Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How Rejected Grant Applications Built a 45M Research Platform
Transcript
- Lucas: You get a rejection letter from a federal grant agency. The reviewers say your project is too ambitious, the scope is unrealistic, and the budget is unjustified. What do you do? Luna: If I'm most people, I set the letter aside, feel frustrated, maybe appeal it. But I'm guessing the founder we're talking about today did something different. Lucas: Very different. Dr. Elena Vasquez was a materials science researcher at a mid-tier university when she submitted a grant proposal to the National Science Foundation. She was studying novel alloys for high-temperature applications. The proposal was rejected, and the feedback was brutal — but also specific. Luna: So she didn't just get a 'not funded' stamp. She got a diagnosis. Lucas: Exactly. One reviewer wrote that the project required equipment no single lab possessed and that the timeline was unrealistic precisely because she'd have to wait months to access each piece of gear. Another reviewer pointed out that her budget didn't account for data-sharing costs. So instead of resubmitting the same proposal, Vasquez started thinking about the infrastructure itself. Luna: And that's how a research platform was born. But give us the numbers — how big did it get? Lucas: The company is called LabLink. It went live in 2020, and by the end of 2025 it had processed over 45 million dollars in transactions. It connects labs with spare equipment capacity to researchers who need it, and it includes a data-sharing layer that satisfies grant compliance requirements. Luna: Forty-five million in transactions — that's not revenue, right? That's the gross value of equipment bookings and data licenses? Lucas: Correct. LabLink takes a 12 percent commission, so their revenue is somewhere around 5 and a half million. But they've been profitable since 2023. The interesting part is how Vasquez got there. Luna: Let me guess — she used the rejection as a customer discovery document. Lucas: She literally did. She took the reviewer comments, printed them out, and highlighted every pain point. Then she interviewed 40 other materials science researchers in her network. Every single one said the same thing: equipment access is the bottleneck. One lab has a scanning electron microscope sitting idle for weeks while another lab across the country is on a six-month waitlist. Luna: So she built a marketplace. Like Airbnb for microscopes. Lucas: Exactly. But she also solved the data problem. Grant agencies now require data management plans. LabLink offers a standardized repository that researchers can point to in their applications, and it automatically tracks provenance. That feature alone convinced three major universities to onboard their entire materials science departments. Luna: And the name LabLink — did she come up with it after the rejection? Lucas: She actually chose it because it was the domain that was available. She spent 11 dollars and 99 cents on the domain. But the real branding came from the story. When she pitched to early adopters, she would literally say, 'I built this because the NSF told me my project was impossible without it.' Luna: That's a powerful pitch. It's honest, and it explains why the product exists. Lucas: It also made her memorable. One of her first big customers was a researcher at MIT who had read the same rejection letter — well, not literally the same letter, but he'd received similar feedback. He became a reference customer. Luna: So the rejection became her origin story. Lucas: And a competitive advantage. Because she had lived the problem, she knew the specific workflows. For example, she built in a feature that let users automatically generate the equipment usage logs that grant auditors require. That was a pain point she knew intimately. Luna: I love that. The rejection didn't just motivate her — it taught her exactly what to build. Lucas: And this is a pattern we've seen across many episodes. But there's a subtlety here that often gets missed. The rejection letter wasn't wrong. The reviewers were correct: the original project was too ambitious and the budget was unrealistic. Vasquez didn't ignore the feedback; she accepted its premise and then asked a different question. Luna: What was that question? Lucas: She asked: 'If this project is impossible because of the infrastructure, how do I build the infrastructure so projects like this become possible?' That reframing turned a failure into a market opportunity. Luna: It reminds me of something I read in a Harvard Business Review article about pivots. The most successful pivots don't abandon the original insight — they find a different way to monetize it. Lucas: Exactly. Vasquez's insight was that materials science research was being held back by coordination problems. The grant application was just one manifestation of that. Building LabLink addressed the root cause. Luna: And it's worth noting that LabLink is still a research platform. It's not a for-profit company that abandoned science. They're a public benefit corporation, and they have a nonprofit arm that subsidizes access for underfunded labs. Lucas: That's a critical point. Vasquez never wanted to leave research. She wanted to make research more efficient. In fact, she still publishes papers. Her lab at the university is a LabLink user. Luna: So she's living the product. Lucas: Literally. And that authenticity resonates with customers. LabLink's net promoter score is 72, which is extremely high for a B2B platform. Luna: Let's talk about the financials for a moment. How did she fund the initial build? Lucas: She bootstrapped the first version using 12,000 dollars from her personal savings and a small university innovation grant — about 25,000 dollars. She hired a freelance developer from Upwork for the MVP. The first version was ugly, but it worked. Two labs at her own university started using it within a month. Luna: And then? Lucas: She applied to the NSF again — not for a research grant this time, but for their Small Business Innovation Research program. She got the SBIR Phase I award, 225,000 dollars. That let her hire a second developer and build the data compliance module. Luna: So the same agency that rejected her research proposal funded her company. That's poetic. Lucas: And it's not uncommon. The SBIR program is specifically designed to commercialize research. Vasquez just needed to frame her idea as a business solution to a research problem, not as a research project itself. The reviewers saw the commercial potential. Luna: One thing I find inspiring about this story is how she used her academic network. She didn't need venture capital. She grew organically through word of mouth in a very specific community. Lucas: Yeah, LabLink didn't raise a traditional VC round until 2024, and by then they had 2 million in annual recurring revenue. They raised a 4 million Series A at a 40 million valuation. The lead investor told Vasquez that her rejection letter was the best pitch deck she could have shown them. Luna: She literally showed the rejection letter to investors? Lucas: She included it in the appendix. And the investor said it proved she understood the market better than any competitor. Because she had the receipts. She knew exactly why the old approach didn't work. Luna: That's a fantastic lesson for any founder. Save your rejection letters. They might be your best marketing material. Lucas: And if these conversations have moved your work forward in some small way, we want to keep them coming without interruption. We deliberately don't run ads on these shows. If you want to support that choice, the link is buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small gesture that makes a big difference for us. And it keeps the show completely independent. Lucas: So Vasquez's story is a master class in what to do with critical feedback. She didn't get defensive. She got curious. Luna: And that curiosity built a 45 million dollar platform. Lucas: It also built a community. LabLink now has over 1,200 labs registered across 30 countries. They're expanding into biology and chemistry this year. Luna: Are there any other examples of founders who turned rejection into something similar? Lucas: Sure. There's a company called Protocol that started as a rejected software tool for clinical trials. The founder was a medical researcher who couldn't get funding for his trial management system, so he built it as a SaaS product. It sold for 200 million last year. But the LabLink story is special because Vasquez stayed so close to her original mission. Luna: What's next for LabLink? Lucas: They're launching an ai powered matching engine that predicts which equipment a researcher will need based on their experimental design. It's effectively the opposite of the rejection problem: instead of being told what you can't do, the system tells you exactly how to do it. Luna: That's coming full circle. The rejection that said 'this is impossible' is now being used to make the impossible routine. Lucas: And that's the core lesson: the feedback you receive — even the negative feedback — contains the blueprint for your next move. You just have to be willing to read it honestly. Luna: I think that's a great note to end on. Thanks for listening to The Founder's Journey. Lucas: We'll be back with another story next week.