Damaris Hurtado Pérez: Interview with Jack Ma

Jack Ma ( China, 1964), founder and chairman of Alibaba Group, one of the leading tech companies in the world with Google, Facebook, Amazon and Microsoft. He is in the process of implementing five new strategies that will drastically disrupt the ecommerce market today. His goal is to start a transition and start delegating the steering wheel of his company to focus on what is truly important to him: philanthropy. Through his Foundation, Jack has one great plan: to rethink and disrupt the current global education system so that it can face the challenges of the digital era.

 Author: Elena Cué

 

Jack Ma. Photo: Elena Cué

Jack Ma ( China, 1964), founder and chairman of Alibaba Group, one of the leading tech companies in the world with Google, Facebook, Amazon and Microsoft. He is in the process of implementing five new strategies that will drastically disrupt the ecommerce market today. His goal is to start a transition and start delegating the steering wheel of his company to focus on what is truly important to him: philanthropy. Through his Foundation, Jack has one great plan: to rethink and disrupt the current global education system so that it can face the challenges of the digital era.

The Jack Ma foundation you started in 2014 gives support to schools in rural areas in China. What are your future plans in that area?

There are close to 40 million students and young people living in poor rural areas. I think the best way to help kids is to help their teachers. Teachers in rural areas have very poor conditions. They are not respected and no one cares about them. We are trying to build a system to encourage, inspire and support them. Another way to help teachers is to train their headmasters. Most teachers give up on teaching because they do not like their headmasters. Headmasters in rural areas have never received even an hour of training, so how could they inspire teachers? That prompted us to start this program.

Unfortunately, a lot of schools in poor areas do not have enough kids. Each school has about 15 students in each grade. We try to combine them and create boarding schools with over 100 students. Teachers love to go and teach there. China, Africa and a lot of developing countries are experiencing the same problem. We are developing a huge plan. We want to improve the model we have in China and then use it in other countries. The other thing is how we can use internet and technology to train students, teachers and headmasters. I am really interested in this type of education.

Another remarcable program of your foundation is the African Netpreneur Prize that awards one million dollars and is currently open to all African technological entrepeneurs. What are your goals with that initiative?


Africa needs three E’s: E-government, E-education and E-entrepreneurs. An E-government will be efficient and transparent. E-education would be the foundation. Then, If they have great entrepreneurs, they will improve Africa’s economy significantly. What we do is encourage entrepreneurs and turn them into the new heroes of Africa. We inspire them to hire more people, to be more creative, to improve the economy. Just like what China has done for the past 20-30 years. I have been working on entrepreneurships in China for more than 20 years. I have personally built six companies that are all very successful today. I figured out ways to train and develop people to be entrepreneurs. I want to encourage that in Africa. My foundation gives one million dollars to ten African entrepreneurs every year. The purpose is to create successful case studies for entrepreneurs in Africa. Regardless of the country, area, age and type of business. It is not all about technology. If you run a successful barber shop or a restaurant, you can still receive an award. We want to show Africa that there are a lot of entrepreneurs and there are many ways to upgrade them.

Considering the current exponential development of technology, transhumanism and artificial intelligence, what do you think should education be focused on in this new world that is coming?

My view is that the whole education system needs to be upgraded. Today’s education system was designed 100 years ago during the industrial period. It trains people to remember and calculate things; it makes people smarter and more hardworking. Unfortunately, we are moving from an industrial period to a digital one. Over the past 30 years we have been trying to make people like machines. In the next 30 years we will be making machines like people. The current education system trains people to compete with machines. 

Is not that an impossible battle?

Yes, there is no doubt in the digital age in which we live. The only way to succeed is to start teaching our kids to be more creative, constructive, innovative. This is the way the education system should follow. We have to train our kids not to have to best scores but to be the best version of themselves because no matter how hard you work on remembering and calculating things, a machine will always be able to do it much better than you will. If we do not change the way we teach, our kids will be in big trouble in the future. In the age of information explosion, we should teach our kids to have independent thought.

