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Profits at the
Bottom of the Pyramid
A tool for assessing your opportunities by Erik Simanis and Duncan Duke

OCTOBER 2014
REPRINT R1410G

Erik Simanis is a senior extension associate at
Cornell University’s Johnson
School of Management.
Duncan Duke is an assistant professor of management at Ithaca
College’s School of Business.

2 Harvard Business Review October 2014

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PROFITS AT THE BOTTOM OF THE PYRAMID
A TOOL FOR ASSESSING YOUR OPPORTUNITIES BY ERIK SIMANIS AND DUNCAN DUKE
During the past decade, many multinationals have come up short trying to make a profit by solving the pressing needs of low-income communities. Preoccupied with their social missions, companies have optimistically taken on challenging projects, only to be surprised when weak consumer demand and obstacles such as bad roads
October 2014 Harvard Business Review 3

This article is made available to you with compliments of FM Global Insurance.
Further posting, copying, or distributing is copyright infringement. To order more copies go to www.hbr.org or call 800-988-0886.

PROFITS AT THE BOTTOM OF THE PYRAMID

keep revenues low and costs high. Over­ tretched s and disillusioned, many switch gears and reconstitute their ventures as break-even social investments that are destined to remain small.
Profits are critically important for ventures targeting the bottom of the economic pyramid—the more than 4 billion people who individually earn less than $1,500 per year. Compared with a social responsibility project, a profitable business stands a better chance of