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

Overview

Entrepreneur and former presidential candidate Andrew Yang argues that the next major startup opportunity is lowering the cost of living for Americans. Inspired by Mark Cuban's Cost Plus Drugs, Yang launched Noble Mobile, a low-cost mobile carrier that returns money to customers who use less data. He frames this as a market-based response to AI compressing wages and displacing workers.

Key Takeaways

Yang believes startups that give customers their money back, rather than extracting value, represent a rich vein of opportunity.
He launched Noble Mobile last September as a mobile virtual network operator that charges a fraction of traditional carrier prices.
Noble Mobile refunds customers who use less data and shares profits with subscribers.
Yang sees this as a market substitute for Universal Basic Income, which he still supports but doubts the government will deliver effectively.
Investors remain heavily concentrated on AI, making consumer businesses with thin margins a hard sell.

Stats & Key Facts

#Noble Mobile launched last September and has grown to thousands of customers.
#The company is bringing in millions in revenue and is unit profitable per customer.
#Average monthly savings of $50, invested and compounded over 40 years, could amount to $24,000.

The Core Thesis: Giving Money Back

Yang reframes startup value creation around returning margin to customers.

›He asks what a business looks like if the model is giving money back instead of extracting it.
›Yang listed categories Americans overpay for: housing, education, food, fuel, transportation, media, and wireless.
›He picked wireless as his entry point into the category.

Yang has a theory about where the next wave of startup opportunity lies, and it starts with a question most founders are not asking: what if the business model was giving money back instead of extracting it?

Yang told TechCrunch on a recent episode of Equity that housing, education, food, fuel, transportation, media, and wireless are the things people all spend money on. He was inspired not by Mark Cuban's wealth or celebrity but by Cost Plus Drugs, Cuban's startup that sells pharmaceuticals at cost. Yang picked wireless and launched Noble Mobile last September.

Noble Mobile in Practice

Noble Mobile is Yang's attempt to prove the thesis works.

›It is a mobile virtual network operator providing cell service for a fraction of traditional carrier prices.
›Customers get money back if they use less data.
›The company shares profits with subscribers to encourage loyalty and word of mouth.

Yang said the company is unit profitable per customer but shares the profits with subscribers, with the idea that satisfied customers will stay and refer friends and family. He framed the pitch as simple: small monthly savings, invested over decades, add up to meaningful sums.

An Emerging Business Category

Yang places Noble Mobile among a broader group of startups.

›Cost Plus Drugs sells pharmaceuticals at cost.
›Dumb phone makers like Light Phone reduce cost and complexity.
›Online grocery store Misfits Markets is another cited example.

In each case, the startup's value proposition is the margin it gives back to the customer rather than the margin it captures.

The AI Connection

Yang ties the opportunity directly to artificial intelligence.

›He warns AI will suck up a lot of value and jobs.
›Americans will then ask how to meet basic needs.
›Meeting those needs less expensively is where Yang sees opportunity.

Yang first entered public life during his 2020 presidential campaign, when he advocated Universal Basic Income to combat AI-related workforce displacement and wealth concentration. The campaign did not succeed, but he argues the thesis has only grown more relevant.

UBI Versus the Market

Yang still backs UBI but questions the government as the delivery mechanism.

›He argues AI-generated value needs to be redistributed to average Americans.
›He is uncertain the government will redistribute it productively.
›He sees room for a direct connection between the money and the people through markets.

Where policy fails, Yang argues market incentives can step in. He worries the government might use collected wealth to plug a hole rather than do something productive.

The Investor Challenge

Capital allocation remains an obstacle for mission-driven consumer startups.

›Capital is concentrated heavily in AI right now.
›Consumer-facing businesses with thin margins and a social mission are a hard sell.
›One investor told Yang he would invest if Noble Mobile were reframed as an AI company.

Yang suggested the tide might change because even wealthy, extractive companies need consumers with enough buying power to buy their products. He argued that concentrating value in a few hands and firms is bad for everybody.

Frequently Asked Questions

What is Noble Mobile?

It is a mobile virtual network operator launched by Andrew Yang last September that provides cell service for a fraction of traditional carrier prices and gives customers money back if they use less data.

What inspired Yang's startup thesis?

He was inspired by Mark Cuban's Cost Plus Drugs, which sells pharmaceuticals at cost, prompting Yang to look for other categories where startups could give money back to customers.

How does the AI angle factor in?

Yang believes AI will absorb value and displace jobs, leaving Americans struggling to meet basic needs, so he sees opportunity in startups that lower the cost of living.

Does Yang still support Universal Basic Income?

Yes. He continues to advocate UBI but is uncertain the government will redistribute AI-generated wealth productively, so he sees markets as an alternative direct connection between money and people.

How is Noble Mobile performing?

Since its September launch, the company has grown to thousands of customers, brings in millions in revenue, and is unit profitable per customer while sharing profits with subscribers.

Yang is betting that lowering the cost of living, not extracting more from consumers, is the next startup frontier as AI reshapes the economy.