Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunities lies, and it starts with a question most founders don’t ask: What if the business model was to give money back instead of extract it?
Yang was inspired by Mark Cuban. Not because of his wealth or his celebrity, but because of Cost Plus Drugs, the Cuban startup that sells pharmaceutical products at cost price. Yang made a list.
“Housing, education, food, fuel, transportation, media and wireless,” Yang told TechCrunch in a recent episode of Equity. “The things we all spend money on.”
He chose wireless and last September launched Nobile Mobilea new virtual mobile network operator that provides cellular service for a fraction of what traditional operators charge and gives customers money back if they use less data.
As AI threatens to compress wages and displace workers, Yang sees a business opportunity in lowering the cost of living. Cost Plus Drugs, Noble Mobile, dumb phone makers like Light phoneand even online grocery store Misfits Markets are early examples of an emerging business category where the startup’s value proposition is the margin it returns to the customer.
“AI will absorb a lot of value and jobs, and then Americans will look up and say, ‘How can I meet basic needs?’” Yang said. He believes that meeting people’s needs “at less cost” is “a great opportunity.”
That instinct didn’t come from nowhere. Yang first launched himself into the public eye during his 2020 presidential campaign, during which he advocated for Universal Basic Income as a means to combat AI-related workforce displacement and concentration of wealth. The campaign was unsuccessful, but the thesis has only become more relevant.
Yang remains a proponent of UBI, arguing that the value generated by AI companies should be redistributed into the hands of average Americans. But Yang is not so sure whether the government will be the vehicle for that redistribution, or whether it will simply use the collected wealth to “plug a hole and do something not terribly productive.”
“There is room for a direct connection between money and people,” he said.
That’s where the market comes in. When policy fails, Yang argues, market incentives can intervene. Noble Mobile is their attempt to prove it. Since launching last September, the company has grown to have “thousands and thousands” of customers and is generating “millions in revenue.”
“We are profitable per unit per customer, but we simply share the profits with our subscribers with the idea that it will make you happy, you will stay and maybe you will tell your friends and family,” Yang said.
The speech is simple. Yang noted that the average monthly savings of $50, invested and compounded over 40 years, could amount to $24,000, enough for a retirement down payment. and in this economy, who isn’t thinking of small ways to improve their personal finances?
Whether investors will share that enthusiasm is another question entirely. Even if the opportunity is real, capital is heavily focused on AI right now, while consumer-facing companies with thin margins and a social mission are a tough sell.
“At least one Noble Mobile investor told me, ‘I love you, Andrew, I want to work with you; if you could turn this company into an AI company, we would invest,'” Yang said.
However, the tide could be turning, simply because even the richest extractive companies need an economy in which consumers have enough purchasing power to purchase their products.
“Having value concentrated in the hands of a handful of people and companies is simply bad for everyone,” he said. “There are some people I know in Silicon Valley who are open to that for a variety of reasons… (like) they just don’t want to have to hire private security.”
Yang encouraged founders and investors to tackle the problems they are passionate about and find a way to build a valuable company on them.
“Think bigger and more broadly about trying to address the problems and not subscribe so much to groupthink, because there are some valuable opportunities,” he said.
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
