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Chapter 2641 The Boy Who Cried Wolf

Masayoshi Son's SoftBank has invested in numerous internet projects globally. Yahoo's success made him famous in Silicon Valley, and the story of its investment returns reaching thousands of times was repeatedly reported by global financial media.

But Masayoshi Son has never been able to let go of the Chinese market.

In 1999 and 2000, when the global internet bubble was inflating to its most frenzied point, the Nasdaq index was hitting new historical highs every day, venture capital firms in Silicon Valley were searching the world for the next Yahoo, and any company with an "e" or "i" in its domain name could get funding.

And in their eyes, China, a market with over a billion people, is a giant, largely untapped pie...

With over a billion people, even if only one percent of them go online, that's over ten million internet users.

This figure represents a huge market in any country.

This is why the entire Chinese market is being frantically pursued by global capital. These gluttons are not kind-hearted; they are simply after money.

Masayoshi Son understands the Asian market better than most American investors.

He is a Korean born in Japan who studied in the United States and has a natural intuition for East Asian business logic and cultural context.

He knew perfectly well that the Chinese internet would explode sooner or later, and what he had to do was to seize the position before that explosion.

So Masayoshi Son had SoftBank's investment team compile a list of all the emerging internet companies in the Chinese market and go through them one by one.

The list includes companies that run portal websites, search engines, e-commerce platforms, and instant messaging services—dozens of companies in total.

Team members noted the details of each company on the side.

When it was Alibaba's turn, Masayoshi Son's gaze involuntarily stopped.

He discovered that the company's business model was very unique, quite different from Amazon and eBay.

Amazon is where Amazon sells its own products, while eBay is where individuals buy and sell secondhand goods.

Alibaba, on the other hand, operates on a B2B model, bringing together small and medium-sized suppliers in China and global buyers on the same platform to facilitate transactions.

This model is not common in the United States because large retailers and brands in the US have their own established channels and do not need a third-party platform to facilitate the transactions.

But after staring at Alibaba's business plan for a while, Masayoshi Son suddenly understood.

China is the world's largest manufacturing base, with countless small and medium-sized factories. Lighter factories in Wenzhou, electronic component factories in Dongguan, and garment accessory factories in Yiwu—these factories lack the funds to participate in overseas exhibitions and the channels to reach international buyers. Alibaba is their online equivalent of the Canton Fair.

Moreover, Alibaba's growth data is too strong. The number of registered suppliers is doubling every quarter, and the curve of inquiries from overseas buyers is so steep that it looks like it was drawn with a ruler.

This data is not an estimate from a market research company, but rather real figures generated by actual user activity on the platform.

After careful consideration, Masayoshi Son decided to personally contact Jack Ma.

He didn't go through SoftBank China or any intermediaries; instead, his assistant directly obtained Jack Ma's contact information.

The assistant went through all the documents in his hand and made several phone calls, finally obtaining Jack Ma's mobile phone number from a Chinese investor.

……

At that moment, Jack Ma was having a meeting with his team in Alibaba's office in Hangzhou.

Alibaba's offices have moved from their original small apartment to an office building on Wensan Road in Hangzhou. They've rented the entire building. Although the decor is still quite simple, at least everyone has a fixed workstation now.

Moreover, the new Alibaba headquarters building is already under design and construction.

Jack Ma was standing in front of a whiteboard, explaining the next steps in the market expansion plan to his team. The whiteboard was covered with maps showing the distribution of industrial zones in various cities in East China. He held a marker in his hand, his sleeves rolled up to his elbows, and he spoke with great enthusiasm.

Jack Ma's phone suddenly rang. He took it out and glanced at it, only to find that it was an international long-distance number.

At that time, telecommunications fraud had not yet ravaged the world, so Jack Ma did not suspect anything.

He originally intended to hang up and continue the meeting, but the number kept ringing, so on a whim, Jack Ma went outside to answer it.

The other party immediately introduced himself in slightly accented English: "Mr. Ma, hello! I am Masayoshi Son from SoftBank."

Jack Ma didn't immediately realize that this person was really Masayoshi Son.

SoftBank? Masayoshi Son?

Masayoshi Son, the one who invested in Yahoo?

Jack Ma stared blankly at his phone for several seconds, his mind racing. How did SoftBank find him?

At that time, Alibaba was not well-known internationally. There were no more than ten reports about Alibaba in overseas media combined. Its biggest reputation was as an affiliated company of Tianchao Group.

Then Jack Ma immediately adjusted his mindset and returned to full energy, chatting with the other party in his Hangzhou-accented English.

