You don't need to be a math major to know that spending $5 for a college textbook is less than spending $45 and way less than spending $187. In this story problem, the prices are real. A new edition of “Professional Feature Writing” by Bruce Garrison goes for $187 on Amazon.com, while the cheapest used copy is listed at $45. That bargain-basement $5 version? It's a 24-hour e-book rental from Chicago startup Packback Inc.
A limited-time-only e-book isn't the same, of course, as an old-fashioned textbook. But for students who don't crack open their books until just before an exam, it's all they probably need. A growing number of investors and publishers seem to agree.
Packback, conceived when its founders still were undergraduates at Illinois State University and launched in spring 2013, has attracted 80,000 users and $1 million in venture capital from, among others, celebrity entrepreneur Mark Cuban. The site lists 3,200 textbooks from big-name publishers such as McGraw-Hill Education, up from just 21 titles at the beginning of the 2013-14 school year.
Co-founder and CEO Mike Shannon hopes that within 18 months Packback will build “full catalogs” of digital textbooks — which means many students would be able to rent most of their assigned readings via its site.
Textbooks these days “are often more of a reference point,” says Mr. Shannon, 24, a rapper and 2012 finance and economics grad whose previous job was ball boy for the Chicago Bulls. Yet “prices are continuing to rise, so students are looking for alternatives.”
LEARNING FROM THE PROS
That argument won over Mr. Cuban, who invested $250,000 after Mr. Shannon and co-founder and Chief Operating Officer Kasey Gandham pitched him on ABC reality show “Shark Tank” last spring. Since then, locals including 1871 CEO Howard Tullman and ContextMedia Inc. co-founder Shradha Agarwal also have invested in Packback.
Mr. Shannon still checks in weekly with Mr. Cuban. He might see Ms. Agarwal daily. That's because Packback's eight employees work in a corner of ContextMedia's River North headquarters that is devoted to startups.
Ms. Agarwal says she appreciates the team's practicality. Instead of focusing on technology and ignoring the challenges that face even e-book publishers, she says, Mr. Shannon “is very aware of the reality on the ground and working on what Packback needs to do to get students onto their platform and get publishers on board.”
To that end, Messrs. Shannon and Gandham (a 2013 marketing grad) and co-founder and design chief Jessica Tenuta (a 2013 graphic design grad) have signed up 200 student ambassadors on 80 campuses; they're paid commissions on sales.
They'll need a bigger army to beat rivals CourseSmart from Vital Source Technologies Inc. of Raleigh, North Carolina; Chegg Inc. of Santa Clara, California; and Seattle-based Amazon.com Inc. Also, the startup, which won't disclose revenue, is not profitable.
Packback has a something the others don't, however: Mr. Cuban's endorsement. Since he backed Packback, the company has received 1,800 applications from students looking to represent the company on campus.