Now, the human beings worry a lot about artificial intelligence and robots...

But I do not. Robots are machines, they do not have a heart. They only have a chip. A chip can never dream like a heart does. The heart has love, dreams and creativity. If human beings only use their brains, no matter how hard we work, we will not be able to compete against the machines. Heart is about EQ and brain is about IQ. If we only compete with our IQ, we will be gone. We have to compete with our EQ and LQ plus our IQ. That is the educational system that the world needs.

 

Jack Ma and Elena Cué

 

What does creating the E-commerce world giant Alibaba Group mean to you?

What we want to do is not to just make E-commerce. Alibaba facilitates all aspects of business. During the industrial era, only big companies were successful. They had the money, resources, network and technology. However, 99% of the businesses worldwide are small businesses. So we want to help small businesses compete and be prosperous. Today, Alibaba does everything to empower small businesses and young people to grow. Our dream is through technology to enable that every small dream comes true. That is why we focus on marketplaces. We build logistics, financial and cloud computing systems. These are the systems that can improve any small business and make it competitive. In the beginning nobody believed my vision but in the past 20 years all companies that have used our marketplace and systems have gone on to be successful.

How are Alibaba and Aliexpress different from Amazon?

We are not an E-commerce company. Amazon is an E-commerce company. We are helping companies become E-commerce companies, to become Amazon. People think we are the Amazon of China but it is not the case. We believe that any company can follow the Amazon model. We help them deliver, pay and receive money, reach the market and have the same technology capabilities as Amazon. That is our vision and what we think the world will look like in the next 10 to 20 years.

Amazon buys and sells...

We do not, we provide solutions to companies. If you have an IT problem, we offer you cloud computing. If you have a delivery problem, we provide the logistics. If you are having issues reaching the market, you can use our resources.

What changes of your "Five Big New" strategies do you consider will be the most important in the future?

In the next 10 to 20 years we will be moving into the new retail. It is redefining the way retail works. Offline shops are waiting for customers to come. New retail is offline and online combined. It is no longer you going to the shop, now the shop goes to you. New retail has new manufacturing as well. In the old days, manufacturing was about ideas and engineering, making a product and selling it in the market. Because of data, in the future we will know exactly what everybody wants so we will be able to tailor-make it. In the past it was B2C (business to consumer), now it is C2B (consumer to business). 

The financial system of the past was the big banks looking for a customer who would like to invest. In the future, we will empower every small business that needs money. As long as they have a good credit rating system, they will get finances. We are redefining the financial system.

Cloud computing and internet technology is going to replace traditional technology. In the last century the competitive advantage was oil, this century it is data. Without data, it is difficult to customize and be innovative. Data is very important. These are the five elements that we think are going to change the world significantly. At first, the retail and manufacturing industries will not like it. Successful people love yesterday. But successful people only represent 20% of the population. What we want to do is make 80% of people more successful while making sure everyone is competing for the future, not for yesterday.

How can Artificial Intelligence help humanity?

Every technological revolution brings a disaster. The initial intention is always good but the consequences are not. As I said in Paris and New York, the First Technological Revolution, directly or indirectly, caused World War I. The Second Technological Revolution again, directly or indirectly, caused World War II. Now we are in the Third Technological Revolution. If human beings do not respect it, embrace it and lead it into the right direction, we may have some big problems. If there ever is a World War III, it should be a war against poverty, disease and environmental issues. Humans should use technology to solve their problems instead of using it to become more powerful and compete against each other. That is crazy and stupid.

What is the greatest contribution of the current Technological Revolution?

