Q and A with a former Alibaba executive: Every crisis presents opportunities

Dear Readers,

This week’s column features Porter Erisman, an ex-vice president at Alibaba. He is also the producer of the film Crocodile in the Yangtze River – The Alibaba Story.

We reconnected and exchanged a few messages after he read this commentary. Given that he was with Alibaba during the SARS outbreak in 2003, I thought a Q and A with him would be helpful so he can share his experience with you.

I hope you find Porter’s insights useful. We’ve also unlocked our reports on Covid-19 so you can read it for free. If you like our work, please support us by subscribing.

Q and A with Porter Erisman

Alibaba Porter Erisman and Jack Ma

Jack Ma and Porter Erisman (right)

What I learned from Jack and my colleagues at Alibaba was that the old adage is true – every crisis presents opportunities.

WW: When did you join Alibaba and what was your role?

PE: I joined Alibaba in April 2000, just as the company was moving out of Jack Ma’s apartment. For the next eight years I served as a vice president in a variety of international roles, ranging from marketing to website operations.

WW: Prior to SARS, could you describe the mood and general plans at Alibaba?

PE: SARS hit China – and Alibaba – in spring of 2003. It came at a time when the company had just reached profitability, and the mood was at an all-time high after a long internet winter that followed the dot-com bust. We were finally growing again and entered 2003 with big, ambitious plans to grow the company even more. But of course, when a colleague of mine was confirmed a SARS case, all those plans changed.

WW: That sucks, and it does sound familiar. Anyway, you were quarantined for 10 days – what happened? How was your work affected?

PE: In spring of 2003, we attended the Canton Fair, a very important trade show for us at the time. We had invested about US$300,000 for promotional activities at the event, so the team was hesitant to cancel. But because the Canton Fair was held in Guangzhou – the SARS epicenter – it proved risky and, in retrospect, foolish for us to attend.

When we got back to Hangzhou, a colleague who had been sitting next to me at the Alibaba booth became a confirmed SARS case and was hospitalized. I and seven others were put into quarantine in our homes. I was locked in my apartment and a guard was placed at the apartment lobby. But the local government was actually very good to me and brought me flowers and food, so I felt safe and cared for.

Sensing the risk to the operations, Jack Ma had everyone from the Hangzhou headquarters take computers home and we set up a virtual operation so that we could still run the company. This proved to be an important decision because not long after our first set of quarantines happened, the entire Hangzhou headquarters, which had about 400 employees, was put in quarantine.

For the next week or so, the whole company was run virtually, with our Hangzhou colleagues working from home. We had customer service phone calls rerouted to our homes, and all the family members of staff – including grandmas and grandpas – would answer the phone, “Hello, Alibaba” before passing the phone to our Alibaba colleague. It was run so smoothly that the vast majority of our customers around the world had no idea that we were quarantined.

Alibaba SARS

Screengrab from Crocodile in the Yangtze – The Alibaba Story

WW: How did then-CEO Jack Ma react? And how did he communicate to the team?

PE: SARS could have destroyed the company, but instead, it brought our team much closer together. And I think it was all because of Jack Ma’s reaction.

While most of us would have panicked, Jack stayed calm and rallied us to stick together to keep the company running. He pointed out that it was important not only for Alibaba’s survival but also for the survival of all of the small and medium-sized businesses that depended on Alibaba. He used the crisis to bring the company together, and the employees responded incredibly well.

While working from home, colleagues held online karaoke contests and got busy in chat groups to keep everyone’s spirits up.

Fortunately, after a week our colleague was released from the hospital, and we were released from quarantine. When we arrived back at work, we were a stronger team than before the crisis.

WW: What did you learn from the experience that you’d like other entrepreneurs to know?

PE: What I learned from Jack and my colleagues at Alibaba was that the old adage is true – every crisis presents opportunities.

When we entered 2003 we had big plans. When the SARS crisis hit, all of those plans changed. We could have hung our heads and thought about how none of our original plans for the year could be realized. But as Jack Ma likes to say, “Change is the only constant,” and it is important to embrace change. So we were forced to stay calm, face the new reality, and find opportunities where we could.

First, we found that SARS was an opportunity to bring the team together to face a common challenge. How we overcame SARS as a team not only served as a source of inspiration at the time, but also added to the company lore. Even today, new Alibaba colleagues are taught about how the team faced the challenge successfully as an example of the importance of staying positive and embracing opportunities in the face of a crisis. Here, Jack Ma’s leadership and communication to the team were key.

Second, we realized that SARS was an opportunity to grow ecommerce in China. In 2003, many small businesses were still doing things in traditional, inefficient ways. But when buyers and sellers stopped wanting to meet face to face, it meant that they finally had to adopt ecommerce and the growth trend accelerated. This was further accelerated when we partnered with the government to hold training seminars throughout the country for small businesses to teach them how to do business online. It can be said that 2003 was the year that ecommerce really took off and went mainstream in China.

Third, we used the opportunity to launch new business ideas. In fact, the consumer ecommerce boom in China started during the SARS outbreak, which was also when Alibaba’s Taobao site was launched. People may not know that Taobao’s founders were working together, quarantined in Alibaba’s original apartment before we even publicly launched the company. Just think about it: A US$400+ billion business was launched when things seemed most bleak. There can be no doubt that some of the next generation of wildly successful businesses are being developed and launched today – even when it seems like our darkest hour.

Finally, the Covid-19 crisis presents other opportunities for us all, beyond business. Maybe it’s time to write that book or screenplay you’ve always dreamed about. Maybe it’s time to slow down a bit and focus on that exercise plan that you’ve been putting off and take up yoga or do push-ups and sit-ups at home.

I had my own grand plans for the year that are now on pause, but I see it as a wonderful opportunity to spend time with my 3-year old daughter and 5-month old son. I now have the chance to focus on them and see their changes every day. And I’m sure that some day – after we’ve overcome this challenge – we will look back and fondly recall those times when we slowed down and spent time together as a family. Maybe that’s the best opportunity of all.

This Q and A was edited for clarity and brevity.

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You can find the previous commentary via this link: “Move fast and stay helpful”. You can also read all my commentaries here.

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