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Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunity lies, and it starts with a question most founders aren\u2019t asking: what if the business model was giving money back instead of extracting it?<\/p>\n
Yang was inspired by Mark Cuban. Not by his wealth, or his celebrity, but by Cost Plus Drugs \u2014 Cuban\u2019s startup that sells pharmaceuticals at cost. Yang made a list.<\/p>\n
\u201cHousing, education, food, fuel, transportation, media, and wireless,\u201d Yang told TechCrunch on a recent episode of Equity<\/a>. \u201cThe things we all spend money on.\u201d<\/p>\n He picked wireless and last September launched Nobile Mobile<\/a>, a new mobile virtual network operator that provides cell service for a fraction of what traditional carriers charge and gives customers money back if they use less data.\u00a0<\/p>\n As AI threatens to compress wages and displace workers, Yang sees a business opportunity in bringing down the cost of living. Cost Plus Drugs, Noble Mobile, dumb phone makers like Light Phone<\/a>, and even online grocery store Misfits Markets are early examples of an emerging business category where the startup\u2019s value proposition is the margin it gives back to the customer.<\/p>\n \u201cAI is going to suck up a lot of the value and the jobs, and then Americans are going to look up and say, \u2018How do I meet basic needs?\u2019\u201d Yang said. He believes meeting people\u2019s needs \u201cless expensively\u201d is \u201ca very rich vein of opportunity.\u201d\u00a0<\/p>\n That instinct didn\u2019t emerge 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 of combating AI-related workforce displacement and wealth concentration. The campaign didn\u2019t succeed but the thesis has only grown more relevant.<\/p>\n Yang is still an advocate for UBI, arguing that the value generated by AI companies needs to be redistributed into the hands of the average American. But whether the government will be the vehicle for that redistribution, or whether it will just use any collected wealth to \u201cplug a hole and do something not terribly productive,\u201d Yang is less certain.\u00a0<\/p>\n \u201cThere is room for a direct connection between the money and the people,\u201d he said.\u00a0<\/p>\n That\u2019s where the market comes in. Where policy fails, Yang argues, market incentives can step in. Noble Mobile is his attempt to prove the point. Since its launch last September, the company has grown to \u201cthousands and thousands\u201d of customers and is bringing in \u201cmillions in revenue.\u201d<\/p>\n \u201cWe\u2019re unit profitable per customer, but we just share the profits with our subscribers with the idea that it\u2019ll make you happy, you\u2019ll stay around, and maybe you\u2019ll tell your friends and family,\u201d Yang said.\u00a0<\/p>\n The pitch is simple. Yang noted that the average monthly savings of $50, invested and compounded over 40 years, could amount to $24,000 \u2014 enough for a retirement down payment. And in this <\/em>economy, who isn\u2019t thinking about little ways they can upgrade their personal finance?<\/p>\n Whether investors will share that enthusiasm is another question entirely. Even if the opportunity is real, capital is concentrated heavily in AI right now, while consumer-facing businesses with thin margins and a social mission are a hard sell.<\/p>\n \u201cI had at least one investor say to me around Noble Mobile, \u2018Love you, Andrew, want to work with you \u2014 if you could just make this an AI company, we\u2019ll invest,\u2019\u201d Yang said.\u00a0<\/p>\n The tide might be changing, though, simply because even the most wealthy, extractive companies need an economy in which consumers have enough buying power to purchase their products.\u00a0<\/p>\n \u201cThe value being concentrated in the hands of a handful of folks and firms is just bad for everybody,\u201d he said. \u201cThere are some folks I know in Silicon Valley who are open to that for a variety of reasons\u2026[like] they just don\u2019t want to have to hire private security.\u201d<\/p>\n Yang encouraged founders and investors to take on problems they\u2019re passionate about and find a way to build a valuable enterprise on top of it.<\/p>\n \u201cThink bigger and more broadly about trying to tackle problems and don\u2019t subscribe so much to groupthink, because there are some valuable opportunities out there,\u201d he said.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n