The first technological revolution relieved human energy. The second relieved distance. The current one relieves the brain. It will bring challenges but it will make human life better. I am 100% sure about that. The only issue is how we are going to train and develop our current and future generations to be ready for it. If you are not ready for that technology, you will be scared. And with fear comes problem. It is not the young people or poor people who are worried about the technological revolution, it is the powerful rich people and developed countries. That is very interesting. Artificial intelligence is coming. You can not stop the new technology but you can change yourself and embrace it. Technology should be used for good deeds. Tech companies have to take responsibility. Especially companies like us, Google and Amazon. We have a big responsibility to care for issues like jobs, privacy, etc. Only then will we grow together.

The Alibaba Group continues to grow dramatically. What do you think has been the key to its success? 

First, you have to have a vision. Many companies tend to lose their vision as they grow. They always think about the current or next quarter. When you lose your dreams, you become a machine and human beings are not machines. In order to keep our company growing, we always think about the future. Compared to yesterday, we are big but compared to tomorrow, we are still a baby. The second key is people. You have to find the people that believe in the future. People who are innovative and are willing to work day and night. The third key is to respect your competitors. A competitor is not an enemy. If you think of your competitor as an enemy, it will be terrible for you. You have to learn from your mistakes and change yourself. I think I am lucky because I was trained to be a teacher. As a teacher you look at every student differently. You respect and love them for who they are. I have spent most of the past 20 years training and developing people. I think of them as generals fighting on the battlefield. We must believe in the future. It is important to know how to build a team as well. It is not about hiring the best people, it is about finding the right people who have the same vision and values as you. And then it takes time.

You said that the fact that 47% of your employees are women has contributed to your company’s success. In which ways do you think they did?

We no longer have 47% as we have just acquired two big companies with mostly male employees so that percentage lowered down a bit. I am giving my plea to the team so we can get back to those figures. If we have it below 33%, then we have a problem. I did not know we had so many female colleagues in the company until an American journalist asked me about it. I did not realize it at the time. Then I looked it up and realized it was true. More than 34% of our senior managers are women. That is a lot of women leaders. AliBaba became so popular on the internet. 15 years ago I told the team that the computer is all about code. However, it is not the computer talking to another computer, it is the people behind the computers communicating with each other. The computer is only a tool. We thought about making our services, software and products more human-like, more considerate. We found out that women do a better job on that. Women care about others much more than men. Unfortunately, men care more about themselves. Women care about their husbands, children, parents. They are more considerate. You need more people that care about others in your company. Women are more loyal as well. It is very difficult for other companies to steal them as employees. If you treat them fairly, they will be very loyal. We have so many great women leaders and employees at our company. Men think about what they can get. Women think about what makes them happy. In this century there will surely be more women leaders, not only in business, but in the world itself. The world will be more balanced.

You know women very well.

We have 700 million active buyers on our website every month. More than 70% of them are women. Women not only buy for themselves but for others. They are big shoppers but not necessarily always shopping for themselves. Look at what men are buying; they either buy things for themselves or a gift to impress a woman. That is human nature.

You have included the practice of Tai Chi Chuan, which you consider essential for your life, as part of your employees’ working day. Why is it so important to you? 

Tai Chi is a philosophy about balance. It is about hard and soft, fast and slow. This is the philosophy I like. No matter how strong you look, you should be very soft on the inside. If you want to live longer, you should not do much exercise. Turtles do not move but live very long. However, if you want to live a healthier life, you should exercise more. That is how health and longevity compare. Turtles have a lot of diseases but they manage to live longer because they save energy. A lot of animals who run fast, do not live long. That is the balance. When you create products for your customers, you should also have this philosophy in mind. A lot of young people love to move fast. If slow is done properly, it ends up being fast. This is the philosophy I want to bring to the company. In the western society young people like boxing. Boxing is fast but how many years can you do boxing? By 50 you are gone. With Tai Chi, when you are young it does not make any sense. But when you reach 50-60, you get a much more balanced body. I want to make companies live longer with a philosophy behind them. If you only live for the next quarter, forget it. If you want to live 100, 200 years, you need to think about the culture that will make you live longer.

The most important thing about a company are the employees ...

