Factors Affecting Entrepreneurs' Performance at the Bottom of the Pyramid: A Frugal Innovation Approach

Bottom of the Pyramid (BoP) population is commonly seen as a segment in need of aid or donations to survive. On one hand, this customer segment has been viewed as a way to expand the customer base with affordable products or services. On the other, BoP entrepreneurship has been perceived as a long-term mechanism to help vulnerable population get out of poverty. The present study makes use of a frugal innovation perspective and new product development theory to identify factors affecting the performance of BoP entrepreneurs. Results indicate that this segment can start entrepreneurial ventures with a social purpose despite of all sorts of limitations. They follow processes similar to those commonly carried out by startups and larger companies when developing new products or services. Also, they excel at defining value propositions that match market needs.