Jack Ma: China's ecommerce CEO

Summary

Good Bad Billionaire: Jack Ma - China's E-commerce CEO

Introduction

In this episode of Good Bad Billionaire from the BBC World Service, Simon Jack and Zing Singh delve into the life and legacy of Jack Ma, the founder of Alibaba, one of the world's largest e-commerce companies. They explore Ma's remarkable journey from humble beginnings to becoming a billionaire, examining his entrepreneurial spirit, his relationship with the Chinese government, and the controversies that led to his financial decline. The hosts also evaluate whether Jack Ma fits the archetype of a "good," "bad," or "just another" billionaire.

Early Life and Struggles

Jack Ma, born Ma Yun in 1964 in Hangzhou, China, emerged from a modest family where his parents were musicians—a profession frowned upon during the Cultural Revolution. Growing up in poverty, Ma was a scrawny child who often found himself in fights, reflecting his resilient and combative nature [05:27]. Despite his physical challenges, Ma was ambitious about learning English. At 13, he bought a pocket radio to self-teach the language and began offering city tours to foreign tourists in exchange for English lessons, showcasing his early entrepreneurial mindset [07:09].

Ma's academic journey was fraught with setbacks. He failed his university entrance exams multiple times, particularly struggling with mathematics, before finally securing a place in an English teaching course at Hangzhou Teacher's Institute in 1988 [08:01]. Post-graduation, Ma faced repeated rejections in job markets, including being the unlucky number 24 out of 24 candidates for a position at KFC [08:48]. Nevertheless, his persistent spirit saw him land a low-paying job as an English teacher, a role he cherished and held for a decade [10:06].

Founding Alibaba and Rise to Success

In 1999, leveraging his passion for the internet, which he first encountered during a tumultuous trip to the United States in 1995, Ma founded Alibaba with a group of 17 friends. The initial capital of $60,000 marked the beginning of what would become a transformative enterprise for Chinese commerce [16:30]. Alibaba started as a business-to-business platform designed to help small and medium-sized enterprises thrive amidst China's rapidly expanding economy.

Ma's strategic decision to seek Western investment was pivotal. In 1999, Goldman Sachs invested $5 million in Alibaba, followed by a decisive $20 million investment from Masayoshi Son of SoftBank in 2000 [18:27]. These investments propelled Alibaba into profitability by 2002, enabling Ma to expand into various sectors, including consumer-to-consumer marketplaces like Tao Pao (similar to eBay), online payment systems with Alipay, and cloud computing services [21:08].

One of the most significant milestones was Alibaba's IPO on the Hong Kong Stock Exchange in 2007, raising $1.7 billion and propelling Ma into billionaire status by 2009 [24:07]. The company's growth continued with its record-breaking IPO on the New York Stock Exchange in 2014, which raised $21 billion and solidified Alibaba's position as a global e-commerce powerhouse [26:41].

Relationship with the Chinese Government

Jack Ma's relationship with the Chinese government was crucial to his business success. Initially, Ma navigated the complexities of China's state-controlled economy by maintaining a cooperative stance, advising his employees to "be in love with the government but not to marry them" [15:36]. This delicate balance allowed Alibaba to thrive while aligning with governmental expectations.

However, Ma's outspoken criticism of China's financial regulatory system in a 2020 Shanghai speech marked a turning point. He labeled the system as "outdated" and compared Chinese banks to "pawn shops," which led to a swift crackdown by Chinese authorities. Consequently, the highly anticipated Ant Group IPO was blocked, and Alibaba faced an antitrust investigation, culminating in a hefty $1 billion fine in 2023 [28:26].

Philanthropy and Criticism

Jack Ma has engaged in significant philanthropic efforts through the Alibaba Foundation and the Jack Ma Foundation, focusing on areas such as education, environmental protection, and women's entrepreneurship [36:43]. For instance, in 2006, Alibaba launched initiatives to support underprivileged mothers, and by 2020, 20,000 women had received training and funding to become online entrepreneurs [36:56].

Despite these contributions, Alibaba has faced criticism for its "996" working culture—demanding employees work from 9 am to 9 pm, six days a week—and concerns over data privacy and environmental impact due to the vast array of products sold on its platforms [33:36]. The hosts acknowledge these issues but note that such challenges are common among major tech companies [34:32].

Financial Decline and Regulatory Crackdown

Following his critical remarks, Jack Ma's fortune plummeted by $12 billion within months, with his net worth dropping from $61 billion to approximately $24 billion by 2024 [29:50]. The Ant Group IPO was indefinitely postponed, and Alibaba's market value suffered a staggering loss of $877 billion due to regulatory actions [30:06]. Ma's public persona diminished, and he retreated from the international spotlight, focusing instead on academia as an honorary professor at universities in Hong Kong, Japan, Rwanda, and Israel [31:10].

Judgement: Good, Bad, or Just Another Billionaire

In evaluating Jack Ma, Simon and Zing consider several categories:

1. Wealth: Ma reached the pinnacle of wealth as Asia's richest man at his peak but remains significantly wealthy at $24 billion [31:38]. They awarded him a 9/10 for his amassed wealth and lifestyle.

2. Rags to Riches: From a poor upbringing and multiple academic and professional setbacks to building a global empire, Ma's journey scores an 8-9/10 [32:03].

3. Villainy: While Alibaba's demanding work culture and environmental impact are noted, the hosts find no substantial personal villainous actions, awarding him a 4/10 [35:03].

4. Philanthropy: Ma's philanthropic contributions are significant but somewhat limited relative to his vast wealth. The hosts rate him a 5-6/10, recognizing his efforts while noting areas for further impact [38:29].

5. Power: Ma holds considerable influence, having interacted with global leaders and sitting on UN committees alongside royalty and presidents. He receives an 8/10 for his power [39:08].

6. Legacy: Alibaba's transformative impact on Chinese and global commerce secures Ma an 7-8/10 for legacy, though its enduring nature remains to be fully realized [40:30].

Final Verdict: Just Another Billionaire

Ultimately, Simon and Zing classify Jack Ma as "just another billionaire." While his story is undeniably compelling and his contributions significant, they conclude that Ma does not exemplify a distinctly "good" or "bad" billionaire. Instead, his legacy aligns with that of influential, wealthy entrepreneurs who have shaped global industries without crossing into overt malevolence [42:25].