In our company we believe everyone should treat work happily but treat life seriously. I always say “Do not work too hard. Please work happily.” I hate when people work very hard. How can they last? Only when you are happy, you get creative and innovative and you last long. When you find the click of happiness, a fountain of ideas comes out.

What is your involvement in the preservation of the environment?

I have been heavily involved in environmental issues for the past 10 years. I worry about the air, the water. I spoke a lot on the subject and pushed governments to do something about it. Now, the Chinese government is finally starting to worry about the environment so I’ve started to pay attention to the things that people do not see, i.e. education. When everybody starts to pay attention to the environment, then you should turn your attention to other issues. There are no accidents on a very crowded road as everyone is more careful. It is the street with no traffic where accidents happen. I am a board member of The Nature Conservancy and I also built the Paradise Foundation in China. We are learning from the US and Europe and their experience with protecting the environment. What I want to do is wake up the consciousness in society. The protection of the environment is a huge problem. If we do not take measures, there are going to be problems for all of us. It is so contagious and needs to be controlled.

What do you think is the secret to be able to fulfill our wishes?

The secret is your will. You should seriously believe this will and not because other people believe in it or society thinks it is right. You have to believe it with your heart. Then you have to find the people who believe it and you have to take action. And you need time. It is not something that happens overnight. You have a wish you truly believe. You find a group of people that truly believes in your wish. You have to be ready to take action and make mistakes every day. And then time keeps on moving, things will change. It is not a one day change. A lot of smart people with values and vision fail because of the time aspect.

What do you think about our country Spain?

I love it. The first time I was here, it was a cloudy day but the second time and this trip it has been great. The weather, the people, the culture, the food. I think Spanish food is much better than French food. It is more natural and healthier. Your culture has a bit of adventurism, romanticism, dignity. It is amazing. Spain needs to be known by more people around the world. I consider myself lucky to have been here three times. I would love to come here more often.

 

Jack Ma. Photo: Elena Cué

China has become one of the greatest world powers. What factors do you think have been key in the remarkable development of China?

In the past 40 years, what China has done is to start learning. Learning is so important. China used to be so closed. When a country or a person is closed, he/she refuses to learn from the others. What does close-minded mean? It means you refuse to learn new things. China opened its mind. We have learned from the US, Japan, Europe. Our people are so hardworking because we have been poor for so many years. For example, today in China, in a city like Beijing or Shanghai, if you take 100 young people, 90 of them can speak at least 20 English words. But if you go to New York or Washington and take 100 American young people, how many of them can speak a foreign language? Why? Because we have learned. Learning and hard work can change everything. The other factor is that China really respects knowledge. It is improving a lot. In the early days, we took on a lot of the outsourced low-end work from the US related to road work and clothes manufacturing. We did not care, we just wanted to do it. Everyone can be successful if he/she works hard. You do not care if it is big or small, you just do it. There are a lot of reasons behind China becoming the second largest economy. This is something that the world should see and respect. We are hard-working, we learn, we are open-minded. Of course, there are still a lot of things that China needs to improve. 

For example?.

China only just connected to the world in the past 40 years. USA, Europe and Japan have been connected for the past 100 years while we have just opened up. We do not have an international language in order to communicate. There are a lot of problems. It is the duty of people like me. I travel around the world in order to learn to communicate. I go back to China and tell people and businesses there. Today a lot of problems arise because a chicken is talking to a duck (Cantonese proverb: miscommunication due to a language barrier) They are very angry so they do not talk. There should be a language that they can use to communicate. People do not respect you because you have money but because you take responsibility. China has been learning to survive, to develop economically and to take responsibility. That is the big lesson that us Chinese are learning.

Thanks to Alibaba's and Ant Financial, China is today the most advanced financial service industry in the world. Among your achievements are having being able to have 100% security on all transactions, both on the front and back end. People do not need a wallet or a credit cards any longer, this has greatly increased the financial inclusion of the population and now you are able to pay using your face thanks to facial recognition. Could you tell me more about the "3-1-0" method of Ant Financial? 

