Shoe Dog by Phil Knight (Part 2)

Year 1973. Bowerman retired from coaching and Pre wasn’t himself. He finished 4th in the Olympics. Oregon people were still proud of him. 6 months later, he regained his fire. Finally he wore Nike shoes and this generated a tremendous amount of hype. Later, we decided to hire Pre. Everyone respected Pre, for some reason. Pre was also enthusiastic about Nike and wore it wherever he went. I made Woodell and Johnson switch cities. Despite excellent sales, we were in the red and it was disappointing indeed. I realized that the debenture holders only cared about how much they earned. I made Houser in charge of the lawsuits. I was constantly bombarded with questions from lawyers and it was irritating. My family was my only respite and my son loved my stories. My wife was pregnant again. Another lawyer, Rob Strasser, came onbaord. He was a giant of a man. He was a great thinker and was very smart. Supply and demand is a big problem. The business constantly had cash flow problems and we had other problems like dockworkers’ strike. I had another son, who we named Travis.

Year 1974. I was faced by 5 lawyers and 4 other distributors. We tried to settle out of court but Onitsuka rejected it outright. Houser wasn’t fiery and he was our hero. Our first witness as Philip Knight, which was me. I couldn’t concentrate in court. The court seemed sceptical of my answers. I was at rock bottom after 2 days. I had performed badly. Despite me, we felt that the judge was on our side. Even Bowerman wasn’t prepared. Kitami kept lying in court through his translator and pretended that he never planned to break our contract. A few weeks later, we awaited the verdict. We were the more truthful and Kitami was lying. We had the rights to the names of Boston and Cortez. We won and had right to damages which would be quantified later. After everything, we ordered drinks and celebrated in a big way. We won $400,000. Houser would get half of it and he was pleased. Now, we all had to sign documents to make it legal. Kitami shook my hand graciously. Later, I wanted to hire Strasser. We wanted our work to seem meaningful and like play. Later, he agreed and became our first in-house counsel. The yen to dollar was allowed to float and labour costs in Japan was on the rise. Taiwan’s quality control was poor and they didn’t have capacity in their factories. Later, we considered Puerto Rico. Thankfully, we found a guy named Giampietro, who was a true shoe dog. We knew we wanted to work with him. Now, we wanted to turn the Exeter factory into one that could produce shoes. I wanted Nissho to give money to build the factory and Johnson to run it. Everyone must do what is necessary to help the business. Reluctantly, Johnson agreed. We were hitting $8 million in sales. We wanted to reach out to Jimmy Connors, a renowned tennis player. He managed to win Wimbledon, however he failed to sign the papers in time.

In fact we had every expectation that we would fail. But when we did fail, we had faith that we’d do it fast, learn from it, and be better for it. – Phil Knight

Year 1975. I wanted to pay Nissho first. We needed to make his happy as we were reliant on him. We ordered too much inventory, leaving us cash strapped. I kept believing demand for shoes outstripped our annual sales. I had a good relationship with Sumeragi too. However, he was replaced by Ito, the Ice Man. We didn’t have a good relationship with this banker. We were struggling to pay creditors. We lived on a slight overdraft, on the float. We emptied all our bank accounts for a $1 million payment to Nissho. Our employee paychecks bounced. Suddenly Holland, our banker, wanted to throw us out. I was pissed and told Nissho about it. I wanted to borrow a million dollars from them. Holland suspected there was fraud in our company. This was one of my lowest points in my life. I held a crisis meeting with some of our important employees and managers. Creditors were angry that we couldn’t pay. Two creditors were pissed that we missed the payment. Ito was pleased when he learned about the secret factory. The creditors were pissed and we had to escort them around, ensuring that they do not see each other. We would meet the FBI later. There was no fraud uncovered and Ito agreed to pay out the remainder of our debt. We were very grateful to Ito for doing that as that rescued us. There was no victory dance and needed to find a bank. We talked to First State Bank of Oregon and they extended 1 million of credit to us. I was constantly inspired by Pre and his determination. Pre died suddenly and everyone was shocked. We found money to curate Pre’s rock.

Somebody may beat me – but they’re going to have to bleed to do it. – Pre

Year 1976. What kind of company did we want to build? This was a very important question for us. Sony was one of our role models. All I wanted to do was to win and I desperately didn’t want my business to fail. Money wasn’t our end goal. Now, we were planning to go public to raise even more funds. However, there were many cons to going public. Bowerman wanted to cash out. However he was stubborn and wanted out. I reluctantly agreed to buy out two third of his stake. However, he could stay on as vice president. We had production facilities in New England and Puerto Rico. The waffle trainer was still very popular in the market. Now, I wanted to convert sports shoes for everyday wear. We decided to ramp up production and find more manufacturing hubs. I turned to Taiwan, with the help of Jim Gordon. Taiwan had many small factories producing shoes. Taiwan also had tensions in China. We toured over 10 factories before we found a decent one. The hosts kept making us drink Mai Tais. Later, we flew to Taipei. We met Hsieh. Factories made the difference between good and bad shoes. He wanted to connect us with the best factories in Taiwan. At the 1976 Olympics, I knew I wanted to have a Nike-shod runner make the Olympic team. It was definitely possible. Shorter pulled ahead and did well at the Olympics. Many of the famous Olympians were wearing Nikes. Everyone was wearing a Nike. Bowerman’s request for shoe uppers were ignored by our factory. Shorter wore Tiger shoes for one of the races. Our sales now hit $14 million. However, we were constantly strapped for cash due to our ‘float’ model of getting funds. Camaraderie was strong in our company. We were mostly Oregon guys. We were very crude in the way we spoke and talked to one another. Often, we discussed problems over drinks. We needed to step up on advertising efforts. Now, we considered going public again. Buttface meetings were a pure joy we engaged in healthy debate. We were all winners. I empowered my group to take action and gave them responsibility. I knew I needed to spend more time with my real family.

Don’t tell people how to do things, tell them what to do and let them surprise you with their results. – Nike

Year 1977. Rudy was an aerospace engineer. He was an original. It was a beautiful day. He found out a way to inject air in the shoe for superior cushioning. There were pressurized air bags inside. To him, it was the next big thing. This was revolutionary. I tried them on and it was amazing. The air soles were amazing and I realized Strasser was a great negotiator. He was completely honest, which turned out to be a good tactic. We wanted to promote them to basketball players. Sonny Vaccaro was another shoe inventor. He was hired too. Many of the clubs had Adidas and Converse memberships. They managed to get many teams on-board. We scouted John McEnroe, the famous tennis player, and fell in love with him instantly. Customers loved our LD 1000 shoe. We had a new ad agency. He thought of a good tag line for us ‘Beating the competition is relatively easy. Beating yourself is a never-ending commitment.’ I still didn’t believe in advertising as I felt the product will speak for themselves. Our debenture holders wanted to cash in. We considered going public again. Henry Kissinger recommended that Nike go public. I received a bill of $25 million from US customs one day. We were all shocked. The law was that the American Selling Price law, said that import duties on nylon shoes must 20% of the manufacturing cost of the shoe unless there is a ‘similar’ shoe currently manufactured by a competitor in the US. The duty will be then 20% of the competitor’s selling price. We could not accept this and we will fight this to the bitter end. There was no way out. I slammed the phone so hard that it spoilt and I had to get it replaced. It was horrible and I wasn’t spending much time with my kids as well. Our sales were nearly $70 million a year. We moved to a new house.

Year 1978. I was outraged at the Feds. Now, we needed more lawyers and a guy named Werschkul was recommended. He was eccentric too. Strasser knew and liked him. Bowerman wanted a rubber mill. Hayes bought a factory. We could use it as a storage. I was upset as they bought it without consulting me. However, I realized that they were kidding. My new office and swanky and very spacious indeed. Adidas was selling clothes now. I realized that accountants were trustworthy and I tended to hire them. I needed someone to run the clothes division. I wanted the company staff to improve their dress sense. I put Nelson, an accountant, in charge. However, he failed miserably. Werschkul wrote a few hundred pages article on The Decline and Fall of the Nike Empire. He was psychologically not okay. I knew I needed to work harder to deal with my problems.

Year 1979. I met the person at the Fed. The government official was a horrible man. I was angry at him and told him I would fight the decision. I headed to the US Senate to fight my case. We finally got to meet the senator. We moved offices again. Labour costs continued to rise and I was thinking of moving to China. We approached a guy named David Chang, who could introduce us to China. The issue was that he was arrogant and we didn’t like that.

Year 1980. Chang gave us his bio. His job was to help foreigners find contacts in China. China was strict and bureaucratic. After we threatened to counter sue, the government started about settlement talks. I thought that I deserved not to pay a cent at all. I knew that this fight had to end if we wanted to go private. The fear of going public was losing control. One way was to issue Class A and B shares. We needed to do something to solve our cashflow issues. The government settled on 9 million and I agreed. I signed the cheque. China welcomed me. I knew I wanted to keep going forward, and not to look back. Hayes was not coming with us as he had phobias. He carried vodka in his underwear and couldn’t get on board the plane. Over the 12 days we travelled around China. I realized that not many people wore proper shoes as they couldn’t afford them. Finally, we could visit their factories. We got to meet officials and we seemed warmly welcomed by them. We grew to like how Chinese good tasted. Now, we met the Chinese ministry representative. Thankfully, after many speeches by Chinese people, we signed 2 deals with Chinese factories. To us, business was not just about profits but being human too. Not all public offerings can go well. We released our announcement with the SEC. However, I would still own 46% of Nike. I went about to promote our stock to investors and bankers. We were tired after touring different cities. My parents were understandably very happy. The announcement date would be Dec 2, 1980. Finally, we got the price released at $22. We would all be multi-millionaires after the IPO. After the IPO, I was worth $178 million.

When you make something, when you improve something, when you deliver something, when you add some new things or service to the lives of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, you’re participating more fully in the whole grand human drama. – Phil Knight

Night. We were going to venture outside our comfort zone. We met Buffett and Gates at Palm Springs. Have I done everything I could with my life? I was lucky to have loving parents who supported every step of the way. Now, I have stepped down as Nike CEO. Sales hit $16 billion in 2006. We have 5000 stores and 10000 employees. The roads near the main campus were named after my co-founders. I always believed in gratitude. LeBron James gave me a Rolex watch that was engraved in 1972, I was immensely touched. All the sports celebrities that we knew felt like family. My son did something dangerous during scuba diving and ended up unconscious. My son passed away soon after. There was a strong camaraderie between me and the other athletes. Bowerman passed away in 1999. Strasser passed away in 1993 via suffering a heart attack. We used the bad headlines to invent the company. We tried to be environmentally friendly. I provided many entry level jobs for people. I find younger Americans more pessimistic about their future. We must all learn to be professors of the jungle. WE give $100 million away every year and helped build athletic facilities. Your mother is your first coach, always remember that. What’s on your bucket list? Luck is important too and the element of luck should never be underestimated. Never stop learning and improving yourself.

