We’re entering what many call the “golden age of AI agents” — a pivotal moment in tech evolution where domain-specific digital coworkers reshape how businesses operate, create value, and engage the world. These AI agents don’t just automate tasks; they reason, act, and collaborate alongside humans to enhance decision-making and accelerate outcomes.
As a result, a massive new market category is forming — agentic AI businesses — projected to grow at a staggering 45% compound annual rate and reach $47 billion by 2030. This has also sparked the creation of tens of thousands of new startups looking to tap into the next transformative wave in AI for business.
In this article, we break down the blueprint for building and scaling a successful agentic AI business with the help of Haoyu Zha, a Y-Combinator alumnus and founder of HOAi, a fast-growing startup transforming how homeowner associations (HOAs) operate with the help of digital workers
We’ll also explore why now is a great time to launch a startup in this space. Unlike the SaaS era, startups can now go from idea to market leadership with fewer resources and greater speed than ever before, targeting the most significant portion of business spend — labor.
Whether you’re a founder, an investor, or a technologist, this article will outline the five foundational keys to thriving in the new area of agentic AI.
Watch the Podcast
What does it take to build — and rapidly scale — a successful company in the era of Agentic AI? Watch this podcast where we explore that question with Haoyu Zha, the Y-Combinator founder of HOAi, a fast-growing startup harnessing AI agents as digital workers to transform how homeowner associations (HOAs) operate, create value, and engage their communities. Founded just a few years ago, they have scaled to manage over 1 million homes. Learn the five keys to success!
The Startup Boom in the Age of AI
The rapid maturing of AI has sparked a surge of new startup ventures, but amid the hype, most will not survive. According to PitchBook, Startup Genome, and CB Insights, more than 17,000 AI startups have launched in the U.S. over the last decade. Globally, the number approaches 70,000. It is projected to accelerate from here as Agentic AI comes onto the scene.
- 58% of global VC investment in Q1 2025 was in AI startups
- 28% growth in new startups in Q1 2025 compared to the previous year
- 80% increase in AI startup venture capital funding in 2024
These numbers reflect a changing tide in innovation priorities. Investors are doubling down. Enterprises are no longer just experimenting — they’re deploying real AI into their operations and planning to evolve to agentic AI rapidly. The movement isn’t just about chasing hype; it’s about strategic opportunity. Investors view AI not as a niche but as the next foundational platform — and even more significant than the cloud and mobile revolutions of the last decade — capable of fundamentally reshaping every industry. With AI-native infrastructure maturing and time-to-deployment shrinking, the path to revenue and scale has become faster and more capital-friendly.
The allure is equally compelling for top talent. They are departing from large incumbents in search of greater autonomy, enhanced creative control, and the opportunity to influence products from the ground up. AI startups present qualities that appeal to mission-driven builders eager to move quickly and address real-world challenges, with enormous rewards potential on the horizon.
Yet, despite the explosive growth and investor enthusiasm surrounding artificial intelligence, the stark reality is that up to 90% of AI startups are projected to fail. While AI holds immense transformative promise, the journey from prototype to profitable product remains steep and unforgiving. Many startups will launch with excitement and initial funding, only to plateau when their technology fails to deliver meaningful business value or differentiate itself in an increasingly saturated market. Most startups will struggle to move beyond hype, provide sustainable value, and emerge from a crowded marketplace by not recognizing that the game has changed from the previous era of SaaS businesses.
In the coming months and years, we’ll likely see a surge in early-stage experimentation followed by a wave of quiet shutdowns or strategic pivots. Some will be absorbed by more prominent players seeking talent or intellectual property, while others will run out of capital before reaching product-market fit. As generative AI becomes commoditized, startups that merely wrap existing foundation models in AI agents will find it difficult to survive. The winners will be those who combine speed with substance, building real solutions to real problems in highly domain-specific sectors where digital labor can deliver new, measurable impact.
