Can C.K. Prahalad Pass the Test?

Prahalad had put money into Jain's first two companies, Imageware and Virage Inc. Now he was sinking the first installment of an investment that eventually totaled at least $3 million into the newly formed Praja. Jain became CEO. But, he says now, "it was very clear that there were lots of business issues that I didn't understand as well as I could have." Eventually, he asked Prahalad to help him run Praja. "If you want to build the company the way that we want it," he told Prahalad, "the leadership should come from you and me." To his colleague's surprise, Prahalad said yes. "After he decided," Jain recalls, "I said, 'As a friend, I want to know why you are doing this.' He said, 'Ramesh, neither you nor I need a company to maintain our current lifestyle. But what is the next challenge in life?' "

"What would happen if this power became commonplace?"

For Prahalad, Praja's challenge -- and so, his -- is twofold. One: Make it through the tough times, build a successful business, and use the technology invented by Jain in a transformational way. Two: See what it's like to take your own management medicine.

At its simplest, Praja's technology offers a very quick way to build applications and to organize all kinds of information, from sensory data to video to text to audio information. Praja is focusing on two areas: knowledge sharing and data analysis. Analysts at General Motors, for example, are using the company's technology to compare sales data from different countries and time periods. Need to contrast, say, Saab sales and Ford Explorer sales in Brazil in March? That's just the sort of calculation that GM used to spend weeks on. With ExperienceWare, it's instantaneous.

Meanwhile, Praja is experimenting with knowledge management at Zurich Financial Services, where it has created a virtual, cross-cultural learning community that brings together senior executives from all over the planet. Participants can use video, text, or other information to compare projects or management problems, untethered by place, time, or even language. "It is still a work in progress, but it has been very well received," says Gunnar Stokholm, head of business development at Zurich Financial Services.

It is one thing, of course, to enable an online executive confab -- and quite another to build something that touches the world. But it is the broadest implications of this concept that get Prahalad excited. In a world where information is available to everyone and not segmented by language or even literacy, Praja's technology could be used to help not just executives but also the rural poor. Strategies for containing breakouts of contagious diseases could be shared, globally and in real time, across languages and technologies. Says Jain: "A lot of things that we are going to be developing will be revolutionizing in different ways. We're making language irrelevant."

This is the vision -- one of bringing the power of information to everyone -- that drives both Prahalad and Jain. "This company was started with the basic assumption that we would empower people to be themselves, to experience life on their terms," says Prahalad. "Then you take the next step and ask, 'What would happen if this power became commonplace, rather than only for the wealthy?' The moment you ask that question, staring in your face are 4.5 billion people. How do you help ordinary people understand how to exercise their power? More interestingly, how do you get large companies to understand that if they don't, they'll have no social legitimacy left?"

Just before joining Praja, Prahalad and fellow professor Stuart Hart, from the UNC Kenan-Flagler Business School, circulated a draft of a paper called "Raising the Bottom of the Pyramid: Strategies for Sustainable Growth." They argued that the 4 billion poor people at the bottom of the economic structure represented a valid, vibrant market for goods and services -- and that large multinational companies could make big profits by meeting their needs. "The challenge for managers is to visualize an active market when what exists is abject poverty," they wrote. "With all due respect to the importance of wetlands, it is like visualizing a theme park where you see only swamp."

It's kind of a contrarian idea. Until now, the rural poor have been considered unable to sustain a market, unlikely ever to get enough disposable income to buy anything that a big western company would want to sell. But in India, Prahalad found companies making money hand over fist by selling to the poor. The idea that informed capitalism could help the world's downtrodden got him really, really excited. "It brought a fire and a passion to C.K. that goes beyond what I'd seen before," says Hart.

This is, in ways not yet completely clear to anyone, Praja's future. But it's not the present. These days, Praja is marketing exclusively to big companies. Prahalad and Jain are scrambling for a third round of funding. (Together with board members, the two recently kicked in $3 million to keep the company going until the fall.) But Prahalad's grand vision must wait. "You cannot solve the world's problems in a small company," he says. "The goal is not to say that we are going to do it anyway, with or without money. It's a nice, brave thing to say, but very soon you'll be running out of cash."