Business book with a new slant on “national standards”

As New Zealand continues to debate “new national standards” for primary school literacy and mathematics, Auckland author-publisher Gordon Dryden says one his favourite business books of 2009 may have the answer.

In China to qualify for university students have to sit an entrance exam and achieve at least a 70 percent pass mark in all core subjects.

In his teens Chinese student Jack Ma was brilliant in speaking English. He achieved that partly by buying a $2 transistor radio and listening to English-language broadcasts. And partly by studying "Crazy English", a method devised by another Chinese student, Li Yang, to become near tops in his college-entrance English exam. (You can check out Crazy English online. It's a cross between group karaoke, a religious revivalist meeting and an Anthony Robbbins motivational course. But it actually helps students in large groups “embed English phrases and sentences” into their speech — especially in Asian societies where many students prefer to act together in unison.)

So no problem with Jack's English exams: way above 90 percent.
But in mathematics? Appalling. First-year exam results: 1 percent—the lowest in all China.

So Jack Ma spent the next year guiding English-language tourists around his home city, for small-change income, while swatting up nights on his maths. Next maths exam: 19 percent.
Same pattern the third year, with two big exceptions:

1. A visiting Australian family appreciated his English-language guiding so much they invited him to spend a free summer holiday with them and their same-age children at their home. The cultural differences inspired him to look towards a global future, using his English skills as a base.

2. Back in China, he studied all the exam-math questions from recent years and spent hours each day memorising the main answers. Result: at last he achieved the "national standard" and passed his college entrance exams with a maths mark of 79 percent.

Jack then soared through college (in his favourite subjects), majoring in English, earned a job teaching the subject at a Chinese university for several years, and then (as China was now opening up to the outside world) set up a Chinese-English translation and interpreting service.

In the mid 1990s he accompanied a Chinese trade mission to North America as interpreter, and for the first time discovered the Internet on a personal computer. Asking how it worked, he was told to type any word into "an internet search engine". He typed in "beer". And up came a definition of beer, its history and several leading brands. But none from China. Why not? "Try typing in 'China beer'," said his guide. But when he did that the answer came up: "No data." And the same came up for many inquiries about Chinese products.

Like New Zealand schools, China had no "national standards" for innovation, creativity and entrepreneurship. Jack would have passed them easily.

So back in China, after much trial and error, he set up the alibaba.com e-commerce site to sell, in English, the products of 32 million small manufacturers to the Western world. It is now by far the world's biggest e-commerce site. And, for a guy who failed to achieve "national standards" in maths and thus accounting, he invented several ways to check and guarantee the credit-worthiness of buyers and sellers.

Then, about the same time that Sam Morgan was setting up Trade Me in New Zealand (and later selling it for $750 million), Jack Ma set up Taobao.com—to rival, in China, the soaring success of eBay. Taobao is now by far the biggest customer-to-customer e-commerce auction and trading site in China; as Alibaba is the world's biggest business-to-business global exchange site.

So then Jack Ma looked at other Internet sales models: Amazon, Dell, Yahoo and then Google. Only one problem: China in the late 1990s was way behind "developed countries” in the use credit cards. So Jack Ma invented his own Chinese alternative: AliPay.

In 2007, Jack Ma and his team combined Alibaba, Taobao and PayPal into the Alibaba Group, and floated the holding company on the Hongkong Stock Exchange.
His numbers apparently added up.

Seventeen percent of the company was sold that day to outside shareholders (Yahoo had already subsceribed US $1 billion), and raised US $1.5 billion at the issued price of US1.74 a share. It was the second-biggest stock-market "float" in history—second only to Google's $1.6 billion.

By the end of the day, Alibaba shares were trading at over $US5. And that valued the Alibaba Group at US $26 billion. Jack Ma had surpassed all "international standards", by turning his talent and passion into a global success — achieved with a great team of partners whose talents complemented his.

"ALIBABA: The inside story behind Jack Ma and the creation of the world's biggest online market place", by Liu Shiying and Martha Avery, Collins Business, 2009