Customers first, investors last

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John Q. Public
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Customers first, investors last

Post by John Q. Public »

I saw another story about Alibaba's IPO today. If you haven't been paying attention, it's sort of a Chinese combination of Amazon and Ebay but it's bigger than both of them combined. Their company philosophy really struck me because it's the way I was brought up, trained, and the way I've always thought a business' priorities should be set. Except I realized it's been years since I've seen it practiced, except for the odd mechanic, handyman or taco stand.

"Customers first, employees second, investors third."

Whatever happened to that? Any more, it seems to be "Investors first.... And, well, yeah, that pretty much covers it." I was taught that the customer always comes first and if you keep him happy, the money will come. It seems to have worked for Jack Ma. He's made $8.9 Billion, so far, this year and the IPO hasn't even happened yet.

It was very refreshing to hear that. Almost makes me want to buy something from them but I don't think they do business outside of China.
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Re: Customers first, investors last

Post by RedFred »

Well now that makes him a 1%er so I'm sure you'l find something wrong with him soon enough.
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Re: Customers first, investors last

Post by Parrotpaul »

Any thoughts on the topic, Fred, or do you just want to take cheap shots?
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Re: Customers first, investors last

Post by Troglodyte »

JQP posted; "Almost makes me want to buy something from them but I don't think they do business outside of China."

The logical next step will be to open AliBaba warehouses here in the US. Amazon, Ebay and WalMart will be history in a few years. Alibaba's pirated and slave labor goods will be much cheaper..
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Re: Customers first, investors last

Post by AsIfYouKnew »

Paul, his comment was on topic.

As for investors last, this seems more in line with a communistic economic philosophy, so I am not surprised.
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Re: Customers first, investors last

Post by John Q. Public »

The topic is the philosophy, not the man, so I'll agree with Paul.

Interesting that you would say it sounds communistic. It's the way businesses operated until the late '70s/early '80s.
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Re: Customers first, investors last

Post by AsIfYouKnew »

Agree to a point, but you did note that he made billions. IMHO, that brings it into the realm of fair play.

As for your assertion of how business was conducted, where are you getting that information? I am not disagreeing with you, but would like more background on why you made that statement.

From an economic standpoint (which deals with the motivations of firms) there has not really been any significant movement away from the generation of profit, which ultimately goes to the share holders. That focus goes all the way back to The Wealth of Nations.
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Re: Customers first, investors last

Post by Fordama »

:shrug: \:D/ :slapfight: :rockon:
Last edited by Fordama on Wed May 14, 2014 12:19 pm, edited 1 time in total.
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Re: Customers first, investors last

Post by Fordama »

As for investors last, this seems more in line with a communistic economic philosophy, so I am not surprised.

Can't see in any way, shape, or form how that is communistic.

It seems a lot more like someone building a business that is supposed to last, rather than trying to squeeze as much money out of the situation as quickly no matter the cost to the customer or employee.


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Re: Customers first, investors last

Post by AsIfYouKnew »

Communism puts the people (or State) first.

Capitalism puts profit first.

Econ 101.

A capitalist must balance the needs of the consumer with the needs of the firm, but the ultimate goal is to make a profit.
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Re: Customers first, investors last

Post by Fordama »

No, putting the customer first has nothing to do with the state's control of the means of production.

It was, in this country at one time, considered a sound business trait. Probably still is by many smaller businesses.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."

Old Hank Ford was such a commie!

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Re: Customers first, investors last

Post by AsIfYouKnew »

This is what I said.

As for investors last, this seems more in line with a communistic economic philosophy, so I am not surprised.

I know it is a subtle point, but perhaps if you ruminate on it, you will understand what I was trying to say.
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Re: Customers first, investors last

Post by Fordama »

I guess if that investor is some sort of 19th century proponent of child labor and monopolies as a way of life, it might seem communistic.

For most of 20th century America it seemed like the sensible way of doing business.

Unfortunately, we are regressing back to the 19th century when it comes to where labor and consumers fall.

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Re: Customers first, investors last

Post by Troglodyte »

Without a means of attracting and keeping investors, the entire business system would collapse.
What needs to be done is to lower the investors expectations of a quick humungous profit.
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Re: Customers first, investors last

Post by John Q. Public »

AIYK wrote:Agree to a point, but you did note that he made billions. IMHO, that brings it into the realm of fair play.
Not really. I'm sure everybody here is thrilled for him, going from being a humble English teacher to being a multi-billionaire. Some of us are especially happy that he did it the old fashioned way - by putting his customers first and earning it, rather than by trying to squeeze every last dime out of his customers and the business just so he could make more money.

Maybe you weren't around when that was the common practice, or maybe you forgot or maybe it was the side of the Business Department you came from, but on the Marketing side we were taught that to make more money, you sold more stuff. Period. Sell enough of it and you'll make good money. Don't sell enough of it, maybe your idea wasn't very good. Mr. Ma's idea seems to have been pretty good.
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Re: Customers first, investors last

Post by coolestanonuser »

The moment you negotiate a deal with someone to back your company with their private capital (or go public and have shareholders), you have a moral obligation to protect their and your assets. Imo investors should always be priority. No working capital = no customers.
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Re: Customers first, investors last

Post by Wabash »

Once upon a time the corporate tax rate was 90%. Employees were regarded as valuable assets with legacy benefits.

That seems to have been kicked to the curb.

One can argue the fairness of that belief, but what is not debatable is whether not we were better off as a society.

Sounds like Mr. Ma believes that for anyone (investors, employees etc) to get paid, customers are needed in adequate amounts.
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Re: Customers first, investors last

Post by joefutbol »

coolestanonuser wrote:The moment you negotiate a deal with someone to back your company with their private capital (or go public and have shareholders), you have a moral obligation to protect their and your assets. Imo investors should always be priority. No working capital = no customers.
They aren't mutually exclusive, and there's nobody forcing you to purchase their stock or invest in their company.

Having happy employees means having happy customers, and having happy customers means increased profits. Some are even of the opinion that it's actually immoral to put profits ahead of people. Crazy, right?
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