Conclusion

Jack Ma's journey embodies the quintessential rise of a self-made billionaire in the digital age, marked by innovation, resilience, and complex interactions with governmental powers. His story provides a nuanced perspective on the intersection of entrepreneurship and regulatory environments in a rapidly evolving global economy. As Ma steps back from the limelight, the episode leaves listeners contemplating the true essence of wealth, power, and legacy in the modern world.

Transcript

[Simon Jack]

This BBC podcast is supported by ads outside the uk.

[Michael Lewis]

Hey there, it's Michael Lewis, author of Going Infinite Moneyball, the Blind side and Liars Poker. On the latest season of my podcast, against the Rules, I'm exploring what it means to be a sports fan in America and what the rise of sports betting is doing to our teams, our states and ourselves. Join me and listen to against the Rules on America's number one podcast network, iHeartradio. Open your free iHeart app and search against the Rules. Listen to against the rules on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts.

[Simon Jack]

Welcome to Good Bad Billionaire from the BBC World Service. Each episode, we pick a billionaire and find out how they made their money.

[Zing Singh]

And then we judge them. Are they good, bad, or just another billionaire?

[Simon Jack]

I'm Simon Jack, the BBC's business editor.

[Zing Singh]

And I'm Zing Singh. I'm a journalist, author and podcaster.

[Simon Jack]

And before we introduce this episode's Billionaire, I think it would be churlish to not dwell on the fact that Good Bad Billionaire is a winner.

[Zing Singh]

Yes, we have won a British Podcast award for best business podcast. It just happened recently. It's very exciting.

[Simon Jack]

We are still basking the afterglow of that victory and we would just like to thank all the listeners, all the judges, everyone involved, and our super production team for a real team effort to win the gold award.

[Zing Singh]

However, I will also point out that we have no idea where our trophy has gone and I think a producer has made off with it. So if that's you and you're listening, please, at least let me touch it one more time.

[Simon Jack]

You know who you are. Where is it? Anyway, let's dive in.

[Zing Singh]

In this episode, we've got one of the richest men in the world.

[Simon Jack]

Open sesame. It is Alibaba founder Jack Ma.

[Zing Singh]

Now, Jack Ma is worth a very cool $25 billion, which makes him right now at least 80 richest person in the world and in the top 10 richest Chinese billionaires.

[Simon Jack]

But just a few years ago, he was the richest person in Asia with over $60 billion. So where did half his fortune disappear? It's a fascinating story involving the Chinese government. Well worth listening to.

[Zing Singh]

So his wealth came from, as we mentioned, Alibaba, which is an e commerce company he founded in 1999.

[Simon Jack]

It's been called the Chinese Amazon. It does a lot of the things that Amazon does.

[Zing Singh]

And if you go to China, Alibaba is everywhere. In fact, his online payment system, Alipay, has more than 1.2 billion users. There are More transactions in China done with Alipay than with actual cash.

[Simon Jack]

Jack is a beloved national celebrity in his homeland.

[Zing Singh]

That's right. He's actually been nicknamed Daddy Ma and has even appeared in a short kung fu movie fighting martial arts superstars like Jet Li. You can actually watch it on YouTube.

[Simon Jack]

Yeah, he's got the full set of billionaire toys that we come across, like a $50 million Gulfstream jet, a 200 million doll superyacht.

[Zing Singh]

And he's also bought two historic French vineyards for around $13.5 million. So he makes his own wine.

[Simon Jack]

Plus he spent $23 million on a 28,000 acre property in the Adirondacks in upstate New York, which has its own trout stream, of course, Woodlands, its own maple syrup operation.

[Zing Singh]

So wine, trout, maple syrup. I mean, he's living the life. Let's hear from Jack himself, speaking to Tim Sebastian for the BBC in the year 2000.

[Simon Jack]

You're ambitious. Ambitious for what?

[Jack Ma]

Ambitious that. Well, change the world, change the way people work. When we started Alibaba, I mean, the company, we thought that we going to build a business that can last for 80 years. It's not for 80 miles. So we're very ambitious. But people, my parents also laugh at me. So what I talking about, you want to set up our business for 80 years? We said, yeah, let's go ahead. But I Never thought about 80 years later what the company will look like.

[Zing Singh]

He actually sounds quite serious in that clip. But you've actually met him and he seems quite a different kind of character. Right.

[Simon Jack]

It was the weirdest thing and one that I kind of shudder about to this day, because I was asked to moderate this rather boring panel of business people at the British Library in central London. And there were all these people, this person from a big trade body, person from one of the big accounting firms, and then there was this other guy called Jack who I'd never heard of, and we started this debate and he keeps butting in. He's full of beans, he's quite flamboyant, he's very noisy, he's very energetic and he's kind of dominating a little bit. So I'm just going, thank you very much, Mr. Ma. If you could just shut up now and let the other people speak, because we don't. I think we've heard quite enough from you because I honestly never heard of him. Never heard of Alibaba. This must have been about 2007 or 8 or something like that. And of course, to this day, I think I could have made best friends with Wally, you know, we're on very useful contact with one of the. With the richest man in China.

[Zing Singh]

You could be drinking Jack Ma's maple syrup. Maple syrup and Adirondack.

[Simon Jack]

I know. So. Yeah, no, but incredibly charming, incredibly engaging, full of energy and, and he could see, when he talked, the rest of the room was really engaged with him. So you could see why he's such a popular person in China to this day.

[Zing Singh]

Let's rewind to the start and find out how he got his beginnings. Jack Ma began life with very little and he got into a lot of fights as a little kid.

[Simon Jack]

He was born in 1964 in Hangzhou, eastern China, and his original name was Ma Yun.

[Zing Singh]

He has an older brother and a younger sister. His parents were actually musicians.

[Simon Jack]

And that is China under Chairman Mao. Remember, the Cultural Revolution would begin just two years after Jack was born. And that's a period when Chinese youth were encouraged to sort of purge society of things that were anti communist, which included of course, his parents occupation as musical students.

[Zing Singh]

So Marg grew up in a really poor household and he was a very small, scrawny kid. In fact, he's still quite small. He's actually 5 foot 4 and I guess the generous word for it would be odd looking.

[Simon Jack]

He is an unusual looking guy. I'm not going to try and describe him any further. Have a look for yourself. But he's not your average looking Joe.

