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(SHOCKER) Alibaba Founder Jack Ma To Step Down, Wants To Be A Teacher

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In a piece of shocking news, Jack Ma, the billionaire founder of Alibaba, announced on his 54th birthdays that he will step down as the company’s executive chairman.

“No company can rely solely on its founders,” Ma wrote in a Monday letter to shareholders, employees and customers. “Because of physical limits on one’s ability and energy, no one can shoulder the responsibilities of chairman and CEO forever.”

After building a $420B juggernaut and setting the record for biggest IPO ever, Ma says he has done what he wants at Alibaba and instead has other goals.

Ma wants to teach and do kung fu with Jet Li

“I also want to return to education,” Ma said in the letter, “which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?!”

Current CEO Daniel Zhang will take full reigns in 12 months, the company said. Ma says he plans on staying on the board of directors till 2020, but says he has spent the past 10 years planning for his exit.

“Teachers always want their students to exceed them, so the responsible thing … for me and the company to do is to let younger, more talented people take over in leadership roles,” he said.

According to reports, Ma also plans on starring in a kung fu movie with Jet Li.

Alibaba’s crazy rise 

Ma’s story is one of the greatest success stories of all time. Ma, a former English teacher, started Alibaba nearly two decades ago in his apartment. (Hashtag WealthHACKING!)

With a net worth of around $40B, Ma is one of the richest people in China—and in the world, period.

Before hitting that mark, Ma struggled to find jobs and was rejected from KFC before finding work as an English teacher for $12 a month from a local university.

“I failed so many times,” Ma said at the World Economic Forum annual meeting in Davos, Switzerland in January. “Twenty-four of us interviewed for a KFC job, 23 got accepted, I was the only guy rejected.”

He later set up shop with 17 of his friends, which led to first the biggest IPO in the US, but later the biggest in the world.

What’s next for Alibaba?

The announcement could come at a troubling time for the e-commerce giant.

Chinese tech stocks are getting hammered at the moment, with three stocks alone (including Alibaba) losing hundreds of billions in market value in the past few months alone.

Leading Chinese tech companies are down about 12% overall. Despite the slump, Alibaba’s still trading at $156.36, close to double its $68/share IPO price.

In other words, it’s still worth $405.31B.

Here’s Jack Ma’s full letter below:

Dear Alibaba customers, Aliren, and shareholders,

Today, as we mark the 19th anniversary of Alibaba, I am excited to share some news with you: with the approval of our board of directors, one year from today on September 10, 2019 which also falls on Alibaba’s 20th anniversary, Group CEO Daniel Zhang will succeed me as chairman of the board of Alibaba Group. While remaining as executive chairman in the next 12 months, I will work closely with Daniel to ensure a smooth and successful transition. Thereafter, I will stay on the Alibaba board of directors until our annual shareholders meeting in 2020.

I have put a lot of thought and preparation into this succession plan for ten years. I am delighted to announce the plan today thanks to the support of the Alibaba Partnership and our board of directors. I also want to offer special thanks to all Alibaba colleagues and your families, because your trust, support and our joint enterprise over the past 19 years have prepared us for this day with confidence and strength.

This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development.

When Alibaba was founded in 1999, our goal was to build a company that could make China and the world proud and one that could cross three centuries to last 102 years. However, we all knew that no one could stay with the company for 102 years. A sustainable Alibaba would have to be built on sound governance, culture-centric philosophy, and consistency in developing talent. No company can rely solely on its founders. Of all people, I should know that. Because of physical limits on one’s ability and energy, no one can shoulder the responsibilities of chairman and CEO forever.

We asked ourselves this question 10 years ago – how could Alibaba achieve sustainable growth after Jack Ma leaves the company? We believed the only way to solve the problem of corporate leadership succession was to develop a system of governance based on a unique culture and mechanisms for developing consistent talent and successors. For the last 10 years, we kept working on these ingredients.

Having been trained as a teacher, I feel extremely proud of what I have achieved. Teachers always want their students to exceed them, so the responsible thing to do for me and the company to do is to let younger, more talented people take over in leadership roles so that they inherit our mission “to make it easy to do business anywhere.” Carrying out this mission in order to help small businesses, young people and women around the world is my passion. This is not only our intent from day one but I feel blessed to have this opportunity. To realize the dream behind this mission requires participation by a lot more people than just Jack Ma and persistent effort by generations of Aliren.

Alibaba is amazing not because of our business or scale or accomplishments. The best thing about Alibaba is that we come together under a common mission and vision. Our partnership system, unique culture and talented team have laid a strong foundation for the legacy of our company. In fact, since I handed over the CEO’s responsibilities in 2013, the company has run smoothly for five years on the back of these institutional ingredients.

