As we entered 2003, The Year of the Sheep didn’t come in quietly. Colorful fireworks lit up the Hangzhou skies, while the constant rat-a-tat-tat of exploding firecrackers echoed throughout my apartment complex. With my round-the-world dream finally fulfilled, I was focused and determined to dive back into Alibaba with a renewed sense of commitment. I’d enjoyed my travels and seen the world but was looking forward to enjoying the camaraderie of a start-up again. As opposed to when I first joined Alibaba, money was not a significant motivation the second time around and I agreed to come back for half my previous salary. Working as one of only two Westerners in a Chinese environment would be a great way to improve my Chinese-language skills, I figured.
After the celebrations in the street had died down, Alibaba organized an all-company gathering at a hotel to kick off the new year. I was curious to see how Alibaba had changed since I’d left. When I arrived at the hotel, I was pleasantly surprised to hear cheers and the thumping of dance music emanating from the conference room and to see so many new faces streaming in. The mood was 180 degrees from where it had been a year earlier. Just a few months before, the company had finally become profitable, and tonight was the night to celebrate.
Joining in the frenzy was Savio Kwan, cheering and chanting along with the staff, most of whom were 20 years his junior. Seeing the turnaround in company morale and performance, it was immediately clear how wrong I’d been in my first impressions of Savio’s management style. I’d come full circle to appreciate that Savio was exactly the COO that Alibaba had needed. Savio hadn’t provided a rigid backbone for the company. Instead, he had provided an exoskeleton—outer constraints that helped keep the company from growing out of control. His emphasis on codifying Alibaba’s values proved to be the critical formula that allowed the company to grow larger while maintaining its start-up spirit and strong team culture. It was exactly what our young company needed to allow new leaders to emerge from the pack.
One such leader was Liqi, my new boss and the head of international operations. With the room full and the music pumping, Liqi jumped on stage, grabbed a microphone, and invited everyone to start dancing. We swarmed the stage, jumping up and down as balloons bounced and flags waved, chanting and cheering in the euphoria of knowing that Alibaba was finally on the upswing. After a cold, dark Internet winter, spring had arrived.
On my first day back in the office, I sat down with Liqi to discuss the year’s strategy. He was short, pudgy, and wore huge black-rimmed glasses, which made him look a bit like a Chinese member of Run-DMC. He had a deep, raspy voice and a sharp, slightly dirty, sense of humor that kept the staff doubled over during meetings. But behind all that, Liqi was incredibly tough. In contrast to Jack’s open, consensus-building style, Liqi’s focused on action and results, the only things that mattered to him. Style points meant nothing.
Whereas Jack’s life experiences had made him equally comfortable among Chinese and foreigners, Liqi’s relationship with foreigners was complicated. Like a lot of Chinese, he seemed to simultaneously admire and resent Americans. Of course some of the resentment was justified. He once described to me how he’d gone to a top Guangzhou university in the 1980s but wasn’t allowed to enter the five-star Garden Hotel there because he was a local Chinese. Foreigners, on the other hand, could wander in and out of the hotel freely—policy at the time when China was just opening up and it was assumed local Chinese didn’t have the means to stay at the hotel themselves. Liqi could read and understand English well but was uncomfortable speaking it, so all our meetings were held in Chinese. It was a huge help to my language skills but made it much more difficult to argue my case in strategy discussions.
Nevertheless I admired Liqi. He had joined up with Jack in the days of China Pages, and Liqi had the true spirit of an entrepreneur. And with firmness and decisiveness, Liqi had built up Alibaba’s national sales force, a key factor in its reaching profitability. A street-smart, no-nonsense manager, he was a perfect counterweight to Jack. If Jack was a budding Bill Gates, Liqi was his Steve Ballmer. Given my own tendency to be a bit too laidback, I realized that working for someone like Liqi would be good for me.
“Porter, we haven’t worked together before, so we will have to take time to get used to each other’s style,” Liqi said directly that first day. “One thing I can say is that I care about results. You are going to be judged based on the numbers you deliver. And there’s one main thing you’re going to be focused on—getting buyers to Alibaba. We’ve done a great job of signing up China Suppliers for the last year, but now we need to feed them. We finally have enough money to end our zero budget marketing strategy. But we need a cost-effective way to attract buyers from around the world to support our sales. Until now we haven’t had a breakthrough. And you need to find that breakthrough.”
“Yes, I understand. Buyer, buyer, buyer,” I said, sounding as confident as I could. But behind my facade of confidence I was nervous. Where was I going to find a breakthrough?
As we discussed the year ahead, we looked at the calendar. “In April the Canton Fair is going on in Guangzhou,” Liqi added. “There are going to be buyers from all around the world there. Our sales team is going to have a huge booth there to meet with and sell to Chinese suppliers. So make sure to leave room on your calendar for that.”