[Zing Singh]

Now, despite his small stature, he'd often get into fights with his classmates and he has said, I was never afraid of opponents who were bigger than I. Yeah, quite an interesting billionaire mentality there.

[Simon Jack]

I think maybe Ye. Yeah, he's a scrapper for sure. And as we'll see as his story goes on, you know, he tries a lot of different things. He comes up against obstacles and I think we have seen that from a lot of billionaires. One of the common characteristics is how they treat adversity and also crucially, not.

[Zing Singh]

Being afraid to take on a fight. In fact, at 13, Jack even got moved to a different school altogether because he was getting into so many of them.

[Simon Jack]

And he collected crickets, which he made fight each other, which sounds kind of cruel maybe, but it's a traditional choice Chinese game, which again had been banned under Chairman Mao.

[Zing Singh]

So clearly he displayed a bit of a rebellious spirit even when he was a kid.

[Simon Jack]

Yeah, but he has one obsession. He wants to learn English.

[Zing Singh]

So he saved up his money to buy a pocket radio to help teach himself the language. And then he has this other idea. Right. He's 13. It's a year after Mao dies, rules are kind of loosening in China. It's starting to attract overseas tourists. So every day he gets up at 5am and cycles 40 minutes to the best hotels in the city.

[Simon Jack]

And there he approaches travelers and offers them tours of the city. But instead of asking for cash, he does the tour in exchange for English lessons. And it works. Tourists like him, he makes pen pals and he keeps giving tours for the next nine years.

[Zing Singh]

And in fact, if you're wondering, wait a second, where does a Jack come from? Then it's actually a tourist who was unable to pronounce his Chinese name, Ma Yun, who gives him the name Jack.

[Simon Jack]

As we were saying, how you treat adversity is a common denominator in our billionaires. And Jack's young life is filled with rejection and failure.

[Zing Singh]

He initially wants to study to become a teacher, but he repeatedly fails the university entrance exams, which are notoriously tough in China.

[Simon Jack]

Math's apparently his worst subject. He gets apparently 1 out of 120 for maths in one exam. Even if you put a random number, do you think you get more than 1 out of 120?

[Zing Singh]

Statistics, you think you'd do a little bit better than one out of 120.

[Simon Jack]

But on his third try, he gets into an English teaching course at what he described as his city's worst university.

[Zing Singh]

You know, so at least he's got a sense of humor about things. But when he graduates in 1988, he faces even more rejection from job interview after job interview. In fact, at one point, he interviewed for KFC when it opened in its city. They interviewed 24 candidates and employed 23. He was unlucky number 24.

[Simon Jack]

And he's got similar stories for police jobs, jobs at hotels where his cousin did work but was employed before him anyway. And he sometimes blames, we've already mentioned this, his physical appearance for the rejections.

[Zing Singh]

But as with a lot of our billionaires, he keeps on believing. He even applies to Harvard, that prestigious Ivy League university in America, 10 times, and it goes without saying, always failing.

[Simon Jack]

But he's got one thing going for him. He's popular at university. He was elected student chairman and later chairman of the whole City Students Federation.

[Zing Singh]

And he also has the love of his school sweetheart, a woman called Zhang Ying, who is also known as Kathy. They get married right after their graduation, and they are actually still together today, but details of their life are kept very private. So they have kids, but it's unclear how many they even have together.

[Simon Jack]

So he's not Single.

[Zing Singh]

And Kathy, interestingly, has reportedly said of her husband Jack that he's not a handsome man, but I fell for him because he can do a lot of things handsome men cannot do.

[Simon Jack]

That would be nice. That's nice, isn't it?

[Zing Singh]

I think that's nice.

[Simon Jack]

My wife would say the same thing.

[Zing Singh]

Could you become a billionaire?

[Simon Jack]

It's looking a long way off right now.

[Zing Singh]

Yeah. If there's anything we've learned from this podcast is that neither me or Simon have anything remotely near the chops to become a billionaire.

[Simon Jack]

Too true. But anyway, Jack persists, and at 24, he gets a job as an English teacher.

[Zing Singh]

It only pays about $12 a month, which is, you know, not a lot, not even in 80s China. But he loves it. He's said to have described it as the best life I had. And he actually teaches for the next decade. I mean, that's a long time. 10 years. He still says he was the best teacher in Hangzhou.

[Simon Jack]

Yeah. And he seems quite settled. And maybe he could have done this for the rest of his life, but he's a bit of a hustler. He's entrepreneurial. So he starts his first business, which is an agency providing English translation and interpretation.

[Zing Singh]

And then a crazy trip to America introduces him to something that will completely turn his life upside down.

[Simon Jack]

Yeah. In 1995, Jack Ma is now 31, and he has a chance to visit the USA. Rumors persist, actually, that the Chinese government had sent him on an Internet fact finding mission. But it seems more likely he was there because of his English skills on behalf of a local company.

[Zing Singh]

So he was apparently sent to mediate between a Chinese company and their American partner. And so Jack gets on a plane and goes to Malibu, California to meet the US boss, who is this tough guy who shows him a really good time. They go to Las Vegas to have fun. Jack wins $600 just by playing on slot machines. So pretty lucky guy.

[Simon Jack]

But back in Malibu, Jack soon realizes all is as it seems. The boss, it turns out, is a con man with a fake company. And when he turns down a bribe, the boss turns on him, flashing a gun and locking him in his house.

[Zing Singh]

I mean, this is crazy.

[Simon Jack]

This is like one of those kind of hangover movies or something.

[Zing Singh]

It really is. And, you know, obviously Jack is terrified at this time, but he uses his charm to kind of convince the man they can do business together.

[Simon Jack]

But at the first opportunity he escapes, he takes his $600 winnings from the slot machines to go north to.

[Zing Singh]

And it's in Seattle that he logs on for the very first time to a brilliant new invention known as the Internet.

[Simon Jack]

Jack's first web search apparently was to have been for beer. And there are no results for any Chinese beers, although beer is very popular in China. So when he returns home, he is determined to put China on the Internet.

[Zing Singh]

Now, when he's back home, Jack invites all his friends and a local TV crew round to his place for a party and he's going to introduce them to this thing called the Internet.

[Simon Jack]

So they sit around, they drink beer, they play cards, and after three hours, he's managed to download half a page.