You measure yourself by the people who measure themselves by you. – The Bucket List

But that’s the nature of money. Whether you have it or not, whether you want it or not, whether you like it or not, it will try to define your days. Our task as human beings is not to let it. – Phil Knight

And those who urge entrepreneurs to never give up? Charlatans. Sometimes you have to give up. Sometimes knowing when to give up, when to try something else, is genius. Giving up doesn’t mean stopping. Don’t ever stop. – Phil Knight

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Dating Tips 109

Left Swipes and Love by College Magazine

A Millennial’s Guide to Hookups, Dating and Tinder

Introduction. You are in college and you might be curious. The book will dish out tips when using Tinder.

Getting the Girl (or Guy). Why do jerks seem to get the girls? Dennis Procopio is an expert in life coaching and will answer some of your questions. You must talk to a girl who you find is attractive. Creativity is emotional Viagra to a girl. You need to be comfortable in an area where you are not. You need to know what you like. The trick is to do something you like and join an interest group. Confidence is king. Instead of trying to impress them, guys should figure out what they want. Many men feel that they are rude and not creative. However, most men are okay. Start by performing small acts of kindness to show your love for the girl. Lose the fear. Be emotionally honest and be physically intimate towards her. Get involved in a sport if you are weak. Man up and go dancing.

If you are really a man and you want to prove how manly you are, then man up and go dancing. Do things that challenge you to stop taking yourself so seriously. Learn how to go out and have fun. – Dennis Procopio

Women respond to the following in this order: confidence, talent and honesty. Money is like having a big dick. Money and a big dick make you feel confident and women like confidence, but they don’t really care about it. – Dennis Procopio

I lost my boxers but found a girlfriend. I hated and didn’t know how to dance but I forced myself to go. I was stuck with a girl who didn’t know how to dance as well. We decided to practice together. Her name was Liz. Soon, I mustered courage to ask her out. I brought her to meet some of my friends. We danced at the fountain, almost naked. I lost my boxers halfway. I was forced to go commando back home. Never go skinny dipping on campus.

Ten ways to Get into Her Pants. Step 1 is to be a gentleman. The trick is not to overthink your approach and simply talk about anything. You can start off by saying ‘I love your glasses….Hey, were you in XXX class last semester?’ Ask a girl if she wants to dance and do not grind her from behind. Learn to ask the right questions. Do not simply fire questions, and get creative with your follow-up. Try to establish common ground as soon as possible. Try to avoid awkward silences. As a guy, you are supposed to carry the conversation. The trick is to answer your own question too. Laugh at her jokes as this is incredibly sexy. Sneak in some physical touch and grab her waist. The arms, shoulders and neck are okay. Ensure eye contact during the date.

Approach the whole group first, but then hone in on one girl you want. You better be standing next to the girl you want, too. – Unknown

Eye contact is a big one that gentlemen tend to overlook (pun intended). It makes us more comfortable, shows confidence, and is literally the easiest way to convey interest: My eyes are on you, and only you, for a reason. – Unknown

A Bro’s Guide to Picking Up Girls. Vinny and Luke Vaillancourt are known as V-Squared on YouTube and they are experts at love. Use social media to your advantage. Add fun facts to your conversation. Read the person’s Tinder profile so that your conversation won’t be so shallow. Our generation doesn’t do pick-up lines. Please hold off discussing sex on your first conversation. Cheesy lines won’t work well. Go under the surface to get under the sheets. Always be bold. Try to be friends with her first. In a new college, take the chance to sit and know people who are alone.

I Kissed a Girl and I Liked it a Little Too Much. It is important to stay safe and not get pregnant. Always carry condoms with you. Girls liked to kiss each other back in college. However, this time it was different. I really liked her. Happiness was the only thing that mattered.

Sex and Hooking Up

Ten Sex Facts Everyone Should Know, But Doesn’t. There are many forms to sex. Technology has created a new era of sex. It is very unlikely that both you and your partner will experience orgasm at the same time. Women are much less likely to experience an orgasm as they need stimulation from the clitoris. Porn creates bad expectations of sex. Sex gets weird in college. College is a time of experimentation. Less people are dating because they can have sex. Thinking about your grandma during sex won’t make you last longer. Learn from your own experiences. Women are actually very knowledgeable about sex. Men tend to be more confident due to their egos. Your expectations shape your sexual experience.

The Truth about My Casual Hookup. To love someone, it takes time to know their quirks. Dating is very different from a hookup. It is good to set it straight from the start, and know whether someone wants to date you or is just looking for a fling.

College doesn’t have to be all about hookups- being in a meaningful relationship with someone you can call your best friend is just as rewarding. – Unknown

What Movies Don’t Teach you About Sex and Dating in College. The fact is that many people are still virgins in college and haven’t been in any relationships. Not everyone can just have sex and not have romantic feelings for that person. Some guys are simply douchebags who just want to pump and dump. People in college and very gossipy and they end up talking a lot about the same guys in school.

You can make it whatever you want. If you want monogamy, then cool. If you want to just mess around, you can do that too. It’s like pasta: You can have spaghetti, spaghetti with meatballs, fettuccine or whatever. At the end of the day it’s still pasta. You can just do whatever. – Michael Junior

The Morning After: Getting Rid of Your One-Night Stand. You might wake up and find a guy lying on your bed. How do you get rid of him? Make up an excuse and say you need to work on a project. Escort them home and give them a free ride. Just be blunt and say no. Create a medical emergency. Get emotional and cry. The guy will surely leave.

Ten Lines that Instantly Scream Friend Zone. Instead of texting each other for hours on end, look out for the following cues (10 phrases). 1) I value our friendship too much; 2) I love you, bro; 3) ‘Let’s go bra shopping; 4) ‘I wish I could find someone just like you.’; 5) ‘You’re like a sibling to me.’; 6) ‘Burp’; 7) I want to explore my options; 8) ‘You’re too nice for me’; 9) ‘Can I bring my friend with me?’ 10) I’m so happy we’re best friends. If you hear any of the above, you know you have been friend-zoned.

Online Dating 101

Modern Dating: Is Romance Dead? In the past, men married at 23 and women at 20. Now, why do we engage in Netflix and chill? Many people nowadays want instant gratification and want hookups more than dates. Divorce rates are rising. We are also more afraid to commit. We are afraid to settle because the person might not be the right one. Being in too many bad relationships might scar you. Why do you need to date when you can get instant gratification? Do you want a serious commitment or casual fling? The choice is wholly on you to decide.

If an individual we’re interested in brings too much baggage into the mix, we adapt the “there’s more fish in the sea” mentality and move on. The ‘through the thick and thin’ concept is overshadowed by the realm of possibilities we have with sites like OkCupid. – Unknown

The 6 Commandments for Sliding into a Girl’s DM. Social media allows you to meet people whom you have never seen before. Confidence is the key. You must feel that you are good enough for her. Find out about her background and do some research. Learn to be direct. If you want her number or a date, simply ask. The worst answer you will get is no. Do not send or ask for nudes. That will definitely not work. Please proofread before sending.

Don’t message her on FB, then follow it up with a message on Instagram. If the girl doesn’t reply to your first message, she isn’t going to respond to your second or 69th one either so wait for a response or try again once you’ve met her in person. – Unknown

On the Unfounded Fear of Online Dating. Online dating can actually work if used correctly. I found the right guy on Tinder. He was extremely good looking although the problem was that he lived far away. Online dating allows you to gain exposure to people outside your social circle.

Whether you’re looking for a relationship or a casual hookup, you have to set boundaries-meaning open communication about your needs and expectations. But that’s true for all relationships, online or not. – Unknown

Why I’m not Embarrassed about Tinder. Online dating is very common nowadays. Tinder is like real-life flirting. It is like window-shopping based on people’s looks. Tinder is less hookup oriented as compared to Grindr. The largest advertisement in Tinder is your face. Learn to embrace the way Tinder works. It can lead to successes. Sometimes, you might even meet mutual friends on the app. Once I succeeded, I deleted Tinder. The right guy might just be a swipe away.

We see someone we’re physically attracted to, and we make a move. What we do on Tinder is the same thing we do at the bar, except with Tinder you need permission from the other person to approach. – Unknown

Making it Last

Ten Gifts Your Girlfriend Actually Wants. Get her a thoughtful photo album or a scrapbook. Get something for her from Pinterest. Go for concerts together. Explore etsy for handmade crafts. Get her a mix CD with her favorite music. Get her fashionable gloves. Go for groupon deals. If you are in a long term relationship, give her a surprise visit. Choose an item from the Amazon list.

Ten Gifts Your Boyfriend Actually Wants. Get him food that is healthy. Get him some household items or some sentimental DIY decorations. You might also try special edition DVD collections. Pay him a surprise visit. Buy theme park tickets for him. Understand what his guilty pleasures are. Bring him for an outdoor excursion and go hiking together. Get him the latest gear. Buy clothes.

Long Distance Love: Making it Work. LDRs are usually tough. It is great if you can find an on-campus couple. Handle communication by using on-line platforms. Use FaceTime. There is a need to plan when to communicate too. It is not simply good to be spontaneous when dealing with communication issues. Also, remember to devote time to improving your social life in school. You must handle trust issues. If there are no complete trust, it won’t work. However, do remember to give each other space. Ignore the haters who think LDR won’t work. Send random love texts and be creative about it. If you are good, LRDs can work.

Keeping Your Sanity in a College Relationship. Choose a date night so that even if you are busy, you can look forward to date nights. Do understand that plans might change. Quantity does not equal quality. Detach from the hip. One or two days away from one another won’t kill you. Be well rounded. A lack of social life will affect your health and your relationship. Read books together as that is sexy. Some form of planning for activities and dates are useful. Don’t keep using the phone to text. Learn to stay away from your phone to experience life. Staying honest, assertive and open is the key.

But at the end of the day, communication will always be the key to a successful relationship at any stage of the game. Even if you don’t know what to say or how to say it, opening up to your partner is always a good thing. – Unknown

Break Ups and Exes

Five Signs You Need to Move On. How do you know which relationships can be mended? These are signs when you should move on. If you start making excuses for their bad behavior, it’s a bad sign. If you ask him how he is and he doesn’t reply, it’s time to move on. If he starts to ignore problems and not communicate, it’s over. Not committing to future dates or plans is also a no-no. If his family and friends doesn’t like him, it’s bad too. If the above scenarios happen, you need to understand that there is nothing much you can do and you should move on.

