Chinese billionaire Jack Ma realized a policy of not hiring the best candidates for a job during Alibaba’s early years and it eventually paid off.
Written by China-based investment adviser Duncan Clark in 2016, the book also revealed Ma’s unflattering opinion of those who graduated from business schools:
“It is not necessary to study an MBA. Most MBA graduates are not useful… Unless they come back from their MBA studies and forget what they’ve learned at school, then they will be useful. Because schools teach knowledge while starting businesses requires wisdom. Wisdom is acquired through experience. Knowledge can be acquired through hard work.”
As the entrepreneur pointed out, candidates from the so-called “college elite” have the tendency to get frustrated easily when faced with real-world challenges.
Ma revealed in a speech:
“A good team does not mean you hire excellent people from Harvard or from a multinational or from Fortune 500 companies.
“I remember when we raised the first $5 million, we thought, ‘Ha, now we have money.’ From $50,000 to $5 million, so we should hire great people. We hired close to 10 excellent vice presidents from many multinational companies. One of the guys who was a marketing expert vice president of a big company, he gave me a business plan, a marketing plan: $12 million.
“And I said, ‘Hey, we only have $5 million, how could you give me a business plan for next year’s budget in marketing set for $12 million?’
“He said, ‘Jack, I’ve never made any plan below $20 million!’
“Hire the right people, not necessarily the best people. The best people are always the ones you train. There’s no ‘best people’ in the market, the best people for you are always the ones you train yourself.”
Ma understood that it would take thick-skinned individuals to survive a company which was then still finding its place in the modern economy.
“Today is brutal, tomorrow is more brutal, but the day after tomorrow is beautiful. However, the majority of people will die tomorrow night. They won’t be able to see the sunshine the day after tomorrow,” Ma would often say to new recruits.
The new hires had to contend with very low salaries and grueling work hours, working seven 16-hour work days per week and earning barely $50 per month.
Alibaba employees were also required to live no more than ten minutes away from the office to save traveling time.
But what sets the company apart from the other firms in China is how Alibaba was managed like a Silicon Valley company from the start.
It has remained one of the very few Chinese companies which issue each employee share options in the company, vesting over a four-year period.
When the Alibaba’s clientele eventually grew, customer service demands also increased. Ma’s employees responded to the challenge by turning themselves into free “tech support” to customers.
From providing basic troubleshooting tips on computers to resolving delivery issues, the instant customer care team managed to respond to every email within two hours, further establishing the company’s “customer first” principle.
With the right people behind him, Ma was able to transform Alibaba into a multinational e-commerce, retail, Internet, AI, and technology conglomerate considered to be one of the biggest companies in the world today.