[Zing Singh]

Jack says of the time, I was so proud I proved the Internet existed. It's quite strange to think of a time when this was considered a big deal.

[Simon Jack]

Yeah, but I, I mean, I'm at my ripe old age, in my mid-50s. I do remember the first faltering days of the Internet when it did seem like this mythical thing. Is it, is it out there? What's on it? Can I access it? How do I do it? What are the code words to get in? It felt like this kind of, you know, whole new domain that you took your first faltering steps into, like a newly born foal in the forest clearing.

[Zing Singh]

Do you remember, do you remember what your first Internet search was for?

[Simon Jack]

Oh, gosh, now you're asking me a question. I don't know, I think it might have been for myself, you know? You know, typical really. I'm still doing it.

[Zing Singh]

Still doing it. But presumably takes a little bit faster than 3 hours to download half a page of web results.

[Simon Jack]

So he's proved to his friends at least, and to a TV crew that the Internet existed in China. So he borrows $2,000 from friends and family to set up a website with a friend who's a techie.

[Zing Singh]

And this is actually quite typical of Jack Ma and a lot of our other tech billionaires. They're very good at getting better techies to work for him. And actually, Jack is probably one of the least technically skilled of all the tech billionaires we've covered. I don't think he knows how to code even.

[Simon Jack]

Don't let pesky skills get in the way of a good entrepreneur. He sets up a site, one of China's first website. Website. It's a digital directory called China Pages and it's a hit.

[Zing Singh]

So at this point it's probably worth thinking about how China has changed from Jack's childhood under mao by the 1990s. And this is really interesting because I actually know this period sort of Firsthand. Some of my family were kind of born in this period. They're a little bit younger than Jack Ma, but they tell me stories about how they grew up in villages where there was no electricity, very little running water, wild dogs running around in the street. And now they go back to these villages and everyone's got high speed Internet. And it happened so quickly. I remember visiting family in the 90s in China and feeling as if I'd stepped back in time. It felt like I was in the 70s or the 60s even because of how underdeveloped some parts of the country was. And now when you go to a shopping mall in China, I mean, feels.

[Simon Jack]

Like you're in the future.

[Zing Singh]

Feels like you're in the future.

[Simon Jack]

But the nation is having a decade of explosive growth. China's becoming the world's second largest economy. But this isn't rampant capitalism and the state is still ultimately in control.

[Zing Singh]

And in fact, the state decides to take over China pages. And Jack is forced into a partnership with the government.

[Simon Jack]

Yeah, state owned China Telecom puts in $185,000, but they take five out of the seven seats in the company board. So essentially totally in charge.

[Zing Singh]

Jack says everything we suggested they turn down. It was like an elephant and an ant. And presumably Jack is the ant.

[Simon Jack]

Well, maybe that's why later on he calls his company Ant Group. We'll get to that in due course. But Jack resigns from the that he founded. He briefly heads a government backed Internet agency and these experiences shape his relationship with the Chinese authorities, which will play a big part going forward. As we'll see.

[Zing Singh]

He's told his employees to, quote, be in love with the government but not to marry them. Which is an interesting way of putting it.

[Simon Jack]

Really interesting, the fact that China is becoming much more commercial, much more international. And there was a thought in both the US and Western European that a bit like what happened with the Soviet Union, the more commercial it becomes, the more McDonald's you have, the more Internet stuff, the more western brands you have available to buy China, the more capitalism in its western form would take root. And that would lead to a kind of dilution of communism. But as we'll see, that was a miscalculation by the West.

[Zing Singh]

So it's around the 90s, Mars left China pages. But then here comes the venture that will eventually make him very, very rich.

[Simon Jack]

Yeah, he doesn't want to miss out on the online boom and he thinks E Commerce will be big. So he decides to pioneer an online marketplace in China.

[Zing Singh]

He convinces a group of 17 friends to quit their jobs and join him in setting up this marketplace.

[Simon Jack]

Yeah, that includes Jack's wife and a Yale University graduate called Zhou Tsai, who actually gives up a job which had an annual salary of $750,000 to work for just $50 a month. That is quite amaz move and a gamble.

[Zing Singh]

I mean, having said that, it's worked out for him because he's now chairman of Alibaba and he is a billionaire in his own right.

[Simon Jack]

So Jack has convinced this group to put in $60,000 between them for his startup, Alibaba. And it's named after 1001 Arabian Nights character because of the phrase open sesame.

[Zing Singh]

Yes, it's a kind of business to business platform that Jack says will open sesame to treasure for its users.

[Simon Jack]

Yes, he said our focus is on helping small and medium sized companies make money at exactly the moment when lots of small, medium sized companies in China want to do exactly that.

[Zing Singh]

It's actually quite interesting because if you visit the Alibaba website now, you will see a very confusing array of different products and goods. So I actually took a look at this last night before we recorded and on the most popular page on Alibaba, you can buy 500 quilted handbags for $11 each. But you could also buy an off road motorbike for $500, aircon units for $100, diesel generators for $300. I mean everything and anything at very, very low prices shipped over in.

[Simon Jack]

Fascinating what it's become. In the early days, it's starting out well, but he needs more investment to expand. But he's being quite choosy about who he takes money from. After his China page experience, he seems quite wary of actually Chinese investors.

[Zing Singh]

So he actually turns to the West. He accepts $5 million from the leading global investment bank Goldman Sachs in 1999.

[Simon Jack]

Yeah, when asked how he convinced them, he said it was more how they convinced him. They clearly saw China as the greatest economic growth opportunity and wanted in.

[Zing Singh]

And the next year after that, he meets the now legendary investor Masayoshi Son, who is a CEO of the investment bank SoftBank.

[Simon Jack]

Yeah, son was very briefly the world's richest man. He prides himself on making a quick decision. So in five minutes, Son decides to invest $40 million. But Jack will only accept 20 million.

[Zing Singh]

And actually Son's investment, despite the fact he cut it in half, is one of the greatest investments ever. Because SoftBank's initial $20 million stakeholders actually peaked in value at just over $129 billion.

[Simon Jack]

Crikey, that's an astonishing return. But when Son invested, it confirmed the value of Jack Ma's stake in Alibaba was worth at least a million dollars. So in 2000, Jack Ma is a millionaire.

