Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunity will lie, and it starts with a question most founders don’t ask. What if your business model was to give back money instead of extracting it?
Yang was inspired by Mark Cuban. It’s not his wealth or celebrity, it’s Cost Plus Drugs — a Cuban startup that sells medicines 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 Mobile, a new mobile virtual network operator that offers cell service for much less than what traditional carriers charge and gives customers money back if they use less data.
As AI threatens to squeeze wages and lay off workers, Yang sees a business opportunity in lowering the cost of living. Cost Plus Drugs, Noble Mobile, dumb phone makers like Light Phone, and online grocer Misfits Markets are early examples of emerging business categories where a startup’s value proposition is the margins it returns to customers.
“AI will suck up a lot of value and jobs, and then Americans will ask, ‘How can we meet our basic needs?’” Yang said. He believes meeting people’s needs “affordably” is a “very rich opportunity.”
That instinct didn’t come out of nowhere. Yang first came to public attention during the 2020 presidential campaign, during which he advocated for universal basic income as a means to combat AI-related workforce displacement and wealth concentration. The campaign was not a success, but it made the paper more relevant.
Yang still defends UBI and argues that the value created by AI companies should be redistributed into the hands of ordinary Americans. But it is unclear whether the government will be the vehicle for such redistribution, or whether it will simply use the collected wealth “to plug holes and do things that are not very productive.”
“There is room for a direct connection between money and the people,” he said.
This is where the market comes into play. Yang argues that when policies fail, market incentives can step in. Noble Mobile is his attempt to prove that point. Since launching last September, the company has grown to “thousands” of customers and is generating “millions of dollars” in revenue.
“We make unit revenue per customer, but we just share the profits with our subscribers with the idea that it will make you happy, keep you around, and tell your friends and family,” Yang said.
The pitch is simple. Yang points out that if you invest and compound interest over 40 years, an average of $50 a month in savings could amount to $24,000. This is enough for a retirement down payment. And to this Who doesn’t think about small ways to upgrade their economy and personal finances?
Whether investors will share that enthusiasm is another question entirely. Although the opportunity is real, capital is currently heavily focused on AI, while low-margin, consumer-facing businesses with a social mission are a hard sell.
“At least one investor around Noble Mobile said to me, ‘We love you, Andrew. We’d love to work with you. If you can make this an AI company, we’ll invest,’” Yang said.
But things may change. Because even the wealthiest extraction companies need an economy where consumers have enough purchasing power to purchase their products.
“Having value concentrated in the hands of a few people and companies is bad for everyone,” he said. “There are people I know in Silicon Valley who are open to this for a variety of reasons…(for example) they just want to avoid having to hire private security.”
Yang encouraged founders and investors to take on problems they are passionate about and find ways to build valuable companies on top of them.
“Think bigger and more broadly about your efforts to solve problems and don’t subscribe too much to groupthink, because there are some valuable opportunities there,” he said.
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