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The engrossing book, ‘Alibaba: The House that Jack Ma Built’ is an insider’s account of how an English teacher in China built one of the world’s most valuable companies, rivaling Walmart and Amazon. The rise of Alibaba from startup to giant in less than 15 years culminated in a $25 billion IPO in 2014, the largest global IPO ever.

The author Duncan Clark founded BDA Consulting in Beijing in 1994, and first met Jack in 1999 in the small apartment where Alibaba was founded. He served as an advisor to the firm, and draws on a wide range of sources for this informative book. Duncan was formerly with Morgan Stanley, and has lived in China for over 20 years.

Here are my Top Seven takeaways and tips for entrepreneurs from this 287-page book, in terms of the context of e-commerce in China, Alibaba’s strategy and culture, competitive positioning, and future growth. See also my review of the related book, China’s Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies are Changing the Rules of Business by Edward Tse.

1 Build an innovation ecosystem

“Over 400 million people, more than the population of the US, make purchases on Alibaba’s websites each year,” according to Duncan; this accounts for two-thirds of all parcel deliveries in China each day.

The company’s strengths are built on the ‘iron triangle’ of e-commerce, logistics and finance. Its marketplace websites include TMall (branded products), Alibaba (international B2B trade), TaoBao (local e-commerce), and Juhuasuan (Groupon-like site).

It has invested in premier logistics firms such as Shentong, Yuantong, Zhongtong and Yunda; most of their business comes from TMall and Taobao. Payment provider AliPay is expected to generate almost $5 billion in revenues by 2018; it has also created an online mutual fund, Yu’e Bao (becoming the fourth largest money manager in the world within 10 months). The new business Sesame Credit Management provides credit ratings to third parties.

2 Build an innovation culture

Alibaba has built a culture of camaraderie and commitment. Employees are called ‘AliRen’ (‘the Ali People’), and the anniversary (May 10) is celebrated as ‘AliDay,’ which celebrates teamwork and achievements. Lessons from hardships such as the SARS crisis are shared, and mentorship is strongly promoted. Employees are encouraged to learn from setbacks, but without ‘shame and blame.’

The culture is informal, and employees are encouraged to adopt a nickname. Employees can avail of interest-free loans for housing. The company’s culture is codified in the Six Vein Spirit Sword: customers, teams, change, integrity, passion and commitment. Employees are frequently rotated between regions and roles to broaden their experience. Former Alibabaemployees have been associated with 317 startups (as compared to 294 from Tencent and 223 from Baidu).

3 Be a master storyteller

Jack Ma is regarded as a masterful speaker, and networks with the giants of the business world. He has been described as a ‘Rockefeller’ of his age and even ‘Don Quixote,’ and a mix of ‘Bill Gates, Steve Jobs, Larry Page and Mark Zuckerberg, all rolled into one.’ He has also been nicknamed ‘Crazy Jack,’ and his charisma is called ‘Jack Magic.’

Unlike many Chinese entrepreneurs who returned from US education and work stints, Jack describes himself as ‘one hundred percent Made in China.’ He has a strong ability to ‘charm and cajole,’ and is ‘attention-grabbing in both English and Chinese.’

Quotable quotes (‘a soundbite machine’) and humour are hallmarks in this maverick’s talks, and Duncan jokes that Jack Ma could be a ‘stand-up comedian’ as well. As storytelling and culture-building techniques, Jack uses references, imagery and metaphors from Chinese martial arts characters. (See also my review of the related book, The Storyteller’s Secret by Carmine Gallo.)

4 Understand the local context

In Jack Ma’s early years, formative developments were the reforms of the Deng Xiaoping era. He grew up in Zhejiang, China’s ‘crucible of entrepreneurship’ in the Yangtze River delta, with Shanghai as its centre. The Yiwu wholesale market was an early template for Alibaba, and Wenzhou was home to the country’s first private railroad and air carrier. The General Association of Zhejiang Entrepreneurs may be ‘the largest business association in the world.’

The collapse of the Soviet Union followed by the rise of the Internet shaped the Chinese government’s cautious approach to dealing with the online world – promoting digital infrastructure while controlling media expression. “China wanted a Silicon Valley, but one that it could control, built on its terms,” Duncan observes; this would manifest in the ‘Great Firewall of China’ as content filters.