[Zing Singh]

So he's gone from English teacher, translator, to one of China's first E commerce millionaires.

[Simon Jack]

For sure. So Jack is now a millionaire. In the year 2000, Alibaba is expanding rapidly. It's making money for small and medium sized companies, just as Jack's planned. But many of those customers pay nothing for the service. So Alibaba's not making any money for itself.

[Zing Singh]

And also internationally, the dot com bubble is bursting, so Jack has to lay off staff. And he's reported to say, I call Alibaba 1001 mistakes.

[Simon Jack]

By 2002, Alibaba is near bankruptcy with only enough cash to keep going for 18 months. So how does Jack Ma go from near bankruptcy to billionaire?

[Michael Lewis]

Hey there, it's Michael Lewis, author of Going Infinite Moneyball, the Blind side and Liars, Pokemon. On the latest season of my podcast, against the Rules, I'm exploring what it means to be a sports fan in America and what the rise of sports betting is doing to our teams, our states and ourselves. Join me and listen to against the Rules on America's number one podcast network, iHeart. Open your free iHeart app and search against the Rules. Listen to against the rules on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts.

[Zing Singh]

So at this point, Jack Ma is a millionaire, but Alibaba is on the verge of going bust. So to take that company from near bankruptcy to one of the biggest companies in the world, the first thing Jack does is that he doesn't panic.

[Simon Jack]

No, he set up Alibaba as a company that would last for 80 years. So he sets about learning from his mistakes, and he does two things.

[Zing Singh]

He says that that one mistake was limiting how high his partners could rise in the company. So he changes that.

[Simon Jack]

Yeah. So instead of saying, the highest you'll ever reach is a manager, I'm the ultimate boss, he says that they can rise higher in the ranks of the company.

[Zing Singh]

He actually says, the lessons I learned from the dark days at Alibaba are that you've got to make your team have value, innovation and vision. So they've got to be able to see where they can get to.

[Simon Jack]

Yeah. And the other big thing he does is once again to look outside China's borders to the US he develops a.

[Zing Singh]

Product that enables China's exporters to trade with U.S. buyers online.

[Simon Jack]

And it's an Immediate success. By the end of 2002, Alibaba has made a $1 million profit.

[Zing Singh]

Now this is truly lift off for the company because with Alibaba now in profit, Jack Ma starts expanding his operations.

[Simon Jack]

Yeah, and I think you can see some parallels here between Jack Ma and Jeff Bezos at Amazon. It took Amazon a long, long time to actually turn a profit. Any money they made, they plowed back into the business. I think the first of Amazon's existence, it only made a profit in one year. And Jeff Bezos said that was an accounting mistake. But Alibaba actually went into profit quicker than Amazon did. And when Jack started making money, he reinvested into new areas of the business.

[Zing Singh]

He set up a customer to customer market which is a little bit like ebay. It's called Tao Pao, which translates to searching for treasure.

[Simon Jack]

Unlike ebay, it earned money from advertising and selling additional services rather than sale commission fees.

[Zing Singh]

And then he sets up Alipay, the online payment system, which is now another enormous part of his business. For instance, it's now got over a billion customers in China and it's expanding. So this year in 2024, it was a major sponsor of the European championships soccer tournament in Europe, which then ups its European profile.

[Simon Jack]

In fact, on the way to this studio this morning, I passed a bus which was plastered from top to toe in AliExpress with the Euro 2024 livery on it.

[Zing Singh]

So later on he'll also add cloud computing, which is a bit like Amazon Cloud, a site offering discounts by buying in bulk, which is a bit like a Chinese Groupon, a video platform, which is a bit like YouTube, like this.

[Simon Jack]

A bit like that.

[Zing Singh]

He's basically chopping and changing and taking bits that are working here and there and making them the number one kind of platform in China. He's even got a grocery delivery app and an end to end delivery system that aims to get packages anywhere in China in 24 hours and anywhere in the world in 72 hours.

[Simon Jack]

Sounds like a bit like Jeff Bezos company Amazon. Right? Right.

[Zing Singh]

And over the next decade, Alibaba cements itself as a dominant force in e commerce in China.

[Simon Jack]

And Jack funds all this growth with some massive investments. In 2005, his old friend Masayoshi Son had invited Jack to an entrepreneur event in California. And it was there that Jack bumped into Jerry Yang. Remind us of who he is.

[Zing Singh]

He's one of the founders of Yahoo. So one of the OG Internet bosses, I would say. They reportedly had a conversation that lasted just 10 minutes and within that 10 minutes. Whatever Jack said clearly convinces Jerry to invest $1 billion in Alibaba for a 40% stake in the company.

[Simon Jack]

Wow. So it's growing fast. This is the perfect time to do something we've discussed a lot in these podcasts, which is to go public to have a sale of shares, an IPO. In 2007, Alibaba had its first IPO on the Hong Kong Stock Exchange. It raised another $1.7 billion with Jack putting him on the verge of billionaire status. And that was confirmed when finance magazine Forbes Asia list him as worth $1.3 billion in 2009.

[Zing Singh]

So Jack is officially a billionaire, but he isn't about to slow. So on goodbye Billionaire, we often talk about the jump from a million to a billion being huge.

[Simon Jack]

And the jump from 1 to 2 billion is the same amount. It's another billion, but I would say it's arguably a little bit easier. But the point is that we've got lots of people who hit the billion dollar mark. There are 3,000 of them in the world. To go higher up the tree, it gets rarefied the higher up that mountain you climb. There are only 200 worth 10 billion, and there's only 25 in the world who have 60 billion billion, which is what Jack Ma was worth at his peak. So he's top of the tree.

[Zing Singh]

I mean, when you think about going from a million to a billion, we've talked a lot about the work that goes into it. But to get to the point where you are one in a group of only 25 people, I mean, you would all fit probably onto a single bus.

[Simon Jack]

Yeah. Not even half a bus.

[Zing Singh]

A van.

[Simon Jack]

Yeah, a big van. To scale those heights, you got to be the right person with the right business at the right time. And Jack Mars Alibaba, I think, ticks all of those boxes. Yeah.

[Zing Singh]

It's one of those spectacular success stories that I think don't come around very often.

[Simon Jack]

Yeah. I mean, the Internet has spawned many of the billionaires we've talked about, but this combines also, as I say, the sort of huge economic expansion in China and its reach out into the rest of the commercial world.

