Copper Labs’ Playbook for Breaking into Regulated Markets: 5 Unconventional Strategies That Worked
Most startup advice becomes irrelevant the moment you enter a regulated market. In a recent episode of Category Visionaries, Copper Labs CEO Dan Forman revealed their unconventional playbook for breaking into the utility sector – an approach that turned traditional startup wisdom on its head.
- Make Regulatory Investment a Strategic Priority
While most startups view regulatory compliance as a necessary evil, Copper Labs made it a core strategic advantage. “For a startup of our size to have to invest so heavily in doing things like that is atypical. You wouldn’t do that in most markets, but in a regulated utility market, it’s table stakes,” Dan explained.
Their approach went beyond basic compliance. “By engaging directly with regulators, we’ve seen significant forward movement in reaching out, wanting to understand,” Dan noted. This direct engagement helped create demand pull-through, as regulators began mandating utilities to implement solutions that only Copper Labs could provide.
- Transform Risk Aversion into Competitive Advantage
Instead of fighting against the industry’s conservative nature, Copper Labs leveraged it. “A lot of what needs to take place in this market in particular is just staying around long enough because these utilities are risk averse. They don’t want to go and pick the flashy new startup that’s come around. They want to work with somebody that’s been around for a while,” Dan revealed.
Their solution? Becoming ubiquitous in the industry. This year alone, they’ve had a presence at 26 conferences. The result? “The anecdote coming back has been Copper’s everywhere. We’re seeing you everywhere,” Dan shared.
- Leverage Non-Competitive Industry Dynamics
Most B2B startups struggle to get customer references, but Copper Labs discovered a unique advantage in the utility sector’s non-competitive nature. “The interesting dynamic with utilities is they don’t compete with each other for the most part,” Dan explained. This insight transformed their approach to case studies and references.
“If Xcel Energy, or in our case National Grid, can deploy something that demonstrates them being innovative, solving some problem in a new or efficient way, they really like to raise their hand on that and share it with the market,” Dan noted. This dynamic helped turn successful deployments into powerful sales tools.
- Master the Art of “Respectful Provocation”
Breaking into regulated markets requires challenging established norms without alienating potential customers. Dan calls this being “respectfully provocative” – a delicate balance they’ve mastered through experience.
Their Valentine’s Day article “Falling Out of Love with AMI” became the highest-performing piece on a major industry site in two years, but it also taught them valuable lessons about balanced criticism. “How do you call BS on something that needs it without making the people that bought into their story seem like they’re part of the problem?” Dan reflected.
- Focus on Regulatory-Driven Demand
Rather than just selling features, Copper Labs aligned their solution with regulatory mandates. “When regulators are mandating that northeast utilities, for example, engage in behavioral gas demand management during winter peaks, we’re really one of the only people that can help them to do that,” Dan explained.
This alignment created natural demand pull-through, as utilities sought solutions to meet regulatory requirements. It’s a strategy that turned regulatory constraints into sales opportunities.
The Broader Implications
For founders targeting regulated markets, Copper Labs’ experience reveals several key principles:
- Invest in regulatory engagement earlier than seems reasonable
- Turn industry conservatism into a competitive moat
- Understand and leverage industry-specific dynamics
- Challenge norms while maintaining credibility
- Align with regulatory tailwinds
As Dan summarized their approach: “We need to shift the narrative in the market… We’ve all been marching in the same direction for a long time. It hasn’t worked. We’ve got new problems to solve.”
For founders taking on regulated industries, the key insight is that success often comes not from fighting the system’s constraints, but from finding clever ways to turn them into advantages. Sometimes the best way to disrupt a regulated market is to become its most credible insider.