Forethought AI’s Early Build Mode Approach to Achieving Product-Market Fit

Forethought AI co-founder Deon Nicholas and his team focused on solving real problems rather than chasing hype or inflated valuations from the start, with Nicholas believing firmly that conviction should come from customers, not VCs. This approach paid off significantly when Forethought won TechCrunch’s Startup Battlefield competition in 2018 after Nicholas described the preparation as a “friendly pressure cooker,” sprinting to secure as many paying customer logos as possible before hitting the stage. The company’s focus on tangible customer value fueled investor interest and led to a $9 million Series A, helping define the early wave of the AI boom with a foundation built on genuine traction rather than flashy demonstrations.

The Seven-Failure Rule and Customer Detective Work

At the heart of Nicholas’s strategy lies his “7-Failure Rule”—founders should embrace iteration over perfection and expect several misses before finding product-market fit. The Forethought team maintained a strict list of their ideal customer profile and refused deals with bespoke feature detours unless they clarified the core product for multiple customers, not just one. Nicholas emphasizes that early users aren’t always direct about what isn’t working, so founders have to learn to look between the lines. The company measured behavioral signals like daily active users per seat, percentage of tickets routed by AI, and median time-to-first-value rather than relying solely on sentiment-based metrics like Net Promoter Score, allowing them to identify problems like “silent churn” before they became critical.

Building Sustainable Growth Through Focus, Not Frenzy

While investor momentum built quickly for Forethought, Nicholas maintains the company’s longevity stemmed from focus, not frenzy, stating that startup success isn’t about hype or rock-star energy but about building something customers love enough to stick around for. The company initially concentrated on teams with significant inbound volume, robust knowledge bases, and operational maturity to measure impact—typically mid-market to enterprise organizations with 50+ agents and compliance requirements like SOC 2. Nicholas’s advice for founders is straightforward: build from day one with customers, validate every step with feedback, and don’t get distracted by valuations or buzz. Product-market fit isn’t about achieving perfection—it’s about proving consistent value to the people who matter most, with customer retention serving as the ultimate validation of sustainable business building.