Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How a Founder Turned 300 Rejection Letters Into a 40M Business
Transcript
- Lucas: So today I want to talk about a founder who turned three hundred rejection letters into a forty-million-dollar business. And I don't mean that as a metaphor — she literally kept every single letter. Luna: Wait, she kept them? Like filed away in a drawer? Lucas: In a shoebox. She started counting after the first fifty, and by the time she hit three hundred, she said it became almost like a collection. Each one taught her something about how not to pitch. Luna: Okay, I need the full story. Who is she and what was she pitching? Lucas: Her name is Amy — I'm not using her last name because she's still operating under the radar — and she had written a children's book about a young fox who learns to build a treehouse. Standard kids' fare, but with some clever STEM themes woven in. She thought it was a slam dunk. So she sent query letters to every major children's publisher in the US. Luna: And they all said no. Lucas: Every single one. But here's the thing — she didn't just send the same letter over and over. After each rejection, she'd tweak one thing: the subject line, the first paragraph, the summary of the book. She A/B tested her pitch letter like she was running a marketing campaign. And she tracked which versions got a personal note versus a form letter. Luna: So she was using rejection as data. That's smart, but after three hundred, most people would give up. Lucas: Right, and she almost did. But around rejection two hundred and fifty, she noticed something: the personal notes were getting longer. One editor wrote, 'This isn't right for our list, but your writing is strong.' That tiny bit of encouragement was enough to keep her going. Luna: So what changed? Did someone finally say yes? Lucas: No. She realized the traditional publishing model was a dead end. The gatekeepers weren't going to open for her. So she decided to self-publish. This was around 2018, before self-publishing was as mainstream as it is now. She used Amazon's Kindle Direct Publishing and printed a small batch of paperbacks through a print-on-demand service. Luna: That's a big leap of faith. How many copies did she sell at first? Lucas: In the first month, she sold forty-two copies. Mostly to friends and family. But then she did something that changed everything: she started going to local bookstores and offering to do storytime events. She'd show up with her book, a plush fox toy, and a simple activity sheet. The first bookstore that said yes sold out of their initial order of twenty copies in one weekend. Luna: So the in-person connection worked where the query letters failed. Lucas: Exactly. She realized that the book itself wasn't the problem — it was the pitch. When parents saw kids engaged with the story, they bought it. So she doubled down on the direct to consumer model. She built a simple website, started doing school visits, and eventually created a subscription box with activity kits tied to the book's STEM themes. Luna: That's a total pivot from selling a book to selling an experience. Lucas: It is. And that subscription box became the engine. Within two years, she had ten thousand subscribers paying fifteen dollars a month. That's one point eight million dollars in annual recurring revenue from the boxes alone. Then she licensed the character to a toy company, and that deal alone was worth three million upfront. Luna: Wait, so the book itself wasn't the main business anymore? Lucas: No, the book became the loss leader. She priced it at ten dollars, barely breaking even on printing. But every book sold led to a subscription box sign-up or a licensing opportunity. The book was the marketing, not the product. By 2024, the entire franchise — books, boxes, toys, an animated web series — was doing over forty million in annual revenue. Luna: And it all started with those three hundred rejections. What did she say about that shoebox? Does she still have it? Lucas: She does. She told me she keeps it in her office as a reminder that 'no' is just a data point. And she still reads through them sometimes to see how much her pitching improved. She said the early ones were terrible — too long, too focused on herself, not enough on the reader. Luna: There's a lesson there for any founder: the pitch that works is the one that's been rejected a hundred times and refined each time. Lucas: Absolutely. And she's not the only one. I've seen this pattern in dozens of founders: the ones who succeed are the ones who treat rejection as a feedback loop, not a verdict. Luna: So if someone listening is in the middle of a rejection pile right now, what should they do differently tomorrow? Lucas: First, start tracking. Create a simple spreadsheet with the date, who you pitched, what version of the pitch you used, and what the response was. Second, after every rejection, change one variable — just one. And third, look for the pattern in the responses. If you're getting form letters, your pitch isn't breaking through. If you're getting personal notes, you're close. Amy's breakthrough came when she got a personal note that said 'strong writing, not for us.' That's a signal. Luna: And if you're not getting any responses at all? Lucas: Then you need to change the channel. Amy was stuck on query letters until she tried in-person storytime. Sometimes the medium is the barrier, not the message. Go where the gatekeepers aren't. Luna: That's really practical. I love that she used the rejections as fuel instead of letting them stop her. Lucas: If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. It's a small way to keep these stories coming without any sponsors. Luna: Yeah, it makes a real difference. Every contribution helps us keep the show independent and focused on the stuff that matters. Lucas: So back to Amy's story — one last detail I found striking. When she finally got that first licensing deal, she went back to the editor who had written that encouraging personal note and sent her a signed copy of the book with a thank-you note. That editor later told her it was one of the most memorable moments of her career. Luna: That's classy. And it shows that even the rejections are relationships. You never know when a 'no' today might become a 'yes' tomorrow — or at least a good reference. Lucas: Exactly. So the takeaway for me is this: your job as a founder isn't to avoid rejection. It's to make sure every rejection teaches you something. Three hundred 'no's can be the best business education you never paid for. Luna: Well said. And maybe next time you get a rejection, put it in a shoebox instead of the trash. Lucas: I might just start. That's it for today. See you next time.