Early Internet players in China, some with US exposure, include AsiaInfo, UTStarcom and the portal players Sina, Sohu and NetEase. The dotcom crash of 2000 and the financial crisis of 2008 would rearrange the pecking order of the different waves of China’s digital startups.

Today, Jack Ma stands “at the intersection of China’s newfound cults of consumerism and entrepreneurship,” Duncan observes. Due to pressure on urban land, inventory and rental costs are high - and retail offline penetration is lower than in large countries like the US. Thus, e-commerce is a necessary channel for many categories and has become a lifestyle. “More than 40 per cent of Chinese consumers buy their groceries online as compared to just 10 per cent in the US,” says Duncan. Young mothers are also a key customer base for Alibaba.

5 Accept the cycles of boom and bust

Jack was born on September 10, 1964, the Year of the Dragon. His parents shared a passion for folk art performances. As a boy, he developed a love for the English language and literature, which would help him develop an international outlook and network with visiting tourists. He developed a friendship and professional association with one such Australian tourist, David Morley, who became an angel investor in the company.

A visit to the US exposed him to the Internet, and he launched his first online venture China Pages, moving out of his teaching days (his other venture was Hope Translation services). He later moved to Beijing to work for the trade ministry; a formative meeting was with Jerry Yang, founder of Yahoo, during his China visit. Jack’s next venture would be Alibaba, for which he roped in Taiwan-born investor Joe Tsai as co-founder.

Early competitors would be the websites of the trade magazine Global Sources, and MeetChina. The NASDAQ IPO of China.com in 1999 opened the international floodgates of the consumer Internet investment boom in China. Jack Ma’s ambitions rose to position Alibaba as a global player, attracting early investment from Goldman Sachs and Softbank(Masayoshi Son would be regarded as a ‘kindred spirit’ for Jack Ma).

6 Be prepared to take on the giants

The growth of the international market attracted larger players like Yahoo and eBay. eBay bought a stake in Chinese player EachNet, and Alibaba responded by launching Taobao and AliPay with new investment from SoftbankeBay fumbled with wrong cultural approaches to its China strategy and design, and eventually withdrew.

Yahoo entered the China market with a Chinese PC manufacturer as partner, and later bought a firm called 3721 Network Software; Jack Ma negotiated a deal to sell 40 per cent of Alibaba’s stakes to Yahoo for a valuation of about $4 billion. Other entrants such as Google exited the China market due to security and censorship concerns.

7 The road ahead – plan for the bigger picture

The ‘BAT kingdoms’ (Baidu, AlibabaTencent) are major Internet players in China today. There are notable local competitors to Alibaba, such as JD.com (with an ‘asset heavy’ strategy like Amazon), and chat-based commerce from WeChat (the app launched by Tencent).

Alibaba is investing heavily in startups in China in mobile, media and crowdfunding spaces (the book does not cover its investments in other countries like India). It also has a research wing, AliResearch, and has launched rural initiatives such as e-commerce kiosks as well as a global consumer operation called AliExpress. (See also my review of the related book China Fast Forward: The Technologies, Green Industries and Innovations Driving the Mainland’s Future by Bill Dodson.)

Concerns have arisen, however, over the investment and holding patterns in the web of companies controlled by Jack Ma. His activities as entrepreneur and philanthropist have expanded to grappling with China’s greatest challenges, in reforming healthcare, education and environment.

It would be fitting to end this review with one of Jack Ma’s popular quotes: “Today is brutal, tomorrow is more brutal, but the day after tomorrow is beautiful.”

Author: MADANMOHAN RAO
Source: https://yourstory.com/2016/12/tips-entrepreneurs-alibaba-story

Categorized in Business Research

Do you still have a Yahoo Mail account? The tech company made its way onto the scene in 1994 and became a popular search engine and email service. However, it's had a very rough year.

First we learned of a massive data breach that could have impacted billions of users. Then we found out Yahoo was allegedly complying with a government security agency's request to spy on all incoming emails. Now, there is more troubling news coming out about the tech giant.

Security researcher Jouko Pynnonen recently discovered a severe security vulnerability with Yahoo Mail. The flaw would allow an attacker to access the victim's email account.

This was a cross-site scripting (XSS) attack, similar to the one discovered by Pynnonen around the same time last year. Watch this video to see a brief detail of last year's discovery:

Why this flaw is so alarming

What's terrifying about this is the victim wouldn't even need to click on a malicious link to be affected. You only had to view an email sent by the scammer for your Yahoo Mail account to be compromised.

