What Do Magnates Regret?

By Zhang Youhong

At the St.Petersburg International Economic Forum in Russia,Ma Yun said: “The biggest mistake I have ever made is having created Alibaba.I didn't expect it to change my whole life.Back then I just wanted to set up a small company,but somehow it ended up being such a big business.”

God knows only how many people at home would be amused by his comment.

Ma Yun’s Regrets

The first thing I could think of is the ambitious words Ma Yun once said.

On February 21,1999,18 people,including Ma Yun's wife,his colleagues,students,and friends gathered around Ma Yun at his home in the neighborhood of Hangzhou Lakeside Garden.Ma Yun waved his hand and announced: “From now on,we are going to do something great.Our B2B will bring a revolution to the Internet service model.”

The very thing Ma Yun wanted to do was create Alibaba website.He continued: “Now,each of us shall keep some money for food,and contribute all the rest.”

Ma Yun,or Jack Ma,born on September 10,1964,is a Chinese business magnate,investor,and philanthropist.He is the co-founder and former executive chairman of Alibaba Group,a multinational technology conglomerate.

Back then he was as lean and eloquent as he is now.In his ensuing two-and-a-half-hour talk,he told these 18 people that the small company he was going to build would become a 102-yearold big business in the future.

Ma Yun at that moment would by no means be convinced that what he was going to do would be described as “the biggest mistake in my life” by himself in the future.He was so determined and resolute back then: “We must be prepared for the worst scenario,but,even if Mike Tyson himself knocks me down,as long as I'm still alive,I will jump up and continue to fight.”

Later,Alibaba became a Group,whose every step up was applauded by Ma Yun's lecture,along with his fighting spirit.

On May 10,2003,Taobao came into existence.Several technicians worked around the clock to develop the software in secret.When Taobao was launched,Ma Yun said it would defeat eBay,which at the time occupied 90%of the market share of domestic e-commerce.

In 2014,Alibaba Group was listed on the New York Stock Exchange with a market capitalization of more than 200 billion US dollars.The “great thing” Ma Yun talked about came true.

However,only two years later he expressed his sentimental feelings as in “the biggest mistake in my life was having created Alibaba.”

Perhaps he indeed has had those fiashing moments of a sense of loss.He also said that if there was an afterlife,he “would not create such a business again.” “I wish I had the chance to travel to some country,any country in the world,and spend a calm life there.I don't want to talk about business,neither do I want to work.”

Tired? Bored? Or just feeling a bit lost while looking back on the gains and losses of the past two decades?

Anyway,this comment from Ma Yun might sound a bit pretentious to outsiders.Ma Yun created Alibaba,and Alibaba made Ma Yun a business tycoon.Otherwise,he might still be viewed as the unusual-looking lecturer and the “l(fā)iar” people called him behind his back in CCTV's documentary,Ma Yun,a Scholar.

Common people only believe in the outcomes.

Apart from this,Ma Yun also mentioned something else he had regretted.

When he founded Alibaba,on the night he made that great speech,he told his team: “You will be group managers in the future,not executives.Our executives should be hired from abroad.”

Yet it turned out that external executives hired from overseas were not exactly fit for those positions.Their performance proved to be rather mediocre while they had difficulty adapting to the corporate culture Ma Yun had established.So when those executives walked away and resigned one after another,the 18 founders around Ma Yun took up the positions of senior executives,which eventually generated the various legends around Ma Yun.For example,a young reception girl became the director of the Green Hand Logistics (known as Cainiao in Chinese),who is now worth several hundred million dollars.Peng Lei,a former teacher in an ordinary secondary school,became the boss of Ant Financial and the leader of a large group of professional financial talents,becoming a famous wealth legend.

From this point of view,Ma Yun's regrets over his misjudg mentsmightbe justifiable.

However,if he hadn't founded Alibaba as he said,he for sure would have regretted more.

Lei Jun Missed Out on Ma Yun

Actually,in the case of Alibaba,many people do have more justifiable regrets than Ma Yun.

As one of the first-generation angel investors in China,Lei Jun had done relatively well.People had been coming to him for project financing ever since he took over Kingsoft.

Back then,Kingsoft was one of the earliest Internet companies.Lei Jun joined Kingsoft in 1992 and became its CEO in 1998.He was hailed as a child prodigy and a model worker in China.In the early internet age,Kingsoft was quite rich.

