BY JAMES PETHOKOUKIS
Amazon founder Jeff Bezos turned 38 in January 2002, and many of what turned out to be the company’s biggest accomplishments — Amazon Web Services, Amazon Prime, Kindle — were still in the future. Amazon’s market capitalization was a mere $4 billion versus $1.6 trillion today. Actually, it was a close call that Amazon was even around in 2002. The late-1990s dot-com crash erased 90 percent of the stock’s value. And if the company hadn’t raised a bunch of cash just before the downturn, “Amazon would almost certainly have faced the prospect of insolvency over the next year,” writes Brad Stone in The Everything Store: Jeff Bezos and the Age of Amazon.
The reason I note Bezos’s age is that Zhang Yiming, who helped found ByteDance (parent company of TikTok), is also 38. But unlike Bezos, he won’t be the guy in charge of taking his company to even bigger and better places. He’s stepping down as its chief executive at the end of the year, supposedly “to focus on long-term strategy” for the company. The Financial Times described the move as “the latest retreat from the limelight by a Chinese tech leader as Beijing cracks down on the industry.”
Perhaps the most noteworthy example of this phenomenon is the sudden downshift in the public profile of billionaire tech entrepreneur Jack Ma, founder of Alibaba and Ant Group, after he gave a speech last year criticizing China’s regulators and state-owned banks. As one Hong Kong-based investor told CNN Business:
The environment is now so opaque and difficult that even the iconic master-operator Jack Ma has paid a very dear price for missteps. Zhang Yiming and [CEO of e-commerce company Pinduoduo] Colin Huang are intensely aware of this example, and their desire to not follow in Ma’s most recent footsteps probably played at least some role in their respective decisions to step down. [While] this may be beneficial or necessary from Beijing’s standpoint, over the longer term it cannot bode well for China’s tech ecosystem.
That point about the harmful ecosystem impact of increased Beijing meddling is one I’ve been making: “Does an authoritarian surveillance state — one where its richest entrepreneurs suddenly go missing for a spell — offer a better ecology for entrepreneurial innovation and imaginative risk-taking than a liberal democracy?” And this from venture capitalist Paul Graham, who tweeted, “Xi Jinping’s unwillingness to allow Bezoses is good news for anyone worried about China’s growing power.”
I think there’s so much fascination in America with Chinese industrial planning and its targeting of key tech sectors (despite China’s productivity woes) that some of us forget about the strengths of a dynamic, open economy that protects property rights, doesn’t punish a business for what its CEO says, doesn’t tell a business how to run its business, and lets a business succeed or fail based on whether it passes the market test.