Entrepreneur and former presidential candidate Andrew Yang believes the next wave of startup opportunity lies not in extracting value but in giving money back to customers, according to a recent interview with TechCrunch's Equity podcast. Inspired by Mark Cuban's Cost Plus Drugs — which sells pharmaceuticals at cost — Yang identified a list of everyday essentials: housing, education, food, fuel, transportation, media, and wireless. "The things we all spend money on," Yang told TechCrunch.
The Problem: Rising Costs and AI Displacement
Yang's thesis is rooted in the accelerating impact of AI on the economy. As AI threatens to compress wages and displace workers, Yang sees a business opportunity in bringing down the cost of living. "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."
This idea builds on Yang's 2020 presidential campaign, where he advocated for Universal Basic Income (UBI) to combat AI-related wealth concentration. The campaign didn't succeed, but TechCrunch reports that the thesis has grown more relevant. Yang still supports UBI, arguing that the value generated by AI companies needs to be redistributed. "There is room for a direct connection between the money and the people," he said.
Yang's Proposition: Giving Money Back
Yang's approach flips the traditional business model. Instead of extracting maximum value, startups in this category — like Cost Plus Drugs, Noble Mobile, dumb phone makers Light Phone, and online grocery Misfits Markets — compete by returning margin to customers. As TechCrunch reports, these are early examples of an emerging business category where the startup's value proposition is the margin it gives back to the customer.
"Where policy fails, market incentives can step in." — Andrew Yang
Case Study: Noble Mobile
Yang launched Noble Mobile last September as a mobile virtual network operator that provides cell service for a fraction of traditional carriers and gives customers money back if they use less data. Since launch, the company has grown to "thousands and thousands" of customers and is bringing in "millions in revenue," according to TechCrunch.
Yang said, "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."
The potential savings are significant. TechCrunch notes that the average monthly savings of $50 from such a service, invested and compounded over 40 years, could amount to $24,000 — enough for a retirement down payment. Here's a breakdown:
| Monthly Savings |
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