Yahoo filters HTML messages, which is supposed to keep malicious code from making its way into a user's inbox. However, Pynnonen discovered a vulnerability that kept the filters from catching all malicious code. It had to do with different types of attachments that could be added to emails.

The good news is once Pynnonen reported the flaw, Yahoo fixed it. The tech giant also paid him $10,000 for discovering the vulnerability through its Bug Bounty Program.

Even though these flaws have been patched, it's been a rough stretch for Yahoo. If all of these problems worry you, you might want to close your Yahoo accounts. Here are instructions on how to do that:

  • How to close your Yahoo account:
  • Go to the "Terminating your Yahoo account" page.
  • Read the information under "Before continuing, please consider the following information."
  • Confirm your password - if you forgot your password, you can recover it with the Yahoo Sign-in Helper.
  • Click Terminate this Account.

Remember, if you do close your Yahoo account, you will not be able to use services associated with it. So if you decide to keep your account, at the very least make sure you have a strong password. Here are three proven formulas for creating hack-proof passwords.

You can also enable two-step verification, set up a Yahoo Account Key, or use a password manager. It's always better to be safe than sorry!

Author:  Mark Jones

Source:  http://www.komando.com/

Categorized in Internet Privacy

ISLAMABAD: In 2013, after Yahoo acquired Tumblr, a micro blogging website, many financial analysts thought that Yahoo would move away from troubled waters and join ranks with the likes of Facebook and Twitter, if not Google.

Marissa Mayer indeed made a good bet by acquiring the blogging platform for $1.1 billion but unfortunately the acquisition failed to turn things around for Yahoo. Revenues fell, though Yahoo snatched back some market share from Google in 2015 after a deal to replace Google as the default search engine on Firefox browsers in the US.

Despite several acquisitions and organisational changes, profits continued to tumble and eventually the company was put up for sale in 2016. Now in hindsight, we can identify four reasons why a company valued at more than $100 billion in year 2000 ended up getting acquired for less than $4 billion in 2016.

Do you Yahoo!?

After 21 years, board of directors at Yahoo still has no idea if Yahoo is an internet technology company or is it a media powerhouse. For most users, Yahoo is an obsolete search engine; for some, Yahoo is synonymous to Yahoo Mail and for many, it is a finance news portal.

The organisational identity crisis resulted in an unbridged gap between its internal self-image and its market positioning. Yahoo was the ‘go-to destination’ to find good content on internet but it failed to develop a new niche after the dot-com bubble burst.

Yahoo is a buzzkill when it comes to acquisitions.

It acquired more than 110 companies since its inception but only a few had a strategic fit with its core business. Yahoo has shown a poor track record in general when it comes to managing million dollar acquisitions. Yahoo failed to monetise the $5.7 billion Broadcast.com, an internet radio company and had to close operations of GeoCities – a web hosting company that it acquired for over $3.6 billion. Yahoo did the same with Delicious and Flickr.

A hands-off approach to product development

Unlike Mark Zuckerberg at Facebook and Larry at Google, co-founders of Yahoo essentially disconnected themselves with decisions related to the product design. Product managers called the shots who would prepare extensive requirements elicitation documents for engineers to execute – with little room for feedback.

Creativity was not a priority and there was no culture of process improvement. Things never changed even when underdogs started to steal Yahoo’s thunder and grab its market share.

Missed opportunities

In 2002, Yahoo failed to close a deal with Google co-founders when they asked for $1 billion. Eventually when Yahoo’s CEO went to them with the reluctant offer, Google raised their valuation to $3 billion.

Similarly in 2006, Yahoo approached Facebook with an offer of $1 billion. Though Mark Zuckerberg declined, it was widely known that an offer of $1.1 billion would have got the deal approved by Facebook’s board.

In 2008, Microsoft approached Yahoo with a takeover bid of over $44 billion. Yang resisted the offer and made up a “stockholder rights plan” as a poison pill to make the company unattractive for takeover. Eventually in 2012, Yang stepped down from the board leaving the company in dire straits.

Final word

An internal memo written by a Yahoo employee in 2006 (called Peanut Butter Manifesto) highlighted that the company wants to do everything and be everything – to everyone. The “fear of missing out” and the inability to focus on a core business contributed to the downfall of an internet pioneer.

http://tribune.com.pk/story/1153035/yahoos-demise-internet-giants-failure-story-missed-opportunities/

Categorized in Search Engine

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