Capitalism 2.0

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Transcript

  • 1. Capitalism 2.0 Let’s Define Our Future Sramana Mitra, Founder, One Million by One Million
  • 2. Value-Creatorsvs. Speculators Compensation Brain Drain Lopsided Incentive Structure
  • 3. MIT Computer Scientist as Wall Street Quant Wastage of an MIT Education
  • 4. Speculators HaveHijacked Capitalism Recurring Bubbles Colossal Human Suffering Zero Value Creation
  • 5. Speculators MakeMoney Either WayWhen 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 & LeverageLiving Beyond One’s Means Has Become A Virtue Long-term Credit-fueled Growth in America
  • 8. Chronic Consumption Fueled by CreditHousehold Balance Sheets Are Scary
  • 9. Possible, Because Credit Was Available EasilyOffered 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 SpeculatorsCDS, 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 AValue Creator’s Fortune Steve Jobs, Mark Zuckerberg, Bill Gates, Larry Page, SergeiBrin, 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 InfantEntrepreneur Mortality Over 600,000 companies go out of business in America every year
  • 17. In Contrast, Speculators Gamble With Other People’s MoneyAt Worst,Socialized Risk, Privatized Gain
  • 18. How Do We Change This System?How Do We Marginalize The Speculators?
  • 19. Capitalism 2.0Distributed, Democratic Capitalism
  • 20. Primary TransactionBetween 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 AreCompany BuildersOften Owner Owned and Operated
  • 24. Increase the pool of private SMEsEducate them to succeed, sustain, grow
  • 25. Reduce 600,000 per year US mortalityNeed education, mentoring, incubation
  • 26. Expand Global SME PoolInject education, mentoring, incubation
  • 27. Entrepreneurship Education: KeyNeeds to be scalable and distributed
  • 28. Only Solution for a Massively Scalable System: TechnologyOnline education, affordable even for young students and emerging market entrepreneurs
  • 29. Emphasis on BootstrappingLean, 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 companiesEspecially, 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.com1M/1M: A Framework For Capitalism 2.0
  • 36. 100th 1M/1M FREERoundtable 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 ImplicitGreed rules, and needs to be kept in check
  • 39. Regulation is Necessarye.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, PublicGoods & Defense Need to be Financed Somehow Taxes are necessary
  • 42. Capitalism 2.0: Tax PolicyIntroduce Speculation TaxIntroduce Entrepreneur’s 401KReduce Corporate Tax Rates to under10% from current 35%Eliminate Payroll TaxesIntroduce Consumption Tax (VAT)
  • 43. Capitalism 2.0: Spending PolicyWelfare & Entitlements, especiallyunemployment benefits need to beswapped with service requirementsPeople should not get paid to sit athomeRetraining should be compulsory
  • 44. Retraining MUST Include Entrepreneurship EducationCommunity Colleges can offer 1M/1M or similar
  • 45. 5 Billion People onthe Internet by 2020Massive opportunity for value and wealth creation through entrepreneurship on a global scale
  • 46. Let’s Use This Opportunity andEstablish Capitalism 2.0Free the world from the clutches of the speculators
  • 47. http://1m1m.sramanamitra.com1M/1M: A Framework For Capitalism 2.0 1M Entrepreneurs $1M+ in Revenue Each 10 million+ Jobs $1 Trillion Global GDP