On the phone, Masayoshi Son said directly, "Mr. Ma, I am very interested in Alibaba's model and have looked at Alibaba's data. I feel that Alibaba's growth trajectory is somewhat similar to that of Yahoo in its early days. I would like to schedule a time to meet with you and invite you to SoftBank's headquarters in Tokyo for a face-to-face meeting. SoftBank will cover all your round-trip airfare and hotel expenses."

"Thank you for the invitation, Mr. Sun! I will definitely be in Tokyo on time," Jack Ma readily agreed.

"Alright! I'll personally pick you up at Haneda Airport then."

"Mr. Sun, you're too kind."

After hanging up the phone, Jack Ma couldn't help but feel very excited. "Masayoshi Son of SoftBank. This guy has a very sharp eye. Every company he sets his sights on succeeds. It's obvious that he has his eye on Alibaba."

Jack Ma pushed open the conference room door again and said to the executives in the room, "Everyone, Masayoshi Son just called me. SoftBank wants to invest in us."

There was a moment of silence in the meeting room, and then everyone started talking at once.

Soon, Suning also received the news, but they weren't as excited as others had imagined.

He remained remarkably calm.

Of course, Suning did not prevent Jack Ma and Masayoshi Son from contacting each other, because sometimes the more you try to stop them, the more counterproductive it becomes.

……

Next, Jack Ma took two core members to Tokyo. The three of them were still revising the business plan PPT on the plane, and Jack Ma went through the logical order of each page again.

Upon arriving at SoftBank's headquarters, they were led into a spacious conference room with floor-to-ceiling windows on three sides, offering a view of the Tokyo Tower.

Jack Ma sat on one side of the conference table, connected his laptop to the projector, and prepared for the upcoming presentation.

When Masayoshi Son pushed open the door and came in, Jack Ma noticed that this man was quite decisive and efficient.

After sitting down, without any pleasantries, he said directly, "Mr. Ma, please begin your demonstration."

Jack Ma had prepared a complete business plan presentation PPT, which consisted of dozens of pages, each with detailed data and charts, covering everything from market size to competitive analysis to financial forecasts, all in a structured manner.

But seeing Masayoshi Son's straightforward approach, Jack Ma simply pushed the PowerPoint presentation aside, stood up, walked directly to the whiteboard, picked up a marker, and started drawing.

Jack Ma started by outlining the pain points of small and medium-sized manufacturing enterprises in China...

A lighter factory owner in Wenzhou can produce the world's cheapest lighters, but he lacks the channels to sell his products to the United States. He can't afford the booth fees at the Canton Fair, and even if he could, two exhibitions a year wouldn't be enough. Then he drew a diagram outlining the needs of global buyers…

An importer from California wanted to purchase a batch of ceramic tableware. He flew all the way to China to find a supplier, but the process was costly, inefficient, and hampered by information asymmetry.

Jack Ma once again placed Alibaba's platform matching mechanism in the middle...

By placing Chinese suppliers and global buyers on the same platform, suppliers can showcase their products, while buyers can search, inquire, and place orders. The platform only facilitates information exchange and does not intervene in the transaction process.

The whiteboard was filled with more and more arrows and circles, ranging from suppliers to buyers to logistics to payments.

Jack Ma became more and more excited as he spoke, his pace so fast that the translator couldn't keep up. The translator had barely finished translating one sentence when Jack Ma had already finished three.

Finally, Masayoshi Son waved for the translator to stop and spoke directly to Jack Ma in English.

Jack Ma spoke for about six minutes.

When we stopped, the whiteboard was already covered with drawings, various arrows and keywords intertwined, looking at first glance like a giant spider web.

Masayoshi Son leaned back in his chair, remained silent for a few seconds, and then said one word: "Stop."

Jack Ma stood in front of the whiteboard, holding a marker, unaware of what Masayoshi Son was about to say.

Masayoshi Son looked at Jack Ma and said, "Mr. Ma, I can invest in you. Thirty million US dollars."

"Thank you for your recognition, Mr. Sun! However, Alibaba's major shareholder is Tianchao Capital, and the introduction of SoftBank's investment will require approval."

"Mr. Ma, I'll be waiting for your good news in Tokyo."

……

After Jack Ma returned to Hangzhou, he kept thinking about Masayoshi Son's investment intentions.

Thirty million US dollars, at the current exchange rate, is a huge number, enough for Alibaba to burn through for several years.

Jack Ma certainly knows SoftBank's influence in the international investment community, and he also knows how astute Masayoshi Son is.

Yahoo's return on investment was several thousand times. If he replicated that success with Alibaba, no one dared to imagine how high Alibaba's valuation would soar.

If Alibaba can secure investment from SoftBank, its path to internationalization will be much smoother.

Overseas buyers will have a significantly higher level of trust in Alibaba when they see that it is backed by international capital like SoftBank.

