The Underdog Capitalist
Thursday, December 30, 2010
If Prahalad’s work had a common theme – if he himself had a core competency — it was what he called the democratization of commerce. He was an unapologetic celebrant of capitalism. But his version of capitalism was one in which the little guy could win, and often did. Small companies were not destined to be crushed by their larger rivals, because ideas mattered more than resources. And selling products to the world’s poor didn’t exploit them, in his mind; it gave them the same choices that the rich and the middle class have, including ice cream on a hot day. “The process must start with respect for Bottom of Pyramid consumers as individuals,” he wrote. If the world’s poor wanted cellphones, they should have them, Prahalad said. They might end up using them in ways that no one expected, like starting a business that sold products to other bottom-of-the-pyramid consumers.
Prahalad seemed most excited by companies, especially Indian ones, that managed to combine his two big thoughts, by simultaneously selling to the poor and upstaging more established businesses. A few years ago, when we were talking about the inefficiency of American health care over lunch, he launched into a story about an Indian hospital chain that held down costs and errors by doing little other than eye surgery. By specializing in one area and focusing intently on quality, it turned itself into a role model for health care in the vastly richer United States.