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

**SPEAKER_1** (0:00)
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**Shaan** (0:31)
When I was, I don't know, 21, I got this really cool opportunity to go on an all-expense paid trip to China, courtesy of Alibaba. And Alibaba at the time wasn't as well known as it is today. Today, it's pretty well known. It's a publicly listed company, $40 billion plus company, something like that. And so the question is, what would you do if you had 15 minutes talking to the CEO of Alibaba? Because I had 15 minutes and I choked. All I could muster up was, what's the key to success in business?
One of my worst questions, but whatever, I shot my shot. Everyone else is too scared to speak. And so the CEO at the time, this guy, David Way, he drops a knowledge. He goes, you know, asking what makes something successful, modeling success is misleading. You can't copy success because there's a million different factors, a combination of luck and timing and specific context for every single success that's a big, big outlier success. Instead, you should ask me, what are the keys to failure? Because those are always the same.
And I gave him the look like, okay, go ahead. You have permission to blow my mind.
And he said, there are three things that will kill any company if in excess. So if you have an excess of any of these three things, it'll kill your company. Money, plans, and technology.
That's not what I was expecting. So then he continued to explain that at Alibaba, they had this internal motto, no money, no plan, no technology. All right, tell me more. What is it? So no money. He goes, money makes people stupid. When problems arise, the first instinct becomes throw money at it rather than attacking it with creativity. And this works sometimes. Sometimes you do, the easiest path is money, but it becomes this crutch that you can never get rid of as a company that people are so used to solving everything with money and they lose the ability to solve problems with creativity. So he was telling a story, you know, years ago, Alibaba wanted to create their own version of Google AdWords. And Google AdWords at the time was like, you know, the main business model of Google. Google was like a $200 billion company then, it's like a trillion dollar company now.
And so, you know, how much money did Alibaba fund the AdWords project, right? Clearly, if you did this, it was going to be worth billions and billions of dollars. So what did they give it? $100 million, $10 million, $1 million? No, they gave it $250,000. And, you know, $250,000, not $250 million, $250,000. And that was for everything, salaries, servers, marketing, office space, everything. That was the full budget. And they had the money, they had just done a $1.7 billion IPO, so it's not like they were strapped for cash. But the CEO was basically saying, look, if we're gonna build something great here, we're gonna build it due to creativity. And he said, here's what he told me, in quotes, he goes, I wanted them to hunt like dogs. These are from my notes. I wanted them to hunt like dogs. The team worked, they worked out of the founders' old apartment. Just like when we started Alibaba, there was like 17 people working out of Jack Ma's apartment. The team for the AdWords project moved back into that apartment. They literally found servers from like the trash, like refurbished servers.
Even still, they needed more money. They hired an engineer to architect their system and to this day, what that one guy did is the single most creative engineering feat that they've ever seen inside the company. And once the team was done, they asked for money to create like backup servers, like a redundancy to be safe. And we said, no, no redundancy. We would rather risk servers crashing than risk spreading the attitude that money should replace our creativity, our diligence, our hustle and intelligence. And then he said, you know, it's funny, the more money you have, the more expensive everything seems to get. All right, second one, no technology.
Alibaba is basically like an online marketplace. And they have about three, you know, at the time they had three, 4,000 engineers on staff, probably triple that now.