The document discusses issues with the current capitalist system and proposes ideas for a new "Capitalism 2.0" model that focuses more on value creation by entrepreneurs rather than speculation. It argues that speculators have hijacked capitalism and make money whether value is created or destroyed. The current system over-incentivizes speculation over entrepreneurship through compensation structures and availability of capital. The document proposes ideas like online entrepreneurship education, mentoring networks, reducing business mortality rates, and tax policies to bridge capital with entrepreneurs and make personal capital more readily available to help transition to a system that marginalizes speculators and incentivizes value creation instead.

1. Capitalism 2.0
Sramana Mitra
Founder, One Million by One Million

2. Value-Creators
vs. Speculators
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. Definition Of A
Speculator
Long vs. Short Investor
Day-Trading
Brownian Motion that Creates no Value

6. Speculators Make
Money Either Way
When Value gets Created, AND
When Value gets Destroyed

7. Speculators Gamble
With Other People’s
Money
At worst, Socialized Loss, Privatized Gain
Bail out money used to dole out huge bonuses
Need regulation to enforce high reserve ratios at banks to avoid
Too Big To Fail situations

8. Value Creation vs.
Value Destruction
Short-sellers Manipulate Markets

9. 2008 Financial Crisis
CDS, Derivatives, and a colossal mess

10. Fortune at the Top of
the Pyramid
Today’s Capitalism is Largely Dominated by Hedge Funds,
Private Equity, and some Entrepreneurs

11. No One Begrudges An
Entrepreneur’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;
Part of the American Dream

12. The Value Creator’s
Path is Hard
Makes money ONLY when value is created
No short-selling
Risk, Sacrifice, Huge Uncertainty

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

14. How Do We Change
This System?
How do we marginalize the Speculators and put the focus
back on Entrepreneurs?

15. Capitalism 2.0
Distributed, Democratic Capitalism
Focus on Entrepreneurs

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

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

18. Less Than 1% Gets
Funded

19. The Other 99%?

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

21. Example:
WaterFilters.Net
Rural Minnesota, $10M a year business

22. Niche businesses

23. Emphasis on
Bootstrapping
Lean, Capital Efficient Startups

24. use Dividends, not
Exits
use Dividends, not
Exits
The companies stay private
Outside the reach of speculators
Example: Germany’s SME Sector

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

26. Bank Financing
Much more important

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

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

29. Mentoring Networks
Don’t Work
Focus on the 1%

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

31. 1 Million Entrepreneurs
$1 Million+ Revenue Each
1M by 1M
10 million+ Jobs
$1 Trillion Global GDP

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

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

34. 113th 1M/1M FREE
Roundtable Today
Over 8000 participants over 3 years
Coached over 500 entrepreneurs
Premium program launched in November 2010

35. Capitalism 2.0:
Tax Policy
Tax Policy
• Introduce Entrepreneur’s 401K
• Make it easy to Bootstrap Startups
• Make more Personal Capital Available
Readily to the Entrepreneur
• Bridge the gap between Capital and
Entrepreneur

36. Philosophy Qs: Should Capitalists Receive So Much
Preferential Treatment Over Entrepreneurs?
Who Creates The Value?