Andrew Yang thinks the next big opportunity for startups is lowering the cost of living

Entrepreneur and former presidential candidate Andrew Yang has a vision for where the next wave of startups lies, and it starts with a question most founders don’t ask: what if the business model was giving money back instead of giving it out?

Yang was inspired by Mark Cuban. Not for his wealth, or his celebrity, but for Cost Plus Drugs – a Cuban start-up that sells drugs at cost. Yang made a list.

“Housing, education, food, fuel, transportation, media, and telecommunications,” Yang told TechCrunch in a recent episode of Equity. “Things we all spend money on.”

He chose wireless and last September launched Nobile Mobile, a new mobile network operator that offers mobile service at a fraction of what traditional carriers charge and reimburses customers for using less data.

As AI threatens to depress wages and lay off workers, Yang sees a business opportunity in lowering the cost of living. Cost Plus Drugs, Noble Mobile, blind phone makers like Light Phone, and even the online grocery store Misfits Markets are early examples of a class of startups where the startup’s value proposition is the limit it returns to the customer.

“AI will eat up a lot of value and jobs, and then Americans will look up and say, ‘How do I meet basic needs?'” Yang said. He believes that meeting people’s needs “at low cost” is “a very rich opportunity.”

That thought didn’t come out of nowhere. Yang made a public appearance during his 2020 presidential campaign, where he advocated Universal Basic Income as a way to combat AI-related displacement and wealth concentration. The campaign was unsuccessful but the thesis grew more relevant.

Yang remains an advocate of 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 use any accumulated wealth to “close the hole and do something less productive,” Yang is less sure.

“There is a direct connection between money and people,” he said.

This is where the market comes in. Where policy fails, Yang says, market benefits can step in. Noble Mobile is his attempt to prove this point. Since launching last September, the company has grown to “thousands and thousands” of customers and brings in “millions in revenue.”

“We have one profit per customer, but we just share the profit with subscribers with the idea that it will make you happy, you will stay, and maybe you will tell your friends and family,” said Yang.

The tone is simple. Yang noted that an average monthly savings of $50, invested and compounded over 40 years, can add up to $24,000 — enough for a low retirement payout. And this time in economics, who doesn’t think of small ways they can improve their 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 businesses have narrow margins and social work is a tough sell.

“I had one investor say to me at Noble Mobile, ‘I love you, Andrew, I want to work with you — if you can just make this AI company, we’ll invest,'” Yang said.

The situation may be changing, however, because even the richest, most productive companies need an economy where consumers have enough purchasing power to buy their products.

“Value concentrated in the hands of a few people and firms is bad for everyone,” he said. “There are some people I know in Silicon Valley who are open to that for various reasons…[like] they just don’t want to hire private security.”

Yang encouraged founders and investors to tackle problems they are passionate about and find a way to build a valuable business on top of it.

“Think big and broad about trying to deal with problems and don’t subscribe too much to group thinking, because there are significant opportunities out there,” she said.