Can you stay friends with your ex? Many people don’t believe in being friends with exes as it will never be the same again. Some people still believe in platonic relationships. However, do not rush into being friends right away. There are no clear guidelines as every situation is different.

Finding Love in a Hopeless Place

How to Show You’re Serious about Love. Understand your limits. Watch your tinder account. Please get off your phone. Most people are bolder online than in real life. Remember why your ex sucked. Be clear about what you want and what your romantic goals are. Dating around is good in the sense that you can learn about your preferences. Overall, one should embrace love. Never be afraid to love again.

If you want a relationship, don’t post pictures where you look like a party girl. If you want more than a casual hookup, leave some room for mystery and don’t display your goods for all to see. You get what you put into it.’ – Lauren Frances

The biggest mistake is dating people that don’t have the same values or goals and magically expect people to change. – Lauren Frances

I’m not saying falling in love and being in love is easy. But I am saying it’s worth it. – Lauren Frances

Tinder dating app photo

Minimalism by Grace Scott

The Real Truth About Minimalism

Introduction. Minimalism is about living a less commercial and material life. It is about de-cluttering and then focusing on the aspects of your health like health, relationships, passion growth etc. It is becoming more popular in recent times, especially in areas like art and music. It is now a trendy philosophy. Gear yourself towards a nominal policy and lifestyle. Only keep the stuff which is necessary and this will lead to less stress and more time on your hands. Learn to prioritize. However, one needs to guard against one-upmanship, which is feeling guilty after having purchased an item or compare with others to see who has the least number of pairs of shoes. Will you be resentful towards those you consume a lot? This concept of minimalism is not for everyone. However, be wary of becoming obsessed in de-cluttering. Do realize that it is not completely possible to totally de-clutter.

You must keep the things you most value and remove everything else that distracts you from that value. Being a minimalist means you live intentionally. You know where you are going and are actively planning to go there. – Grace Scott

Thoughts are possessions too. To be a true minimalist, you must free yourself of chaotic and unimportant thoughts, and get rid of stressful emotions. – Grace Scott

As a minimalist you no longer worry about others, you have little emotional attachment to stuff or possessions. You are now a single entity moving toward your definition of happiness. – Grace Scott

Not just another ‘Minimalism’ Guide. Minimalism places experiences and well-being over material things. Avoid spending money on replacing or maintaining items. Minimalism frees you of stress in owning things. However, understand that minimalism is not anti-consumerism. Austereness is an art form which uses monochromatic pallets of primary colours and shapes. Is there a difference from simple living? Yes, simple living integrates uncomplicatedness in every area of your life. It also means contentment and caring for your environment. There are different types of minimalist. One is the creative and resourceful one. Another is the travelling one, the one who backpacks and live in tents. There are also those who are intentionally homeless. This group of people are unlikely to be happy. Some people go for the tiny house movement. There are those who are accidental minimalist, who became one because of force rather than choice. They might have lost a job etc. The professional one is someone who feels superior towards others who own more items. There are also urban, original minimalists. The small holdings minimalists farm the land to feed themselves in a sustainable manner. Small spaces can be well decorated as well. Dogmatic minimalists own 100 items of less and read many books. Do understand that being a minimalist does not make you a better person. It is not about throwing away objects, but also de-cluttering the mind. How do you define what is important in your life? Too many material items drain your bank account. Free you from time commitments which you are not interested in. Learn to reduce your goals and focus on the major ones only. Reduce your debt. Eliminate distractions from your electronic devices and avoid multi-tasking. Spend time to build face-to-face and not just virtual friendships. Understand that minimalist is a lifestyle choice and is not easy to achieve. Free yourself from the consumer culture. Choose thoughts that have meaning and value and get rid of those which cause stress and remorse. Think positively. Stay in the present and do not think excessively about the past, which you have no power to change. Write down your thoughts and talk to yourself. Have an action plan to address your worries. Distract yourself by going for a run etc.

Why is Minimalism so Popular? The core of it is detachment. The heart of it is not just disposing items. 1) Due to financial crisis, people cut back on spending; 2) environmental concerns; 3) People compare less with what their peers own; 4) Personal debt is increasing; 5) There is more to life than just possessions; 6) Technology is making the world a better place; 7) You can store a lot of information in computers; 8) Social media is making the movement popular; 9) Anti-consumerism mindset. Does your life lack meaning even though you are busy? Take the item that you love and break it down to its core purpose. Think about how life will be different without the item. Will you be happy or sad? Minimalist closets are pared down. Live a more intentional life. Head off to the mountains, go for a road trip. If you are a minimalist, there is no need to keep promoting the same lifestyle to others. Some things might have sentimental value to you. Money and possessions can only bring short term happiness. Most people tend to spend more once their income levels rise and they constantly buy new items. Those who spend on others also reveal a higher level of happiness. Know the 80/20 rule and focus your time on the 20%. 20% of lifestyle choices can bring 80% of happiness. Sometimes, having possessions might allow you to share them with others, thus bringing about happiness. Sometimes, happiness also involves planning. The trick is to use your possessions to have yourself happy. Keep them well and be grateful that you own them.

Do you have stuff that you rarely use? Unnecessary clutter sends negative impacts on your life. Box up your duplicates and unused stuff. Be simple. – Grace Scott

To some people, this is the ultimate happiness. The joy of finding a bargain or just something that makes you giddy is happiness. There is nothing wrong with this type of lifestyle. – Grace Scott

By focusing less on the material goods, there is more time to focus on the meaningful – experiences, travel, play time, and relaxation. – Grace Scott

You are unique because of your individual traits, skills, experiences, aptitudes, interests and attitudes. You are not the sum of your possessions, but those possessions can give you joy if you share them with others. – Jolibois

Minimalism is a Double-Edged Sword. Do you always need to keep up with the Jones? Seek experiences over possessions. Being a minimalist can ruin your business. Minimizing means being stingy in your business spending. It can be lethal to your relationships. Realize that you can’t really change someone and it is always smarter to change yourself first. Make it a team effort. Value relationships over a minimalist lifestyle. Our ancestors owned stuff and made tools too. De-cluttering doesn’t really protect the environment as it clutters the landfills. Not purchasing goods means the economy can’t grow. Where should you throw the things that you plan to dispose of? Understand that commercialism is not all bad. Materialism might even hone productivity .Obsession with things can make you hoard items. If you want to be a minimalist, think about how it will affect your family etc. Do not be a minimalist and have a miser attitude towards life. Avoid simply being a trend follower without understanding the trend. Minimalism can drive you crazy. It might mean that you do not plan for the future. You may also lack ambition because strive less in life. Sometimes, your objects can define you and giving them away means you lose a part of you. You may start competing with other minimalist. It also signals a lack of passion in life. You tend to cut corners in everything you do. Life may become boring if you are not careful.

Just remember that unless you totally rid your world of possessions, thoughts and emotions, you will never be a true minimalist. You will just be confused. – Grace Scott

Minimalism is not for Everyone. You must be committed to the lifestyle wholeheartedly. If you the collector type of person, minimalism is not for you. Your items might form a part of you too. If you like fashion, do not be a minimalist. The same applies to photographers, mechanics, children etc. Your spouse may not agree with your minimalist lifestyle too. For the family man, minimalism is not a wise choice. Ensure you spend enough on your children for their developmental needs. You should never be forced to throw away your belongings. Before you throw, make sure you think carefully as you don’t want to throw them away and regret later.

Minimalism vs Frugal Living. Being frugal is being careful with money. Frugal people might still have possessions. In such a lifestyle, luxury is rare and hedonism is unheard of. Avoid lavish and extravagance and cut down on waste. Being thrifty is definitely important. Avoid buying a very expensive phone and also paying for cable subscription

Living a smarter life is not necessarily becoming a minimalist or adopting a frugal lifestyle, it is keeping the things you love, purchasing the things you need, and living a sensible life. – Grace Scott

Minimalism and Your Diet. Have a minimal diet and eat clean. Avoid processed food and add fish, nuts and seeds to your diet. Eliminate bread, pasta, sugar. Learn to fast and drink coffee to replace food. However, do not skip breakfast. Keep yourself hydrated at all times. Take multivitamins and fish oil. Walk at least 15 minutes a day. Use the gym. Sleep is important and get as much rest as you can. Minimize eating portions and eat small and order small dishes only. Avoid snacking, this is very important. Avoid carbonated drinks and only eat when hungry. Stop when you are full.

How to Become a Hybrid Minimalist. Is the way you spend in line with your values and desires and your happiness? Do not become a slave to your possessions. This is very important. The key to everything is moderation. You can still collect things you like and lead a minimalist lifestyle. Find a good job which you like and pays okay. Forced minimalism will not make you happy at all. Live with only what you need. It is better to be a practical minimalist. Or you can even be a balanced materialist. Buy only what you need and take care of what you own. Get rid of toxic relationships from your life. Learn to love your day job. Re-arrange your stuff and get your stuff to friends who might need them more. Sell your things. Avoid buying too many storage containers which lead to clutter. The key is to avoid buying duplicated items. Find a lifestyle which works for you and which you are comfortable with.

Owing less is better than organizing more. – Joshua Becker

Conclusion. Do not de-clutter so much that you rely on others for stuff. Ensure that you have tools for emergency. Never take minimalism in the extreme form. Others might find that you are weird. Cut back in areas which doesn’t matter as much. Ultimately, be happy with your choices and the make the most of them.

 

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Shoe Dog by Phil Knight (Part 1)

A memoir by the Creator of Nike

In the beginner’s mind there are many possibilities, but in the expert’s mind there are few. – Shunryu Suzuki

Dawn. I was in Oregon and it was my birthplace. It was 1962. I was 24 and had a good degree and a masters from Stanford. However, oddly, I still felt like a kid. I wanted to be successful but didn’t know how. Life was there to be experienced. Time is finite and I wanted my life to meaningful and purposeful. I wanted my life to be about Play. Sadly, I was not a good athlete. I needed a great dream and direction in life. Life is a game. The world, to me, should be made up of crazy ideas. Running was one of my favorite activities. It gave me a lot of satisfaction. I told myself not to stop at all.

