MFM Mini - Shaan's 15 Minutes with the CEO of Alibaba

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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Shaan Puri?

  When I was, I don't know, 21, I got this really cool opportunity to go on an all-expense-paid trip to China courtesy of Alibaba. And Alibaba at the time wasn't as well-known as it is today. Today, it's pretty well-known. It's a publicly listed company, you know, $40 billion-plus company, something like that. And, um, yes, so the question is, what would you do if you had 15 minutes talking to the CEO of Alibaba? Because I had 15 minutes and I choked. All I could muster up was, uh, you know, "What's the key to success in business?" Right? Um, one of my worst questions, but whatever. I shot my shot. Everyone else was too scared to speak. And so the CEO at the time, this guy, David Wei, he drops a knowledge.

• 0:43Shaan Puri?

  He goes, "You know, asking what makes something successful, you know, modeling success is misleading. You can't copy success because there's, you know, a million different factors, a combination of luck and timing and specific context for every single success. That's a big, big outlier success. Instead, you should ask me, 'What are the keys to failure?' Because those are always the same." And, uh, you know, I gave him the look like, "Okay, go ahead. You have permission to blow my mind." And he said, "There are three things that will kill any company if in excess. So if you have an excess of any of these three things, it'll kill your company. Money, plans, and technology." That's not what I was expecting.

• 1:28Shaan Puri?

  So then he continued to explain that at Alibaba, they had this internal motto, "No money, no plan, no technology." I said, "All right, tell me more. What is it?" So, "No money." He goes, "Money makes people stupid. When problems arise, the first instinct becomes throw money at it rather than attacking it with creativity." And this works sometimes. Sometimes you do. The easiest path is money. But it becomes this crutch that you can never get rid of as a company, that people are so used to solving everything with money and they lose the ability to solve problems with creativity. So he was telling a story, you know, years ago Alibaba wanted to create their own version of Google AdWords. And Google AdWords at the time was like, you know, the main business model of Google. Google was like a $200 billion company then.

• 2:13Shaan Puri?

  It's like a trillion-dollar company now. And so, you know, how much money did Alibaba fund the AdWords project, right? Clearly, if you did this, it was going to be worth billions and billions of dollars. So what did they give it? $100 million? $100 million? $10 million, $1 million, no, they gave it $250,000. And, uh, you know, 250,000, not 250 million, $250,000. And that was for everything, salaries, servers, marketing, office space, everything. That was the full budget. And, uh, and they had the money. They had just done a $1.7 billion IPO. So it's not like they were strapped for cash. But the CEO was basically saying, look, if we're gonna build this, if we're gonna build something great here, we're gonna build it due to creativity.

• 2:56Shaan Puri?

  And he said, here's what he told me in quotes, uh, he goes, "I wanted them to hunt like dogs." These are from my notes. "I wanted them to hunt like dogs." The team worked, they worked out of my old, out of the old founder's old apartment. Just like when we started Alibaba, there was like 17 people working out of Jack Ma's apartment. The team, the team for the AdWords project moved back into that apartment. They literally found servers from like the trash, like refurbished servers. Even still, they needed more money. They hired an engineer to architect their system. And to this day, what that one guy did is the single most creative engineering feat that they've ever seen inside the company. And once the team was done, they asked for money to create like backup servers, like a redundancy to be safe. And we said, no, no redundancy.

• 3:38Shaan Puri?

  "We would rather risk servers crashing than risk spreading the attitude that money should replace our creativity, our diligence, our hustle and intelligence." And, um, and then he said, you know, it's funny, the more money you have, the more expensive everything seems to get. All right, second one, no technology. Alibaba is basically like an online marketplace and they have about three, you know, at the time they had three, 4,000 engineers on staff, probably triple that now. But they never talk about themselves as a technology company. So David said this pretty specifically, he goes, "We are a service company. We are here to solve customer issues, not to build new technology. So in order to serve as a service company, yes, we often use the best technology so we serve better.

• 4:22Shaan Puri?

  But if it fails, we'll do it manually because we are not a technology company. We are a service company." And this is very common, you've seen this with, uh, Amazon, they talk about customer obsession. Zappos used to say, "We deliver happiness." It is important to how you think about yourself as a company, but this also applies as a person. How you, how you define yourself will define what you, what you are willing to do and not to do. The last thing was no plan. So how the heck are you supposed to reach your goals without a plan? And so, you know, David said, he turned to the other, kind of, there was a bunch of other CEOs, kind of executive people in the room that were all pretty successful. And he goes, okay, all of you here, you're very successful. And how many of you today are doing what you planned

• 5:03Shaan Puri?

  on doing when you started? Right? Crickets. Everybody, everybody's, everybody's success was sort of off plan. And David said, the plan always changes, but the mission never waivers. And sometimes you need to make a plan to get others to believe and to figure out what to do next. But you must follow your gut, you must adapt to the circumstances. Do not follow the plan you wrote when you started. Follow the mission, follow the vision, and follow the reason why. If you, if you're, if you're just trying to follow the mission, you will always come up with the right plan right in time. And too many people get married to the plan that they wrote and forget the reason they wrote the plan to begin with. And so that was my 15 minutes with the CEO of Alibaba. And even though my question kind

• 5:46Shaan Puri?

  of sucked, I think I got my money's worth. No money, no plans, no technology. If you like stories like that, you gotta be smashing the subscribe button to my newsletter. It's a free newsletter. I send out one or two stories like this a week. And yeah, they're always entertaining. They're always got a little nugget of insight in there. So I think you'll like it. And go to seanpurie.com. It's S H A A N P U R I E dot com. I know that's hard to spell, but figure it out. I'll put the link in the, in the description as well. Subscribe to the newsletter to get more stories like that.

• 6:15Speaker 01

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• 6:59Speaker 01

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• 7:44Speaker 01

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