Entrepreneur and former presidential candidate Andrew Yang has a theory about where the next wave of startup opportunity lies, and it starts with a question most founders aren’t asking: what if the business model was giving money back instead of extracting it?

Yang was inspired by Mark Cuban. Not by his wealth, or his celebrity, but by Cost Plus Drugs — Cuban’s 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.”

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

As AI threatens to compress wages and displace workers, Yang sees a business opportunity in bringing down the cost of living. Cost Plus Drugs, Noble Mobile, dumb phone makers like Light Phone, and even online grocery store Misfits Markets are early examples of an emerging business category where the startup’s value proposition is the margin it gives back to the customer.

“AI is going to suck up a lot of the value and the jobs, and then Americans are going to look up and say, ‘How do I meet basic needs?’” Yang said. He believes meeting people’s needs “less expensively” is “a very rich vein of opportunity.” 

That instinct didn’t emerge from nowhere. Yang first launched himself into the public eye during his 2020 presidential campaign, during which he advocated for Universal Basic Income as a means of combating AI-related workforce displacement and wealth concentration. The campaign didn’t succeed but the thesis has only grown more relevant.

Yang is still an advocate for 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 just use any collected wealth to “plug a hole and do something not terribly productive,” Yang is less certain. 

“There is room for a direct connection between the money and the 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 its launch last September, the company has grown to “thousands and thousands” of customers and is bringing in “millions in revenue.”

“We’re unit profitable per customer, but we just share the profits with our subscribers with the idea that it’ll make you happy, you’ll stay around, and maybe you’ll 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 amount to $24,000 — enough for a retirement down payment. And in this economy, who isn’t thinking about little ways they can upgrade their personal finance?

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

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

The tide might be changing, though, simply because even the most wealthy, extractive companies need an economy in which consumers have enough buying power to purchase their products. 

“The value being concentrated in the hands of a handful of folks and firms is just bad for everybody,” he said. “There are some folks I know in Silicon Valley who are open to that for a variety of reasons…[like] they just don’t want to have to hire private security.”

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

“Think bigger and more broadly about trying to tackle problems and don’t subscribe so much to groupthink, because there are some valuable opportunities out there,” he said.

Andrew Yang thinks the biggest startup opportunity of the next decade is not building AI. It is lowering the cost of living for the people AI is about to displace. In a TechCrunch interview, the former presidential candidate and UBI advocate laid out a thesis: as AI compresses wages and eliminates entry-level jobs, the market opportunity shifts to companies that make basic needs cheaper.

“AI is going to suck up a lot of the value and the jobs, and then Americans are going to look up and say, ‘How do I meet basic needs?‘” Yang said. He sees “a very rich vein of opportunity” in startups that bring down costs in housing, education, food, fuel, transportation, media, and wireless.

Yang’s proof of concept is Noble Mobile, a mobile virtual network operator he launched last September. It sells cell service at a fraction of traditional carrier prices and gives customers money back if they use less data. The company has grown to “thousands and thousands” of customers and is generating “millions in revenue.” It is unit profitable per customer.

The model was inspired by Mark Cuban’s Cost Plus Drugs, which sells pharmaceuticals at cost plus a flat markup. Yang sees both companies as early examples of an emerging category where the value proposition is the margin the startup gives back, not the margin it extracts. Misfits Market (discounted groceries) and Light Phone (minimalist hardware) fit the same pattern.

“We’re unit profitable per customer, but we just share the profits with our subscribers with the idea that it’ll make you happy, you’ll stay around, and maybe you’ll tell your friends and family,” Yang said.

The challenge is capital. Investors want AI companies, not consumer-facing businesses with thin margins and social missions. “I had at least one investor say to me around Noble Mobile, ‘Love you, Andrew, want to work with you if you could just make this an AI company, we’ll invest,’” Yang said. The workforce displacement Yang warned about in 2020 is now showing up in data: Goldman Sachs estimated 16,000 US jobs lost to AI per month, and entry-level workers are absorbing the most damage.

Yang is still an advocate for universal basic income but is less confident the government will deliver it. “There is room for a direct connection between the money and the people,” he said. Where policy fails, market incentives can step in. A $50 monthly saving, invested and compounded over 40 years, amounts to $24,000, enough for a retirement down payment.

The thesis is contrarian in a venture market that has poured $700 billion into AI infrastructure this year alone. But Yang’s argument has an uncomfortable logic to it: even the most extractive companies need consumers with enough buying power to buy their products. “The value being concentrated in the hands of a handful of folks and firms is just bad for everybody,” he said. “There are some folks I know in Silicon Valley who are open to that for a variety of reasons, like they just don’t want to have to hire private security.“