Alibaba: The House That Jack Ma Built pdfdrive com

Hope and Coming to America
China has a million companies that want to sell abroad, but they don’t know
how.
—Jack Ma
In January 1994, at the age of twenty-nine, Jack founded the Hangzhou Haibo
Translation Agency. When the company first started there were only five staff
members, mostly retired teachers from the institute. He rented two rooms at 27
Qingnian Road, not far from West Lake in a converted church that once housed
the YMCA. Today the sign for Hope Translation still hangs outside, where the
translation agency maintains a meeting room, adjacent to what has become the
YMCA International Youth Hostel.
Jack convinced some students from his English night school to lend a hand
with the business, largely to help find his first clients. On opening day, his
students went to Wulin Square with banners to help publicize the company.
A few of these students ended up joining the company full-time. One of the
early employees was Zhang Hong. She met Jack in 1993, when he was teaching
advanced oral English at the YMCA. She recalled, “Nobody else saw the
opportunity in this business. . . . We didn’t make much money at first, but [Jack]
persevered. . . . I respect him tremendously for he has a great ability to motivate
people and he can invest things that seem hopeless with exciting possibility. He
can make those around him get excited about life.”
Jack’s first business was focused on helping local companies find
customers overseas. Jack later recalled, “I had to teach during the day, and had
no time to help others do translation work. But lots of retired teachers had
nothing to do at home, and their pension was low, so I wanted to found a
translation company, to be an intermediary.” With its narrow focus on
translation, Jack would not find commercial success with Hope. But his first
venture gave him direct exposure to the entrepreneurial revolution that was

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transforming Zhejiang and his first tentative steps as an entrepreneur himself.
The Chinese word for Hope was 
Haibo,
which literally translates as “vast
like the sea.” Popular slang for leaving a government job and entering the private
sector at the time was to 
xia hai,
or to “jump into the sea.”
Jack wanted to get his feet wet as an entrepreneur, but he wasn’t quite ready
to take the plunge and abandon his public sector job as a teacher.
Entrepreneurship is such a well-established part of modern Chinese business and
culture today that it is easy to forget how much things have changed in the last
few decades.
In the earliest days of China’s economic reforms, entrepreneurship was
viewed as a highly risky, even illegal undertaking. Memories then were fresh of
those imprisoned or even executed during the Cultural Revolution for carrying
out commercial activities.
From 1978, the establishment of a “household contract responsibility
system” allowed farmers to sell surplus crops on the open market. The first
embers of private business started to grow with the township and village
enterprises (TVEs). The TVEs were nominally state-controlled but in effect
privately run rural enterprises. The spark was lit for a rapid expansion of private
sector employment in China.
From the early 1980s, the Chinese government began to recognize
entrepreneurs,
1
first individual entrepreneurs then businesses run by
entrepreneurs.
The first entrepreneurs, the 
getihu,
were not leaving behind a stable
government job, but rather were those with nothing to lose. They were mostly
agricultural laborers, their low status inviting the pejorative association of
“peddlers.” As they grew richer they were resented and mocked for their success
and lack of class. One early 
getihu
even papered the walls of his home with
banknotes.
Some of the richest businesspeople in China today started out as lowly
getihu,
many in Zhejiang Province. To understand Alibaba’s rise, it is helpful to
understand how Jack’s home province became the source of so much wealth.