What if there were a way, without being an athlete, to feel what athletes feel? To play all the time, instead of working? Or else to enjoy work so much that it becomes essentially the same thing. – Phil Knight

Let everyone else call your idea crazy… just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there is’. Whatever comes, just don’t stop. – Phil Knight

Year 1962. I told my dad about my idea. I wrote a research paper on shoes. I spent a lot of time exploring this idea. Many didn’t believe in my idea. I was in Stanford then. The idea was to manufacture shoes in Japan. Travelling was always my goal and I wanted to see the world. As such, I sought my dad’s approval. Things were looking bleak as my dad didn’t have a lot of cash to spare. Starting a business was too risky as 26 of 27 new companies will fail. My dad was a down to earth guy who wouldn’t travel excessively. We often talked about sports. I was called Buck when I was young. My grandma was resentful of the Japanese and didn’t support my trip. My grandma was known as Mom Hatfield. The public hated Japan after the WWII. My twin sisters were Jeanne and Joanne. Both my parents gave me consent. I spent a lot of time researching. I wanted my friend, Carter, to join me on the trip. Thankfully he agreed to it too. Our first stop was Waikiki Beach in Hawaii. We decided to stay in Hawaii for longer than necessary and we sold encyclopedias to make some cash. However, I had trouble selling them. I realized that selling things wasn’t that easy after all. My mom encouraged me to run and I realized I was good at that. I met Bernard Cornfeld, who headed Investors Overseas Services. I sold Dreyfus Funds. I was doing rather well back then. Carter found a girl he liked and didn’t want to travel with me. I took a leap of faith and decided to travel alone. Travelling alone seemed very daunting. Many of the buildings in Japan were damaged from the war. Thankfully my dad knew people in Tokyo who could show me around. I wanted to discover the Zen style of life. I learnt to forget the Self. After my visit to the Tokyo Stock Exchange, I realized that I didn’t see money as being that important. I was getting in touch with my spiritual self. Climbing Mount Fuji was a mystical experience and I longed to climb it. My friends gave me advice on not to be pushy when dealing business with the Japanese. The Japanese don’t have a direct way of saying things. I agreed to meet the shoe makers, Onitsuka. Ken Miyazaki gave me a tour of the shoe factory. I was extremely nervous when talking to those executives. My plan was to bring Onitsuka shoes to America. They asked me many questions about US culture and the market for shoes etc. I was working for Blue Ribbon then. They agreed and struck a deal with me. Later on, I visited Hong Kong and toured the top of Victoria Peak. I also visited Manila and Philippines. Along the trip, I stopped by Bangkok and Vietnam. I even had time to visit the Himalayas. In addition, my trip covered Egypt and India. Some of the other places I covered were Istanbul and Jerusalem. After more than 6 months, I was finally home and couldn’t wait to share my travels with my family.

Year 1963. The shoes from Onitsuka hadn’t arrived. I saw the world and was enlightened by my experience. I needed a way to try and make more money. I knew Mr Don Frisbee, CEO of Pacific Power & Light. I needed a job badly. He advised me to get my CPA and then after that an MBA so as to secure a decent level of earnings. I worked in an accounting firm for a while. But the work was too hectic for me to enjoy it, even though I was learning. Work would have to take centre-stage in my life. This was how I spent 1963.

Year 1964. I received 12 pairs of beautiful shoes from Japan. Bill Bowerman was my old track coach at Oregon and thought shoes meant everything to an athlete. He was always finding ways to improve how a shoe wore. Running shoes had to be light and springy. He was willing to experiment with new materials. I knew the Japanese were willing to improve their shoes. I knew I needed to please Bowerman. I loved that the man was fearless. He didn’t care about whether others respected him. He exhibited a strong level of hard work and grit and was a war hero. Facilities at Oregon were Spartan, to say the least. He was a guy you didn’t want to mess with. He often pushed me to be my best on the track. Surprisingly, he wanted to get hold of the Japanese shoes as well. The plan was to enter the business 50-50. His lawyer arranged for the paperwork to be completed. Bowerman was a guy who always went against the grain. However, he was an excellent coach. We met Jacqua and his wife. In the end the deal was 51 to 49, in my favour. I wanted to be the exclusive distributor of Onitsuka shoes in the US. Both my parents grew up in poor conditions. To them, family was paramount. My mum was a very strong-willed woman. Nevertheless, I knew she loved me deeply. My father lent me $1,000 to buy the 300 pairs of shoes from Japan. Mr Miyazaki allowed me to be the distributor for Onitsuka. My sales strategy was to sell them at track meets. The sales were tremendous. I realized I could sell them because I believed deeply in the product too. Sports was the way to make the world a better place. Soon, I ventured into a mail order business. The demand was overwhelming. I sold at the shoes at more than twice the price I bought them. My dad gave me $3000 more to buy more shoes. I hired salesman to help me with selling. I met Jeff Johnson, a sprinter, one day. Life was good but he didn’t want to be my salesman. A coach claimed that I was poaching as he had the exclusive American distributorship rights. This was to be a legal battle. He was Mr Manhasset. I needed to talk to Onitsuka management about this. I flew down to Japan again to settle things once and for all. I knew that I needed to stay calm and not be emotional. Competition was about forgetting your limits. Mr Miyazaki no longer worked for Onitsuka. Instead, I got an appointment with Mr Morimoto, his replacement. After the meeting, he promised to get back to me. The next day, I met the founder of the company, Mr Onitsuka. The Marlboro Man would sell his wrestling shoes nationwide, but limit track shoes sales to the East Coast. This deal would last for a year, before being subjected to review. I finally climbed Mount Fuji after all the drama that happened. I met Sarah from my climb. Sarah was with her boyfriend. It was difficult getting to the summit. The Japanese often climbed the mountains. I had no plans to see Sarah again. Sarah called me a few weeks later and decided to take up my offer. For two weeks, she lived in my parents guestroom. Happiness is a how, not a what. Sarah loved me. Her parents somehow didn’t approve of me and I found that really disappointing. Later, Sarah mentioned that she didn’t find me to be sophisticated enough and was dumping me. I cried and was disappointed. I hired my sister Jeanne to work part time for Blue Ribbon.

Year 1965. Jeff Johnson liked the shoes I gave him. He wanted to be a sales rep. He was very energetic. However, he kept writing to me and I found it to be irritating. He seemed incredibly needy. Later on, he wanted to quit his day job. Back in the day, running was not popular. Johnson wanted to do it full time, although I discouraged him from doing so. However, later, I hired him as the first full time employee of the company. The banks thought my sales rate was growing too fast and it was questionable. However, my cash balances were not growing as fast. The banker wanted me to re-invest profits into the company. My banker was Harry White and his boss was Bob Wallace. Wallace was a difficult man to deal with. Back then, venture capital didn’t exist. By then, I passed my CPA exams. The money I earned in my day job would be reinvested in the business. I learnt that a lack of equity would cause companies to fail. To me, numbers were beautiful. I was also involved in the military and enjoyed my days then. Hayes was a crazy colleague who loved to drink and make others drink with him. Bowerman visited Japan too and saw Mr Onitsuka. Although Bowerman tried to suggest ideas for Onitsuka to implement, they fell on deaf ears. However, after much persistence, Onitsuka made prototypes for the American market. Bowerman also tried to invent Gatorade for athletes and always occupied himself with the latest products. He was also writing a book about jogging.

Running for pleasure, running for exercise, running for endorphins, running to live better and longer – these things were unheard of. – Phil Knight

Running track gives you a fierce respect for numbers, because you are what your numbers say you are, nothing more, nothing less. – Phil Knight

Year 1966. Bowerman didn’t seem to need any sleep. Johnson continued writing to me. However, I continued to ignore his letters. Johnson was extremely hardworking and treated customers well. He was putting in so much effort. He even sought customer feedback on the Tiger shoes. I rented a space to store shoes and to work from. One day, Johnson was involved in a tragic accident and his skull was shattered. I contemplated starting my next business. If there is something I learnt from life, it would be to fail fast. Thankfully, Johnson recovered. After he hit his sales target, we opened our first retail store. One day, I received news that a coach was trying to buy Tigers from another source. It was the Marlboro man. He was trying to poach business. How should we deal with the Marlboro man? I knew I needed to go to Japan. Thankfully, my boss agreed. There was a new manager in Japan, he was Kitami. I told him about Blue Ribbon’s sales figures and our new store and emphasized that we wanted to be the exclusive US distributor for Tiger shoes. Later, he said he wanted a bigger distributor. He mentioned that he would consider my proposal.

Year 1967. I hired someone else. I wanted to replace Johnson. I asked John Bork, a high school track coach. I didn’t break the news well to Johnson. He was freaked out and pissed. We wanted to expand to Boston and New York. Johnson was not willing to travel outside of California. I regretted the way I ignored Johnson in the past. He gave me an ultimatum and wanted a pay rise. Bowerman wasn’t keen to keep him as he wanted a stake in our company. I met up with Johnson and his dad. Finally, Johnson agreed to stay with a $50 raise but with no equity. Johnson would be on the East Coast . Geoff Hollister wanted to join too. He would be number 3. Bob Woodell would be number 4. The issue with him was that he couldn’t walk and was on a wheelchair. He looked sad and ill. He would work in our second retail store. Aztec, the new shoes, would be born. Adidas tried to sue us for copying their name. They were unchallenged for a long time. I despised them and felt that I could beat them. Bowerman was great at inspiring people. His book made running seem very cool indeed. Woodell was managing his stall well and with good energy. I wanted to live in my office and give up my apartment since I was spending so much time there anyway.

Year 1968. I was working 6 day weeks and I had no social life. I wanted to leave audit, but Blue Ribbon was not sustainable. I applied for a teaching job at a university, where the hours were more humane and better. My exit was sad and difficult. Teaching was tough as some students were not receptive. I tried the Socratic method of teaching, which was to ask a lot of questions. Miss Penelope Parks was a quiet student in class, who didn’t participate. However, she achieved excellent grades during the exam. I tried to offer her a job at my company. She agreed to work for me part time and did the work well. She did everything we told her to. Woodell thoroughly enjoyed having her around and she made him happy. She didn’t cash in her paychecks. I wanted to go out with her. She agreed to it. We visited the Oregon zoo and my trip to Calcutta. At that time, I was still uncertain about Blue Ribbon. She seemed to be impressed by me so far. We had our second date soon. Her family was poor and there were 5 siblings in total. I knew she preferred security over insecurity. She was a shy girl. Later, I met her parents at her home. Our relationship deepened over time. Her house was very messy and chaotic. Finally, I got her parents’ consent for me to take her to Sacramento for the weekend. I introduced her to Bowerman and the other runners. We were planning to get married. She was now my partner. I flew to Japan to talk business again. He liked my designs once again. I was now part of a team in Japan and it felt good. Penny and I got married in September 1968. It was only been a year once I first knew her.

