In a Harvard Business Review column titled, “The C.K. Prahalad Fortune at the Bottom of My Backpack,” Editorial Director Justin Fox discusses Prahalad’s vision of a rising global middle class.
“In the 1850s, a sewing machine cost more than $100. With the average American family taking in about $500 a year, that price put it out of reach for most. Then, in 1856, the I.M. Singer Company introduced an installment plan through which buyers could pay for its machines over time. Sales tripled in the first year. Singer became the first U.S. company to make it big globally, and its installment-plan customers saw their lives improved and enriched.
That’s a story C.K. Prahalad, who died earlier this month, told me over lunch in New York last September. He wrapped it up with the aphorism: ‘If you build it for the poor, the rich can come. If you build it for the rich, the poor can’t come.’”