Exterior of Alibaba Group Beijing Headquarters on November 10, 2019 in Beijing, China.
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Power Players

Alibaba expanded during the SARS health crisis — and its co-founder has advice to share


Leading a company through a crisis is no mean feat — and for some, it can be their undoing. But for those that get it right, it can be an opportunity to set the business apart from the pack. 

That was the case for Chinese technology giant Alibaba Group, executive vice chairman and director of Alibaba's entrepreneur fund Joe Tsai said in a recent interview.

Now an e-commerce giant worth some $678 billion, Alibaba was about to launch Taobao, its online marketplace for consumers, in 2003 when crisis struck. China was hit hard by a then-novel coronavirus outbreak known at SARS (Severe Acute Respiratory Syndrome), which forced businesses to shutter and people to shelter in their homes.

Leading amid crisis

Joe Tsai, co-founder and executive vice chairman, Alibaba Group.
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That might have been it for the nascent company. But instead, Tsai and his 17 co-founders, including Jack Ma, decided to pivot. They implemented what was then a novel — and clunky — work-from-home system to ensure the launch went ahead on time.

"We wanted to make sure that when customers emailed or called us, we could serve them," said Tsai. "Obviously, the first thing you want to do is make sure your employees are safe and working in conditions where things continue to function. As long as that's in place, they can continue to serve their customers."

Just weeks later, Taobao was launched as planned on May 10, 2003. The self-imposed quarantine became a watershed moment for China's economy, as domestic consumers turned to the internet to order goods online. 

Tsai said that steadfast commitment to the mission was instrumental to the company's success — and remains so today: "Fast forward to today and our focus on the customer is still an absolute priority." 

Advice for entrepreneurs

That offers an important lesson for start-ups struggling with today's Covid-19 pandemic, the entrepreneur continued during his wide-ranging discussion with Tony Wong, co-founder and CEO of e-commerce platform, Shopline.

Specifically, business owners should focus on the core goal of their business. If that still remains, even amid the downturn, then it's worth carrying on.

You have to go back to why you founded the business in the first place. Look at what the mission was and the problem you were trying to solve.
Joe Tsai
executive vice chairman, Alibaba Group

"As an entrepreneur, I don't think you should chase ideas. I think you have to go back to why you founded the business in the first place," said Tsai. "Look at what the mission was and the problem you were trying to solve. And if the same problems still exist and the same customers are still there, then it makes sense to continue your business."

"But if you're just chasing ideas, then you don't have the passion. You're chasing it because it's a money-making opportunity and not because you really love pursuing your mission. Let your mission guide your direction."

Just like for Alibaba, that may mean innovating and coming up with new ways to reach that goal amid current limitations.

"You can definitely look inward to change your bad hand," said Tsai. "Let's say you're in the restaurant business and the restaurant has shut down — there's nothing you can do about it. (But) I think a lot of companies now are thinking of alternatives."

"Just because the restaurant's shut down, customers don't stop eating and the alternative is adapting to takeout. The adaptability of the business is very important. Teamwork and internal communication are key to adapting to a new normal," he said.

— CNBC's Tom Huddleston contributed to this report.

Don't miss: Three lessons for entrepreneurs from inside Alibaba's Taobao University

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Alibaba founder Jack Ma sees this 1 potential benefit to AI taking our jobs
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