The famous "18 Arhats Conference"
and "The Man Behind Jack Ma's Success"
On the fifth day of the Lunar New Year in 1999, 18 people filled a room in Hangzhou Lakeside Garden Community.
This is the first all-hands meeting of Alibaba. Jack Ma spoke passionately for 2 hours, and specially invited a photographer to video the whole process.
This is the legendary "18 Arhats Conference", which is one of the most famous scenes in the history of China's Internet development.
At this meeting, Alibaba's vision and mission have taken shape. For many years since then, Ali has basically followed the path that Ma Yun said at the meeting.
Ma Yun determined that the company's vision is to live for 80 years (later changed to 102 years), the mission is to make the world easy to do business, and the service targets are small and medium-sized enterprises. The company will be internationalized from the beginning to compete with Silicon Valley in the United States.
Although Ma Yun spoke with dances and dances, everyone who listened was solemn.
According to the memories of Jiang Fang, Peng Lei and others afterwards, they couldn't understand what he said anyway, but they were too embarrassed to interrupt him when he spoke so passionately.
Ma Yun also stipulated the company's struggle culture.
He said, if you want to go to work at 8 am and leave work at 5 pm, then you don’t have to work here... In the next 3 to 5 years, the price we will pay will be very heavy. will lead us to success.
Ma Yun set a small goal for Alibaba: to go public in 2002.
Everyone pooled 500,000 together, and thus started a new entrepreneurial road.
This group of people has no background, no family background, and none of them graduated from prestigious schools (the only returnee is Lei Wenchao, who graduated from Purdue University in the United States, but he left the company soon), in the words of Jack Ma later: "All No one wants it."
But soon, Ma Yun ushered in a super big cow.
In May, a man named Cai Chongxin came to Lakeside Garden to find Jack Ma.
Cai Chongxin came to help a friend discuss the acquisition. When he came to the lakeside garden in a suit and leather shoes, he saw this scene:
"The stairs were narrow and old, and there were a dozen or so pairs of shoes in front of the door. The apartment smelled bad. I was still wearing formal clothes. It was May and it was hot and humid."
Cai Chongxin was born in Taiwan. After graduating from Yale Law School in the United States, he worked in a world-renowned investment company with an annual salary of 700,000 US dollars (about 5.8 million yuan at the time). When I came to meet Jack Ma, his family was about to welcome their first child.
With such a background, Cai Chongxin had a strong urge to join the team after talking with Ma Yun once.
He returned to the United States and told his wife Wu Minghua about his thoughts. Wu Minghua thought he was crazy, and said, if I agreed, then I would be crazy too.
But Cai Chongxin was determined to come. Wu Minghua found that if he disagreed, Cai Chongxin might hate her for the rest of his life, so he had to accompany him to Hangzhou to inspect Ma Yun to see if it was worth Cai Chongxin's lifelong commitment.
Ma Yun took Cai Chongxin and his wife to swim in the West Lake. When the boat arrived in the lake, Cai Chongxin suddenly proposed that I want to join Alibaba. Jack Ma was taken aback and almost fell into the lake. He said, I can only afford 500 yuan a month.
Cai Chongxin was still very firm, and Wu Minghua also supported him.
Of course, Ma Yun couldn't wish for it, so the most classic pair of partners in the history of Chinese contemporary enterprise development was formed.
After that, they will work closely together for many years, creating miracles one after another. Cai Chongxin is known as "the man behind Ma Yun's success", and he himself, because he joined Ali, has a fortune of tens of billions of dollars and has become the second richest man in Canada (Cai took Canadian citizenship).
The start-up Ali encountered the biggest problem: no money
At one point even faced dissolution
The nascent Alibaba developed rapidly, and soon encountered the biggest problem of all start-ups: lack of funds.
Ma Yun and Cai Chongxin looked for investment everywhere, but hit a wall everywhere. They found 38 companies, all of which were rejected.
Later, Ma Yun talked about this process many times, but what he said was: We rejected 38 investment companies in a row.
Alibaba can't even pay its employees a salary of 500 yuan a month, and the company is about to go bankrupt.
In August 1999, Cai Chongxin found Lin Xiaru, an old friend who worked at Goldman Sachs. Lin Xiaru was the head of the Asia region of Goldman Sachs' private equity department at the time, and she happened to be looking for investment opportunities in Chinese high-tech companies. After listening to Cai Chongxin's introduction, Lin Xiaru was very interested and thought it was a good investment opportunity.
Like Cai Chongxin, Lin Xiaru was also moved by the passion of Ma Yun and the team after smelling the smell of feet in the lakeside garden. In October, Goldman Sachs and Ali reached an agreement, and five institutions invested a total of US$5 million in Ali, accounting for 50% of the shares. Among them, Goldman Sachs contributed 3.3 million.
