Entrepreneur and former presidential candidate Andrew Yang has a theory about the next wave of startup opportunities, and it starts with a question most founders don’t ask: What if the business model was about giving money back instead of extracting it?
Yang was inspired by Mark Cuban. Not through wealth or fame, but through Cost Plus Drugs, the Cuban startup that sells pharmaceuticals at cost. Yang made a list.
“Housing, education, food, fuel, transportation, media and wireless,” Yang told TechCrunch on 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 carriers charge and reimburses customers if they use less data.
As AI threatens to compress wages and displace workers, Yang sees a business opportunity in reducing the cost of living. Cost Plus Drugs, Noble Mobile, stupid 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 is going to absorb a lot of the value and jobs, and then Americans are going to look up and say, ‘How can I meet basic needs?’ “, Yang said. He believes that meeting people’s needs “at low cost” constitutes “a very rich source of opportunities”.
This instinct didn’t come out of nowhere. Yang first rose to prominence during his 2020 presidential campaign, during which he advocated for universal basic income as a way to combat AI-related labor displacement and wealth concentration. The campaign was not successful, but the thesis only became more relevant.
Yang is still an advocate of UBI, arguing that the value generated by AI companies must be redistributed into the hands of the average American. But whether the government will be the vehicle for this redistribution, or whether it will simply use the collected wealth to “plug a hole and do something unproductive,” Yang is less sure.
“There is room for a direct connection between money and people,” he said.
That’s where the market comes in. Where policy fails, Yang says, market incentives can intervene. Noble Mobile is his attempt to prove this point. Since its launch last September, the company now has “thousands and thousands” of customers and generates “millions in revenue”.
“We’re unit profitable per customer, but we just share the profits with our subscribers with the idea that it will make you happy and stick around and maybe tell your friends and family about it,” Yang said.
The pitch 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 the economy, who doesn’t think about small ways to improve their personal finances?
Whether investors will share this enthusiasm is another question entirely. While the opportunity is real, capital is currently heavily concentrated in AI, while consumer-facing companies with low margins and a social mission are a tough sell.
“At least one investor said to me around Noble Mobile, ‘I love you, Andrew, I want to work with you — if you could just make it an AI company, we’d invest,’” Yang said.
The trend could change, however, simply because even the richest extractive companies need an economy in which consumers have sufficient purchasing power to purchase their products.
“The concentration of value in the hands of a handful of people and companies is just bad for everyone,” he said. “There are people I know in Silicon Valley who are open to this for various reasons…[like] they simply don’t want to use private security services.
Yang encouraged founders and investors to tackle the problems they are passionate about and find a way to build a valuable business on top of them.
“Think bigger and broader to try to solve problems and don’t subscribe too much to groupthink, because there are valuable opportunities,” he said.
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Rebecca Bellan is a senior reporter at TechCrunch where she covers the business, policy and emerging trends shaping artificial intelligence. His work has also appeared in Forbes, Bloomberg, The Atlantic, The Daily Beast and other publications.
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