There's a Fortune at the Bottom of the Pyramid --- Really?

A few years ago, the well known management guru, C K Prahlad, generated a lot of enthusiasm with his claim that there is a fortune to be made at the bottom of the pyramid. Several companies climbed on to the Prahlad bandwagon but so far there is precious little evidence of investments being recovered, forget the making of fortunes.

Having grown up in the middle band of the middle class in India, I remember well the folks whose services made a difference to us. The dabbawala who came to our home each morning to take the dabba (lunchbox) that my mother had packed with hot, delicious food for my dad. The cornerstore owner who would sell us candies and savories for 5 paise (oh well, there .. I'ved dated myself) and 10 paise each. Televisions and telephones were luxuries back then and the radio was a common comfort. Narottam Puri was the "best" Indian commentator on cricket matters and Thums Up was a rare treat.

Against that background, making a fortune would require the provision of low-margin services to tens of millions of Indians. For a national enterprise to operate such a low-margin service, it would need to sell a homegenized service or product across the country. But India is all about regional customization, the ultimate in niche marketing. And every niche has it's local kings at every step in the hierarchy of niches. Each one makes a marginally better living than the person one step below him or her in the hierarchy. How then would a corporate enterprise be able to make enough money to sustain its managerial overhead, operational costs, distribution expenses, AND the low margin? Especially when entrepreneurs at every niche in the hierarchy are already providing excellent management in the context of the particular competitive challenges within their immediate domain of operations?

You can see where I'm going with this. To me, making large corporate fortunes by serving the lower levels of the pyramid seems like a largely improbable mission. Individual fortunes can be made and are made on a daily basis. But those individual fortunes are fortunes only in the relative context of the economic ecosystem that is specific to that particular level of the pyramid and require, primarily in its cultural aspects, a lifestyle that is adapted to that level.

The rest of you - focus on the higher levels of the pyramid.