My First Million: MFM Mini - Shaan's 15 Minutes with the CEO of Alibaba

All right.

Quick break to tell you about another podcast that we're interested in right now, HubSpot

just launched a Shark Tank rewatch podcast called Another Bite.

Every week, the hosts relive the latest and greatest pitches from Shark Tank, from Squatty

Potty to the Mench on a Bench to Ring Doorbell, and they break down why these pitches were

winners or losers, and each company's go-to-market strategy, branding, pricing, valuation, everything.

Basically all the things you want to know about how to survive the tank and scale your

company on your own.

If you want to give it a listen, you can find Another Bite on whatever podcast app

you listen to, like Apple or Spotify, or whatever you're using right now.

All right.

Back to the show.

When I was, I don't know, 21, I got this really cool opportunity to go on an all-expense

paid trip to China courtesy of Alibaba, and Alibaba at the time wasn't as well known as

it is today.

Today, it's pretty well known.

It's a publicly listed company, you know, $40 billion plus company, something like that.

And so the question is, what would you do if you had 15 minutes talking to the CEO of

Alibaba?

Because I had 15 minutes, and I choked.

All I could muster up was, you know, what's the key to success in business, right?

What are my worst questions?

But whatever.

I shot my shot.

Everyone else was too scared to speak.

And so the CEO at the time, this guy, David Wei, he drops a knowledge.

He goes, you know, asking what makes something successful, you know, modeling success is

misleading.

You can't copy success because there's, you know, a million different factors, a combination

of luck and timing and specific context for every single success that's a big, big outlier

success.

Instead, you should ask me, what are the keys to failure?

Because those are always the same.

And you know, I gave them the look like, okay, go ahead.

You permission to blow my mind, and he said, there are three things that will kill any

company if in excess.

So if you have an excess of any of these three things, it'll kill your company.

Money, plans, and technology.

That's not what I was expecting.

So then he continued to explain that at Alibaba, they had this internal motto, no money, no

plan, no technology.

All right, tell me more.

What is it?

So no money.

He goes, money makes people stupid.

When problems arise, the first instinct becomes throw money at it rather than attacking it

with creativity.

And this works sometimes.

Sometimes you do the easiest path is money, but it becomes this crutch that you can never

get rid of as a company, that people are so used to solving everything with money, and

they lose the ability to solve problems with creativity.

So he was telling a story, you know, years ago, Alibaba wanted to create their own version

of Google AdWords.

And Google AdWords at the time was like, you know, the main business model of Google,

Google was like a $200 billion company then, it's like a trillion dollar company now.

And so, you know, how much money did Alibaba fund the AdWords project, right?

Clearly if you did this, it was going to be worth billions and billions of dollars.

So what did they give it, $100 million, $10 million, $1 million, no.

They gave it $250,000, and, you know, $250,000, not $250 million, $250,000.

And that was for everything, salaries, servers, marketing, office space, everything.

That was the full budget.

And they had the money, they had just done a $1.7 billion IPO.

So it's not like they were strapped for cash.

But the CEO was basically saying, look, if we're going to build this, if we're going

to build something great here, we're going to build it due to creativity.

And he said, here's what he told me, in quotes, he goes, I wanted them to hunt like dogs.

These are from my notes.

I wanted them to hunt like dogs.

The team worked, they worked out of the founders' old apartment.

Just like when we started Alibaba, there was like 17 people working out of Jack Ma's apartment.

The team for the AdWords project moved back into that apartment.

They literally found servers from like the trash, like refurbished servers, even still

they needed more money.

They hired an engineer to architect their system.

And to this day, what that one guy did is a single most creative engineering feat that

they've ever seen inside the company.

And once the team was done, they asked for money to create like backup servers, like

a redundancy to be safe.

And we said, no, no redundancy.

We would rather risk servers crashing than risk spreading the attitude that money should

replace our creativity, our diligence, our hustle and intelligence.

And then he said, it's funny, the more money you have, the more expensive everything seems

to get.

All right, second one, no technology.

Alibaba is basically like an online marketplace.

And they have about three, at the time, they had three, 4,000 engineers on staff, probably

triple that now.

But they never talk about themselves as a technology company.

So David said this pretty specifically, he goes, we are a service company.

We are here to solve customer issues, not to build new technology.

So in order to serve as a service company, yes, we often use the best technology so

we serve better.

But if it fails, we'll do it manually because we are not a technology company.

We are a service company.

And this is very common.

You've seen this with Amazon, they talk about customer obsession.

Zappos used to say we deliver happiness.

It is important how you think about yourself as a company, but this also applies as a person.

How you define yourself will define what you are willing to do and not to do.

Last thing was no plan.

So how the heck are you supposed to reach your goals without a plan?

And so David said, he turned to the other kind of, there was a bunch of other CEOs,

kind of executive people in the room that were all pretty successful.

He goes, okay, all of you here, you're very successful.

And how many of you today are doing what you planned on doing when you started?

Right?

Crickets.

Everybody, everybody's success was sort of off plan.

And David said, the plan always changes, but the mission never wavers.

And sometimes you need to make a plan to get others to believe and to figure out what to

do next, but you must follow your gut and you must adapt to the circumstances.

Do not follow the plan you wrote when you started.

Follow the mission, follow the vision and follow the reason why.

If you're just trying to follow the mission, you will always come up with the right plan

right in time.

And too many people get married to the plan that they wrote and forget the reason they

wrote the plan to begin with.

And so that was my 15 minutes with the CEO of Alibaba.

And even though my question kind of sucked, I think I got my money's worth.

No money, no plans, no technology.

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It's a free newsletter.

I send out one or two stories like this a week and yeah, they're always entertaining.

They're always got a little negative insight in there.

So I think you'll like it.

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Hey, my first million listeners, this is Steph again from trends.co.

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Machine-generated transcript that may contain inaccuracies.