Jack Ma explains why early VCs rejected Alibaba

Photo credit: Asia Society

At a speech on Thursday at the APEC conference, Jack Ma told a story that probably made some venture capitalists cry. Yes, it’s true – there are VCs that had the chance to get in on Alibaba fifteen years ago, and they didn’t. Why? Let’s let Jack Ma explain:

“Fifteen years ago I was talking with venture capitalists, hoping that I could find somebody to invest in Alibaba. They said: in China don’t even bother talking about ecommerce, you guys don’t have the business infrastructure for it.”

But of course, history proved that China’s lack of ecommerce infrastructure was not a weakness, but a strength. Jack Ma saw and understood that:

“Precisely because China’s business infrastructure was poor back then, and because in China we didn’t have this and that, when the internet came we used the internet to really mature and complete the business infrastructure. In America you’ve got Wal-Mart and retailers like that, so in America ecommerce is dessert. In China, it’s the main course.”

Let that be a lesson to you, startups out there: VCs don’t know everything! Sometimes what VCs see as your biggest weakness might actually be your greatest strength.