'Build a business model that shows cash flows’: Tata Sons Chairman N Chandrasekaran’s advice to start-ups

One advice that Tata Sons Chairman N Chandrasekaran has for start-ups is to focus on cash flows. Speaking at the BT Mindrush 2023 event in Mumbai on Wednesday, he said: “People will hit me but people have to worry about cash flows. They have to build a business model where they can show cash flows. Everything else will come automatically.” 

Indian start-ups have been under the scanner for various reasons. From increased focus on profitability to companies coming under the scanner for corporate governance issues, the ecosystem has been undergoing a correction of sorts.  

The last few years have also seen several iconic, unicorn companies going to the public markets for an initial public offering (IPO). However, most of them failed to make a mark. But Chandrasekaran believes they are not to be blamed. Addressing concerns on whether these start-ups went for an IPO too early, he said: “No, you cannot time the market. You should never say it was a mistake. If you are doing business, you should make mistakes. If you don’t make mistakes, you can’t make decisions.” 

The industry veteran also shed light on how the salt-to-steel conglomerate is investing in the Indian consumer story with Tata Digital and especially, the Tata Neu app. “We are trying to take the omnichannel route with our app. We are not exiting enterprise business but we believe in the Indian consumer story. The Indian consumption story is very strong and it is a big opportunity which is set to become bigger in the next 30-40 years. Sitting here, if we miss this opportunity, it will be a mistake.” 

The Tata Neu app was launched last year in April. It offers a host of services including groceries, flight bookings, car buying, food delivery, investments, hotel bookings, and more. The app faced glitches initially but the group has been working on refining it, Chandrasekaran said. “When you launch a product, the most important thing is customer experience. If you are able to click with the customers, you are able to scale. We did experience some glitches initially, whether it is in the app or its performance. We took time and launched the new version of the app just before the IPL,” he noted.  

He concluded by hinting that some exciting things are on cards related to the app. “We will keep evolving and we have many more categories to launch.”

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