And the thing that really struck me wasn't really the crazy part. I mean Jack was talking about a big vision that I didn't really quite understand. He said to do a startup you don't really have a business plan, you just kind of go along. And those are all the crazy aspects, but it wasn't the reason why I decided to quit my job at the time to join Alibaba. It was really the idea that he was a leader. He was leading these disciples who really truly had a belief. He gave them the mission about what technology was going to do, in particular internet technology, what it was going to do to not just the company but also the whole country.
So Joe, excited to have this conversation with you. In 1999, you were making $700,000 a year in a job, and you were offered to join the startup Alibaba where you were actually going to be paid $600 a year. You did this after a mutual friend of yours introduced you to Jack Ma, who your friend said was very smart and kind of crazy. So my question for you is, why did you pick kind of crazy?
Well, thanks Jeffrey. Before I get to your question, I want to say I'm actually very honored to be interviewed by you on this stage like this. You've been a mentor to me, and the one thing that you taught me is how to treat people, treat all walks of life, no matter who they are, treat them with respect. I've learned a lot from you, so thank you very much. I'm very honored to be here. So the question about kind of crazy, what kind of crazy am I talking about? This was in 1999 when I showed up in this second-story apartment in Hangzhou to visit with Jack. I had read a little bit about him, in fact in The Economist. This is before anybody got famous, but the editor of The Economist, Chris Anderson, identified Jack as the Jeff Bezos of China. And we're like, who is that? Very few people knew Jeff Bezos back then, much less the person in China. I went to his apartment. Before I went into the apartment, there were like 10 or 12 pairs of shoes in front of it. You take off your shoes before you step into people's homes. So I said, well, there must be some 10 or 12 people working in this apartment. I went in, obviously Jack being the charismatic individual that he is, and I was just mesmerized by him for about an hour. Then I had to go to the bathroom, so I said, Jack, excuse me, let me use the restroom. He said it's right over there. I went in and I saw that there were something like 12 toothbrushes on the sink, and I realized these people were just living there 24/7. They were in sleeping bags working away. And something dawned on me that this was the garage equivalent, the HP garage of China. And the thing that really struck me wasn't really the crazy part. I mean Jack was talking about a big vision that I didn't really quite understand. He said to do a startup you don't really have a business plan, you just kind of go along. Those are all the crazy aspects, but it wasn't the reason why I decided to quit my job at the time to join Alibaba. It was really the idea that he was a leader. He was leading these disciples who really truly had a belief. He gave them the mission about what technology was going to do, in particular internet technology, what it was going to do to not just the company but also the whole country.
Did at that time he have a real vision for what this was?
The vision at the time was to create an internet platform so all the small companies, manufacturers, and trading companies from China doing exports can list themselves on this platform. In fact, we call it the BBS, the bulletin board system. That was the first website of Alibaba.com. It was an English language site, in fact, and that's because it was made for non-Chinese people that are sourcing from China to use and buy stuff from China. And we were at the cusp of China entering the WTO. So once that happened, Chinese exporters, the export-driven economy came to life, and that sort of propelled the early success of Alibaba.
So talk about a pivot. You're a lawyer, you're a private equity investor, to give all that up and walk away and go into a tech startup is just a huge leap. So why did you think you could do it? What gave you the courage to do it?
I've always been a curious person and someone who's not satisfied with where I am. I always wonder what happens on the other side of the fence. So as a lawyer, I was doing advisory work. Lawyers rarely control the decision; they give advice to clients and then the clients make their decisions. So I decided that I wanted to go from being an advisor to someone who is in a decision-making role. I joined a private equity firm. When you're investing, you are committing capital, you have to underwrite the investment thesis, and you're making decisions. But then I realized as an investor, I was sitting on boards of companies, but you're really not involved in the actual business itself. You simply allocated capital to entrepreneurs and management teams for them to do the business. So I became curious: what's on the other side? I wanted to be in an operating company. The confluence of factors at the time was the rise of the internet. I think companies like Yahoo, eBay had come before Alibaba two or three years prior to that, and that felt really exciting. So for me, it was an opportunity to get on the other side of the fence to see how a company actually operates, but in an exciting business like the internet.
How old were you at the time?
