20 years of work, but a legacy for the era

Today is a big day for Alibaba. The company is turning 20 years old. It’s a poignant day of reflection for all of us, especially our lead founder Jack Ma, who took the occasion to revisit his old apartment where it all began. As the first American to join Alibaba, it’s also been an emotional and incredibly enriching experience for me. I wanted to take this opportunity to share my reflections on the impact Alibaba has made on both China and the world since the company’s founding in 1999.

Alibaba has created more than 40 million jobs and generated over $830 billion in gross merchandise value (GMV) in the last full fiscal year. More importantly, the platform generated nearly $97.6 billion in revenue in rural communities, nearly fifty-percent of the Taobao store owners are female and the platform is home to over 174,000 shops run by owners with a disability generating 11.66 billion yuan in revenue. Institutions like the World Bank and the United Nations have been amazed at how a digital platform like this has been able to achieve such an inclusive ecosystem with a positive social impact. Leading universities and think tanks come to study Alibaba’s role in developing China and empowering marginalized groups through the use of technology. Unless you’re on-the-ground in China, this perspective is easy to miss.

If you’ve already been following the company, you must know about Jack Ma, the founder of the company with the largest IPO in history. His achievements have been chronicled in books like “Alibaba’s world: How A Remarkable Chinese Company Is Changing the Face of Global Business.” While the business achievements of Alibaba are certainly noteworthy, Jack’s vision for creating Alibaba was to empower the “little guys” and give them a seat at the table to become part of the mainstream economy to utilize technology as the great equalizer and give a voice to those who had been overlooked by the traditional systems.

Essentially, during the past 20 years, Jack Ma and the Alibaba team have created a new development paradigm for the world, and it has been an amazing privilege to witness this firsthand.

Riding the Tiger

I recall the early days when Jack said starting Alibaba was like being “a blind man riding on the back of a blind tiger.” When I met him in San Francisco in 1999, he told me none of the 30+ venture capitalists he met were willing to invest in Alibaba. But he didn’t seem discouraged. These investors saw him as an unqualified English teacher from an undeveloped China with less than 10 million internet users at that time. Ironically, it was exactly those elements that made him so unique and the opportunity so significant.

Alibaba’s journey has been a lesson in a new digital economy and realization of how data is today’s most precious commodity. China lacked many of the components of a traditional retail infrastructure, and as a result, China leapfrogged into e-commerce. It reaped the benefits of the new economy. In the traditional economy, businesses are characterized by a zero-sum mentality – commodities like oil are scarce resources, and value creation comes from hoarding those resources. But in the new economy, data is a renewable resource that can be easily shared, consumed by multiple parties simultaneously, and is made more valuable as more applications are found. Hence, the objective is “growing the pie” through network effects and collaboration. As a result, more value can be created for everyone. Most importantly, the creation of digital platforms that are transparent and efficient also provide opportunities for small businesses to participate in economic systems at lower costs and with lower barriers to entry.

In recent years, Alibaba has invested heavily into bringing this model of using data to empower the digital economy of an area long-overlooked by Silicon Valley: the African continent.

Empowering a Digital Africa

In a recent article for the World Economic Forum, I highlighted how Jack observed the similarities between the development in Africa and what he saw in China 20 years ago. At that time, China had a large population, a rudimentary retail infrastructure, per capita income was only $800, and e-commerce was virtually non-existent. Today, there are over 800 million China netizens and their per capita income is over $9,000. According to eMarketer, China represents 54.7% of the global e-commerce market, a share nearly twice that of the next five countries combined.

Over the past 20 years, Alibaba seized the lack of retail, logistics and data infrastructure in China as an opportunity to leapfrog ahead of the West by leveraging digital tools like integrated digital payments and advanced logistics software. Today, we are sharing what we learned in China with other areas of the world with a similar lack of infrastructure.

Through the creation of the Alibaba Business School’s eFounders Fellowship program, we educate, train, and nurture entrepreneurs in emerging markets, including 119 from Africa alone. And the Jack Ma Foundation has launched a 10-year, $10 million prize fund for African entrepreneurs known as the African Netpreneur Prize, to identify and celebrate talent in the region and honor their success.

One of our students, Uju Uzo-Ojinnaka, posted on LinkedIn last week about her experience training at the Alibaba campus in Hangzhou. She wrote, “10 days filled with so much learning with the sole intention of showing us the possibilities for our Africa… to build our Africa, one trader at a time.” Alibaba succeeds by showing compassion to the next generation of entrepreneurs from emerging markets to help them create the next 100 million jobs by 2037.

What most people don’t understand about Jack is that he never started Alibaba with the goal of making money. Jack’s ability to lead stems from his commitment to educate and nurture people, to grow their businesses within these ecosystems.

Spreading the Love

Jack motivates his team through a term he champions: the “Love Quotient (LQ).” LQ is about empowering every individual to own their voice and express their most authentic self.

IQ and EQ are important for any leader to lay out a strategy and manage people. But it is LQ that differentiates a good company from a great one. LQ ensures an organization to see its relevance and role in solving society's problems.

Empathy and compassion are key traits of an organization which measures its worth not by how much money is made, but how many people they enable. That emphasis on providing value for the collective good serves as a better metric for any company that wants to have both longevity and a positive social impact.

This vision of the role of the corporation is just one example of how we move beyond the traditional business paradigm. The Business Roundtable is U.S. association of CEOs that had originally defined a company’s purpose as to “exist principally to serve shareholders.” 20 years later, they have finally acknowledged the system-wide benefits of Jack’s mantra: “Customer First, Employee Second, Shareholders Third.”

Beyond being one of the largest, most innovative companies of our era, Alibaba has given us frameworks for how business can be conducted in a way that is sustainable, global, and good for society. I hope that in the future, more global leaders and organizations can recognize the importance of a high LQ.

The Road Ahead

Digital platforms can be used for changing mindsets, behaviors, and entire economies in positive, constructive ways. There are risks in this new and uncharted digital world. But Alibaba has demonstrated that there are greater benefits that come with the inclusive development of this world than those risks which we fear. The biggest risk is missing the opportunity altogether.

Jack Ma and the company he has built has left quite a mark on the world already. Through a long-planned and carefully orchestrated succession process, Jack will pass the reigns of Executive Chairman to the brilliant Daniel Zhang, who has been CEO of Alibaba since 2015. Jack will continue to be an integral part of Alibaba, serving on the Board of Directors and continuing to be a lifelong member of the Alibaba Partnership. As he invests more of his time on philanthropic pursuits, he will continue to make his mark on Alibaba.

Thank you, Jack, for this gift. We can’t wait to see what we will all accomplish together over the next 20 years.

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I plan to produce more articles on innovation in China, and I’d like to learn more about your perspectives. To better inform future articles, feel free to connect with me and share your feedback by clicking on this link here.