Chinese billionaire and Alibaba founder, Jack Ma, has rounded off his meetup with African entrepreneurs in Lomé, Togo, after his short visit to Nigeria.
The Togolese presidency organised the exclusive event hosted by Togo’s minister of digital technology, Cina Lawson, and President Faure Gnassingbé.
Jack Ma resigned his position as the company chief a year ago to concentrate on philanthropic initiatives through the Jack Ma Foundation, and the Paradise Foundation. The Chinese mogul is also an advocate of the UN sustainable development goals or SDGs.
Below Are The Highlights Of His Interactions With African Entrepreneurs
On getting Investors Involved In Your Startup
For founders looking to bring investors onboard their companies, Jack Ma gave the following advice:
‘‘I have a lot of experience with venture capitalists and investors. My company’s value number one is customers. Its value number two is employees and its number three value is shareholders.
When Alibaba went on its IPO, I told potential investors that customers should be the number one priority of the company, followed by its employees and then the shareholders. The investors stared at me confused. They wanted the shareholders to be number one. However, we believed that if the customer pays us the money, the business will be sustainable. On the other hand, if customers do not pay you the money, and investors give you the money, you may end up spending the money incorrectly.
Secondly, the employee. You founders are the mothers and fathers of your companies and not the venture capitalists. Venture capitalists are like the uncles giving you some money to buy some milk. Without the uncles, you still have to keep doing your business. No choice! Trust me, when problems come, those venture capitalists may not continue to be with you. So, don’t trust them to be with you all the time. Your employees will be with you all the time. Some of your customers will be with you all the time.
I don’t like the fact that so many startups are gauging their success today with the number of funds they raise for their businesses. I know the day of reckoning is coming for them. It’s not the money that makes you succeed; it’s the products, the customers. No venture capitalists will give you money free. The past few years have been crazy; people have been bragging about the amount of funds they raise. You don’t win because of the amount of money you raise; you lose because of the number of customers you are not getting.
Please, have a good business model, not a solution model. Keep your customers and your employees happy. I have found that most companies have gone bankrupt not because they don’t have too much money. They have too much money, but when you have too much money, you may get greedy, you lose your mind, you set up beautiful offices, you start to hire people they don’t need. This is a big challenge for most startup companies.
So founders be careful. Get the money you need. As the CEO, when everybody sees bad, keep looking for the good. When everybody sees good, it is time to raise some money, because something bad is coming.
Don’t listen to investors a lot, instead listen to customers.’’
On The Importance Of A Good Team
Jack Ma had this to say:
‘‘When I hire people, I don’t hire friends. I don’t hire relatives. When we are friends, let’s just be friends.When you invite good friends to do things together, long term you have a problem. Big problems. It’s better to hire people and then become friends. This is what I did. When I finally become friends with them, we fight, we kick the table and in the evening we get back to work.
For small companies, what kind of people you use means a lot for the business. For big companies, the kind of people you fire means a lot.
Another important thing: make sure that before a decision is made, you are one of the team. At the time of making the decision, you should be the leader. For example, when I went for my company’s meeting as the chairman, I usually went with goals in mind. During the meeting, I listened to a world of ideas on how to achieve those goals, but at the final fifteen minutes I act like the boss, because somebody has to press the button after all the deliberations.
As a team leader, don’t think you are smarter than your people. Just allow your people to be smarter than you are. A good leader does not have to prove that he is smarter than others. A good leader exploits his team’s smartness to accomplish the organisation’s goals.
I normally allow a period of three years for a leader to turn a stupid or clueless team into a valuable group for the company, otherwise I fire them at that period. If you can’t take a stupid team and make it useful and smarter, then you’re not a leader.’’
On Running An Ecommerce Company In Africa In The Face Of The Prevalent Low Rate Of Internet Adoption
Jack Ma had this to say:
‘‘China was like this when I started Alibaba, however we built our first set of customers little by little, adding at least ten customers everyday, building trust with them gradually. I think the most important thing then was that we understood what they needed, and supplied their needs. It is was not easy, but you have to have a long-term vision for the business.
Fifteen years ago, people didn’t trust to pay money or buy things online. In any case, remember these rules:
- Rule number one: Don’t try to convince successful people. Successful people never change. You should help those people who want to be successful. Thirteen years ago, we never tried to convince people thirty-five years of age. We convinced only those 18 years of age. For them, it’s fun shopping things online. They yearned to have a taste of that experience. We grew together with this set of people. Today, most of them are 30 years old and above.
So face the people who are young and make them excited. Successful people are always sceptical and doubtful.
- Rule Number 2: As an ecommerce founder, you have to make your shopping site to be fun, otherwise customers would see no need abandoning the physical shops around them to shop on your platform. Just imagine: every night, there are about 70 million people browsing through Alibaba site without buying anything. So what are they doing? People come there just for fun. You’ve got to build your site to be fun-filled.
Dealing with distributors as an ecommerce startup:
Although you have taken away their jobs, most of the distributors are not actually adding enough value to the customers or to the producers. Ecommerce tries to create these values for the customers and the producers. tried to carry the distributors along in my early years, but they refused. They thought that ecommerce meant nothing. But after fifteen years of competition, we grew faster and overtook them. So give it some patience.’’
Dealing With Your Customers
Alibaba had this to say:
‘‘When I built Alibaba, the B2C site, nobody came to use it. We only had about 79 people at the time. Somehow, we started to buy and sell to ourselves as a team. At a time, we opened the site and people started uploading their goods to sell on our platform. We were so struggling that we started to buy what those people uploaded to our platform. But we learned one important thing: Don’t abuse the trust people have in your products when they come looking for you. Always make the customer believe in you, trust in you; value them, take good care of them. Customers are the best sales tool in the world, through their words of mouth.’’
How Your Environment Affects You And What To Do
Jack Ma admitted how China helped him.
‘‘China’s population and economy helped me a lot. However, China was not entirely a perfect country for me. But you have to learn not to complain too much. When you complain, you complain your entire life. China helped me a lot and I also helped China a lot.
In its initial years, Alibaba was a struggling company, but we wanted to use the internet to help businesses, to help China and its people. We feel proud today not because we make a lot of money, but because we changed lives for millions of young entrepreneurs.
The more people you empower today, the more powerful you would become.’’
On How Best To Brand Your Startups
Jack had this to say:
‘‘First is the name you choose. Good company name is very important. But at the first stage of the company’s life, you should focus less attention on branding. You should spend money on people. Set target on how to build more customers per month.’’
Advice For Startup Founders On How To Manage People
He said:
‘‘You should always be transparent to your students. A teacher never teaches lies to his students. As a CEO, you have to hope that your people are better than they used to be. As a teacher, I learn. When I was the founder and CEO, I hoped my people did best. I was transparent to my people. I united them.
When you hire people train them. Discipline them. Support them. As a CEO, the best resources of your company are your people. So train them and invest in them. When you invest in your people, you are investing in your products.
Jack Ma Has Some Advice For Those Wanting To Be Like Him
He had this to say:
‘‘Don’t learn how to be Jack Ma; learn from Jack Ma. In my whole life, I have two words: FAIL; TRY AGAIN. TRY AGAIN; FAIL. FAIL; TRY AGAIN.
If you fail, and give up, you have already failed. If you don’t give up, you always have one chance of succeeding. Don’t always look at the richest man in the world; look at your neighbour, the one who just opened a barbershop or a restaurant and is successful. Learn why they are successful in that small setting.’’
You can listen to the full discussion by clicking here.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world