This is a very good question. I started studying interfinancial issues 15 years ago. It was very interesting. At that time at Alibaba, I found an interesting opportunity online. A person wants to sell. He finds you but you do not know how you can buy from him. He offers you his product and demands your money. But if you give him the money and do not receive the product, you will be cheated. At the same time the seller is worried about getting the money himself/herself. I found that this kind of issue lasted for long and there was no solution. So I went to the bank and asked for help in order to solve this problem. The bank did not trust this model and thought our business is too small. I was frustrated so I decided to build our own financial system to be the export of service. I act as a middleman between buyer and seller. The buyer deposits his money to me. If he/she likes the product, I release the money. If he/she does not like the product, I give him his/her money back and return the product to the seller. That was a very simple model. Everybody at the time was telling me how stupid it was. I did not care if it was stupid as long as it worked. The government did not give us a license as there was no such model to use as a reference. I went to Davos World Economic Forum and heard Clinton speaking about leadership being about responsibility. It inspired me to take action. However, if you start such a business without a license, you can go to jail. I called my team and gave them the go ahead. If somebody had to go to jail, it would have been me. But I told them to keep working regardless until we get a license. I also wanted to make sure there is no cheating, no corruption and no mistakes. Everything had to be perfect. So we started. As it was such a simple and easy model, it became really popular. Everyone started to use it. There is even a bank that is using it now. The funny thing is that banks hate it. Normal banks need 500 people while we only need 15. Regular banks charge transaction fees of around 50 dollars while we can do that with 3 cents. In order to survive, you have to think about how to be quick, efficient and cost-effective so you can compete with the banks. The ‘310 model’ is open to everyone in China today. If any company wants to borrow money from us, they can apply through a mobile or a PC. Within three minutes of filling the forms our machine tells you if you are approved or not. The money will then be in your account within one second. It is all credit score based. No one actually touches the money. That means that people do not have to drink wine with bankers in order to get a loan. There is no bribery. We do not want our employees to talk to any of our customers because the data will tell us whether they are good or not. The banks were so scared for the past 10 years. You can borrow one cent from us. You can even borrow one minute. It is a disaster for banks. How can a bank give you a loan for just one minute? How can you borrow just one dollar? We can do that. It is so powerful. The more people do it, the more we know their credit score and the more efficient we get. Society started to trust in the credit system so it pushed people to behave right. Today, if you have an Alipay account, you can go to a hotel or rent a house and you do not have to deposit anything. Even mothers now ask to check their future son-in-law’s credit rating before a marriage takes place. We call it ‘Sesame Credit rating’. We gave loans to twelve million different businesses last year. The default rate is only 1.4% or 1.5%.

Very impressive. You are a generator of good ideas.

We enjoy our work. We really care about our customers. Our values are in the following order: number one are our customers, second, our employees and third, our shareholders. I went to the New York Stock Exchange where the number one value is the shareholders. One of the analysts told me that if he had known shareholders are number three on our values list, he would have never bought shares of my company. I told him he can sell our stock right away because this is our philosophy. We know that if we take care of our customers, they will take care of our employees. If we take care of our employees, customers will be happy and subsequently shareholders will be happy as well. Everyone knows that but no one is ready to say it out loud. Well, I am. When a problem arises, I care about our customers first.

According to your experience, what is the current state of the commercial relationship between the United States and China?

USA and China have some problems and this is very natural. We have had 40 great years of business partnership. We should find positive ways to solve these problems and we need to consider both sides. Competition and cooperation should be considered together instead of turning a competitor into an enemy. We should not solve a problem by causing another one. We have to always look positively. The bottom line is there needs to be a working relationship in place. When USA and Russia have a good relationship, it means world peace. When USA and China have a good relationship, it means prosperity.

 

 

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