Chinese ecommerce goliath Alibaba made history yesterday when its initial public offering – valued at more than $25 billion – became the world’s largest. In a statement, Alibaba revealed that about 48 million shares were sold at the $68 price before the listing publicly debuted on the New York Stock Exchange at $92.70 and closed at $93.89.
Initially launched as a platform to connect Chinese manufacturers with U.S. buyers, Alibaba has exploded into a billion-dollar enterprise that encompasses not only ecommerce, but also consumer-to-consumer auctions, search (through a million-dollar venture with Yahoo), online retail and payment processing. It has been described as a combination of Paypal, eBay and Amazon, and took in more than $8.5 billion in revenue last year.
Some may be tempted to dismiss the Chinese company as another “unicorn,” but entrepreneurs may in fact have a kindred spirit in its founder and CEO Jack Ma, who told Inc.’s Rebecca Fannin in a 2008 interview about the company’s roots as a startup in his one-bedroom basement apartment:
My dream was to set up my own e-commerce company. In 1999, I gathered 18 people in my apartment and spoke to them for two hours about my vision. Everyone put their money on the table, and that got us $60,000 to start Alibaba… There were three reasons why we survived: We had no money, we had no technology, and we had no plan. Every dollar, we used very carefully.
Naturally, Ma’s story has created plenty of teachable moments for startup CEOs looking to replicate his success. As Upstart points out, one core component of the Alibaba strategy is its ability to stand out. Using its TaoBao platform, an Etsy-meets-eBay site, Alibaba was able to herald the age of what Ma called the C2B economy, an era of customization in which consumers, not companies, dictate what is needed in the market.
In an interview with TechCrunch, Hany Nada also credited Ma’s desire to “make the pie as big as possible” as another important factor. Nada, whose venture capital firm GGV Capital reportedly made 40 times its original $8 million investment in Alibaba, explained:
The return would not have been possible if Ma had not been had the spirit of inclusion that extends beyond his vision for his company’s customers but to its other executives and (at least initially) its partners as well.
At the end of the day, however, the most useful advice to glean from Ma’s experience might also be the most familiar. From his 2008 Inc. interview, he explained the importance of building a great team and never giving up:
The lessons I learned from the dark days at Alibaba are that you’ve got to make your team have value, innovation, and vision. Also, if you don’t give up, you still have a chance. And, when you are small, you have to be very focused and rely on your brain, not your strength.
Photo Credit: Melies via Flickr