The Blueprint for Success
A new class of AI-native startups is emerging that takes a fundamentally different approach: they build agentic AI systems that do real work, augment human decision-making, and tackle function-level processes with domain-specific intelligence. They are moving beyond novelty — chasing headlines with flashy generative AI demos — and are now focusing on solving significant, enduring business problems that generative AI and LLMs alone cannot address.
One standout in this new wave is HOAi, which has scaled from zero to over 1 million homes under digital management in just two years. This brief explores how HOAi achieved hypergrowth, what its customer success reveals about agentic AI’s potential, and what the blueprint for startup success looks like in this new era.
We’ll explore the five keys to success, as brought to life by HOAi:
- Go vertical in nuanced markets: The opportunity is domain-specific AI agents that big LLM providers can’t or won’t reach.
- Follow the labor spend, not the IT: Traditional software tapped into IT budgets; target labor spend, which is a 10–20x bigger opportunity.
- Empower decisions over tasks: Enhancing human judgment, not merely automating tasks, creates strategic impact
- Rethink software, go agentic: Don’t retrofit yesterday’s blueprint. Build value that SaaS never addressed. Agent productivity is your savior.
- Visibility fuels viability: Even the most innovative AI agents risk being overlooked in a crowded market. Credibility starts with visibility.
HOAi – A Real-world Success Story
HOAi represents a powerful success story in the emerging era of agentic AI, and its journey holds essential lessons for conceiving, building, and scaling an AI business. When launched in late 2022, it entered a market with 457 active software competitors.
Born out of firsthand frustration with the inefficiencies of managing a homeowner association (HOA), founder Haoyu Zhatransformed a personal pain point into a groundbreaking business opportunity. After serving on his own HOA board and recognizing the operational burdens faced by both board members and property managers, Haoyu started developing an agentic AI solution tailored to the needs of this vastly underserved market. His experience on the HOA board revealed a system riddled with inefficiency, paperwork, and friction. Despite the market encompassing 40 million homes and more than 400,000 HOAs in the U.S., software adoption in the space was minimal, and experiences were poor across the board.
Accepted into Y Combinator and supported by seed-stage investment, HOAi quickly tapped into the HOA property management industry’s labor-intensive, judgment-based back-office workflows. The company achieved product-market fit in 2024 by focusing on building AI agents — digital coworkers — that go beyond answering questions to actually getting work done. As Haoyu explained,
“Agentic AI is meant to get the work done end-to-end, not just simply automating repetitive tasks. We didn’t just build tools. We built digital coworkers that bring superpowers to teams managing HOAs. The opportunity was not in replacing existing software but in creating new value that traditional systems couldn’t deliver.”
Most of the work in HOA management — like accounts payable, budgeting, and homeowner requests — is performed in the back office by humans staring at screens, interpreting unstructured data, and making small but frequent judgment calls. This creates a perfect use case for agentic AI: digital work, but too nuanced for deterministic software. Zha’s insight suggested that AI, combined with tools, decision-intelligence, context, and workflow systems, could emulate the judgment of a human clerk.
HOAi’s success is grounded in its approach of rethinking what software needs to become, not what it has traditionally been. They built an agentic architecture, from the bottom up, that included three key components that work together to enable HOA digital coworkers:
- A Cognitive Core: At its foundation, HOAi augmented GenAI and LLMs to better reason across unstructured communication, documents, and internal policies
- Dynamic application Integration: Agents seamlessly interact with payment systems, ledgers, invoice platforms, and customer service workflows.
- Agentic Workflow Framework: Going beyond AI chats, it builds complete workflows with autonomous agents that perform tasks end-to-end — from processing invoices to managing budget drafts.
By embedding predictive and generative AI into domain-specific workflows, HOAi exemplifies how startups can rapidly grow by leveraging SaaS infrastructure and focusing on judgment-heavy industries ripe for transformation.
With this approach, HOAi was able to help property managers “employ” digital coworkers to scale and enhance back-office operations and homeowner services, while augmenting rather than replacing existing SaaS tools.
The Impact of Digital Labor
HOAi’s digital coworkers can now efficiently handle everything from accounts payable processing to budget generation, vendor coordination, and self-serve homeowner inquiries. By augmenting HOA workforces, they’ve created a tangible impact on HOAs by freeing up human labor for higher-value roles, accelerating homeowner services, enabling preventive maintenance, and reducing costs.