Five years later, Goldman Sachs withdrew for US$22 million. This 7-fold rate of return is not low, but it was the biggest investment opportunity Goldman Sachs lost in history, because these shares will be worth hundreds of billions of US dollars in the future.
And luck is so wonderful. When Ma Yun no longer needed money, money came to him again.
Goldman Sachs' money came in only two days ago, and a friend introduced Ma Yun to meet an investor. Since Ma Yun already held 5 million US dollars in his hand, he took a completely indifferent attitude, did not wear a suit, and did not have a business plan, so he went empty-handed.
The Japanese investor with thinning hair and short stature interrupted Jack Ma after only listening for 6 minutes, saying, I want to invest. This person is Masayoshi Son of Softbank.
Soon, Ma Yun and Cai Chongxin flew to Japan and negotiated the details with Sun Zhengyi: Softbank invested 30 million US dollars, accounting for 30% of the shares (in just one month, Ali’s valuation rose 10 times).
However, when I returned to Hangzhou and informed the team, everyone was upset, saying no, too many shares were distributed. Ma Yun also came to his senses and thought it was wrong, so he called Sun Zhengyi's assistant and said that he wanted to change it to 20 million US dollars.
Jack Ma sent an email to Masayoshi Son saying: "If there is no fate to cooperate, we will still be good friends in the future." Masayoshi Son replied a few minutes later: "Thank you for giving me a business opportunity, we will create miracles together."
So, only 10 months after the "Eighteen Arhats Conference", Ma Yun had 25 million US dollars in his hands.
After getting rich, Jack Ma immediately swelled up. He rented a grand office building in Hong Kong, moved the Alibaba headquarters from Hangzhou, and moved to Hong Kong to work himself. It also established a server base and technical headquarters in the United States, set up offices in the United Kingdom, South Korea, Japan, and Australia, and recruited elite talents globally.
In 2000, Ma Yun promoted Alibaba all over the world. He gave speeches in BBC, Harvard, MIT, Wharton, World Economic Forum, Asian Business Association and other places, and was internationally famous by Business Weekly and The Economist. Magazine reports, and even became the cover figure of Forbes.
In China, Jack Ma started the "West Lake Discussion of Swords", inviting Jin Yong, Zhang Chaoyang, Wang Zhidong, Ding Lei, etc. as a landlord to discuss the future of the Internet, and he has become the leader of the domestic Internet industry.
Ma Yun and his Alibaba are in the limelight for a while.
But it was also at this time that Alibaba had fallen into very serious internal and external troubles.
In 2000, the Internet bubble had burst, the global Internet industry entered a cold winter, and investors also tightened their wallets. Although the number of Alibaba users has grown rapidly, it has not found a good monetization model and has been unable to make profits for a long time.
Internally, the cost was high due to the overstretched spread, burning through more than a million dollars a month. Internal management is also a mess. According to Ma Yun: "50 smart people are together, it is the most painful thing in the world."
At that time, Ma Yun recruited a large number of elite talents from Harvard, Stanford, Wharton and other schools, and every time he held a meeting, there were quarrels, and Ma Yun did not know who to listen to.
There are many contradictions between professional managers and founding members, between foreign employees and domestic employees, and waves of resignation keep coming and going.
Just 10 days after "West Lake Lunjian", Jack Ma announced that Alibaba had entered a state of emergency. He told the company's employees:
The next six months will be very severe, and we must be prepared to work overtime at any time. Everyone prepares for the winter, even kneeling to survive.
By the end of the year, more than half of the 25 million financing had been burned, and only 7 million US dollars remained in the company's account. If no new way out was found within half a year, Alibaba would be doomed.
Jack Ma finally made up his mind and made several decisions: one is to abolish a large number of overseas bases and return to China in an all-round way; the other is to withdraw the headquarters from Hong Kong to Hangzhou; the third is to lay off employees globally.
The third decision was the hardest. Because Ma Yun naturally likes crowds and excitement, and is more emotional, he has never been willing to lay off employees. But when the company came to life and death, he couldn't help it.
Ma Yun introduced Guan Mingsheng, who has worked in General Electric for 16 years, to Ali as COO to help change. A large number of elite talents have been laid off, and Ma Yun has since completed the transformation from an emotional person to a ruthless entrepreneur.
After these changes, Alibaba’s monthly operating costs fell to around $500,000, and the company won 14 months to survive.
Ma Yun likened this experience to the "Long March". He said that the completion of the reform means that we have climbed the snow-capped mountains, crossed the grasslands, and arrived in Yan'an. Next, there are three things to do: carry out the rectification movement, establish an anti-Japanese military and political university, and reclaim wasteland in Nanniwan.
The so-called rectification movement is to unify goals, missions and values; the establishment of the Anti-Japanese University is to cultivate capable cadres;
With the help of these three tricks, Alibaba has gradually improved. By the end of 2001, the number of enterprise users doing business in Ali exceeded one million, and the company also achieved a breakeven.
Ali finally survived.