I wanted to build something that was my own, something I could point to and say: I made that. It was the only way I saw to make life meaningful. – Phil Knight

Year 1969. Sales was continuously improving. Our sales force was increasing. I was now justified a salary. I was 31 already. Now, I was working full time at the company. Now, I needed some advertising. I needed advertising to promote my company. In general, I was more a pessimist than optimist. Puma and Adidas were not at their best behaviour. I was beginning to have doubts about Kitami. I tried to buy someone at Onitsuka. He would be a spy to Kitami. It was normal in their culture to hire a spy. Later, Kitami came to visit my office in the US. Penny learnt that I was forgetful and misplaced things. Penny was an excellent cook and spent the money I gave her wisely indeed. My father started believing in my business now. Penny discovered that she was pregnant and we were overjoyed. We planned to get a new house which was bigger. She continued to work for Blue Ribbon. Woodell never lost his composure. We really managed to get along well. We needed a bigger office. Penny treated him very well too. She was about to conceive soon. She gave birth to a cute boy. We made the baby. My new son was named Matthew. An employee tried to do mutiny. However, this time I reminded him that I was the boss. Bork reminded me that the back room, our warehouse, was in shambles.

Year 1970. I flew to Japan again. I needed to sign a new deal. He wanted to renew us for 3 more years. Sales were up to $22 million. Kitami would be promoted to company’s operations manager. I signed the agreement. Onitsuka was always late in shipping products. However, there was nothing I could do. Bowerman’s Cortez was becoming too popular and we couldn’t meet their demand. The bankers also didn’t treat me with much respect. My banker wanted to see larger cash balances before they would increase my loan amount. I was thinking of a mini public offering in order to raise cash. All of our cash was tied up in shoes and assets. 1970s were the era where venture capitalists were formed. My holding company would be ‘Sports-Tek Inc’. There was little demand for our shares. We withdrew the offering in the end. I was always thinking about how to improve my liquidity position. I invited Grelle over for a party and made my pitch to it. However, he was not interested. Woodell’s family was also kind enough to lend me $5,000 and didn’t ask for interest. I felt burned out and tired. I challenged Grelle to a running race. Steve Perfontaine appeared on the cover of Sports Illustrated. He was an excellent runner with a great reputation. Later, I decided to approach Bank of Tokyo for funding instead. I met a guy named Cam Murakami and we struck a deal. Was Onitsuka plotting to break my deal by approaching other distributors? I was pissed and considered inviting Kitami to remind him of what Blue Ribbon could do.

Year 1971. Kitami accepted my invite and came to Portland. We gave him and his assistant a time of their lives. Kitami was angry and shouted at White, my banker. White was pissed and jumped out. Kitami mentioned that my sales were disappointing. I peeped at Kitami’s folder and saw 18 other shoe distributors in the US. He was relentless. We had done so much for Onitsuka and that was the way he was treating Blue Ribbon? I met Kitami for cocktails. Bowerman was drunk that evening, which was very unlike him. My consultants advised me to stick with Onitsuka for the time being. We had to stick to the devil because we relied on them for business. Kitami wanted me to sell Blue Ribbons to him. If I didn’t accept, he would approach stronger distributors. First National didn’t want to do business with us anymore. White told me to find another bank. I talked to everyone, and knew that I needed help desperately. Sumeragi approached me, saying he wanted to introduce quality shoe manufacturers in Japan. I always tried my best to spend time with my son, Matthew. If my relationship with Kitami cannot be salvaged, what hope was there left? I needed to find a replacement for Onitsuka. I arranged a meeting in Mexico, in a factory called Canada. I signed a contract with them. This would not violate my contract. I got Carolyn Davidson to help design a logo for the shoes. We looked through her designs. It had to signal ‘motion’. The logo we chose looked something like a wing. We kept debating on the name of the shoes. We wanted ‘Falcon’; ‘Bengal’; ‘Dimension Six?’ My head my splitting and we couldn’t come up with a good enough name. Johnson came up with ‘Nike’. It was the Greek goddess of victory. It was good because it sounded short and easy to remember. Anyway, our company’s motto was to be victorious. My relationship with Nissho was going well. He kept giving me cash. I wanted a public offering where I sold convertible debentures instead of stock. This was 1971 and the shares sold fast. Canada, the factory, was a letdown because the shoe couldn’t take the cold. Sumeragi promised to help me find new factories. He introduced me to Senter, a shoe dog. Sole was a guy Sumeragi hired. I met Chuck, CEO of Marcona Mining, for advice. Sole was nice and knew factories which could make shoes for Nike. We agreed to go to Japan to look at them. Sole Jr went instead as Sole was ill. Sole Jr was very rude towards the Japanese and it was embarrassing. The samples provided to me looked very good indeed. Now, I had to think of names for the different models. The tennis one would be Wimbledon. The basketball one would be the Blazer. The running ones would be Cortez, Marathon and Obori. Penny joined me in Japan. She had a panic attack and leg cramps. Now, I had to tell Onitsuka about my new business plans. Bowerman, in the meantime, kept trying to improve the sole of the shoes.

Shoe dogs were people who devoted themselves wholly to the making, selling, buying, or designing of shoes. – Phil Knight

Year 1972. Everything depended on Chicago. Nissho was our future, not Onisuka. Onitsuka didn’t know about it yet. Nippon Rubber first wave of shoes were not the best too. I was pissed and wanted to give up. However, I knew that I needed to pull together and work hard. We did better at the show than expected. Kitami was angry and approached me. Kitami managed to spy on our storeroom and saw all the Nikes there. Kitami brought his lawyer the next time we met. Jaquua was on our side and threatened to sue if Tiger wanted to cut us off the deal. Bowerman was Kitami’s secret consultant. I broke the news to our employees and told them we had to rely on Nike now. These were certainly trying times for our company. I felt that we could win big time. Everyone left in a good mood. Pre was a great runner from Oregon and we all rooted for him. We were thinking of marketing Nike shoes for him during races. Sports can certainly empower people and give them a sense of victory. The fans also can take part in the sport. It’s not so much about winning, but trying your best. Sales of Nike kept improving. Israeli terrorist kills a few athletes at the Olympic village in 1972 and shocked the world. Nastase was a tennis player who wore Nike but started winning tournaments. We wanted to sign a deal with him. We had a celebrity athlete endorser and I was elated.

It’s time we faced facts: If we’re going to succeed, or fail, we should do so on our own terms, with our own ideas – our own brand…Let’s not look at this as a crisis. Let’s look at this as our liberation. – Phil Knight

shoedog

Alibaba by Duncan Clark (Part 2)

Burst and Back to China. There were other companies with the same ideas as Alibaba. Global Sources was preparing an IPO. Alibaba, in response, started hiring a lot of people. How is the Chinese government going to handle the Internet? Chinese regulators are known to regulate quickly. China knew that it needed to adapt to new technology to boost the economy. The venture capitalist market was in its infancy. The Chinese government knew that they could not stop the Internet’s rise. They created the VIE, variable interest entity. This allows foreign investors some control over revenues generated by a Chinese company through a complicated arrangement of contracts. Sina, NetEase and Sohu all had IPOs. However, they all didn’t do well as public companies. It was Mar 2000, the dot com crash was happening. A lot of market capitalisation was being wiped out quickly. A bubble formed and it was popping. Everything was crashing down. The party was truly over. Chinese tech IPOs could not be listed for the next 3 years. Jack attended trade shows and wanted to hire the best talents. Jack was attracting a lot of attention from the media. The 3 IPOs’ share price was hit badly. Jack Magic was wearing off. He hired 30 engineers to try and over-turn the company. Now, they decided on a B2C, back to China policy. Alibaba was slammed as they were not making money. MeetChina was not doing well too. Alibaba needed to find a way to make money and impress investors. At that time, Alibaba’s closest rivals was Global Sources. Alibaba started charging fees, however, their revenue was not growing fast enough. In 2001, they hired Savio Kwan as the COO. Jack was CEO, Joe was CFO, John was CTO and Savio was COO. Some employees were sacked in order to cut cost. Advertising was cut to reduce expenses. Alibaba was undergoing tough times and Jack was certainly worried. The 3 IPOs were now penny stocks. The fact that Alibaba was still private worked to their advantage. Thankfully, Alibaba rided out the difficult years of 2001 and 2002.

Born Again: Taobao and the Humiliation of eBay. Jack Ma hates eBay as a competitor, but admires it as a company. Now, he is a settler. Alibaba would move their HQ back from Shanghai to Hangzhou. 8848 was struggling. Now, Jack wanted to target the consumer e-commerce market. Despite 8848’s failure, Jack was not deterred. eBay was proving to successful. Shao Yibo wanted to be the eBay of China. He wanted to challenge EachNet. Bo was a genius at mathematics. I got to know Bo too. Bo was a humble guy. EachNet was getting a lot of investments and funding. Could the eBay model really work in China? In addition, China didn’t have a developed credit card market and courier services. Online payment was still years away, at the very least. EachNet explored the cash on delivery concept. In 2002, China UnionPay was launched. However, China’s legal system offered few protections for merchants. EachNet tried to create escrow services and copy PayPal. Unscrupulous vendors created fake accounts to dilute negative ratings. EachNet faced many issues. Later, EachNet sold a 33% stake to eBay. eBay was attracted by the allure of the Chinese market. eBay was slow to enter Japan and suffered greatly. Later, eBay acquired the whole of EachNet. They had 90% of China’s consumer e-commerce by then. However, in 2 years, they were driven out of China. Why did eBay fail in the end? Jack was scared that eBay would eat Alibaba’s business. This was when TaoBao was launched. SoftBank also managed to get rid of eBay from Japan. Jack strategized and thought of a plan to counter eBay. He wanted Alibaba to be portrayed as David vs the Goliath, eBay. TaoBao was launched on May 10, 2003. SARS broke out in 2002. Many employees had to undergo isolation. Jack inspired the troops during difficult times. The virus boosted online sales and there were less retail sales. Internet usage spiked when people were at home. Initially, many people did not know that Taobao and Alibaba were even related. However, over time, people knew and were surprised. Taobao used guerrilla marketing techniques to reach out to small sites. This proved to be very effective indeed. It would be years before TaoBao could make money. Softbank pumped even more funds into Alibaba. Goldman sold their stake, way too early. eBay still thought Taobao was very small. China was the next big thing. eBay thought that whoever wins China, wins the world. The merchants were pissed at high commissions charged by eBay. eBay got the culture wrong and thought that experts in the US could solve everything. However, they didn’t understand the local market. Their website design also left much to be desired. Taobao was a website built for the Chinese people. Taobao also understood merchants’ needs better. EachNet started charging listing fees to sellers. TaoBao didn’t charge, but had to think of ways to earn money. This was their winning move as during the initial stages, people didn’t want to pay to have things listed. Customer service on Taobao is excellent. eBay also moved their servers over to the US. However, information and traffic is screened before entering China. Hence, some user information ended up being blocked. Migration of servers turned out to be a bad mistake. The website lagged ever more. eBay was not very strong in technology and could not manage various website changes. There was too much red-tape in eBay. Taobao’s execution was better and that killed eBay. There were 2,000 employees in Taobao in 2004. The ant was their mascot. eBay could not manage payment properly. Alipay was launched in 2003. The escrow model established trust . PayPal came up with the solution, but they were too late. PayPal was also sued in the US, causing more problems. Alipay was still continuously improving. Taobao wins because they pay attention to user experiences. eBay tried to buy Taobao, but failed. eBay thought that investing large sums of money into China would gain them a victory. Even when eBay tried to introduce Paypal in China, they failed. eBay bought Skype for $2.6 billion. eBay’s market share of China e-commerce dropped to less than 30%. Alibaba is essentially the combination of eBay, PayPal and Amazon.

