The Elphinstone building at Horniman circle in Mumbai’s Flora Fountain area has an old-world charm about it. There’s a buzz at the Starbucks outlet on the ground floor; CEO Howard Shultz is in town. On the third floor is the Tata Trust office, all glass-panelled partitions and carpeted floors.There is an air of expectancy. Trust Chairman Ratan Tata, also Chairman Emeritus of Tata Sons, is awaited, and he arrives on the dot at 10.30 am, dressed casually in a Ralph Lauren checked shirtand pleated trousers.

There are others waiting to see him, I am told, as I am ushered in. Tata has made personal investments in over 20 start-ups and counting. He is excited about digital and start-up India but cautions that entrepreneurs should not be carried away by valuations. Digital India is, however, here to stay and is no bubble, he emphasises. “I have to say, the digital world has overtaken me. There was a time in the mid-1980s when I considered myself quite literate in these areas,” says 78-year-old Tata, in a brief interview to BusinessLine . Edited excerpts:

How excited are you about the way digital India has transformed the country?

The transformation to a digital economy has already taken place, firmly. It’s quite heartening to see what it has done to the average and less privileged Indian; it’s given them stature, ownership and identity. It has transformed the marketplace. We have a potential market for a billion smartphones, and those who can upgrade to smartphones as time goes on will do so. That’s the vehicle for buying; so many people can never be reached in the brick-and-mortar form.

So, what digital India has done is to put a retail outlet in your pocket. And, as more and more Indians get involved with the Snapdeals, Flipkarts, Amazons and Googles of this world, India is going to blossom into a huge consumer marketplace. Now that’s not the metrics but about the logistics reach. It is a transformation that has already taken place; it’s not a bubble and is there to grow. There will be ups and downs in individual companies, but I think digital India is here to stay.

What drives your faith in start-up India? You support a lot of start-ups, though you have said many are in valuation mode, not in evaluation?

In exuberant times, large sums of money have come from overseas which have caused that valuation to take place. To some extent start-up companies have images of themselves that cause them to hold off on investments that come their way because they think valuations are not adequate and that, to some extent, may hurt some and there will be a 'balancing out' phenomenon. This may not be a burst bubble, but some companies will fail, some will be sold to stronger companies, and some kind of rationalisation will happen in this new market place.

Are you excited about the new ideas that are emerging?

I am excited about some of the unconventional concepts. I must say that I myself am learning, because many of those that I would have considered to be failures have turned out to be successful. I am equally impressed by some of the founders, with what they have done, and not so impressed by some of the other founders whom I have met, who seem to be keen to sell out, as soon as they can, to a larger player. I am aware that some of my investments may not be successful. Yet, sometimes, even if I feel an area is going to be difficult but if I sense that the founder needs help and he or she is someone who is passionate about doing what they do, I will help them.

Do you spend a lot of time mentoring these start-ups you have invested in?

Not a lot of time but it is increasing as the investments have grown. I meet a lot of founders the first time, when they make their pitch.

Do you foresee a bright future for entrepreneurs in India?

Yes, though I think there needs to be an understanding that it is not their money and they need to have a responsibility to their investors. Some entrepreneurs talk of a high burn rate, high advertising rate, and so on, with no outcome, so it doesn’t impress me. But an entrepreneur who has that kind of a feeling of responsibility towards his investors is somebody who will have all my support.

Do you wish you had started some of these digital initiatives in the Tata group?

I tried several times, but never really got true support. I think what we should have done from the Tatas was to support and remain passive investors. We should have bought into one of these start-up companies and supported them, as the requirements are very different, the mindsets were very different but the opposition to getting involved with this new bubble, as it was called, was always present. When I got free and not fettered with Tatas, I did what I had planned to do.

What areas had you looked at then?

It was basically in the retailing area. At that time, one couldn’t look at analytics or such, with TCS being there. We went into digital design in Tata Technologies — I started that — and we tried to keep it as much like a Silicon Valley design shop as possible but it was very difficult to keep it from not being fettered by HR constraints, capital constraints, and so on.

What are your personal experiences in the digital world? Do you do a lot of e-commerce shopping?

I have to say, the digital world has overtaken me. There was a time in the mid-1980s when I considered myself quite literate in these areas; now I am finding myself lost in the new internet world and what it has done, and I am five to ten or twenty steps behind, as the case may be, in the usage and understanding of what there is. I am feeling more irrelevant in this area and amazed that my cook’s daughter or my bearer’s son can do much more on this front than I am able to. I am, however, still greatly interested and greatly enamoured by some of the things that can be done in this area.

Do you personally browse or shop for digital gadgets?

Yes I do. I am a big Apple purchaser, but mainly in the Croma kind of stores. I buy a lot of electronics, some which I never take out of the box!

Do you buy anything else from e-commerce sites?

I quite frankly enjoy the touch and feel of a store, so I am a big bookshop person. Or, I go to an electronics store; Best Buy and Croma are places I could spend a lot of time in.

And what digital gadgets do you personally use?

I probably have everything that Apple has made and everything Bose has made; I am very loyal to certain brands.

Will 2016 see you again in further investment mode?

It depends on how successful I am in terms of what I have invested in because, to some extent, there has be monetisation of what I have put in.

Most of the startups seem to be doing reasonably well?

On paper!

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