I welcomed the prospect of heading to the China Import and Export Fair, also called the Canton Fair, in a couple months. As an event it could be grueling, involving long hours standing up at booths and fighting through massive crowds. But at least it would allow me to go out and network with Alibaba’s international buyers, speak English, and have some contact with the outside world. As much as I liked Hangzhou, I needed to come up for air from time to time.
Right around this time I began to read some unsettling reports in Western media about a mysterious new illness that was sending people in Guangzhou to the hospital. At first it seemed to be just a strange flu that affected only a handful of people. But before long the illness had a name—SARS—and a death count.
As the illness spread from Guangzhou to densely populated Hong Kong, panic set in. The Western news programs showed scenes of hospitals, ambulances, and people wearing face masks in the hope of protecting themselves. But the Chinese media covered up the story, afraid that reporting on it might create panic in China and hurt the economy. “There’s nothing to worry about” was the message from the Chinese government.
As I read about the growing epidemic, I grew concerned for my own safety and the safety of our team if we continued with our plan to attend the Canton Fair. Heading to the epicenter of the SARS outbreak with the goal of shaking hands with thousands of strangers from all over the world seemed like just about the worst possible move at the moment. I wrote a strongly worded email to Liqi and Savio, stressing that we should reconsider our plan to attend the fair in light of the health risks to our team. Liqi’s response did not encourage me:
“The government is saying that it’s OK, so it’s OK. I’m sure if there was a risk, they would cancel the Canton Fair and let people know it wasn’t safe to come to Guangzhou. Look, Porter, I’m going and other senior managers are going too. If we don’t go, it’s like we are sending in the rank-and-file troops but not sending our generals. We all need to go in order to show support for our team.”
It made sense. If we were still going to participate, we couldn’t exactly stay back in Hangzhou while sending the entry-level staff. But I was disappointed with the decision. Sure, the Canton Fair was our most important sales event, and canceling our booth would have cost us money. But in this case it seemed a dangerous call. Still, I couldn’t blame Liqi—the national media were telling everyone in China that there was no need for widespread concern.
A few weeks later I was in Guangzhou helping run the Alibaba booth at the Canton Fair and shaking hands with buyers from Nigeria, Iran, Uzbekistan, the United States, and Latin America. If global trade was an engine of the global economy, these guys were the mechanics working under the hood. With sleeves rolled up and dirt on their hands, they lived in a world where every penny spent cut into their profit margin, and they had to constantly muscle their suppliers to squeeze out the best quality, at the best cost, and in the shortest amount of time. Battle weary from years of tough travel and negotiations, they were a far cry from the pampered investment bankers and management consultants I had gone to business school with.
That year’s Canton Fair was strikingly different from those of the past. Ordinarily it’s a lively hive of activity, with thousands of buyers and sellers shaking hands and sealing deals. But that year only one side of the equation had shown up—Chinese sellers. International buyers, for the most part, had stayed away. The divide between China’s state-censored media and the free press of the West could not have been more apparent.
As I chatted with the few buyers who trickled in, Kitty Song from the China Supplier sales team worked alongside me, chatting with local customers. Cheery and full of energy, she managed to greet each supplier even as she fought off a cough. With so few buyers to meet, the local exporters spent more time at the Alibaba booth exploring the Internet as a potential channel to overseas buyers, who apparently did not to want to travel to China.
Although our team delivered a record number of sales following the Canton Fair, I was relieved to be safely back in Hangzhou the following week. We’d tempted fate and survived. The gui hua (cassia) flower was in full bloom in my neighborhood, emitting a sweet fragrance that filled the air; I had a beer in one hand and a croquet mallet in the other. I was hanging out with some Westerners I’d met in my apartment complex. A local journalist happened upon us and interviewed me about whether I was worried about SARS. (With the media blackout on the epidemic now lifted, local news teams could finally report on it.) “No, I’m not worried about it,” I said. “I think it’s a bit overblown. In fact, I just came back from Guangzhou and didn’t experience any problems.”
Back in the office, Jack stopped by my desk. He had a mischievous look on his face, as he often did when he felt he was onto a big new idea.
“How are things going now that you’re back, Porter?”
“Things are good,” I said. “Liqi and I are working well together.”
“That’s great,” he replied. “Because the sales are strong and the company is doing really well. And I’ve made a decision that, in three years, people are going to say was the smartest decision we ever made.”
My curiosity was piqued. “Really? What’s that?”
“You’ll just have to wait and see. It’s a big one.” He smiled and walked away.
