Three business alums who launched their digital textbook rental startup while students at Illinois State are taking a big next step next month—expanding to college campuses nationwide.
Their company, Packback, offers pay-per-use, 24-hour affordable digital rentals of textbooks that students could read and electronically highlight and bookmark on their tablet computers. It’s the creation of Nick Currier ’13, Kasey Gandham ’13, and Mike Shannon ’12, who met through the Alpha Kappa Psi fraternity and would later go on to win a College of Business entrepreneurship contest together.
Packback ran a successful beta launch on the Illinois State campus in the fall 2013 semester, offering rentals for $3-5 per day to 1,000 students in 21 courses. A major research firm gathered data throughout the launch, and the results were better than expected, said Gandham. One of the impressive stats: Packback scored a 41 percent adoption rate in its target market of would-be book buyers.
“This really is a product of ISU, which is pretty exciting,” Gandham told STATEside.
The beta launch’s success sets the stage for Packback’s extended rollout in the spring, with a roster of publishers still to be finalized. Packback hopes millions of students nationwide will soon have access to $5 digital rentals, Gandham said. Illinois State students beyond the initial 21 courses will also be able to rent, he said.
Anyone who’s been in college is familiar with the problem Packback aims to solve: New textbooks are expensive, so students buy used ones, which still aren’t cheap (and don’t make the publishers any money). In turn, publishers raise the price on new books to make up the difference, and it goes on and on. Nobody’s happy—and that’s where Packback comes in. STATEside first caught up with the Packback co-founders in February, prior to the beta launch.
Network of support
Packback is one of the first breakthrough tech startups to emerge from Illinois State, and the trio isn’t doing it alone. They’ve spent the last few years building a dynamic team of advisors and investors, often with connections made through College of Business faculty and other Illinois State alums.
One of them is Corey Ferengul ’93, a marketing grad who is now chief operating officer for Undertone, a digital advertising firm. Ferengul met the Packback trio through Doan Winkel, the associate director of programs at Illinois State’s George R. and Martha Means Center for Entrepreneurial Studies.
Ferengul was impressed by how much legwork the students had already done, including countless networking road trips to Chicago between classes. But Ferengul, whose brother runs a college bookstore, was also struck by their idea. They were aimed at the startup sweet spot—a market (textbooks) that is both going through a transition and is open to disruption by technology.
They wanted to work with—not directly against—publishers. That was a “really smart move,” Ferengul said.
“They understood that they can bring in the disruption, but if the existing players don’t have a role in that, they’d be fighting uphill for a long, long time. They were very practical,” said Ferengul.
Ferengul became one of Packback’s earliest advisors and investors, helping them navigate early fundraising and avoid the missteps that can sometimes stall startups. (The alum also returned to campus this year for a Means Center talk and as a guest judge for the center’s Startup Showcase competition.)
“Because we’ve had such great advisers like Corey, we haven’t made that big mistake,” Gandham said.
Outside of the beta launch, the Packback team has kept busy. They’ve raised at least $500,000 from some of Chicago’s top investors, brought on new chief technology officer Deepak Goel, and expanded the engineering team. And during a lull last spring as they waited for tech work to wrap up for the beta launch, Packback rolled out a second product. Called BookSwap, it’s a Facebook app where college students can buy or sell textbooks to each other—an attempt at a more efficient Craigslist.
“It feels like every time I talk to the guys they’ve taken a huge step forward,” Ferengul said.
Illinois State’s focus on undergraduate entrepreneurship is noteworthy, he said, and students have some unique opportunities thanks to faculty such as Means Center director Mark Hoelscher, plus Winkel and others.
“You’re gonna see more and more of these stories coming out of ISU,” Ferengul said.
Ryan Denham can be reached at rmdenha@IllinoisState.edu.