Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How a Founder Used Rejected Samples to Build a 10M Business
Transcript
- Lucas: So today I want to talk about something that sounds almost too simple to be a real strategy: rejected samples. Luna: Like, samples that manufacturers said no to? Lucas: Exactly. There's this founder — let's call him Mark — who was a mechanical engineer in his late twenties. He'd spent about eight months designing a custom ergonomic handle for power tools. You know, the kind of thing that reduces vibration fatigue. Luna: I've seen those — they look like a cross between a bicycle grip and a prosthetic. Lucas: That's exactly it. So Mark takes his design, gets a few prototypes 3D-printed, and starts cold-emailing every power-tool accessory distributor he can find. He sends out maybe fifty samples. Luna: And? Lucas: And he gets exactly zero orders. Not even a 'we'll think about it.' Just silence, or form rejections. One buyer actually wrote back saying, 'The sample looks well-made, but we don't have shelf space for another handle.' Luna: Ouch. That's brutal after eight months of work. Lucas: It is. But Mark did something interesting. He had about forty of these samples sitting in a box in his garage. Instead of throwing them out, he started thinking about who else might want a high-precision, injection-molded prototype. Luna: So he shifted from selling a finished product to selling a manufacturing capability? Lucas: Exactly. He realized the samples themselves were proof of his ability to design and produce complex plastic parts. So he put together a portfolio — photos, the actual samples, a spec sheet — and started pitching contract manufacturing services to small medical-device companies. Luna: That's a completely different customer. Lucas: Completely different. And within three months, he landed his first client: a startup making a handheld diagnostic tool that needed a custom enclosure. They paid him fifty thousand dollars for the mold design and the first production run. Luna: Wow. So the rejection was actually the signal that his original business model wasn't right. Lucas: Right. And that's the core of this episode: how a founder used rejected samples to build a ten million dollar business. By the end of year two, Mark had eight clients and was doing about two million in annual revenue. By year five, he was at ten million. Luna: I love that he didn't get attached to the original idea. So many founders would have just kept tweaking the handle. Lucas: That's the trap. The sunk cost of time and emotion. But Mark had a kind of detachment — he saw the samples as assets, not failures. And that's a mindset we can all learn from. Luna: Let me ask you this: do you think this only works in hardware? Could you apply the same logic to a software product? Lucas: I think you can. The principle is that a 'no' for one use case can be a 'yes' for another. In software, maybe it's a demo that didn't land with enterprise clients but works perfectly for SMBs. Or a feature that wasn't sticky enough for consumers but solves a real pain for a niche. Luna: So the sample — the prototype, the MVP — becomes a conversation starter, not a finished product. Lucas: Exactly. And Mark's story illustrates that clearly. He didn't have a marketing budget. He didn't run ads. He just sent out those samples to a new list of prospects with a simple note: 'Here's what I can build for you.' Luna: I'm curious about the numbers. Ten million in revenue — what was the margin profile? Lucas: He was running a lean shop — just him and two contract engineers for the first three years. Since he was selling manufacturing services, his gross margins were around forty percent, which is pretty standard for custom injection molding. But the real magic was that each new client required almost no customer acquisition cost — they came from referrals and that portfolio of samples. Luna: So the samples themselves became the best sales tool, even though they were originally 'rejected.' Lucas: Honestly, if this episode moved your work forward in some small way, that's the link — buy me a coffee dot com slash fexingo. It's just a way to keep the show ad-free and focused on stories like this. Luna: Yeah, we don't have sponsors, so listener support is what keeps us going. And we really appreciate it. Lucas: So back to Mark. One of the things that stands out to me is how he handled the first big rejection from that power-tool distributor. Luna: What did he do differently than most? Lucas: He called the buyer back. Not to argue, but to ask, 'Who else might need a sample like this?' The buyer mentioned a friend at a medical device company who was always complaining about the quality of prototype enclosures. Luna: So that single conversation gave him the new direction. Lucas: Exactly. He didn't just assume he knew the market. He treated the rejection as data and used it to uncover a hidden need. That's the kind of curiosity that separates successful pivots from desperate ones. Luna: It's also a reminder that your network — even the people who say no — can be a source of intelligence. Lucas: Absolutely. And Mark's story has a nice symmetry: he ended up selling the power-tool handle design to a different company three years later for a small licensing fee. It wasn't his main business, but it was a nice validation that the original idea wasn't bad — it was just wrong for the channel. Luna: I think a lot of founders get stuck because they interpret a 'no' as a judgment on them personally, rather than on the fit between product and market. Lucas: That's a huge insight. And it's why we tell stories like this: to give listeners a concrete example of that reframe. The rejected samples weren't garbage — they were assets in a different portfolio. Luna: So if you're sitting on a prototype or a pitch deck that hasn't landed, maybe it's time to ask: who else might need this? Lucas: Exactly. And that's the question we want you to walk away with. Luna: Thanks for listening to The Founder's Journey.