Chinese billionaire Jack Ma explains in his book “ALIBABA: The House That Jack Ma Built,” how his policy of not hiring the best candidates for a job during its early days eventually paid off for him.
The book, written by China-based investment adviser Duncan Clark in 2016, says how Ma had an 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.”
Ma pointed out that job applicants from the so-called “college elite” usually get frustrated very easily when faced with real-world challenges.
“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’s acumen in hiring the right people for the job helped him to transform Alibaba into one of the biggest companies in the world today. The founder of the multinational e-commerce, retail, Internet, AI, and technology conglomerate often told his new recruits how brutal the business in the real world is:
“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’s philosophy of what it takes to survive in the dog-eat-dog business world soon rubbed off on his employees and they learned to quickly change themselves according to what the market demanded.
In accepting the company’s silicon-valley type “customer first” mantra, his people were one of the first in the Chinese market to provide free “tech support”, as well as delivery solutions. They also responded to every email within 2 hours.
In the early years of his company, Ma demanded that his new hires lived no more than 10 minutes from their office so that they can devote seven 16-hour work days per week to the business. Although he could only pay them a measly $50 a month, he rewarded his loyal employees with share options in the company, vesting over a four-year period.