Andrew Yang believes the next big startup opportunity is to lower the cost of living

Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunities lies, and it starts with a question most founders don’t ask: What if the business model was to return money rather than extract it?

Yang was inspired by Mark Cuban. Not through his wealth or fame, but through Cost Plus Drugs – the Cuban startup that sells drugs at cost. Yang made a list.

Yang told TechCrunch on a recent episode of Housing, Education, Food, Fuel, Transportation, Media and Wireless. justice. “Things we all spend money on.”

He chose wireless last September Nobile Mobile launcheda new mobile virtual network operator that provides cellular service for a fraction of what traditional carriers charge and gives customers money back if they use less data.

While artificial intelligence threatens to squeeze wages and displace workers, Yang sees a business opportunity in lowering the cost of living. Cost Plus Drugs, Noble Mobile, and stupid phone makers like Light phoneand even online grocery store Misfits Markets are early examples of a startup business category where the startup’s value proposition is the margin it returns to the customer.

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

This instinct did not arise out of nowhere. Yang first launched himself publicly during his 2020 presidential campaign, during which he called for universal basic income as a way to combat AI-related workforce displacement and wealth concentration. The campaign was not successful, but the thesis became more important.

Yang remains an advocate for universal basic income, 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 necessary vehicle for this redistribution, or whether it will just use any wealth amassed to “plug a gap and do something largely unproductive,” Yang is less certain.

“There is room for direct communication between money and people,” he said.

Here comes the role of the market. When policy fails, market incentives can kick in, Yang says. Noble Mobile is his attempt to prove this point. Since launching last September, the company has grown to “thousands and thousands” of customers and generates “millions in revenue.”

“We make revenue per customer, but we share the revenue with our subscribers with the idea that it will make you happy, you’ll stick around, and maybe you’ll tell your friends and family,” Yang said.

The pitch is simple. Yang noted that an average monthly savings of $50, invested and accumulated over 40 years, could amount to $24,000 — enough for a down payment. And in this Economy, who doesn’t think of simple ways they can upgrade their personal finance?

Whether investors will share this enthusiasm is another question entirely. Even if the opportunity is real, capital is heavily concentrated in AI right now, while consumer-facing companies with thin margins and a social mission are hard to sell.

“At least one investor in Noble Mobile said to me: ‘I love you, Andrew, I want to work with you — if you can turn this company into an AI company, we will invest in it,’” Yang said.

However, this tide may be turning, simply because even the wealthiest extractive companies need an economy in which consumers have sufficient purchasing power to purchase their products.

“Concentration of value in the hands of a handful of people and companies is bad for everyone,” he said. “There are some people I know in Silicon Valley who are open to it for a variety of reasons… (such as) they don’t want to hire private security services.”

Yang encouraged founders and investors to take problems they’re passionate about and find a way to build a valuable organization on top of them.

“Think big and broadly in trying to address problems, and don’t engage too much in groupthink, because there are some valuable opportunities out there,” he said.