Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunities lies, and he starts with a question most founders don’t ask: what if the business model gave money instead of taking it away?
Yang was inspired by Mark Cuban. Not from his wealth or celebrity, but from 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.”
It chose wireless and last September launched Nobile Mobile, a new virtual mobile network that provides mobile service for a fraction of what traditional carriers charge and refunds customers if they use less data.
As artificial intelligence threatens to squeeze wages and displace workers, Yang sees a business opportunity to lower the cost of living. Cost Plus Drugs, Noble Mobile, dumb phone makers like the Light Phone, and even online grocer Misfits Markets are early examples of an emerging class of businesses where the startup’s value proposition is the margin it gives back to the customer.
“AI will absorb a lot of the value and the jobs, and then Americans will look up and say, ‘How do I meet basic needs?’ Yang said. He believes that meeting people’s needs “less expensively” is “a very rich vein of opportunity.”
This instinct did not come out of nowhere. Yang first came to the fore during his 2020 election campaign, in which he championed Universal Basic Income as a means of combating AI-related labor displacement and wealth concentration. The campaign did not succeed, but the thesis became more relevant.
Yang remains a supporter of UBI, arguing that the value created by AI companies should be redistributed into the hands of the average American. But whether the government will be the vehicle for that redistribution, or whether it will simply use the collected wealth to “dig a hole and do something that’s not terribly productive,” 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 argues, market incentives can step in. Noble Mobile is his attempt to prove the point. Since launching last September, the company has grown to “thousands and thousands” of customers and brings in “millions in revenue.”
“We’re profitable per customer, but we’re just sharing the profits with our subscribers with the idea that it will make you happy, stick around, and maybe tell your friends and family,” Yang said.
The pitch is simple. Yang noted that the average monthly savings of $50, invested and compounded over 40 years, could add up to $24,000 — enough for a retirement down payment. And in this economy, who doesn’t think of a few ways they can upgrade their personal finances?
Whether investors will share that enthusiasm is another question. Even if the opportunity is real, capital is heavily focused on AI right now, while consumer-facing businesses with thin margins and a social mission are hard sells.
“I had at least one investor say to me at Noble Mobile, ‘I love you, Andrew, I want to work with you — if you could make it an AI company, we’ll invest,'” Yang said.
The tide may be turning, however, simply because even the richest, mining companies need an economy in which consumers have enough purchasing power to buy their products.
“Value concentrated in the hands of a handful of people and businesses is just bad for everyone,” he said. “There are some people I know in Silicon Valley who are open to it for various reasons…[like] they just don’t want to have to hire private security.”
Yang encouraged founders and investors to take problems they are passionate about and find a way to build a valuable business on top of it.
“Think bigger and bigger about trying to solve problems and don’t subscribe so much to groupthink, because there are some valuable opportunities out there,” he said.
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