From Rejection to Revolution: How Crowdbotics Found Product-Market Fit in Regulated Industries

Most startup founders chase the obvious markets. But in a recent episode of Category Visionaries, Anand from Crowdbotics revealed how some of their biggest wins came from an unexpected direction - highly regulated industries that most startups actively avoid.

The journey wasn't planned. "Gosh, that's a great question. I had no idea. I would never have predicted that," Anand admits when asked if targeting regulated industries was always the strategy. "Let me tell you why we ended up going into regulated spaces. It was really because customers pulled us in."

This pull came from a unique advantage in Crowdbotics' approach to software development. While many competitors focused on drag-and-drop tools that hide code complexity, Crowdbotics took a different path. "We are snapping together, recommending, selecting big building blocks of code into functional software," Anand explains. "Each of those modules has been verified whitelisted by somebody inside your organization."

This emphasis on verification and visibility resonated particularly well with regulated industries, where security and control are paramount. As Anand notes, "If you're a CIO or a security officer, matters quite a bit in terms of understanding what your software is actually doing and if it is actually going to be secure or insecure."

The turning point came from an initially disappointing venture into government contracts. "Our first efforts to get anywhere through the US government's procurement process proved to be extraordinarily difficult," Anand recalls. "We just got rejected over paperwork issues, over not knowing how to sell or engage with buyers inside the US government. It was extraordinarily demoralizing."

Rather than retreat, Crowdbotics persevered. This persistence proved crucial as the government landscape began to shift. "I think there's been a number of changemakers who have shown up inside positions in the federal government that say, we really need to adopt us grown technology and US grow innovation fast to stay competitive and efficient," Anand explains.

The success with government contracts created a powerful ripple effect. "The US government is one, of course, that meeting their security standards means that we can work in a wide variety of contexts that are a little bit less meticulous," says Anand. This credibility helped Crowdbotics expand into other regulated sectors like healthcare and finance.

For founders eyeing similar paths, Anand emphasizes the importance of systematic approaches to market entry. "Early founders who I advise sometimes underestimate exactly how much work is required to run a systematic fundraising process," he notes. This same principle applies to market expansion - success requires methodical execution rather than opportunistic plays.

The company's growth trajectory validates this approach. "For the last three years, we have doubled or tripled top line revenue every year. So 200% to 300% growth," Anand shares. Much of this growth has come from large customers building mission-critical software systems.

Looking ahead, Crowdbotics is positioning itself as more than just another AI-powered development platform. "Solutions that are in the market today, or that have jumped into the market lately, often think about a very narrow approach to software creation using artificial intelligence," Anand observes. Instead of following trends, they're focused on creating systemic value through their modular approach to software development.

This focus on fundamentals over hype extends to their entire business philosophy. As Anand advises, "You got to build a company that's going to be relevant over ten years, not over the six months or twelve months that there is a dynamic hype cycle around language models."

For founders, the key takeaway isn't just about targeting regulated industries - it's about recognizing that sometimes the best opportunities lie in the markets others avoid. Success comes not from chasing trends, but from building something of lasting value, even if that means taking the harder path.