Beyond efficiency, the customer experience has improved. Homeowners receive faster, clearer responses. Support requests are routed more accurately. Property managers are now better equipped to serve their communities and build relationships rather than chase paperwork. The impact can be summarized in four dimensions:
- Efficiency: Automating routine tasks allows HOA boards to focus on strategic decision-making.
- Cost Savings: Predictive maintenance and streamlined operations can lead to significant cost reductions.
- Enhanced Communication: Transparent and timely communication fosters trust between residents and HOA boards.
- Data-Driven Decisions: Access to analytics enables informed decision-making, improving community management.
As Peter Grimes, CEO and founder of EJF Real Estate Services, Inc., stated, the impact of the HOAi agents on their business were significant:
- A/P reduced from 750 hours a month to 3 minutes
- 2,000 hours of budgeting time were eliminated
- $10,000 per month in labor savings
- 5-star homeowner rating soared
These outcomes were all accomplished by AI agents with human supervision. The human supervisors simply needed to approve the work the AI would do after evaluating and optionally tweaking the AI agent’s proposed plan of action. After hitting “OK,” the agent autonomously completes the work, providing status updates as appropriate. This is very different from what traditional software packages could do.
Building on this momentum, in just the first four months of 2025, HOAi has scaled its customer base 6x and now supports more than 1 million homeowners, just a fraction of the total market of some 40 million households.
Watch the EJF Real Estate Services explain the value of AI Agents.
The Five Keys to Success
As we enter what many call the “golden age of AI agents,” a powerful new market category is taking shape — one centered around intelligent digital coworkers who can reason, act, and collaborate with humans to enhance decision-making, streamline workflows, and even operate autonomously. These AI-powered agents go beyond the GenAI-powered AI assistants we are accustomed to, actively participating in driving outcomes across specialized domains.
With the market for agentic AI workflows projected to grow 45% annually through 2030 — reaching $47 billion — this is more than a trend; it’s a transformational shift in enterprise automation. The demand is real and is being driven by users wanting more value from AI, not just vendors looking to create a new market.
As highlighted during the recent AI Agent Builder Summit hosted by theCUBE, startups can now build and scale faster than ever, achieving product-market fit sooner with significantly fewer resources than the SaaS era required. The game has completely changed at its core.
This moment also marks the beginning of a new “super cycle” in business innovation. Unlike the cloud and SaaS era, where startups required heavy engineering investments and long ramp times, today’s AI-native landscape favors lean, fast-moving teams that can deploy solutions quickly by building on top of existing SaaS platforms and generative AI infrastructures, which represent a new “gateway” into the world of AI, just as the browsers represented a new “gateway” into the online world more than 25 years ago.
Vertical specificity, fast iteration, and the ability to deliver AI agents that work within real-world workflows are becoming the new engines of growth. Entirely new billion-dollar categories are being created — not by broad horizontal platforms, but by focused players solving hard, judgment-based problems in overlooked industries.
The convergence of AI-native infrastructure, agentic design patterns, and domain-driven use cases enables startups to bypass old barriers and unlock exponential value. Now is the time to build — and those who understand how to operate in this new cycle will lead the next wave of innovation.
From numerous interviews and engagements with Agentic AI startups conducted by theCUBE Research, including HOAi, a clear set of five core success imperatives is forming.
- Go Vertical, Not Horizontal: Generic agents face two threats: commoditization by foundation model providers and irrelevance to domain-specific workflows that are labor-intensive — where domain knowledge and micro-decisions matter. Venturing vertically into nuanced, underserved markets is quickly becoming the blueprint for startup success. “The world is full of long-tail problems,” Zha noted, “and no foundation model can address all the unique demands across every industry.” Zha emphasized that these “small” markets are often deceptively large and ready for disruption. “These verticals have very niche, nuanced requirements that big players can’t or won’t prioritize,” he said. As Zha put it, “We’re not replacing existing software — we’re creating value that wasn’t possible before.”