The partnership system we developed is a creative solution to good governance and sustainability, as it overcomes several challenges faced by companies of scale: continuous innovation, leadership succession, accountability and cultural continuity.Over the years, in iterating our management model, we have experimented with and improved on the right balance between systems and individuals. Simply relying on individuals or blindly following a system will not solve our problems. To achieve long-term sustainable growth, you need the right balance among system, people and culture. I have full confidence that our partnership system and efforts to safeguard our culture will in time win over the love and support from customers, employees and shareholders.

Since the founding of the company in 1999, we have been of the view that Alibaba’s future will need to depend on “droves of talent” to enable us to iterate on our management succession plans. After years of hard work, today’s Alibaba has a world-class talent pool in quality and quantity. The teacher in me feels extremely proud of our team, our leadership and our unique mission-driven culture, as well as the fact that we continue to develop exceptional business leaders and professional talent like Daniel Zhang.

Daniel has been with Alibaba Group for 11 years. Since he took over as CEO, he has demonstrated his superb talent, business acumen and determined leadership. Under his stewardship, Alibaba has seen consistent and sustainable growth for 13 consecutive quarters. His analytical mind is unparalleled, he holds dear our mission and vision, he embraces responsibility with passion, and he has the guts to innovate and test creative business models. Deservedly, China’s business news media has named him the No. 1 CEO in 2018. For these reasons, he and his team have won the trust and support of customers, employees and shareholders. Starting the process of passing the Alibaba torch to Daniel and his team is the right decision at the right time, because I know from working with them that they are ready, and I have complete confidence in our next generation of leaders.

As for myself, I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle. I plan on continuing my role as the founding partner in the Alibaba Partnership and contribute to the work of the partnership. I also want to return to education, which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?!

The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.

Jack Ma
September 10, 2018

Business

(WTF?!) Is The MBA Dead?

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Well, well, well, what do we have here.

So according to a (totally non-biased) press release from the Graduate Management Admission Council (GMAC) earlier this year, MBA grads are making more money than ever.

(Just for clarity, the GMAC is a “global association of leading graduate business schools.”)

Apparently, US employers plan to offer new MBA hires a starting salary of $115,000, the highest ever recorded in the US when adjusted for inflation.

Key words: PLAN. TO.

In spite of these lofty, non-scientific projections, the number of MBA applications—as a whole—is on the downslide. Here’s a chart from the otherwise very optimistic GMAC.

(Yes, the entire WealthLAB crew is MBAs, too. Jury’s still out whether that makes us marks or smart. 🙄)

And according to Forbes, this makes it the best time ever to pursue an Ivy League MBA.

So what does this all mean? Let’s unpack it for a second.

Top 10 programs are letting everyone in…

According to the various reports, some programs across the country have seen double-digit drops, with the top 10 business schools seeing serious declines. 

At the highly selective Yale University, the acceptance rate jumped by nearly 44%. Dartmouth College’s Tuck School of Business, another Top 10 program, admitted more than one in three of its applicants, a 48% increase in a single year.

Meanwhile its applications dropped by 22.5%.

“The joke among deans is that ‘flat is the new up,'” Andrew Ainslie, the dean of the University of Rochester’s Simon School of Business. “If we can just hold our numbers, that is an incredible achievement.”

Other Ivy League schools have dropped also, with Harvard measuring a fall of 4.5%. Meanwhile, big names like Stanford saw a bit more at 4.6% and UC-Berkeley Haas at a shaking 7.5%.

And outside the Top 10?

When these numbers are narrowed down to individual schools, like University of Michigan Ross School of Business, the picture gets worse. This university saw the biggest reduction, noting an 8.5% decline with just over 3,000 candidates applying. 

There are only a few reported exceptions to this overall decline, but the biggest business schools in the nation agree that there is a serious reduction in MBA interest. 

Ainslie says up to 20% of the top 100 MBA programs in the country are likely to close in the next few years. 

But why?

Uncertainty over work visas for international students, the strong US economy with decreasing job loss, and the rising costs of degrees are all noted as potential causes. 

The positive side to the story, as Ainslie pointed out, is that it’s going to spark new development in the design of existing MBA programs. One particular program has been built around entrepreneurship.

In addition, the prestigious post-MBA job paths—think investment banking and management consulting—have been replaced by jobs in the tech world and Silicon Valley.

Is entrepreneurship the new MBA?