The following week was the May Day holiday, otherwise known as the Golden Week, when everyone in China is given a week off from work. I took advantage of the time to get to know Hangzhou a little better. A former capital of China, its main attraction is the West Lake, the subject of countless paintings and poems. By day families and friends gather on the banks to play cards and drink Dragon Well tea, freshly plucked from terraced tea fields in neighboring villages. At night students and young graduates escape their dormitories and cramped homes to sit on the benches along the perimeter of the lake, kissing in the darkness under the willow trees.
After seven days of my Hangzhou staycation, a part of me wasn’t ready to go back to work just yet. But when I suddenly got an extension, it was for all the wrong reasons.
“Porter, please don’t worry about coming in to work tomorrow,” the voice on the phone said. It was Monson, Alibaba’s head of HR.
“What? Why is that?”
“We’ve discovered that one of our staff might have been infected by SARS. So you and six other people can take the day off tomorrow. We’ll let you know when you need to come back in. Oh, and you’ll all be bei geli.”
“Bei geli? What does that mean?”
“Someone from the government is going to come by to lock your door from the outside. They just want to be safe, just in case.”
I realized I was about to be quarantined.
“By the way, Monson, which one of our colleagues was diagnosed with SARS?”
“Um . . .” he paused, not quite sure whether to tell me. “Kitty. Kitty Song.”
Gulp. Kitty Song? I had spent several days chatting with her, meeting the same people she did, working at her side in the trade show booth. I was worried for her sake but also my own. If she had SARS, maybe I did too.
The next morning I heard the sound of drilling outside my apartment door. And then the sounds of chains clinking. I was locked in.
I nervously contacted my parents to let them know I was under quarantine.
“Oh, the minute they let you out, please come home, Porter,” my mom pleaded. “I can’t bear the thought of having my only son over in China in the middle of SARS.”
I tried to reassure her that I wasn’t in harm’s way. I felt fine, after all. But in the back of my mind I was nervous. With ten days to go before I could be declared free of symptoms, it was simply a waiting game.
I received a call from a local government official who explained how the quarantine would work. Each day a nurse dressed in protective gear would arrive to disinfect my apartment. And I’d also receive two calls to check my temperature. Although I couldn’t leave my apartment, I could order any food I wanted, and the government would arrange for it to be brought over and left outside my door. This quarantine thing might not be so bad, I thought, and placed my first order—shrimp, broccoli, rice, and the ingredients to make a salad.
A couple of days later things took a more serious tone when Kitty’s status was changed from “suspected SARS” to “confirmed SARS.” With that the number of Alibaba staff members under quarantine grew from seven to 500—all employees at Hangzhou headquarters were locked in their homes, unable to come to the office. To keep the website running, 500 staffers carted their computers home and set up a virtual operation. Phones calls were rerouted to staffers’ homes, and parents and siblings helped out by answering the phone.
It was a grave time for the company but worse for Kitty. Whereas I was locked in a nice apartment complex receiving special care and attention as a foreigner, Kitty had been thrown into a stark hospital room with two other SARS victims, one of whom was quickly deteriorating.
But the challenge proved to be an important one for the company, binding the team together to both keep the website running and support Kitty. During the day the team continued to work, chatting online. At night and on the weekend, team members hosted virtual karaoke contests on the company’s Intranet.
Locked in my apartment, I had little to do during the day besides distract myself from health concerns by tinkering with the advertising campaign we were testing on Google’s search advertising platform. I had persuaded Liqi to grant me $600 to test on Google’s AdWords, and the initial results were amazing. Our biggest headache had always been that we had no cost-effective way of reaching our niche business customers in 180 countries. But advertising on Google allowed us to generate targeted traffic from such obscure key terms as “China ball-bearing supplier.” From the Google ads we were suddenly generating targeted traffic from every corner of the Earth at five cents a click. My list of keyword ads quickly grew from six to 500. Could this be the breakthrough that we needed?
As Kitty slowly recovered, staff morale improved. Finally I heard the chains being removed from my door, followed by a knock. When I opened the door, I was greeted by camera flashes, police, and the local Communist Party secretary.
“You’re free to come out!” they said. After seven days of confinement, I bounded outside for some blue skies and fresh air. After calling my mother to let her know I was okay, I called Jack.
“I just got out too,” he said. “And they are telling me that Kitty is fine and should be out tomorrow.”
It was good news all around. Not only had we survived intact, but Alibaba had embraced the challenge laid in front of it. We had managed to keep the website running seamlessly in the face of disaster. In fact, traffic had skyrocketed, as the epidemic accelerated the adoption of e-commerce in China by providing a channel for buyers and sellers to connect without the need to meet face to face. If the true measure of a company is how it weathers a crisis, we had passed with flying colors. Good thing, because we were about to face our greatest challenge yet.