The Accelerator Conundrum: Fortune in the Middle of the Pyramid

Sramana Mitra’s “Fortune in the Middle of the Pyramid” theory of Development Economics presents an alternative to the traditional focus on the “bottom of the pyramid” (BoP). While BoP strategies aim to create products and services for the very poorest populations, Mitra’s theory proposes that tech entrepreneurs can build businesses that target the entire spectrum of the economic pyramid, not just the lowest rung.

The core distinction of her theory lies in its approach to business growth and capital:

• Beyond Hyper-Fast Growth and Unicorns: Unlike the venture capital (VC) ecosystem, which typically demands hyper-fast growth and aims for “Unicorn” status (billion-dollar valuations) within short timeframes (often within 3-month equity-driven accelerator programs), Mitra advocates for a different model.
• Linear Growth, Capital Efficiency, and Bootstrapping: Her theory emphasizes that businesses don’t have to pursue explosive, venture-backed growth. Instead, they can focus on:
  • Linear Growth: A steady, consistent, and sustainable growth trajectory.
  • Capital Efficiency: Operating with minimal external capital, making the most of available resources.
  • Bootstrapping: Self-funding the business through initial revenue, sweat equity, or personal savings, avoiding or delaying reliance on external investment.
• Modest Size, Profitability, and Sustainability: The goal is to build small and mid-sized businesses that are profitable and sustainable, even if they don’t reach the massive scale of Unicorns. This approach focuses on generating real revenue and achieving financial independence, rather than solely optimizing for investor exits.

Mitra’s “Fortune in the Middle of the Pyramid” theory is a foundational concept behind her “One Million by One Million (1Mby1M)” global virtual accelerator. 1Mby1M aims to help a million entrepreneurs worldwide reach $1 million in annual revenue, explicitly promoting this model of capital-efficient, sustainable, and profitable business building for the broader economic landscape. 

She argues that the vast majority of entrepreneurs who seek funding are rejected, and that focusing solely on the “fundable 1%” misses a huge opportunity to support millions of other entrepreneurs who can build successful, albeit not necessarily “Unicorn,” businesses.

Photo Credit: Edi Nugraha from Pixabay

This segment is a part in the series : The Accelerator Conundrum