1. Capitalism 2.0
Let’s Define Our Future
Sramana Mitra,
Founder, One Million by One Million

2. Value-Creators
vs. Speculators
Compensation
Brain Drain
Lopsided Incentive Structure

3. MIT Computer Scientist
as Wall Street Quant
Wastage of an MIT Education

4. Speculators Have
Hijacked Capitalism
Recurring Bubbles
Colossal Human Suffering
Zero Value Creation

5. Speculators Make
Money Either Way
When Value Gets Created, AND
When Value Gets Destroyed

6. Value Creation vs.
Value Destruction
Is Short-selling Necessary?
Why Isn’t a P&L Adequate?

7. Credit & Leverage
Living Beyond One’s Means Has Become A Virtue
Long-term Credit-fueled Growth in America

8. Chronic Consumption
Fueled by Credit
Household Balance Sheets Are Scary

9. Possible, Because
Credit Was Available Easily
Offered To Undeserving Consumers

10. Obsession With Home
Ownership
Whether One Can Afford It Or Not
A Cultural Problem

11. Human Beings Need
Food & Shelter
Home Ownership is NOT a Right
It Needs to be Earned

12. Enter Speculators
CDS, Derivatives, and a Colossal Mess
=> 2008 Financial Crisis

13. Fortune at the Top
of the Pyramid
Largely Dominated by Hedge Funds,
Private Equity, and Some Entrepreneurs

14. No One Begrudges A
Value Creator’s Fortune
Steve Jobs, Mark Zuckerberg, Bill Gates, Larry Page, Sergei
Brin, Jeff Bezos are celebrated; they have created industries,
jobs, technologies, new ways of experiencing the world

15. The Value Creator’s
Path is Hard
Makes Money ONLY When Value Is Created
No Short-Selling
Risk, Sacrifice, Huge Uncertainty

16. Massive Infant
Entrepreneur Mortality
Over 600,000 companies go out of
business in America every year

17. In Contrast, Speculators
Gamble With Other
People’s Money
At Worst,Socialized Risk, Privatized Gain

18. How Do We Change
This System?
How Do We Marginalize The Speculators?

19. Capitalism 2.0
Distributed, Democratic Capitalism

20. Primary Transaction
Between Producer and
Creator of Value
Financeer is Optional

21. Notion Of Exit
Unnecessary
Private Companies
Out of the reach of the Speculators

22. If Financeer is
Involved,
use Dividends, not Exits
The companies stay private
Outside the reach of speculators

23. Investors Are
Company Builders
Often Owner Owned and Operated

24. Increase the pool of
private SMEs
Educate them to succeed, sustain, grow

25. Reduce 600,000 per
year US mortality
Need education, mentoring, incubation

26. Expand Global SME
Pool
Inject education, mentoring, incubation

27. Entrepreneurship
Education: Key
Needs to be scalable and distributed

28. Only Solution for a
Massively Scalable
System: Technology
Online education, affordable even for young students and
emerging market entrepreneurs

29. Emphasis on
Bootstrapping
Lean, Capital Efficient Startups

30. Prevailing Myth:
Entrepreneurship =
Financing
Needs to be corrected

31. Entrepreneurship =
Customers + Revenues +
Profits
Financing is Optional

32. Many more $5M, $10M,
$20M Ideas than $500M or
Billion dollar ones
Worth building private companies
Especially, if you own a significant chunk

33. 1 Million Entrepreneurs
$1 Million+ Revenue Each
1M by 1M
10 million+ Jobs
$1 Trillion Global GDP

34. Virtual Entrepreneurship
MBA for $1000 / yr
Curriculum, Virtual Incubator, Online Mentoring,
Business Development, Financing, Media & Analyst Reach

35. http://1m1m.sramanamitra.com
1M/1M: A Framework For Capitalism 2.0

36. 100th 1M/1M FREE
Roundtable on Oct 6th
Over 7000 registrants over 3 years
Coached over 400 entrepreneurs
Premium program launched in November 2010
A Group of Premium members will tell their stories at 100th meet

37. Role of the Government
in Capitalism 2.0
Is it Needed?

38. Integrity Isn’t
Implicit
Greed rules, and needs to be kept in check

39. Regulation is
Necessary
e.g. Banks need to have higher reserve ratio to avoid too big
to fail situations; risk needs to be managed

40. What About Benefits?
Welfare Economic is Unsustainable
Europe’s Crisis is a good example

41. Safety-Nets, Public
Goods & Defense Need to
be Financed Somehow
Taxes are necessary

42. Capitalism 2.0:
Tax Policy
Introduce Speculation Tax
Introduce Entrepreneur’s 401K
Reduce Corporate Tax Rates to under
10% from current 35%
Eliminate Payroll Taxes
Introduce Consumption Tax (VAT)

43. Capitalism 2.0:
Spending Policy
Welfare & Entitlements, especially
unemployment benefits need to be
swapped with service requirements
People should not get paid to sit at
home
Retraining should be compulsory

44. Retraining MUST Include
Entrepreneurship
Education
Community Colleges can offer 1M/1M or similar

45. 5 Billion People on
the Internet by 2020
Massive opportunity for value and wealth creation through
entrepreneurship on a global scale

46. Let’s Use This
Opportunity and
Establish Capitalism 2.0
Free the world from the clutches of the speculators

47. http://1m1m.sramanamitra.com
1M/1M: A Framework For Capitalism 2.0
1M Entrepreneurs
$1M+ in Revenue Each
10 million+ Jobs
$1 Trillion Global GDP