Transcript for:
Becoming a Legendary Entrepreneur: Lessons from Jack Ma

people if you want to go out there and become a legendary entrepreneur this episode is for you the strategy that i'm about to teach you today is a strategy that turned an ordinary english professor into a legendary businessman who today is known as one of the greatest business icons of his generation the story that i'm about to tell you today is the story of a man who got rejected by kfc and chobi's long interview killer better yeah but 10 years down the line today this man runs a company that is way bigger than kfc itself this is a story of a man who does not even know how to code a computer but today is the founder of one of the biggest internet companies in the world so how the hell is it even possible for a man to do something this remarkable without actually having the skill sets which are usually required to do something like this as it turns out people that's where the business strategy that i'm about to tell you comes into play now this is a story that dates back to the year 2004 when china was just opening up to e-commerce now back then people china was a very closed nation and as soon as china opened its gates to e-commerce several multinational corporates which were highly successful in the united states had their eyes on china why because china and india both put together reform half of the world so if a company has established itself in china by default that company would become the most dominant company in their industry now out of these many multinational corporates one of the most successful and the most powerful company was ebay and ebay was one of the most magnificent companies of that time because ebay had captured 16 countries in uk and us in terms of e-commerce and as soon as ebay declared a statement to come and conquer the chinese market every single expert in the business domain stated that ebay is going to very easily conquer the chinese market but while the world was obsessively talking about how ebay is going to change the chinese market there was a struggling entrepreneur who decided to wage a war against this billion dollar tech giant to put that straight people ebay was a 30 billion dollar company which had the perfect market recipe for success to come and conquer china they had all the money in the world they had the most amazing talent in their team and most importantly because of their experience in e-commerce they knew exactly how the market functioned on the other hand if you look at this struggling entrepreneur he is none other than the legendary businessman and the founder of alibaba.com jack ma today many of you might know jack ma is a very successful business tycoon but back then nobody even knew that jack ma existed in the [Music] that you do not even know how to deal with the finances of your own company how the hell are you going to wage a war against a company that is 100 times bigger than you and that's when jack ma stated one sentence people and today that sentence goes down as one of the most iconic sentences in the history of the chinese business you know what he said he said ebay might be the shark in the ocean but i am the crocodile in the yazay river if we fight in the ocean we will lose but if we fight in the river we will win what is so special about this one sentence that it goes down as one of the most iconic sentences in the history of business well that's because people in the next three years something magical happened and ebay went from having 90 market share in china to completely quitting the chinese market to never ever come back again and jack ma won the battle against ebay what exactly was the game changing factor and what was jack ma strategy as it turns out people one of the most important factors based on which any e-commerce companies success is determined is the website now jack ma and ebay both decided to make a website to sell their e-commerce goods but the way they design their website played a crucial role in this business work now you know what ebay did ebay said that it's going to go and do market research and it's going to find out the most pressing problems that the chinese people are facing so when ebay officials actually went on to see how the chinese market functions they observed three things the first observation they made was they understood that chinese market bargaining shopping so you know what they said we are going to build a beautiful site wherein we are going to eliminate the pain of bargaining all together the second thing that they observed was that the chinese market was filled with cheap goods with no guarantee no warranty joking so they decided to make a site which would sell high quality products and third and most importantly they observed that china and that is the reason why they decided that they are going to build an absolutely clean site which is going to have only a few buttons so that the customer has a remarkable experience whereas when jack ma was asked how exactly is he going to design the website he asked his team specifically to design a complete opposite of what ebay designed jack ma specifically asked his team members to put in a lot of pop-ups in the site to make the site look messy and secondly jack ma said that our website is not going to sell high quality goods at all we will sell only cheap goods we will only sell goods which do not have any guarantee or warranty whatsoever and third and most importantly he said that bargaining should be mandatory for every customer no customer should ever shop without bargaining so they designed a small window customers would specifically have to bargain with the shopkeeper to get the right price now people on the outside agreed to bucha which one of these two sites would you prefer option number one a clean site that sells high quality products and gives you guarantee and warranty along with those products or a website which sells ultra cheap products with no quality whatsoever products so of course we will choose ebay right well guess what that's exactly what the ebay employees thought and that's exactly the reason why they got defeated in the chinese market so the question is why would anybody not like a clean site and why would anybody prefer a clumsy side which is going to force you to bargain well that's where the business strategy comes into play people while ebay was looking at things from the american perspective and all the officials of ebay looked at the chinese market as an external entity jack ma viewed the chinese market as a local resident of china and he understood the mindset of the chinese people more than anybody else the reason why he designed a clumsy website is because he understood that chinese people are used to clumsy and dirty markets and secondly the reason why he decided to sell only cheap goods in the website is because he understood that the very purpose that the chinese people went to the market is to buy cheap goods right now i don't know how many of you guys will relate to this but then we have a pimpri bazaar over here and trust me guys all of us go to the pimbri bazaar and people travel all the way say tens of kilometers to actually come and buy only dirt cheap products people come there to buy only first coffee products and nobody would ever come there to buy a nike shoe because they know nike sugar markets then as far as my understanding is concerned each one of us will know a market like this and most importantly premium products and last and most importantly when it comes to bargaining people you must have realized and you must have faced this with your grandmother that every time your grandmother asked you to go and buy say fruits from a fruit vendor suppose [Music] so you are going to have a terrible time at house and you're going to get scolded because she's going to tell you that you've been looted by the shopkeeper so if you look closely bargaining in the indian culture is actually a mandate and our older generation doesn't even know what it is like to shop without bargaining in fact if you shop without bargaining they are going to assume that and that is exactly how the chinese people viewed ebay and that's the reason why chinese people did not go to ebay and they came to tawa.com because it abided by their culture and by their norms so from this story each one of you guys have three very important lessons to learn the first lesson is that the opposite company might be a billion dollar company and every time you face something like this always remember that that company might be the shark in the ocean but you will always be at an advantage because you are the crocodile in the yacht say river and the mere knowledge of the consumer behavior gives you an unfair advantage over any big multinational corporate so always believe in yourself and your strategy of empathizing with your consumers number two tomorrow when you go on to become a million dollar company or a billion dollar company always remember this time you might be the shark in the ocean and you have to be extremely careful about the crocodile in the yatse river that you might be facing and third and most importantly people always remember that empathy and compassion are two of those qualities that can turn a commoner into a king and no amount of name fame or money can ever stop him from becoming one so be kind and practice empathy thank [Music] you you