SoftBank's global internet industry resource network, Masayoshi Son's deep understanding of the industry, and the synergistic effects among SoftBank's portfolio companies are all things that Alibaba urgently needs at this stage.

China's Tianchao Group is indeed very powerful, but it still has many shortcomings. It can't help Alibaba in terms of internationalization alone.

Therefore, Jack Ma never considered himself to be engaging in promiscuous behavior, but rather to demonstrate the behavior expected of a mature business professional.

Jack Ma spent several nights in his office thinking about it over and over, writing down the pros and cons one by one on a piece of paper. On the left side, he wrote "the benefits of receiving investment from SoftBank," and on the right side, he wrote "the costs of receiving investment from SoftBank." The left side was covered with a large amount of text, while the right side only had a few points.

The problem is that he has an agreement with Suning.

It's written very clearly in black and white...

Alibaba can accept foreign investment, but the foreign shareholding ratio can never exceed 30% at any time.

Moreover, when Suning invested 160 million RMB, it was when everyone looked down on Alibaba, and when Jack Ma was constantly hitting walls and being turned away.

At that time, Jack Ma heard all sorts of sarcastic remarks.

"Let's think about it some more!"

"Your business model is clearly a pyramid scheme."

"This person has a shifty face and talks nonsense; he's definitely not a good person."

Only Suning agreed to meet without even reading the business plan, and after a brief discussion, they immediately decided to invest 160 million yuan.

The weight of this trust cannot be measured in tens of millions of dollars.

Jack Ma knows that money can buy many things, but trust cannot.

So, at the very bottom of that sheet of paper with the pros and cons analysis, a horizontal line was drawn, and the changes in Alibaba's equity structure after Masayoshi Son's $30 million investment were written down...

Tianchao Capital's 40% stake will be diluted, but it will remain the largest shareholder, and the foreign shareholding ratio will still be within the range allowed by the agreement.

After confirming that there were no problems, Jack Ma picked up the landline on the table and dialed Suning's number.

The phone rang a few times before connecting. Assistant Zhuangzhuang answered and then transferred the call to Su Ning.

Jack Ma told Masayoshi Son that he wanted to meet him in Tokyo over the phone, and in just six minutes, Son explained in detail that he had decided to invest $30 million.

He didn't hide any details, nor did he beat around the bush, nor did he conceal the restlessness in his heart.

After listening to the conversation on the other end of the phone, Su Ning remained calm: "So what do you think?"

"Mr. Su, let me be frank with you. SoftBank's investment has indeed helped Alibaba's internationalization. Masayoshi Son understands the internet; he invested in Yahoo and knows how to help an internet company grow from small to large. SoftBank's global network and resources are something that Chinese capital can't provide right now... They have a presence in Silicon Valley, Europe, and Southeast Asia, and these resources have real value for Alibaba's expansion into overseas markets. But my promise to you will not change: foreign ownership will not exceed 30%, and that promise will always stand. If the foreign ownership exceeds this limit after Masayoshi Son's involvement, I, Jack Ma, will be the first to disagree."

Suning remained silent for a moment on the other end of the phone.

Jack Ma gripped the microphone nervously, fearing that Suning would reject the financing offer.

Soon, Su Ning's voice rang out again, still calm as still water: "Mr. Ma, since you've told me, let me state my position. First, the agreement I signed with you stipulated that foreign ownership would not exceed 30%. Whether Masayoshi Son invests or not, and how much he invests, as long as it's within that limit, I won't stop him. Second, Alibaba is your company, and you have the final say in its management; I respect your decisions. Third, thirty million US dollars is not a small sum, but don't rush into expansion just because you've received the money. The money should be spent wisely. Be careful not to make a mess of things."

"Understood, Mr. Su. I will be careful to ensure the safety of the funds."

After hanging up the phone, Jack Ma leaned back in his chair and let out a long sigh.

He picked up his pen again and recalculated the shareholding structure after Masayoshi Son's investment on the sticky note on the table. He suddenly stopped writing when he got to a certain percentage.

Tianchao Capital's shareholding will be diluted to some extent, but it will still remain the largest shareholder.

Moreover, given Suning's personality, he wouldn't care about these few percentage points of change.

What Suning cares about is whether Alibaba can succeed, not how many Alibaba shares it holds.

Jack Ma thought of something again: Suning hadn't said anything like "I've invested so much money in you, you should prioritize my interests" or "Taking SoftBank's money is a betrayal of me" during the entire phone call. He had only said that the contract would be executed as it was written and that he respected Suning's decision.

Jack Ma suddenly realized that while Masayoshi Son's investments were indeed important, investors like Suning might be even rarer than Son in this era of short-sighted profit-seeking.

...(End of this chapter)