Billionaire Ratan Tata's advice to entrepreneurs — how to set up 'disaster proof' business in the post-COVID world
Ratan Tatashares his ideas on how to set up a ‘disaster proof business’ with Sudhir Sethi, the Founder and Chairman of Chiratae Ventures.
- He believes that technology will play a major role in solving the challenges which India’s entrepreneurs now face.
- There could be many things driving the motivation within an entrepreneur, whether it's someone looking to solve a problem or someone just in search of opportunity.
In a discussion between Sudhir Sethi, Founder and Chairman of Chiratae Ventures and Tata, they discuss the secrets to building a ‘disaster-proof’ business — especially when it comes to technology in an exclusive interview shared with Business Insider.
“I think that's a very worthwhile statement to stay with for a while because the people we're dealing with as young entrepreneurs are people who have found solutions or another way to deal with a problem when it occurs. It's that innovativeness that has enabled some of them to operate in the fields that they seem to be in,” said Tata.
“The means of finding a spot or a niche and a segment that they can operate in differently than the traditional way and have young exciting things in that manner. So it would be fair to say that we are going to see the same kind of innovativeness created in the same kind of situation like you have heard many times over. How you look at opportunities and that how you package them are different and this situation does give us an opportunity to innovate,” he explained.
Technology is going to have a major part to play in the post COVID world
When asked if technology will have a major part to play in availing the opportunities but also solving the challenges which India’s entrepreneurs are now facing, Tata said, “I think the quick answer that I find is yes. We can find answers in how to operate in a new scenario. Our willingness to do that or our interest in finding those new solutions, that are the key.”
“So, I guess one way to look at this is not to look at the changes that we are faced with but to look at this as the new landscape or a new playing field. And applying our adaptive nature and innovativeness to finding solutions and hopefully looking back and saying this problem and this challenge gave us a new way to do things. As you mentioned digitizing at home is the new way to bring your customer into your phone. To deal with things as they would be in normal circumstances, but the circumstances are new. And I can say that looking at the situation as it stands. I'm sure there are going to be situations where we're going to say, why did we not do this earlier?” he added.
According to Sethi, entrepreneurs are going to be looking at new business models, new products, new services, new revenue models, which perhaps were not being looked at earlier.
Interpreting the mindset of an entrepreneur during the coronavirus crisis
On the one hand, there’s opportunity but on the other there are hardships. The dichotomy between the two presents a challenge for entrepreneurs in India. For someone looking to enter the market right now, the motivation could vary from person to person.
“I think there could be multiple views on this. One could do it because the entrepreneur is enterprising, unwilling to sit and moan about the changing situation and the need to undo what he has done.That's one type,” said Tata.
“The other type is when it's not looked at as a problem, it's looked at as you said as an opportunity. And the excitement of finding a new way to do things. I know when I was a younger person in the organization, one of the most exciting times that I have had is where you can sit down with a bunch of your colleagues and brainstorm. And when you brainstormed, it enabled you to look for different ways to do things to beat your competition, or to reduce your costs or to change the way in which you operate. And if we are seeing that happen it could bring about a new way, it stops us from being traditional. It forces us to be innovative. And that would be the biggest opportunity we have. The next is can we be innovative first? Can we do it better than our peers in other parts of the world? But that would come later,” he added.
But, in order to find success, you need to understand the customer
A business won’t have a lot of success if it doesn’t understand the needs of its customers. Sometimes even customers don’t know what they want, but provided they’re excited by the product — they will welcome it.
“I think consumer behavior is a little based on many different metrics. It's a willingness to be exposed to the excitement of doing things a different way. It deals exactly with the innovativeness of the entrepreneur in making this the packaging that he is offering to the customer,” said Tata.
“If it excites the customer, if it is packaged nicely and well thought through, I think the consumer will welcome it. He will not resist it. And I think the transformation we sold from the offline to the online, has been an indication of a large consumer base willing to look at a new way to buy, a new way to sell and a new way to experience in terms of dealing with mercantile issues. And I think we're looking at that likely to happen or continue to happen in the future,” he explained.
When it comes to the digital element of payments, “I think there's an element of the marketplace that would be willing to pay more because more is being done to the product and to the customer. And he looks at that as a convenience to be willing to pay more for that. And there's another segment of the customer who is doing this because he expects to see it being more economic for him. When you put those two things together. And the consumer has defined what in his mind is an acceptable cost. The entrepreneur has put more into that package than the customer had earlier been able to access,” he remarked.
Maintaining the balance with the human side of business
The human side of business is important, but it’s not individuals but the relationships they’re harnessing that play an important role.
“I'd like to say that that's something I can't answer generally because I think you have to be looking at individual businesses and the leading entrepreneurs that are driving those businesses. In many cases the innovation of the change is driven by the innovativeness of the entrepreneur rather than the changes sitting to be undertaken. The opportunity is there, somebody has to see the opportunity and package it in a manner that makes sense. Debug it and push it forward,” said Tata.
“So when you look at music then done by Apple or whether you look at an electric car from a non-car manufacturer, you look at the power grid distribution. Decentralized power is what Tesla is doing to the home. And when you look at the delivery of medicines and doctor examinations that sync with a general practitioner if you might. You look at the input of data from the patient to the doctor, on your wrist or or on some decoder somewhere on your body. You look at remote medic medicine and surgery. It's there. Today it's surgery through manipulators but tomorrow it could be done sitting in San Francisco with a surgery being done in Bombay,” he said citing some examples.
“It's how far can you stretch the envelope? And I think what you're looking at and what you're experiencing is that there's no limit to that envelope which a few years ago, we had kept saying we have stretched it to its limits. That doesn't hold true today and that's the opportunity,” Tata explained.
Do, or do not — There is no try
“I don't think there's advice that can be during [the coronavirus pandemic]. I think the motivator is within the entrepreneur. Just in the few minutes we've been talking to each other. We are drivers probably looking at the collapse of the world around us. And in a few minutes we've been talking about the future that it may force on us. Not as a disaster, not as a destruction, but as an opportunity. And it's not you or I that makes that happen,” Tata told Sethi.
“It's the drive in the entrepreneurs’ spirit that enables that to take place. And so I would say that the message that one would give, would really be to look at this as a moment of opportunity and use that as in the means of seeing whether we can look at new areas in a new way. Time frames that were never before considered possible and can just have new ways to look at things that become the way of life. What would we be today if we didn't have the web?” he said.
“If we look back and say how did we manage with that or would without it? It would be a good soul searching question to us. So I think my message to an entrepreneur would be to use this time as an opportunity to innovate more. Not to make it discourage you, but look at this as a real opportunity to look at having a long-term vision, blue sky and daydream through the whole technology routine. There are going to be areas that you can initiate not the same idea that you have in the past but fresh ideas that will sail you through this period,” Tata concluded.
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