In the US, if you place a bid on eBay, it’s a contract, and by law you need to fulfil that bid if you win the auction. That’s very clear. People would be afraid of getting sued if they did not abide by that contract. In China people don’t care: “I place a bid, I don’t want it anymore, tough luck.” – Duncan Clark

There is no treasure that cannot be hunted out, and there is no treasure that cannot be sold. – Taobao Tagline

eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose, but if we fight in the river, we win. – Jack Ma

If you use money to solve problems, why on earth would the world need businessmen anymore. Businessmen understand how to use the smallest resources to expand –  Jack Ma

Whatever is stronger than you, you have to learn not to hate it… When you treat it too seriously as a rival, and intend to kill it, your techniques are completely exposed. Hatred only makes you a shortsighted person. – Jack Ma

Yahoo’s Billion-Dollar Bet. Yahoo would also fall behind until they struck a deal with Alibaba. Jerry Yang was popular in China. When he went to the US, he didn’t know much English at all. However, he had good grades in school. Jerry and Dabid were very close. By 1995, Yahoo had millions of hits. Sequoia invested $2million for a 25% share of the company at the start. Son also pumped in money to buy a 41% sstake. SoftBank saw the potential of Yahoo. Yahoo went public in 1996. Yahoo didn’t want to venture into China yet and started to target Southeast Asia. Yahoo knew it would be tricky trying to enter China. However, since Jerry was from Taiwan, China wasn’t too pleased at Yahoo’s expansion plans. Yahoo was finally launched in China. China was adamant that Yahoo be curbed and not expand. Yahoo’s content was boring compared to Sina, NetEase and Sohu. These 3 would eventually fall to Baidu, Alibaba and Tencent. Tencent harnessed content to cell phones and online games. It was launched in 1998 – Pony Ma. It cloned the ICQ, an instant messaging client. It was renamed as QQ. Their mobile business took off in a big way. However, they are also huge in online gaming. Now, the market capitalization is over 200 billion. Tencent also owns WeChat. Baidu was founded by Robin and Eric. Baidu was founded in year 2000. It was like a search engine. Initially it wasn’t profitable. Their core focus was on the search engine. Google even invested $5 million in it. It is China’s largest search engine. Yahoo partnered with Baidu. However the deals turned out to be major flops. It later bought 3721 networks. Zhou Hongyi is the founder of 3721 networks. He was an aggressive and wild child. However, the integration plan with 3721 didn’t work out. Zhou and Yahoo had some management disagreements which could not be resolved. Yahoo didn’t recognize the threat of Google then. Their search engine was better and more powerful. Zhou criticized Yahoo heavily and blamed their corporate culture. Now, the big move arrived.  Jerry gave Jack $1 billion for a 40% stake in Alibaba. Yahoo initially wanted to invest in Sina, but it got rejected. It was a leap of faith as Alibaba was not making money then. Yahoo was a beneficiary of that investment. Jack, Jerry and Masayoshi Son formed the Golden Triangle Some of the employees managed to cash out and earn large sums of money. The ownership was like this 40% Yahoo, 30% Softbank, 30% existing management. Some of the Alibaba employees didn’t like this new deal. China Yahoo was in trouble from Baidu and Google. The $1 billion deal helped provide the ammo for Alibaba to compete with eBay. The search engine aspect of the Yahoo-Alibaba was failing. Zhou tried to poach people from Yahoo. The case of imprisoned Chinese journalist, Shi Tao, also caused Yahoo much negative publicity. Google closed up most of its China operations in 2010. Not only were there regulatory challenges, there was also the big boys like Alibaba, Baidu and Tencent. None of the Western companies succeeded in China between the period 2000 to 2010. It is better to be a merchant than a missionary.

Growing Pains. eBay exited China in 2006. Tencent was doing well. David Wei would later serve as CEO of Alibaba.com for more than 4 years. The plan was just to list Alibaba.com, a B2B business. It was November 2007. Many simply bought the stock without understanding what it was about. Much of the shares were sold to institutional investors. Yahoo bought 10% of the offering. The company was valued at $9 billion. Taobao was still losing money. Alipay was also losing money as well. Jack bought a $36 million home in Hong Kong, in Victoria Peak. Then the US economy was badly hit and Alibaba’s exports were hit badly. The share price plummeted. However, after the crisis, the company emerged stronger. Alibaba slashed subscription rates during the crisis. They tried to offer the customer even more value-added services. Finally, Taobao sold merchant advertising space to help tem promote their goods. A new cloud computing subsidiary, Aliyun, was also launched. Later, Alibaba would delist from the HK stock market. Consumer e-commerce was doing very well now. Microsoft offered to buy Yahoo for $44.6 billion in 2008. Microsoft and the Chinese government didn’t have a great relationship. Jerry Yang rejected Microsoft’s offer. Their share price plummeted. Many investors saw this as a dumb move by Yahoo. Jerry left Yahoo because of this. Carol Bartz would be the new CEO of Yahoo. Jack didn’t have a good relationship with Bartz. Alibaba wanted to buy back Yahoo’s stake in the company. Many in Alibaba wanted to end the partnership. Carol was fired in September 2011. Fraud was discovered among Alibaba employees in 2011. This damaged consumer trust in a great way. Jack wanted Alibaba’s CEO to step down, which he eventually did. Who owned the Alipay business? It was owned by Zhejiang Alibaba E-commerce company limited, which Jack controlled. It was previously owned by Alibaba Group but got restructured after that. Alibaba’s share price fell after this piece of news. They did not seek approval of board of directors or shareholders. It was now in Chinese ownership. Yahoo didn’t tell their investors about this transfer. Jack argued that he could foresee future regulations which would deny foreign-invested companies. PBOC later issued a license to Alipay. Many people hated this VIE investment structure. Many payment companies in China had to close because they couldn’t obtain the license. PBOC’s rules were very vague. Yahoo and Alibaba’s frosty relationship didn’t help at all. Jack was slammed for this transfer as it appeared to be in his benefit. Jack also had disagreements between Son on a range of HR issues, which were difficult to resolve. Jack believed in treating customers well . Son didn’t believe in giving shares to his employees, like in Japanese culture. Finally, Yahoo was compensated for the transfer. Now, Alibaba was focused on buying back Yahoo’s stake. In 2012, Alibaba paid $7.1 billion to buy back half of Yahoo’s stake, or 20% of Alibaba. Now, Jack was planning other IPOs of the Alibaba group.

Raise money when we don’t need it. When you need it don’t go out to raise money, it’s too late. – Jack Ma

Icon or Icarus. IPO 2.0 was emerging. It is September 2014. Jack and team were making a pitch. There were many investors at the event. He discussed the risk factors the VIE investment structure. Alibaba’s structure allowed a lot of co-founders and formed a partnership. HK banned them from listing. The partners all wanted control of the company. Alibaba decided to list in NYSE instead. It raised $25 billion for 12% stake in the public markets. This was the largest IPO in history. The interesting thing was that you would purchase shares in Alibaba Group Holdings Limited, a company incorporated in the Cayman Islands. However, they did not actually own business assets in China. 90% of the shares were for institutional investors. The company was valued at over $230 billion, more than Coca-Cola. Later, Jack bought a $190 million house in Victoria Peak again. However, in later 2015, the share price plummeted drastically. Why did the share price fall? There was a dispute between Alibaba and the Chinese government agency. Alibaba was accused of selling fake goods and that its employees were taking bribes. Its policing policy wasn’t effective enough to prevent the fakes. SAIC released the report in public, affecting Alibaba’s reputation. Alibaba’s sales figures didn’t hit analyst targets, causing the share price to fall further. SAIC finally deleted the report and Alibaba vowed to police against illegal merchants. Jack respected the governments’ actions. Alibaba introduced a lot of measures to counter pirates. Eliminating piracy is a massive task. They have an Internet Security Team as well. The company also harnesses big data to help them track pirates. Taobao is involved in some lawsuits as well. Fake trades were present too. This happens when merchants ship empty boxed to ghost customers to boost their rankings. There are also click farming companies and fake reviewers. Alibaba is also facing competition. Alibaba pay $4.5 billion to buy a stake in Suning, an electronic goods retailer. JD.com is closely modelled after Amazon and operates its own logistics network. Jack is at swords with JD’s founder, Richard Liu. JD is backed by Tencent. WeChat is also posing a problem for Taobao. It is an unbelievable app that can do it all. Alibaba is also trying to shift its business model to mobile. The mobile wallet is causing huge competition for Taobao. WeChat has WeBank and can offer loans to consumers on their phones. Didi Juaidi is competing with Uber. Alibaba upgraded its office in Beijing. Alibaba is trying to cultivate government support. Jack has his own private equity fund, Yunfeng Capital. It is like a ‘billionaire’s boys club’. They all focus on companies in Zhejiang or Shanghai. However, deals between Alibaba and Yunfeng-related companies pose problems. Some of these transactions are not fully explained. Cloud computing is important for Alibaba, similar to Amazon Web Services. Jack believes in the power of Big Data. There is even a data centre established in Singapore. There are also rural kiosks built in rural areas. They plan to enter this market too. JD.com isn’t ignoring this potential group of customers too. AliExpress was launched in 2010, connecting sellers in China with consumers overseas. Russia accounts for 20% of AliExpress’s sales. Alibaba aims to grow in Western Europe. They are opening ‘business embassies’ overseas too. They also see US as a key market. Cross-border trade is something that Alibaba is now focusing on. Jack Ma has revealed that he doesn’t want to invade the US. After you take your business public, life is more difficult as you face shareholder pressure. Jack is now concerned about environment and health care too. Urbanization has caused havoc for the environment. Cancer is a major issue nowadays

Alibaba health has also emerged. Jack is also concerned with taking care of the younger generation. He sees sports and entertainment as the way forward. Alibaba also invests in film. It has its own streaming service also. Alibaba is also aiming to promote home-grown content. Jack wants Alibaba to be the entertainment company of the world. It can use Alipay to understand what moviegoers are looking for. Jack is concerned that foreigners are not portraying China in a good light, that it is a Communist country etc. Alibaba has found itself being scrutiny after it has become bigger. Alibaba is also venturing into finance and media.