“Tech has displaced consulting and finance as the preferred career path for top-tier college students,” says David Minnick, founder and CEO of Camino Data, and former president of beverage company, Purity Organic.

“When I started Princeton in 2003, it was still a big deal to get a MBA or JD/MBA after college,” he tells Forbes. “That was the thing to do.

“Four years later, when I graduated, we wanted to be more entrepreneurial. We saw people who had started successful tech businesses. We saw there were low barriers to entry, and that it was okay to fail.”

Image: Dunk The sum total of all human knowledge via @James_Kpatrick/ Flickr

Student debt vs. MVP?

There’s also the whole cost thing. Business school can run you $200,000, making it a cringe option for 20-somethings already riddled with debt. For founders, this is money better spent building an MVP.

(No, not Most Valuable Player. Minimum Viable Product.)

Not to mention the experience it brings.

“When I interviewed people with an MBA, or experience at a big beverage company like Coke or Pepsi,” says Minnick, :I was concerned that their personality type wouldn’t be the right fit for a young and growing company like ours.”

In his view, hustle, skills and culture fit are far better predictors of performance than a degree.

Ivy League MBA fire sale…🗑

Apparently this all means that IF you are one who’s always dreamed of an MBA from a prestigious school, there’s no better time than now.

“With an unprecedented decline in MBA application volume at many business schools – including iconic, top-tier programs – there’s definitely a ‘perfect storm’ happening for prospective applicants,” Alex Min, CEO of The MBA Exchange, a top admissions consulting firm, says.

“Deans and admissions committees are feeling strong pressure to fill available seats with qualified candidates, even if some of these individuals might not have been admitted in previous years when application volume was growing.”

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Business

How To Launch Your Business In 30 Days Or Less

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Got a great business idea that you think might be the next big thing? Despite the uncertainty and the risks tagged to becoming an entrepreneur, you wouldn’t know until you try. Besides, it takes less than a month to launch a product or service. Here’s how you make that happen.

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Business

The Art And Science Of How To Keep Talented People Around

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(Editor’s Note: The following article is a guest post by superstar entrepreneur and tech investor Jonathan Schultz.)

The number one reason talented people leave their jobs is because of the failure of their direct managers. Businesses are defined by the strength of their people. Even in the most successful company (think Google, Amazon, etc.), a bad manager can drive talented employees out the door. So what is the true art and science of keeping talented people around?

SITUATIONAL LEADERSHIP

Successful managers apply targeted, dynamic coaching to each individual team member. There is not one management style that works for everyone or every situation. Managers need to adapt their approach to every situation and every team member. This is called situational leadership. This situational leadership model has been used across 70 percent of Fortune 500 companies and has received numerous accolades from training experts.

The model details how we learn new skills and the four stages of mastering new tasks. For every stage and task, managers need to adapt their approach to managing their report.

STAGE 1

When your team member approaches a new and unfamiliar task with a determination to master it, they see opportunity. They are complete beginners in execution, but they possess high motivation and low skill. In this step, the manager needs to take a highly directive approach, where they demonstrate how the task should be done, setting concrete goals and closely reviewing the report’s progress as well. You are not being a micromanager by supporting the growth and training of your team. Sometimes your team needs to use your expertise as training wheels.

STAGE 2

This stage is full of frustration. Why? Because it generally takes people more time to master a skill than they’d like. Discouragement will set it and their confidence will lower. While they have built up more skills, their confidence is at its lowest in this stage. In this stage, the manager needs to serve as a cheerleader and remind their team member of why they were chosen to do this task and remind them of how far they have already come.

STAGE 3

In the third stage, people have gained enough skill to complete the task but still maintain a mentality of imposter syndrome in which they are more skilled than their confidence allows them to believe. They may even still be discouraged. In this stage, managers need to do less guiding and allow their team member to perform while self-directly more consistently. These acts of trust can boost the team member’s confidence and their dependence on the manager will fade while their confidence increases.

STAGE 4

People reach stage four when their confidence is at the same level as their skill. They become veterans and will continue to boost their confidence and skill set. This is the stage in which the manager steps back and gives the employee the space to continue fostering growth. Check in every now and then and help as needed. Also be sure to recognize the team member for all of their accomplishments along the way.

Keeping talented people around is not hard. Managers just need to apply situational leadership and remember that every team member works and learns differently and need an environment in which they can thrive in. As the leader, you are building this environment, so make sure it is a healthy one.

Jonathan Schultz is an entrepreneur, real estate tech investor and influencer. He’s the co-founder of Onyx Equities, a leading private equity real estate firm, and has been voted one of the most powerful people in real estate. Follow Jon’s blog here

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