[Zing Singh]

Right. And this huge boom in Chinese consumerism. Right. People wanted to buy stuff coming out of of the communist era. People were kind of exposed to the marketplace. They were exposed to foreign goods for the first time. Alibaba was perfectly placed to take advantage of that.

[Simon Jack]

You're taking hundreds of millions of people from what you described as an almost agrarian economy into a consumer economy in a couple of decades. It's incredible.

[Zing Singh]

And, you know, the incredible success of Alibaba was confirmed when they had that IPO first in Hong Kong, and then in 2014, they had another IPO on the New York Stock Exchange.

[Simon Jack]

The biggest IPO in history, which to this day has only been surpassed once, and that was by Saudi Arabia's national oil company, which was worth, I think, something like $2 trillion.

[Zing Singh]

So that IPO raised $21 billion for Alibaba. It gave the company a market share of 168 billion. It was the highest value in IPO history for an Internet company.

[Simon Jack]

That's incredible because that includes Facebook, remember? So, you know, it's huge.

[Zing Singh]

So when you think about these big names like Bazaar, Zuckerberg, really Jack Ma right up there, right up there, right.

[Simon Jack]

Up there at the top of the tree. And it sees him become the richest man in China. He's become a celebrity in his homeland. His success is venerated. The public nickname him Ma Baba or Daddy Ma.

[Zing Singh]

Yep. His regular appearances around the world often go very viral. He even at one Point visited then US President Donald Trump in the White House in 2017, which is quite something.

[Simon Jack]

When you give the rhetoric that the Trump White House was talking about China at that time.

[Zing Singh]

Exactly.

[Simon Jack]

He makes regular appearances in Time magazine's list the world's hundred most influential people.

[Zing Singh]

And he even becomes a judge on a TV show called Africa's Business Heroes, which is a TV contest for budding African entrepreneurs. It's a little bit like Shark Tank in the US or Dragon's Den in the UK the show is actually funded by his Philanthropic Foundation.

[Simon Jack]

By 2020, his wealth has grown to $61 billion. He's the richest man in the whole of Asia. And he's planning an IPO for ANT Group. Now, that's the holding company of Alipay and others, which is set to be even bigger than the Alibaba ipo.

[Zing Singh]

But then something happens. He gives a speech in Shanghai where he makes critical remarks about China's financial regulatory system.

[Simon Jack]

This is a huge moment in this story. Absolutely massive, because his success has always relied on having a reasonable relationship with the Chinese state. It was even reported that he's a member of the Chinese Communist Party. But this time, it looks like he's crossed the. And the line he crossed was that he criticized China's financial regulatory system, calling it outdated, and suggested it stifled innovation. He also compared Chinese banks to pawn shops. That, it seems, was enough to bring about a rapid change in his fortunes.

[Zing Singh]

It's so interesting because those comments to someone based over in Western Europe or America probably doesn't even register as being anything other than mildly critical. But I imagine if your relationship with the state has to remain uniformly positive so your businesses can, otherwise you will face a crackdown. That kind of thing is like lobbing a grenade.

[Simon Jack]

Yeah. And who knows? I mean, it may have been that they wanted to take a bit of a more interventionist approach on this kind of massive global success he was having. And we're looking for the slightest opportunity in which to do it. We just don't know the answer to that.

[Zing Singh]

Right. It's still a pretty opaque business as to what happened.

[Simon Jack]

Yeah.

[Zing Singh]

Because after making those comments, he mysteriously disappeared from public view.

[Simon Jack]

He suddenly dropped as a judge on Africa's business heroes. A spokesperson for Alibaba at the time said due to a schedule conflict, Mr. Mark had no longer be part of the final judge panel.

[Zing Singh]

And most significantly, the Ant Group IPO is blocked by the Chinese government.

[Simon Jack]

That is a big moment, because that was going to be a huge IPO. And Jack Ma reportedly loses $12 billion of his fortune in just a few months.

[Zing Singh]

An Alibaba Group faces a Chinese antitrust investigation which focuses on allegations of monopolistic practices.

[Simon Jack]

That investigation concluded with a fine of nearly a billion dollars in 2023. So, oddly, while Alibaba Group's annual revenues are higher than they've ever been, in total, the combined loss of value to Ant and Alibaba of the state crackdown, reported by CNN, is $877 billion.

[Zing Singh]

That's a lot of money to lose.

[Simon Jack]

That's nearly a trillion bucks.

[Zing Singh]

Yeah. That is a lot of money to lose. It makes me kind of break out in a sweat thinking about that. And actually, in 2024, Jack's own wealth is down to about 24 billion. Still a lot of money, but, you know, he's lost a significant chunk of more than half.

[Simon Jack]

Yeah. But then comes a period of a few years where everyone's on the lookout for him. There are some shadowy traces of him. There's a couple of unconfirmed sightings of him doing things like playing golf, being on his superyacht. So there begin these rumors of a comeback.

[Zing Singh]

They do seem to be slightly premature, though. The main thing that Jack has returned to is his first love, teaching. So he's actually now an honorary professor at Hong Kong University and a visiting professor at universities in Japan, Rwanda and Israel.

[Simon Jack]

But he's certainly not the figure on the international stage he once was. He's not the Jack Ma who used to be this kind of huge Presence on the international stage, if CMCs gone into semi retirement. But he's still with us and it's time now for us to judge him. Is he good, bad, or just another billionaire?

[Zing Singh]

So on our first category, we judge our billionaire billionaires on wealth, just how rich are they?

[Simon Jack]

And on this one, he's got to score pretty highly. The richest person in Asia at one point at its peak, he had a fortune of $61 billion. That puts him, I think, in the top 10 easily. Now he's worth just over a third of that. At 24 billion, he's about 80th on the world's rich list, seventh on China's rich list. Still.

[Zing Singh]

Still. I mean, $61 billion is not to be sniffed at.

[Simon Jack]

Yeah. I think having been China's richest man at a time when vast fort were being amassed as China economy expanded so rapidly, the Internet expanded rapidly, I think it puts him really high on the list. And also remember, we do save a little bit of this category about how he spends it. He's got the Gulfstream jet, he's got the superyacht, he's got the vineyards. He's got that with his own wine. Yeah, I'm gonna give him a good 9 on this one.