Online or offline, fighting piracy is like a game of Whack-A-Mole: Whack one molehill, and the moles will pop up somewhere else. – Duncan Clark

Chinese people use to feel a sense of pride for being the world’s factory. Now everyone realizes what it costs to be that factory. Our water has become undrinkable, our food inedible, our milk poisonous, and worst of all, the air in our cities is so polluted that we often cannot see the sun. – Jack Ma

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Invest like a Pro in 10 Days

Everyone needs a budget. Personal finance affects every aspect of your life. Everyone should be investing. Many people believe that they will not have enough money to retire. You need to spend money in accordance with your values. It is important to save for a rainy day. A budget can be altered over time. This book doesn’t delve into complicated material or technical terms. Warren Buffett believes in value investing and not active investing.

Why Should You Invest? Do not invest if you want to make a quick buck or your aunt recommends you a stock. You must understand what you are investing in. You must set a clear goal. The main reason is to build wealth. The average wealthy person invests at least 20% of their income. The trick is to give every dollar a job to do. By investing, you are making the money work for you. This is what is meant by ‘leveraging’ your money. Wealth is a boring motivator. However, one can do a lot with more money. For one, one could retire early. You can use the money for your child’s education. Weddings are getting more and more costly. You might also aim to buy a car in future. Your investment goals must be SMART in nature. For instance, a goal could be ‘I will invest $xx each month into my investment account so that I can purchase a new car costing $yy in 5 years time’. To go the distance, you will need goals.

Investment Growth. One invests so that their wealth can grow. Understand the concept of compound growth. Investments boil down to 3 components: a) amount; b) length of time; (c) rate of return. Remember that in investing, time is your best friend. You can use the Rule of 72 to find out how long it takes before your money doubles. Factors like taxes, inflation, transaction fee can affect your rate of return. Taxes can be huge and should be minimized. Brokers will charge you a transaction fee for buying/selling. Hence, it makes sense to buy/sell large quantities .Mutual fund expense ratios can be quite high. Be wary of fees that are pegged to AUM. 401k fees also erode your net returns.

How to Win the Investment Game. There are plenty of books on investing. The key is to start now and set your investments on auto-pilot. The key is to be boring, there is no need to talk a lot about your investments. Understand about risk/reward. The mix of your assets is your asset allocation. Different instruments have different risks associated with them. Depending on what are your goals and at what stage of life you are in, invest appropriately. Diversify your portfolio. Apply dollar-cost averaging on your portfolio so as to in general, ‘buy low sell high’. Timing the market is stupid and unreliable. If you wait too long for the perfect time to enter the market, chances are you will miss out on a lot of potential income.

Become a Control Freak. You can control the following: When you will invest, How you will invest. Focus on your investment goals, before looking at your expenses. Always focus on only what you can truly control. Markets are irrational and it doesn’t make sense trying to analyse market performance. Be lazy and set everything to autopilot.

Since you cannot successfully time the market or select individual stocks, asset allocation should be the major focus of your investment strategy, because it is the only factor affecting your investment risk and return that you can control. – William Bernstein

Investment Types. Stocks are traded on exchanges and it is like owning a small stake in the company. When they are riskier, they provide greater returns. A mutual fund consists of different stocks. One share might represent different stocks, but the fund also has its own expenses. An index fund is a passively managed one. Mutual funds are run by investment professionals. The author believes in the power of index funds. Even Warren Buffett recommends index funds for most people. The fees are also the lowest. ETFs are tough to beat and have very minimal expense ratios. Stocks are valued via discounted cash flow or the dividend growth model.

All About Bonds. Bondholders are paid before stockholders in a liquidation. There is an expiry date on the bond and the principal will be returned to you at the end of the tenure. Bondholders receive interest first and companies are obligated to pay bondholders their coupon interest. However, you must be concerned with default risk, interest rate risk, inflation risk. Federal bonds are safer than municipal bonds. Corporate bonds have credit ratings. If people anticipate interest rates to go up, then bond values will go down and vice versa. They are useful to add if you are more conservative in your investing style. There are also bond ETFs available.

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Alibaba by Duncan Clark (Part 1)

The House that Jack Ma Built

Jack was a former English teacher. The IPO in Sep 2014 raised $25 billion on the NYSE. Now, it is the largest virtual shopping mall. The company is worth at least 300 billion. He is the richest man in Asia. Online shopping has given the Chinese many more options and quality products. Taobao is its online shopping website. The middle class group in China is expanding fast. Jack has massive appeal on the global stage. The company was founded in 1999. He wagered his home for the business. I was the advisor for Alibaba in its early years. I founded BDA China, a Beijing-based investment advisory firm. His ambitions and unconventional strategies make him famous. He has high hopes for his company to tackle major challenges, like health care and education. Is the Chinese government on his side? Some of the core strengths of the company are in commerce, logistics and finance.

The Iron Triangle. Massive purchasing data are tracked. It was 11 Nov 2015. The total sales for that day was $14 billion, 4 times greater than Cyber Monday. It is known as Singles Day in China. This is the day when people shop like crazy. This shows the power of the Chinese consumer. In the past, the Chinese saved too much and spent too little. You can literally find everything on Taobao. It is known as the Everything store. Tmall is the sister site. In the past, Taobao sold to WalMart etc. However, after the 2008 crisis, they sold more domestically. Jack Ma attributed his success to luck. Their websites do not carry inventory, unlike Amazon. The goods are stored with other merchants. Taobao makes money from selling advertising space. This is similar to Google’s Adwords. This is pay-for-performance advertising. They have many client service managers to manage disputes between customer and merchants. The customer is always placed first. Tmall.com is more up-market and for luxury products. Almost 80% of the $10 billion revenue is from these sites. Many foreign brands like Costco, Apple, Zara are on Tmall. Amazon has just 2% of the Chinese market. China also has Juhuasuan.com, which is the equivalent of Groupon. It is very convenient to shop online. The traditional retailers have to buy land, which is expensive. The government taxes heavily for land users. Grocery chains account for little of the total sales. Offline stores are losing their appeal. E-Commerce is a lifestyle in China. You can return clothes if they don’t fit. 40% of people buy groceries online. Household appliances and even cars are sold online. You can even buy islands in Canada, Fiji etc. Cosmetics and skin care products are huge. However, counterfeit goods are the problem. Taobao tracks fake products and punishes merchants who try to sell fakes. The company has the logistics edge. Packaged deliveries volumes are growing. Couriers are not employed by Alibaba. 4 companies carry out most of the delivery. They are Shentong, Yuantong, Zhongtong and Yunda. They are known as the Tonglu Gang. Alibaba’s success can be attributed to their efficiency. China is building on their smart logistics network. The aim is for same day delivery. JD.com is Alibaba’s competitor but invests in their own logistics. They run an end to end system. Alibaba analyzes big data to make decisions. There might be possibility of drone delivery in the future. In terms of finance, Alipay is the answer to Paypal. It has 3 times the volume of Paypal. Amounts will be debited from customer only after they are satisfied with the goods. Only after that, Alipay will release funds to the merchant. Alipay is also used to make money transfers, top up cell phone account, cashless purchases at restaurants, utility bills, traffic fines, insurance etc. Alipay is literally the virtual wallet. Alibaba’s online mutual fund offers better returns than bank deposits. This is known as Yu’e Bao. The government tried to stop people from withdrawing their bank deposits and imposed measures to limit transfer to third-part online payment accounts. There are also microloans provided to merchants etc. Sesame Credit Management provides credit ratings on consumers and merchants to third parties. He launched Mybank, an internet only bank. They also have wealth management, peer-to-peer lending etc.

China changed because of us in the past 15 years. We hope in the next 15 years, the world changes because of us. – Jack Ma

When customers post a negative comment about a merchant or a product, they can expect to receive a message and offers of refunds or free replacements within minutes. – Duncan Clark

Taobao is famous for offering all sorts of outlandish items. One university student gained notoriety for offering earrings that feature dead mosquitoes – like the insects, each pair is unique. Another vendor even sold bottled farts online. – Duncan Clark

Young men can hire a fake girlfriend to attend social events, or outsource a breakup with their real girlfriend to a specialist on Taobao. Wives worried about a straying husband can subscribe to a counseling service offering techniques to fend off a mistress. Busy young urbanites can hire surrogates on Taobao to visit their parents. – Duncan Clark

Jack Magic. Jack used to teach and has huge influence over the company. He is the face of Alibaba and looks elfish in nature. Some call him ‘ET’. He certainly doesn’t look like a rich guy. He is down to earth and doesn’t come from a rich family. What’s more amazing is that he doesn’t have a tech background. He is very underestimated. He likes the character of Forrest Gump, a guy who acts dumb but who knows what he is doing. Forrest Gump is Jack’s inspiration. Jack is like Steve Jobs, known for his charisma. Some of his quotes are short, simple and inspiring. He speaks without notes. The content of his speeches haven’t changed much. He uses humor in his speeches. One thing going for him is his strong command of English. Alibaba also invests in some Hollywood films. He has a strong ability to motivate his employees. Shareholders want short term profit, which doesn’t interest him. However, employees who won discounted shares can make money from them. Their office is futuristic and huge. There are lakes and villas etc. He reads novels by Jin Young on sword-fighting. There is a huge library in his campus. There are free bicycles which employees can use. Camaraderie and teamwork is very important for Jack. He offers interest free loans of up to $50,000 to employees. Every employee is encouraged to have a nickname. Employees can give feedback through the online bulletin board. The 6 Vein Spirit Sword consists of the mission, vision vales of the company. They are ‘teamwork, customer first, embrace change, integrity, passion and commitment’. Face to face visits are widely used for sales methods. There are regular outings for employees. Prizes for top performers include branded goods etc. Employees are frequently rotated among divisions so that they can learn more. However, the management structure is rather flat. Even former employees have a network where they can bond with one another. Some of these members have founded start-ups too. Jack contributed a lot of capital, right from the start. How did Jack succeed?

