Running your business the Alibaba Way, with Steve Sy

1. Capitalize on the digital economy. (1:57-2:46)
E-commerce, finance, logistics, and big data: These are the pillars of the digital economy. Companies with a presence in each pillar have a special advantage, which can be said for Alibaba. Their journey to this stage was gradual and organic.

“When Jack Ma started, he started with the platform of Alibaba, Taobao, then T-mall. That’s the e-commerce [part],” said Sy. “Then because of that, they need to have [a] good payments [system], so he was building his digital ecosystem… then they have a smart logistics network… and last but not the least, they have cloud computing, which is big data.”

Sy recommends starting a business on these services given that it’s still largely untapped in the country.

“Right now, we’re just starting to digitize here in the Philippines. For most of us business owners, these are the industries that you can be a part of because it’s going to grow, and grow fast,” he said.

2. Don’t create a network, build one… (3:55-4:40)
When expanding across different industries, it can get tempting to create your own brand in order to monopolize the profit. Instead, make partnerships to add value to your services.

Consider Cainiao, Alibaba’s logistics network that comprises 70 percent of China’s market share. “Rather than competing with different logistics companies… they have an AI platform wherein if you’re part of that network, your truck can pick something up on the way back from a delivery. And they were able to reduce their [shipping] cost to P15 anywhere in China,” said Sy.

Making your business model more inclusive improves not only your business but the ecosystem around you.

“That’s the beauty of Jack Ma’s inclusivity mindset. He wants to make business easier for each and every individual.”

3. … and see your revenues increase. (7:33-8:01)
While strong services are surely the goal of every startup, you may be worried about the investment you’ll have to put in for it. If we are to base it on how Alibaba organized their network, it’s actually more profitable in the long run, creating what they call the network externality effect.

When a company increases its number of business units, it creates an increase in connections. Building such a support system lessens cost the more areas are covered, generating higher revenue.

“[Alibaba] has Ant Financial that supports their Taobao and TMall. They have Cainiao Network that supports Taobao, TMall, and Ant Financial,” said Sy. “And [Alibaba has] more than a thousand business units. So they keep on growing. That’s why they’re one of the biggest companies.”

4. A startup is only as strong as its people. (11:53-12:28)
This kind of support is just as important within a business. The core of a startup may be its strategy, and it may be led by its mission, vision, and values, but organization capability and performance management are necessary to implement them.

Sy uses the Bible story of Luke Chapter 5 as an example. “Sometimes we think, ‘We’ve been grinding our startup for so long, I won’t get any more fish.’ But remember: you need to have a bigger net and a stronger, bigger boat. Meaning we need to have bigger capabilities and performance or better systems. So that when you scale, [you’ll] be able to catch all the fish.”

5. Always remember why you exist. (8:47-9:01)
To further motivate one’s employees, it’s crucial to remind them why your company exists in the first place. This gives them tao, a Chinese concept that translates to path or guide.

“How does it motivate you, your employees, and your partners? So it’s a very key ingredient knowing your mission,” said Sy. “When you know your mission, you won’t be so quickly discouraged. Because you know why you exist.”

Those interested in applying for the Alibaba eFounders Program can find more information at this link. The upcoming program class will take place from Dec 2 to 12. The deadline for applications is on Oct 7.