[Zing Singh]

Oh, yeah, Well, I was gonna go for an eight, but then I remember the vineyards and what was it? The trout stream.

[Simon Jack]

The trout stream. The maple syrup.

[Zing Singh]

Yeah. Okay. It's a nine out of ten.

[Simon Jack]

Okay, so nine out of ten. Very high score there. We have another category, rags to riches. How far have they come from where they started to where they got to? And this one again, he's got a score pretty high.

[Zing Singh]

Yeah. I would give him maybe even an 8 out of 10 for this.

[Simon Jack]

Yeah. Because if you go back to him, his parents were storytelling musicians in Mao's China. Not the best profession to have during Cultural Revolution.

[Zing Singh]

No, exactly. And they really suffered as a result of that. He went to, and by his own admission, a terrible university. He kind of languished doing teaching for a bit.

[Simon Jack]

Yeah. Okay, I'm going to give him a nine out of ten.

[Zing Singh]

So eight from me, nine from you, nine from me.

[Simon Jack]

Villainy. Now, there has been some criticism, and this is not just of Jack Ma generally, but of the 996 working schedules. @ some companies like Alibaba, that means working from 9am to 9pm six days a week. High pressure environments, demanding performance targets, lack of job security. You know, it's a pretty attritional kind of environment, I would say.

[Zing Singh]

Yeah. Having said that, Alibaba has responded to some of these criticisms. They've implemented some measures to improve work life balance, like having flexible working, and they've promoted employee well being programs.

[Simon Jack]

But there are concerns about the vast collections of data big tech companies accrue. That's not. Again, this is not an Alibaba specific kind of concern, but in China, you.

[Zing Singh]

Know, it's really hard to go about your daily life without even interacting with an Alibaba app. Once, you know, just Alipay alone. So there are always questions in China at least about what data is being passed on to the Chinese authorities.

[Simon Jack]

Yeah. And that's a debate that continues to go on as we speak. There's also been reports of people getting to lots of debt via Alipay and the safety measures that need to be put in place. But you could say that about lots of apps. So apart from, you know, a brutal working environment, which I think is common of China generally, I don't see any massive villainy on Jack Ma's part.

[Zing Singh]

No, it doesn't seem like he screwed anyone over in his race to get to a billion, which is actually quite unusual for quite a lot of our billionaires. There's always someone.

[Simon Jack]

Yeah, that's true. Also worth remembering on the relationship with the state, going back to that quote that you gave us earlier about on the relationship with the Chinese government, be in love with them but don't marry them.

[Zing Singh]

Yeah.

[Simon Jack]

Was that the right one? Yeah.

[Zing Singh]

Yes, it's bas. It basically translates to get into bed with them, but don't put a ring on it. That's probably the, like, simpler explanation from what he said.

[Simon Jack]

Okay, all right. So villainy. I don't know, I'm gonna. I don't see anything particularly villainous here. I may be being naive about this, but I'm gonna give it a four.

[Zing Singh]

Yeah, I would give him a four. It doesn't really seem like he's been personally villainous. I mean, obviously the buck stops of him because he was the boss of Alibaba. But a lot of these things that we've just discussed discussed are actually quite common to tech companies.

[Simon Jack]

Yeah.

[Zing Singh]

I would say that what Aliexpress and Alibaba do is that they create probably what is so much product and so much waste, which they're then shipping all around the world. So the environmental impact or something like that, I think is probably huge.

[Simon Jack]

You know, you could level the same thing. And a number of other companies. Alibaba did set out some ambitious environment goals in 2021, including achieving carbon neutrality in their own operations by 2030 and enabling and engaging the platform ecosystem to reduce emissions by 1.5 gigatons over 15 years. In 2023, they announced they'd reduce their own CO2 emissions by 13%. So some progress. But does that mitigate the damage?

[Zing Singh]

Yeah, I would give it a 4 out of 10 because. And I know plenty of people who buy things on AliExpress. And the main reason you buy things is because they are dirt cheap. And that encourages you to spend a lot of money. You know, maybe not as much as you would spend if you went into a shop in the UK and bought it on the high street, but you're buying a lot of stuff that you probably don't need, which probably contributes quite a lot to the environmental impact of something like Alibaba.

[Simon Jack]

Yeah, encourages you to buy stuff, throw it away, buy again, blah, blah, blah, blah, blah.

[Zing Singh]

Exactly.

[Simon Jack]

Okay, okay. For each on that one, philanthropy is another one of the categories. What are they given away of their vast wealth.

[Zing Singh]

So in 2006, Alibaba launched its first organized philanthropy to help underprivileged mothers in China. By 2020, some 20,000 mums have been given free training and funding to become online entrepreneurs.

[Simon Jack]

In 2010, Alibaba started to earmark 0.3% of its revenues. Not profits, revenues, which is a big difference to philanthropy. The Alibaba foundation was set up to manage that philanthropic effort. With 56 billion in revenues for 2019. 0.3% is $168 million. Although Alibaba hasn't disclosed the actual figure they put into the Foundation. In 2014, Jack set up the Jack Ma foundation and he put aside shares in Alibaba before that record breaking IPO that we talked about. And in 2019, it was reported that the foundation's shares were worth $4.6 billion and it had paid out over 300 million, which is less than a tenth of what's in there.

[Zing Singh]

So causes have included 14 million to protect wetlands in Hangzhou. A joint pledge with the Alipay foundation and Jo tsai Foundation in $143 million pledge to support the development of women's soccer in China. Causes in Africa, Australia and the Middle East. So quite a global, if slightly China centric kind of approach to philanthropy.

[Simon Jack]

Yeah, well that's nothing wrong with a China centric if you're a Chinese billionaire. I mean, I imagine there's quite a US centric bent to lots of US billionaires charitable efforts. So there's a few hundred million there. There's a few billion apparently in the foundation. It's not clear how much they've distributed, but those shares in the foundation are pretty big chunk of his overall wealth. So I'm going to say I'm going to give him a five and hope that I would upgrade that five when I see more evidence of what's been paid out.

[Zing Singh]

Yeah, I think it's quite unusual to have someone put aside shares to give to their foundation. I've not heard of it before with any of our billionaires, I think.

