Business trio turns a corner with digital textbook startup
It doesn’t take a genius to see that the way college students buy and use textbooks stinks.
But it does take some pretty sharp minds to look at the problem from all sides – students, publishers, investors, professors, marketers – and come up with a solution that’s a solution for all. That’s exactly what College of Business students Nick Currier and Kasey Gandham and recent grad Mike Shannon ’12 are doing.
Their startup is called Packback, and it aims to offer pay-per-use, 24-hour affordable digital rentals of textbooks that students could read and electronically highlight and bookmark on their tablet computers. Students could also buy a digital copy of a textbook at a discount, based on how many times they’ve rented it.
The core problem, says Gandham, is that as textbooks get more and more expensive, students are finding new ways to buy used books to save money. That fragmented retail market fuels more price increases on new textbooks, and the vicious cycle goes on and on, Gandham says.
“It’s not too hard to preach the value of the pay-per-use rental,” said Gandham, a Packback co-founder who focuses on product development.
Like many students, Currier spent more than $1,000 a year on textbooks as a freshman and sophomore. So Currier looked at how much it would cost to buy e-textbooks and put them on a tablet, only to discover the purchase price for those e-textbooks was higher than the tablet itself.
“This immediately set off an alarm,” said Currier, a Packback co-founder focusing on accounting. “How are we supposed to advance our educational experience technologically when it requires a large financial burden to do so?”
Packback’s origins trace back to the business fraternity Alpha Kappa Psi, where founding members Gandham and Currier met Shannon. They were all “super-competitive,” as Shannon puts it, and they teamed up for the first time for a regional competition in Chicago requiring them to pretend they were Google executives negotiating with the Chinese government on censorship issues.
Fifty hours of research later, they came in second among 25 schools.
“It’s really the challenge that excites you, and all the different hats you wear starting your own company,” said Shannon, who graduated in May and is working on Packback business development full-time in Chicago.
Building the team
In 2011, the trio put some structure to their book-rental idea and won Illinois State’s Entrepreneurship Day business plan competition – and the $13,000 prize, which they dumped entirely into getting a patent. While waiting for patent approval, the Packback co-founders spent the past year developing an expert team of digital media and education technology experts.
They’ve also spent this semester stirring up interest about Packback and textbook affordability among Illinois State students through social media,
As a Packback adviser, Knierim says his primary contribution has been helping the trio think long-term. They’ve got a way to solve the textbook problem, he says, but what happens to Packback after they do that? What other opportunities are available to create a much more scalable business model?
Knierim took a meeting with Packback after being hounded by a persistent Shannon. Knierim was impressed after asking Gandham to build what are called functional spec charts – an important make-or-break step for startups where founders have to spell out how technology and their personnel will flow and interact.
Within a few days, Gandham sent over the charts, which were more detailed and professional prepared than what someone with years of experience would produce on his first try.
“I thought, ‘This kid is friggin’ sharp.’ He’s never done this in his life. He just gets it,” Knierim told STATEside. “I love investing time in smart people.”
Ryan Denham can be reached at email@example.com.