Tsai Chongxin reflected: In the past three years, Ali's morale has been poor, and its backwardness is due to forgetting who the real customers are

On April 3, Chairman of the Board of Directors of Alibaba Group (NYSE: BABA, 09988.HK) Joe Tsai reviewed the first half of his career and personal life, and also looked forward to the future of Alibaba Group and the Chinese market.

Talking about his relationship with Alibaba, Tsai Chongxin recalled in an interview that in 1994, he changed from a lawyer to an investor and joined the Wallenberg family Investor AB in Sweden. In 1999, the fourth year of investment work, a Taiwanese friend introduced himself to Hangzhou to meet the "special and crazy" Jack Ma. Mr. Tsai flew from Hong Kong to Hangzhou and met him in an apartment. At that time, Mr. Ma created an English-language website that offered small and medium-sized companies from China to sell products globally, and there were 28,000 registered users at the time.

Mr. Tsai recalled walking into the bathroom of his apartment and finding about 10 toothbrushes next to the sink. At that time, I thought that engineers and others would live, breathe, and work in this room 24 hours a day, 7 days a week, a bit like a garage, "so I joined in, and I was deeply inspired by Jack Ma, not only because of his vision and charisma, but also because there were many people who were willing to follow him, and he didn't have money at that time, and the people who worked there were his students." ”

Talking about Jack Ma's leadership characteristics and why people are willing to follow him, Tsai further said, "I think the most important thing is to let people see what the future looks like. ”

Tsai Chongxin also recalled the story of Taobao being almost sold. It wasn't until around 2005, six or seven years after Alibaba's founding, that Tsai realized that the company had grown to a certain size, when Yahoo and eBay were considering investment, and the company even considered selling Taobao at one point. Eventually, the company negotiated with Yahoo, and they not only invested $1.25 billion in the company, but also acquired a number of venture capital firms in a secondary transaction, and the $1.25 billion valued the company at more than $4 billion.

Reflection: Forget who the real customer is

Talking about the toughest competition facing the group today, Tsai further reflected in the interview, "When we look inside and reflect on the situation in the past few years, we find ourselves falling behind because we have forgotten who our real customers are. We don't have the best experience for users who shop with our app. ”

Since the second half of last year, Alibaba Group has started in-depth restructuring and reform while restructuring its organizational structure. On June 20 last year, Daniel Zhang stepped down as chairman and CEO of Alibaba Group, and Tsai Chongxin, executive vice chairman of the group, became chairman of the board of directors of Alibaba Group; Wu Yongming became CEO of Alibaba Holding Group, while continuing to serve as chairman of Taotian Group.

Tsai Chongxin also mentioned in this interview, "The CEO who is 12 years younger than himself is very, very user-oriented, focusing on the product, interface and user experience, which is the most important thing for us. ”

In order to correct the previous mistakes, Tsai said that in addition to admitting the mistake of not focusing on user experience, the group reshuffled personnel and reorganized the organizational structure in line with the strategy, "I think this is a very common problem in large companies, so we have restructured within Taobao." ”

Tsai further said that it is human nature not to like to admit mistakes. Real leaders and really good managers have the ability to self-reflect and acknowledge the need for change, but it's human nature for them not to do that, "I think we're in this trap, you have to be humble, you have to be able to admit your mistakes and say let's correct the direction and come up with a new vision of purpose, because people are looking for that direction, which is very, very important." ”

Tsai Chongxin also further revealed that the group's morale has not been good in the past three years. On the one hand, due to the pandemic, but also economic issues, competition issues, and regulatory scrutiny, the group paid a huge fine, "and all these factors together are devastating to morale." But the most important thing is that employees are looking for direction, and if it can clearly communicate what the direction is, then they will be refreshed. ”

When the moderator asked, "Do you think you're a good boss?" Tsai said yes, "I think I am." I don't think being a good boss doesn't mean you're going to be too lenient with people, because then you're misleading them. The most important thing is to be able to give them instant feedback. Feedback cannot be quarterly or year-end evaluations, feedback must be immediate. People need to know immediately if they're doing something not quite right or if they're not putting in the full effort. ”

In terms of upholding leadership principles, Tsai believes that he has always emphasized humility and that he must not always pretend to be the smartest person, and that the person reporting must be empowered to put forward his or her own ideas. Otherwise, innovation is stifled.

Talking about the future of the Chinese market, Tsai said that the Chinese market still has great potential and China has been the world's factory for many years. Despite its relatively small population, the Chinese population is still very large and China has a well-educated and skilled workforce. Comparatively, many companies reshoal or outsource their operations to those who diversify their supply chains into Vietnam and Mexico, but looking at the population, they will never be able to replace China as the world's manufacturing hub.

On AI: China is two years behind the top level

Regarding the view of artificial intelligence, Tsai Chongxin said that as one of the largest cloud computing companies in China, Alibaba Group is indispensable for artificial intelligence, "We believe that artificial intelligence is the right hand of cloud business. In addition, e-commerce is one of the areas where this can be achieved and is the richest use case for AI, and we are working on several development efforts. In these scenarios, virtual fitting rooms can be tried, where merchants will be able to use AI to generate photos, product descriptions, and more on their own. ”

"China is now significantly lagging behind in terms of artificial intelligence. It's true that American companies like OpenAI are ahead of all others, but China is trying to catch up. Tsai believes that China may lag behind for a long time in this regard, not because of China's slow pace of development, but because other countries are also developing rapidly. But if you want to be specific about the timing, China could be two years behind the top model.

In terms of chips and semiconductors, Tsai Chongxin said that in October last year, the export control measures taken by the United States on chips did affect Alibaba Group's cloud business and the group's ability to provide high-end computing services to customers, "In the short to medium term, this is a problem, but in the long term, China will develop its own ability to manufacture these high-end GPUs." Alibaba Group has made some efforts in this regard, and we are also looking for other players to get chips from other players. ”

However, in the short term, Tsai believes that before the restrictions are lifted, all parties have stockpiled stocks, so the training of large language models can still continue in the next year or a year and a half.

In the interview, Tsai Chongxin also gave a few pieces of advice to young people, "I recommend learning one or two very basic skills so that you can stand out from the rest and become the top 10%, and you can't just walk into a room and expect to be a generalist in all fields." You have to be able to tell people that I'm an expert on something, and that's how you get respect. In addition, young people need to learn a variety of things. In the future, data science will be very important, in the past it was called statistics, and young people should take data science courses. In addition, psychology should also be studied. ”

"If you have some programming skills, an understanding of data science, a little bit of psychology, I think you have all the tools you need to succeed in life. Tsai Chongxin further said.