[Simon Jack]

Well, the Bill and Melinda Gates foundation definitely have Microsoft ST stock in there. That's the foundation of Bill and Melinda Gates Foundation's fortune. Well, their vast fortune and also the foundation's fortune. That's where most of that comes from. So it's kind of similar in that regard.

[Zing Singh]

Maybe I'll be more generous and give him a six out of ten.

[Simon Jack]

Okay. All right.

[Zing Singh]

It does seem like he's given away more than you would expect.

[Simon Jack]

Okay. All right. We'll keep our eye on that one. And then power. One of our tests that we always use is could this person pick up the phone and talk to a head of state? And I would say this is a definite yes.

[Zing Singh]

Yeah. So he actually met with a lot of heads of state and business leaders when he was at Alibaba Group. So they discussed trade, investment, innovation, social development. So he's out and about.

[Simon Jack]

Yeah. And he's one of those interesting people, which is highly anglicized, if you like, in his business approach and his business network of contacts. And yet if we are, you know, if some theories that we believe has very close ties or some ties with the Communist Party and what have you. So he's an interesting figure as an intellect, collocate in some ways between governments, between Western governments and Chinese governments.

[Zing Singh]

And actually, according to their financial times in 2021, Jack reportedly sits on UN committees with a Rolodex, including kings, queens, presidents and prime ministers. So I would say he ranks quite highly with power.

[Simon Jack]

Yeah, I don't think he's as powerful as Zuckerberg and Murdoch, who I think we gave nines or tens to, but I'm going to give him an 8 on power. I think he's a very powerful figure. He's someone who can move quite easily between Washington and Beijing, and I think that makes him a very powerful figure. I'm going to give him an 8.

[Zing Singh]

Yeah, I'll give him an 8 out of 10. He's a definitely a really interesting personality.

[Simon Jack]

Yeah. And then legacy is our last category. Have they left something behind that will, you know, endure again? One of the tests we apply to this, that if he hadn't done it, would someone else have done it? And I think the answer to that is definitely yes.

[Zing Singh]

Oh, yeah. Some other Chinese entrepreneur would have come up with something like Alibaba.

[Simon Jack]

Yeah. But there was something about his charm, his energy, the fact he spoke flawless English, which allowed him to become the personification, if you like, of Chinese commerce beyond Chinese borders. But, you know, but then he sailed a bit too close to the wind and was slapped down when he was critical of the Chinese system. So maybe that that is meant a salutary lesson. So he's got a legacy in that respect.

[Zing Singh]

I also think maybe his legacy is yet to be determined because you can obviously see, you know, we've talked about, about the huge amounts of advertising Alibaba have spent on the Euros this year. You know, I've seen Alibaba adverts for the first time, like in the last few years in the uk. I think if they manage to nail the Western expansion, it could be an even huger story.

[Simon Jack]

Yeah.

[Zing Singh]

And I think that is very much in the works.

[Simon Jack]

Okay, so legacy eight, I would give.

[Zing Singh]

It a seven because I think, you know, you could add on more points, like depending on how it goes in Western Europe and America, it could maybe even surpass Amazon if they play their cards right. I'm sure Jeff Bezos is losing sleep over it.

[Simon Jack]

And also the reason I'm giving you an A also is because of his place in Chinese culture as this kind of folk hero. I mean, I think that, you know, like Richard Branson was a well known entrepreneur in the UK and people wanted to be rich like Richard Branson. I'm imagining that Jack Ma is a very similar character in China and therefore he is a lightning rod for Chinese entrepreneurialism, which has clearly been a world changing phenomenon.

[Zing Singh]

So 8 out of 10 from you, an 8 out of 10 from me.

[Simon Jack]

Did I manage to talk you up?

[Zing Singh]

Yeah, I think that's the first time.

[Simon Jack]

I've ever done that.

[Zing Singh]

Yeah.

[Simon Jack]

Okay. It's a victory for me.

[Zing Singh]

8 out of 10, billionaire first and.

[Simon Jack]

Then we've got then the ultimate decision. Is he good, bad or just another billionaire?

[Zing Singh]

I think he's just another billionaire.

[Simon Jack]

Right.

[Zing Singh]

I think it's probably one of the easiest cases for me to decide ever, because his story is really interesting, but he hasn't done other than his philanthropy, which, you know, is quite impressive. But not half the course. Half of the course, yeah. But he isn't bad either.

[Simon Jack]

Yeah.

[Zing Singh]

So, yeah, he's just a clearest cut case of just another billionaire for me, albeit in a very rich one.

[Simon Jack]

Yeah, I'm going to agree with you. I think he's just another billionaire. You know, having met him, he seems like a really nice guy. He doesn't seem like he's out to conquer the world with evil intent. If you think that the Amazonification or the alibabification of retail and the world is a bad thing, then you may think that he is bad. But if he hadn't done it, somebody else would.

[Zing Singh]

So Jack Ma, you are just another.

[Simon Jack]

Billionaire, a rich one, a very rich one. But you were even richer at one point. So who have we got next episode.

[Zing Singh]

So we've got South Africa's first black billionaire. In fact, he remains the country's only black billionaire.

[Simon Jack]

He's also part of a power couple. His wife is considered one of South Africa's most glamorous women and is an entrepreneur in her own right.

[Zing Singh]

And his sister is the current first lady of South Africa, making him probably the most well connected businessman in the country.

[Simon Jack]

He is Patrice Motzepe, a byword for black wealth and success in post apartheid South Africa.

[Zing Singh]

Goodbut Berliner is a BBC World Service podcast produced by Mark Ward with additional production by Emma Bettridge. James Cook is the editor and it's a BBC Studios production for BBC World Service for the BBC World Service. The Senior Podcast Producer is Kat Collins and the Podcast Commissioning Editor is John Mannell.

[Simon Jack]

If you enjoyed this podcast, then please rate and review us. And why not tell people about your favorite episode on social media? It helps us to keep telling you these incredible stories.

[Michael Lewis]

Hey there, it's Michael Lewis, author of Going Infinite Moneyball, the Blind side and Liars Poker. On the latest season of my podcast against the Rules, I'm exploring what it means to be a sports fan in America and what the rise of sports betting is doing to our teams, our states and ourselves. Join me and listen to against the Rules on America's number one podcast network, Network iHeart. Open your free iHeart app and search against the Rules. Listen to against the rules on the iHeartRadio Apple Podcasts or wherever you listen to podcasts.