Even today, I still don’t understand what coding is all about, I still don’t understand the technology behind the Internet. – Jack Ma

Customers first, employees second, and shareholders third. – Jack Ma

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. Aliren must see the sunshine the day after tomorrow. – Jack Ma

From Student to Teacher. Jack was born in 1964. His mum worked in a factory and his dad was a photographer. Back then, most production was controlled by the State. It was just after the Great Leap Forward. The Red Guards destroyed cultural icons. Thankfully, his family remained intact. In 1978, China opened themselves up to trade and instituted the ‘open door’ policy. Jack often practised English with tourists from China. He learnt it himself for over 9 years. English has helped Jack a great deal in his business and for understanding the world. To some, Jack appeared like a ‘barrow boy’ or a street hawker, based on his appearance. David Morley, an Australian, made friends with Jack when he visited China. Jack often brought tourists around the West Lake. Jack had a passion for taichi and reading of ‘The Water Margin’. Jin Yong is very popular in the Chinese world. In the past, the Chinese had 3 dreams: 1) wise emperor; 2) clean officials; 3) chivalrous heroes. One of Jack’s heroes is Feng Qingyang, a hero in the novel. His command of Maths was poor when young. Jack failed his exams and had to engage in menial work. He faced many job application rejections in his life. Eventually, he passed and was enrolled in the Hangzhou Teachers College. He stayed with Ken Morley in Australia for a month and his perspective of life changed. Jack always made the Morleys feel at home when they visited China. Jack’s life was not carefree as he had money problems. Jack dated a girl named Zhang Ying. Soon, they got married. Jack is very grateful to the Morley’s for helping him when he had money troubles. After graduating, Jack decided to be an English lecturer. Jack was appealing to his students as a teacher. He resolved to launch a business before he turned 30. He worked on his business part time after work. His first company was named ‘Hope’.

Hope and Coming to America. His first business was a translation agency. His employees knew his ability to motivate others. However, the business failed. In the past, government jobs were cushy and Jack was not willing to give it up. Village enterprises were state-controlled but were privately run rural enterprises. Entrepreneurship was starting to take off in a big way. It was common for poor people in the Zhejiang Province to rise and be rich through starting of businesses. Hangzhou is one of the most prosperous cities in China. Zhejiang is like a hub of entrepreneurial activity. Wahaha is the largest beverage manufacturer in China. Geely is the first non-state-owned car manufacturer. Fosun is touted to be the next ‘Berkshire Hathaway’. Wenzhou and Yiwu are new up and coming Chinese cities. These two cities have helped Alibaba’s expansion strategy. Wenzhou is too near Taiwan and too far from Shanghai. As a result, it suffered in the past. Private enterprise boomed since 1978s. In the past, banks didn’t lend to SMEs, but only to state owned enterprises or politically directed loans. Due to the lack of credit, illegal structures emerged. There were private credit associations, co-operatives, money houses that formed. The entrepreneurs built their own roads. A privately funded railroad and private carrier were born. Yiwu has become one of the key trading nodes. Wholesale markets boomed after 1978 and its population has shot up. It is now home to the Yiwu International Trade Center. There are all sorts of products on sale. It is now the home of traders, especially the Muslim community. There are even different Chinese cities which specialize in different type of goods. Jack saw that this region had potential and was very strong. When the translation agency was failing, Jack started peddling goods and it became a trading company. Translation services would not be able to match his ambitions. Later on, he made his first trip to America. He was ‘virtually kidnapped’ and it was a horrible trip, to say the least. In Seattle, Jack tried the Internet. He stayed with the Selig family in the US. He searched for the word beer on the Internet, but found no Chinese matches. Jack started a website about his translation business. Jack was someone who was very focused on his work and he didn’t engage in random interests. Jack wanted the exclusive right to make web pages in China but had to pay a huge fee. He brought the Intel 486 processor back to China. Now, the concept of the ‘online yellow pages’ was beginning. Now, he was willing to quit his teaching job.

China has a million companies that want to sell abroad, but they don’t know how. – Jack Ma

As long as we are in places where there are people, we are always able to find opportunities. It will be the same in the future. – Jack Ma

China is Coming On. Jack wasn’t keen on being the Dean. He wanted to build an index of Chinese companies in English and publish them on a website. He translated names of Chinese companies to English before upload. China Pages was launched. Jack borrowed money from relatives and friends to fund the start-up. Some of his former students also helped his business. They spread the word about China Pages. They had a few leads. The issue was that not many people had Internet access and couldn’t see their listing on China Pages. It was a challenge explaining what the Internet was. By 1995, internet was made available. It was surprising to be able to connect to the Internet as the Chinese government usually clamps down on information. Soon, the government rolled out phone lines and broadband connections to millions of people. The Chinese government saw value in the Internet. China Unicom, a state owned enterprise, was launched. James Ding was a guy who profited from the Internet and became a tech entrepreneur in the telecom market. Edward Tian was another. They helped to build the data network for Chinese telcos. China Pages was having a hard time because PCs were very expensive. Bill Gates also saw the potential of the Internet. Jasmine Zhang founded Yinghaiwei. The Zhejiang government invited China Pages to build their website. This helped to boost Jack’s profile as an entrepreneur. The problem with China Pages was that even though companies could list products there, they could not sell it directly to customers. There was no way to collect money from the website directly. China Pages was struggling badly. Dife (unit of a Telecom) tried to buy a stake into China Pages. However, it tried to register the domain name which was similar to China pages and act as a competitor. Jack was initially optimistic of the deal. As they had more board members, Jack couldn’t operate as they would vote against his ideas. This was bad and he learnt many lessons from this episode. He learnt that he didn’t want a controlling stake of a company but wanted to manage it. He gave up his stake in China Pages and moved to Beijing. The issue was that China Pages was launched too soon. He took a government job, but planned to re-enter the market when the Internet grew bigger.

It is difficult for an elephant to trample an ant to death, as long as you can dodge well. – Jack Ma

Bubble and Birth. Alibaba was founded in 1999. Other Chinese companies were emerging too. The state-owned entrepreneur kicked Jack out of China Pages. Large SOEs wielded their power. Many companies started building their base and the dot-com boom was taking shape. Yahoo was listed in 1996. These dot-com companies did not have any earnings, thus there was no P/E ratio. Jerry Yang became a hero. Wang Zhidong was the founder of Sina, a language software that allowed people to use in Windows. Sohu was another hit. It was founded by Charles Zhang. He launched a Chinese-language search engine. He worked on e-commerce in the government. However, he mentioned that there was too much red tape which was holding him back. Jack realized he couldn’t fulfil his dreams as a public servant. Jack met Jerry Yang. Jerry founded Yahoo already. Jack started Alibaba even while holding the government job. He chose the name because it was easy to pronounce and it started with the letter A. It also meant ‘Open Sesame’. He had to buy the domain name from a Canadian guy. All along, he had plans for it to go international and be huge. He wanted to stick to small businesses. Dell helped to bring the PC more accessible to the masses and Internet penetration improved. Some tech companies started catching the eye of VCs. Victor Koo founded Youku, China’s YouTube. Jack risked losing out to other start ups like Sohu. He wanted to IPO in 3 years. Alibaba was co-founded by 18 people. Jack met Joe Tsai in 1999, a Taiwanese born investor. They eventually became business partners. Jack’s goal was to find an outlet for all the Chinese factories and not through state-owned trading companies. Joe saw great potential in Jack and his vision. Jack was a clear leader who treated his friends as important as his family. Joe kept Jack’s exuberant ways in check. Jack gave out a lot of equity at the start. Customer information was being stored on paper. Joe helped organize the right corporate structure in order to receive venture capital investments. NetEase and 8848 were experimenting with consumer e-commerce. MeetChina was a B2B site which received huge funding. However, despite this, he felt these companies didn’t focus on the customers, but more on networking with government officials. Alibaba’s main competitor was Global Sources, an old school publisher of trade magazines. Jack attracted attention from the media for his persuasion and public speaking skills. Like Jeff Bezos, Jack also exploited the Internet’s potential. China.com raised an incredible amount of capital.

If we go to work at 8am and get off work at 5pm, this is not a high-tech company, and Alibaba will never be successful. – Jack Ma

Team spirit is very, very important. When we charge forward, even if we lose, we still have the team. We still have each other to support. What on earth are you afraid of? – Jack Ma

Backers: Goldman and SoftBank. There were hundreds of people attending networking events, trying to get VCs to invest in their start-ups. The number of new ventures were emerging rapidly and Alibaba had to stand out. Jack was incredibly charming and enthusiastic. Their initial trip to Silicon Valley failed. Goldman invested in Alibaba in 1999. Shirley was working in Goldman and she knew about tech companies. Shirley knew Joe and Joe introduced her to Jack. Jack’s idea was certainly not new and many other countries have tried it. However, Jack was ever determined to make it work. His team worked like revolutionary comrades. However, Jack retained the rights over key decisions. However, Goldman later reduced their investment to 33% (3.3 million). Fidelity, Venture TDF, Transpac took the remaining 17%. Venture TDF and Fidelity made huge fortunes from their investment. Sohu, Sina and NetEase were all way ahead in terms of investments. All of them raised tens of millions. Alibaba got a better office space. They wanted to be the biggest website in China for B2B leads. Many of the companies that signed up were Chinese companies. Everything was translated to English and properly categorized. Posting items for sale was free too. There was also an issue of staff turnover. There were also very few tech firms in Hangzhou to compete with him. He hired fresh grads from the universities. The pay was low and Jack hired one level below the cream of the crop at universities. Employees were issued share options, with a 4 year vesting period. Lucy Peng was the first HR director. Back then, transactions and money collection were still taken offline. Alibaba soon needed new capital. He received $20 million from investment firm SoftBank, giving away a 30% stake. Masayoshi Son backed Jack. He, too, came from humble beginnings. This was year 2000. He poached John Wu from Yahoo and made him the CTO. Alibaba’s idea was an original one at that time. Many people have been to the US and then who go to China who do a start-up. Jack has always been in China. The bubble was about to pop.

The Internet (is like) beer…the good stuff is at the bottom. Without the bubbles, the beer is flat and nobody would want to drink it. – Jack Ma

The earliest hires earned barely $50 per month. They worked 7 days a week, often 16 hours a day. Jack even required them to find a place to live no more than 10 minutes from the office so they wouldn’t waste precious time commuting. – Duncan Clark

I did not get an education from Harvard… I went to Harvard to educate them. – Jack Ma

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. – Jack Ma

Be the last man standing. – Jack Ma

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