I was 35, I think. Had a family. I had been married for like three years, and then my wife had our first child, our daughter, our first child was on the way. So when she was born, we call her Ali baby.
That's amazing. Roll of the dice. So as we know, 99% of all startups fail. So why and how was this the one? How did this go on to become such a, you know, really one of if not the biggest success in all of China, certainly at the time?
I think the title of this session is called Survival and Innovation, and in fact, there's a causal relationship. Those two actually go hand in hand. I think from the very early days, we didn't have a lot of capital, so everything was about surviving, surviving the little amount of cash we had left in the bank. Because Jack taught everybody that as long as you live another day, you have an opportunity to create. So we had that instinct that we got to survive, which helped us to overcome failures. A lot of startups fail. Some of their products iterate several times, they fail, and then they decide to fold the company and do something else. But Alibaba never did that. We kept going at it. And you might say necessity is the mother of invention. So out of the desire to survive and kind of hang on to our last breath came a lot of innovation. In fact, if you look at the history of Alibaba, we did everything. All of our high-growth businesses were developed organically. We weren't successful with acquisitions, but we were kind of an organic development type of company. We had a B2B marketplace, and then we went into the consumer marketplace, that's Taobao. Then we decided that payment was important to enable transactions to happen online, so we developed Alipay organically. And then we developed the monetization engine organically, basically doing a search-based advertising system on an e-commerce marketplace. So you can imagine a way of monetizing the marketplace via sort of search-based advertising like Google, interposed on a system like eBay. That was our invention, that was our idea. And today Taobao is very profitable, that's still the case. So we grew our cloud computing business organically. So I think the idea is that as long as you can survive and hang on to your breath for just one more day, something good may happen.
All right, so you held your breath and 15 years later you take Alibaba public, largest IPO ever, raised $25 billion, market cap of the company is over $230 billion. And now 25 years since the founding, and now 10 years after the IPO, what's the most exciting thing on the horizon today for Alibaba and for you personally?
So every day I'm in the company I feel excited, and that's because I get to work with young people that are smart, that are creative, that are innovative. So Alibaba does have this DNA of letting young people, letting our team, do a lot of the innovation. It's not a very top-down driven type of company. We like innovation from the bottom up. So today, what's quite exciting to us, obviously the hot topic today is AI.
So before you jump into that, one thing is that there's a great quote from you, and you've been popularizing that even more in this last 18 months since you've returned to be chairman: 'My job is to get out of people's way.' Most chairmen don't think that way. Explain.
I've been with the company for 26 years, so I didn't feel like I need to prove to anybody that I'm in control, I'm in charge. About 18 months ago, prior to that I was for about two or three years slowly phasing out of the business. As one of the founders of the business, I thought the company was already very large and going on its own path. Then 18 months ago, I came back into the chairmanship because I felt a lot of people, including our board, felt that we needed to change the management team. We put a fairly young CEO in place. The CEO of our company is 12 years younger than I am. And they said, 'Joe, why don't you come back as chairman, not CEO, chairman? Because we need an old pair of hands, if not steady pair of hands.' So the first thing I walked into the board meeting, our lawyer said, 'Joe, now you're the executive chairman of the company.' I said, 'Wait a minute, don't give me the title executive. I'm the chairman of the company. I know I'm a full-time officer of the company, so I'm an executive, that's true, but my title should not be executive chairman.' I don't agree with the British system where they have an executive chairman and the CEO. The reason is, then who's in charge? Your employees are going to be confused, external parties are going to be confused who's really in charge running the business. In our company, I'm very clear: our CEO runs the company, and I provide support to the CEO. When it comes to allocating resources, I get involved in capital allocation decisions, I get involved in HR decisions if we wanted to create an equity-based incentive plan. He would want to consult with me on stuff like that. It's important that as chairman of the company, you don't get into people's way. A lot of chairmen can't let go, and I don't think that's the right way to develop the next generation of leadership.
Okay, so let's pivot over to one of the biggest, most important and core businesses, which is cloud computing. And sort of differentiated maybe from Amazon is that you have been investing in developing your own AI capabilities. What gives us the state of where you are today? Where are you in Grok 3 and DeepSeek and all these different competing LLMs out there? Where does Alibaba fit in this, and what matters to you? Where do you think the value is?