On one occasion,Lei Jun rejected a project and came back telling people around him: “I just met a guy who looks rather weird and sly,telling me all kinds of nonsense,was he in a pyramid scheme?

“He said it is a big project,but the way I see it,he looks just like a liar.

“I refused him,well,I am not a fool,how can I let him swindle our money?”

And the guy he had refused was Ma Yun.

Dramatically,in 2012 when Lei Jun started his business and established Xiaomi Corporation,Ma Yun's Yunfeng Capital made investment in it.After a lapse of more than a decade,the “slylooking” guy described by Lei Jun became his investor,and the company which had brought enormous wealth to his investor was exactly the project Lei Jun had rejected.

Lei Jun once joked in public,saying that the most regrettable thing he had ever done was investing in Chen Nian's Vancl.Compared with Vancl,missing out on Alibaba was even more regrettable.

Another magnate,Ma Huateng,also acknowledged regrets publicly and frankly over missing out on Alibaba.

Ma Huateng is a Chinese business magnate,investor,and philanthropist.He is the founder,chairman,and chief executive officer of Tencent,Asia’s most valuable company,one of the largest Internet and technology companies,and the biggest investment,gaming,and entertainment conglomerates in the world.

In March of 2013,while attending the Huaxia Alumni Association,Ma Huateng said:“When Taobao was founded,Ma Yun talked to me,and I had the opportunity to invest 15%.Yet I was not really optimistic about the project,and also felt the proportion offered was too small.I was like,if you want me in,you should give me 50%.Now I can't say how regretful I am.”

Ma Huateng said in public more than once: “The most regrettable thing I've ever done is having rejected Ma Yun,otherwise I would have been the world's richest man.”

That was in 2003,when e-commerce in China was in its infancy.Liu Qiangdong and his JD.com were just starting,and Ma Yun's Taobao had just came online.The reason why Ma Huateng and Ma Yun did not go along was that the former was not optimistic about e-commerce,and also asked for too high a proportion of the shares.The highest Ma Yun could offer was 15%.If Ma Huateng had taken this 15%,he would now have at least 30 billion more dollars in his bank.

People Who Missed Out on Tencent

While Ma Yun makes Ma Huateng regret,Ma Huateng himself has made more magnates regret their choices.

At that time,Tencent was still in its financing stage.Because he doesn't speak English,Ma Huateng could not find any overseas funding and was in a very difficult situation.In his most difficult times,Ma Huateng tried to sell QQ,his instant messaging software,for 600,000 yuan.Yet he could not find a buyer.

Ma Huateng went to Wang Zhidong of Sina and Zhang Chaoyang of Sohu successively.At that time,Wang and Zhang were already star entrepreneurs in the industry,while Ma Huateng was still a nobody.

Ma Huateng went to Wang Zhidong first and asked for 1.5 million dollars.The latter gave it a quick look and refused to buy it,thinking that 100,000 was enough to make a similar product himself.

Zhang Chaoyang was even more arrogant.He once said:“I was so popular in 1999 that I was welcomed like a rock star in Shenzhen.Among my 700-person audience,there was Ma Huateng,who was so inspired by my story that he went back home and created QQ.” Gu Yongzhen,Zhang Chaoyang's subordinate,went to Tencent to check it out,and nothing more happened.

During this period of time,one magnate after another missed out on Tencent.

Li Zekai once invested 2.2 million dollars in Tencent in 1999 and held 20% of Tencent's equity,which was the most important venture investment Tencent had received in its difficult starting period.But after less than two years,Li Zekai sold his stake to South Africa's MIH Holdings Pty Ltd.for 12.6 million dollars,which turned out to be his worst decision ever.

Then there is Wang Gongquan,who recalled: “IDG (International Data Group) invested in Tencent quite early.After a few million invested in it,someone offered 50 million dollars to buy IDG's share in Tencent.Regrettably,IDG sold it and lost Tencent's shares ever since.If we hadn't,this investment in Tencent would have made as much money for IDG as the total of IDG's current profit.Even though I have been out of IDG for many years,whenever we talk about this,my IDG colleagues still find it a huge pain.”

Ma Huateng also went to Jin Haitao,the president of Shenzhen Capital Group Company,who later revealed in a forum that he missed out on Tencent because he could not understand its operation pattern.He regretted it very much.Jin Haitao is obviously regretting a lot.If he had invested,he would be earning 900 times as much as what he is making annually now.