Andrew Yang thinks the next big startup opportunity is lowering the cost of living
"As AI displaces jobs, Yang sees opportunity in reducing living costs, but will investors buy in?"
Andrew Yang launched Noble Mobile in September. Yang, a former presidential candidate, aims to lower the cost of living by giving money back to customers. His startup provides cell service at a fraction of traditional carrier costs and offers refunds for unused data. This approach is part of a larger trend, where companies focus on reducing expenses for basic needs like housing, education, and food.
Yang's idea was inspired by Mark Cuban's Cost Plus Drugs, which sells pharmaceuticals at cost. He believes this model can be applied to various industries, creating a new wave of startup opportunities. By targeting essential expenses, entrepreneurs can build successful businesses while helping people meet their basic needs. As AI threatens to displace workers and compress wages, Yang sees a chance to make a positive impact.
The concept of giving money back to customers is not new, but it has gained momentum in recent years. Companies like Light Phone and Misfits Markets are already exploring this approach. Light Phone, a manufacturer of minimalist phones, aims to reduce distractions and promote a healthier relationship with technology. Misfits Markets, an online grocery store, offers affordable prices for imperfect produce, reducing food waste and supporting sustainable farming practices.
Yang's experience during his 2020 presidential campaign played a significant role in shaping his vision. He advocated for Universal Basic Income (UBI) as a means to combat AI-related workforce displacement and wealth concentration. Although his campaign was unsuccessful, the idea has become more relevant. Yang still supports UBI, arguing that the value generated by AI companies should be redistributed to the average American.
However, Yang is unsure if the government will be the primary vehicle for this redistribution. He believes that market incentives can step in where policy fails. Noble Mobile is his attempt to demonstrate this point. Since its launch, the company has grown to thousands of customers and is generating millions in revenue. Yang's approach is simple: offer customers a better deal, and they will stay loyal and recommend the service to others.
The potential for this model is substantial. Yang estimates that the average monthly savings of $50, invested and compounded over 40 years, could amount to $24,000 – enough for a retirement down payment. This is a compelling pitch, especially in today's economy, where people are looking for ways to upgrade their personal finance. The question is whether investors will share Yang's enthusiasm.
Currently, capital is heavily concentrated in AI, and consumer-facing businesses with thin margins and a social mission are a hard sell. Yang has already faced skepticism from investors, with one telling him that they would invest if he could turn Noble Mobile into an AI company. However, Yang believes that the tide is changing. Even the most wealthy and extractive companies need an economy where consumers have enough buying power to purchase their products.
The value being concentrated in the hands of a few individuals and firms is detrimental to everyone, according to Yang. He knows some people in Silicon Valley who are open to this idea, not just for altruistic reasons but also because they want to maintain a stable and functional society. Yang encourages founders and investors to take on problems they are passionate about and find a way to build a valuable enterprise on top of it.
As the economy continues to evolve, it is likely that more entrepreneurs will explore the concept of giving money back to customers. This approach has the potential to create a new wave of successful businesses while making a positive impact on people's lives. Yang's Noble Mobile is just the beginning, and it will be interesting to see how this trend develops in the coming years.
In conclusion, Andrew Yang's vision for reducing the cost of living is an intriguing one. By targeting essential expenses and giving money back to customers, entrepreneurs can build successful businesses while helping people meet their basic needs. As AI continues to displace workers and compress wages, this approach may become increasingly important. Whether investors will buy into this idea remains to be seen, but one thing is certain – the concept of giving money back to customers is here to stay.
