

It was nice to meet the people I’d be working with in Hong Kong, but I was also curious about the team on the mainland. “So when are we going up to Hangzhou to see the headquarters
and meet the team up there?” I asked Todd.

“To be honest I don’t see much point in going up there anymore. Since I joined the company, the marketing team there has kind of stopped listening to us here in Hong Kong, and
they’ve started to do their own thing. Look, this is what they’re coming up with for ads,” he said, pointing to an online banner ad. Typical of Chinese websites at the time, it
had a bunch of flashy animations and lacked the familiar minimalist qualities of Western sites like Yahoo!.

I had to admit that the ad looked amateurish. But more discouraging than the unprofessionalism of the ad was how Todd responded to my question. It seemed a divide
already was forming between the Hangzhou and international management teams. And rather than trying to address it, Todd seemed to already be giving up.

Because I had spent several years working in China, I knew just how important it was to gain the friendship and trust of one’s local colleagues. In my first job after business school I
learned this lesson the hard way. I had been put in charge of marketing a children’s candy line at a multinational company in Beijing, and it had been a disaster. I focused plenty of time on
developing a great marketing strategy but not enough time on winning the confidence and support of my local colleagues. Eight months later I left the company because I had failed to fit in with
management. In a Chinese company, I’d learned, the informal structure was just as important as the organizational chart. And before you could focus on strategy, it was important to get to
know your teammates.

“Okay, it sounds like the situation might be a bit frustrating right now,” I said, “but at some point I’d like to get to Hangzhou to get to know the team a
bit.”

“I don’t think that’s really the priority right now,” he said. “But if you have a business reason to go up there, then it would make sense.”

Later that week David Oliver gave me a heads-up that Jack was coming to Hong Kong. “Porter, now that you’re running Alibaba’s PR, I should let you know that there’s a big
event arranged for Jack later this week here in Hong Kong. It should be huge, with a lot of media.”

I was new to the Hong Kong Internet scene and curious to see how it compared to Beijing’s. When I arrived at the event, the difference struck me immediately.
Beijing’s Internet industry had been built from the ground up by entrepreneurs from humble backgrounds with little business experience. Unlike the state-owned enterprises that dominated the
rest of the Chinese economy, the Internet industry was a meritocracy, where good ideas, hard work, and innovation meant much more than having the right contacts. (Especially since it was so new
that you hardly knew who the right contacts were.)