Jack Ma talks about the ‘4 cannots’ and the dangers of success
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Alibaba founder and CEO Jack Ma accepted his Asia Society Asia Game Changer award at the United Nations in New York City on Oct. 16, 2014. (Ann Billingsley/Asia Society)

There’s a lot of advice out there for how startups can climb their way to the top of the heap. But once you’re there, how do you stay there? How do you keep the crown and avoid all the pitfalls that can knock you off your perch? Keeping the crown is something that Jack Ma […]

Tech in Asia

There’s a lot of advice out there for how startups can climb their way to the top of the heap. But once you’re there, how do you stay there? How do you keep the crown and avoid all the pitfalls that can knock you off your perch?

Keeping the crown is something that Jack Ma knows a little about, given that his company Alibaba has been the dominant force in China’s ecommerce market for well over a decade. And in a recent conversation with famed Chinese film director Feng Xiaogang, who’s directing Alibaba’s Singles Day Eve entertainment bonanza, Ma apparently laid out what he sees as one major pitfall for successful people in any industry: the “four cannots.”

Ma hasn’t spoken publicly about the four cannots, but Feng Xiaogang mentioned the idea as having impressed him at a recent press event for the upcoming Singles Day fling, and gave listeners a summary of what Ma had said. Based on that and bit of my own extrapolation, here are Jack Ma’s “four cannots” and how they might apply to your business:

The first: cannot see

The problem with being big and successful is that you can easily lose sight of the little guy. As Ma put it to Feng, when you’re a big and successful director, you’re probably not aware of all the hungry filmmakers out there with great ideas who haven’t made movies yet. It’s not that you’re ignoring them, it’s that you’re literally not aware they exist. You cannot see them.The first: cannot see

This is a problem in any business, but it’s especially important to tech, where that “unseen” startup out there might be the one with the idea that can push you off your pedestal or disrupt your business model. It also might be the perfect acquisition that can take your company to the next level. But if you’re not aware it exists, you cannot possibly react to it. The solution, then, is pretty simple: you need to keep a very close eye on your market. Not just on the big companies that compete with you now, but on the tiny seed-round players who might compete with you five or ten years down the line.

The second: cannot respect

The second cannot is the ego trap: you’re aware of a smaller, less successful competitor, but you look down on them. In filmmaking terms, Ma told Feng, this is like a big director of Feng’s caliber not respecting a new filmmaker with no films on his resume.

On the one hand, it’s totally reasonable: Feng has a bunch of blockbusters under his belt, and this guy hasn’t even started shooting his first yet! Whyshouldn’t Feng write him off, at least until he’s made some bigger waves? It’s an understandable attitude.

But that’s a dangerous attitude to have, because everybody starts from nothing, and most people precede their success with a bunch of failures. When you become aware of a startup in your sector that’s a potential long-term competitor, you might be tempted to write them off because their founder has no relevant experience, or because they haven’t raised a big round or built an impressive brand. But that’s the trap – a startup that looks unimpressive can still be threatening. Jack Ma knows a lot about that, having beaten eBay in China with what eBay would once have seen as just a small, weak startup founded by some no-name guy no one had heard of.

Photo Credit: World Economic Forum / Creative Commons

Photo Credit: World Economic Forum / Creative Commons

 

The third: cannot understand

The second cannot leads into the third. If you don’t respect your potential competition, even when they’re still tiny, then you probably can’t understand exactly what they’re doing, and you’ll have a hard time responding when they do achieve success.

Sticking with the Alibaba-eBay example, eBay fell into this trap too. Because they didn’t respect Alibaba as a serious threat, they failed to understand Alibaba’s competitive advantage: its superior understanding of Chinese culture and the demands of the Chinese market. Even after it became abundantly clear that Alibaba could win in China, eBay continued to pursue its own approach, apparently not comprehending or ignoring the lessons of Alibaba’s early success.

When you don’t respect your competitors, you become unable to understand their strengths. Then if or when they do succeed, you have a hard time responding effectively.

The fourth: cannot keep up

The fourth cannot is the inevitable result of the first three: if you fail to see, respect, or understand your competition, then it is likely to surpass you. That’s exactly what happened to eBay: it underestimated Alibaba, failed to understand Alibaba’s appeal, and then was subsequently destroyed by Alibaba. Today, eBay’s China market share is negligible, while Alibaba is the market leader.

Ultimately, the “four cannots” seem to be Jack Ma’s way of imparting an important lesson for successful businesses: don’t get cocky. Even the king of the hill needs to be able to see, respect, and understand those at the very bottom of the heap if he hopes to remain king for long.

Photo credit: Ann Billingsley/Asia Society

This piece originally published on Tech in Asia

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Charlie Custer

About Charlie Custer


I’m a guy who writes stuff, mostly about technology and video games in China. I also made a documentary film about child trafficking. You can follow me on Twitter as @ChinaGeeks.

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