- Target Labor Spend, Not IT: One of the most critical strategic shifts is moving beyond the narrow confines of IT budgets and high incumbency rates, and instead, targeting labor spend — the largest and most untapped expense line in many industries. Studies show that traditional software (SaaS) typically captures only 2–3% of business spending, primarily within IT, while labor represents over 50% of operating costs. The opportunity is 10 to 20 times larger and ripe for transformation. Agentic AI changes the game by allowing startups to target this vastly larger market opportunity, offering digital coworkers that perform judgment-heavy, knowledge-dependent work traditionally handled by human staff. As Zha put it, “We’re not just building software — we’re delivering a new workforce.”
- Empower Decisions Over Tasks: To build enduring, differentiated value, the opportunity lies in enabling better decision-making. Traditional software has long focused on rule-based automation but struggles to interpret context, weigh trade-offs, and apply judgment. In contrast, AI agents grounded in AI decision intelligence (semantic and causal reasoning) will become more skilled at reasoning, planning, and problem-solving — core competencies that define meaningful coworker collaboration with human workers. The future of agentic AI will depend on a shift from predictions and generation to making judgments, often in ambiguous situations. As Zha explained, many vertical domains of work rely on applying knowledge and insights through micro-decisions throughout the day. Startups that position AI agents as decision-support and decision-execution systems will access higher-value workflows and cultivate greater trust and loyalty from users.
- Rethink Software, Go Agentic: The traditional software model — built on deterministic code, static rules, and siloed apps — faces diminishing returns. Its value was in automating repeatable processes, but that era has plateaued. Startups entering the agentic AI era must not simply add AI to the old SaaS playbook — they must fundamentally rethink the software stack and bypass the heavy lifting that defined the last wave of SaaS growth. Thanks to robust generative AI and Cloud platforms, founders can now build domain-specific agentic software 10x faster and with far fewer resources. As Marc Benioff, the CEO of Salesforce, recently explained, Salesforce is achieving 50% productivity gains by embedding agentic layers into its stack. In this new model, the path to scale increasingly lies in building complementary agentic layers on top of the SaaS stack — delivering new value without requiring disruptive rip-and-replace efforts. This creates a new “middleware” opportunity layer, which is exploding with innovation. As Zha put it, “We’re not replacing existing software — we’re creating value that wasn’t possible before.”
- Visibility Fuels Viability: In today’s exploding AI landscape, building a better AI agent simply isn’t enough. With over 70,000 AI startups and growing, the competition is fierce. In this environment, brand visibility becomes a critical first step to viability. Without a recognizable presence, startups risk being overlooked altogether — no matter how powerful their technology may be. Simply put, you can’t scale what no one knows exists. In a saturated marketplace, buyers prioritize vendors they’ve heard of, can easily find, or who show up in research. The era of “build it and they will come” is over; the new playbook starts with building brand equity — establishing credibility, differentiation, relevance, and trust. Studies show that 90% of B2B buyers will engage with known brands, associated with credible thought leaders, customers, or media exposure. Make sure your startup show up!
Startups like HOAi, which have learned these keys to success, are poised to lead. With fast time to market, scalable economics, and growing marketplaces for agents, the era of agentic AI offers one of the best startup environments in decades. This was also the consensus view from over 20 industry pioneers at the recent AI Agent Builder Summit: the age of agentic AI represents the most fertile moment in decades for launching a new software business.
What to Do and When
The agentic AI era is not just a wave — it’s a “Supercycle” that will rewire how software is built, bought, and valued. The timing is rare. The infrastructure is ready. The barriers are down. The playbook is evolving. We are witnessing the formation of an entirely new middleware layer that connects data with intelligent actions.
To learn more about building an Agentic AI business, we’d recommend checking out the following:
Most importantly, tune into the AI Agent Builder Summit to hear from industry pioneers from the companies listed below.
Finally, as always, contact us if we can help you on this journey by booking a briefing here or messaging me on LinkedIn.
Thanks for reading. Feedback is always appreciated.
