My name is Kasey Gandham. I'm a 23 year old entrepreneur and cofounder of Packback (www.packbackbooks.com), which I cofounded my junior year in college where we're launching pay per use digital textbook rentals for $3 to $5 a day in a rent-to-own model to fix/disrupt a broken textbook industry.

Along with my cofounder Mike, I went on the ABC TV show Shark Tank and accepted a deal with Mark Cuban for $250,000 for 20% of our company...even after accidentally counter-offering him $50,000 less than he offered in front of 8M+ viewers, the most watched episode in Shark Tank history!

Proof:

https://www.facebook.com/packbackbooks/posts/798140276882554?stream_ref=10 http://tinypic.com/r/ehnixh/8

EDIT: A quick video on our model/the value prop to students and publishers here: https://vimeo.com/89746909. Take a look at our site to fully understand all our services www.packbackbooks.com

The textbook industry, startups, Shark Tank, working with Mark Cuban...AMA!

EDIT: Hi guys, thank you so much for the amazing AMA, really has been a memorable moment for me as an entrepreneur. I got some great product feedback/suggestions from a lot of you and glad we had some thoughtful dialog on the industry.

Going at 8 hours straight now so I've gotta get some sleep. I'll answer a few more in the morning. If any of you at all want to email me, feel free to send me a note at kasey at packback dot co (not .com). Thanks guys.

EDIT: I'm just about done guys, thanks again. In case you're not interested in digging through the website, since most of the questions are regarding our products/models here's what we do:

1) $3 to $5 pay per use digital textbook rentals - students save on underutilized used books, publishers reclaim lost revenue due to the used book market, and we effectively put an end to rising textbook prices.

Our library spans around 2500+ books, is about to double to 5,000, and is growing every week as we sign on more publishers.

www.packbackbooks.com

If you realize you need your book more often, we'll let you rent it for the semester and will refund you any money spent on daily rentals (hence the "rent to own"). Students typically rush into a semester making an uninformed purchase. Whether you use your book regularly or not, we hope this stops that. This is our vision for the immediate future of the industry.

2) Price Comparison (for buying physical books) - in the meantime while we are building our digital inventory, we also allow students to compare prices across major online retailers to find the guaranteed lowest price across the web for that specific book. This is a free service, and is not something unique or original by us. Several sites like Slugbooks, Bigwords, Texts, etc, have been around that all do the same thing.

www.packbackbooks.com/buy

3) Sell Tool/price comparison (when selling back books) - We'll compare buyback offers for you from major online retailers and will find you the best cash-back offers for each of your books. This lets you maximize your cash back on old books instead of selling to the bookstore. We've developed a pretty awesome user experience around this that I believe is pretty unique in the industry. One account on Packback will let you sell to multiple buyers in one session.

www.packbackbooks.com/sell

Due to the supply/demand of physical textbooks as a commodity, it is impossible for one online retailer to ever have the consistently lowest prices or best buy-back offers. The bottom line is it pays to compare prices when buying physical books. Ultimately, our vision is to fix the industry for all stakeholders with our digital rental models.

Thanks again to all of you!! Please do keep in touch over email, linkedin, twitter, etc.

Comments: 1540 • Responses: 110  • Date: 

10Miles692 karma

DUDE! That must have been so embarrassing. Congrats on your deal with Cuban! I wish you guys had been around when I first started and subsequently dropped out of college.

Other than Shark Tank, what is your marketing strategy going to be from here on out? OTher companies in the market, like Chegg, seem to have a good grip on students, how do you plan to inform them that they might benefit from your product over renting a book for a whole semster? Seems like a lot of education of the demographic that might have to go on here.

chipperowens293 karma

Thanks! We are extremely active on the marketing front across all of your traditional channels (email, SEO/SEM, facebook, twitter, etc). The biggest piece is our brand ambassador program which has been exploding with applicants as of late...we train student entrepreneurs what it takes to run a successful startup in a structured program. They execute a lot of our offline marketing programs for us. The product speaks for itself - it's such a big pain point today's college students can relate to that they all gravitate to it pretty quickly once they even hear about it, so there's not so much a change of behavior we need to initiate as much as there is getting the word out.

SMSdealer177 karma

lol so many marketing buzzwords in this post, keep up the good work just try not to be so jargony to a public audience.

Edit: Looks like lots of people think I'm an asshole for posting this. Does this read like a normal conversation to you? I'm giving him this advice because I'M FUCKING GUILTY OF IT too, and i've been lucky enough to have someone point it out to me.

chipperowens68 karma

yeah, sorry good call

10Miles35 karma

Good point! I like that you're utilizing students as a marketing team of sorts, that's an excellent idea and definitely shows that you're committed to the students! Record companies are keen on that brand ambassador program as well (I was a music major for a while, so in my internship I saw a lot of college kids working for labels as brand ambassadors) and it seems to work really well! Word of mouth works really well in this market, college students are all over Facebook and Twitter with EVERY aspect of their lives, so I feel you're on the right track. Good luck! Have fun! MAKE MONEY!!

chipperowens22 karma

thanks friend! totally spot on and great example with record companies

fufusus422 karma

How much help is Mark Cuban really giving you?

chipperowens1187 karma

Mark is absolutely a machine. He gets back to any of our emails typically within 15 minutes...sometimes an hour or two. We have 24 investors behind Packback. I've never interacted with an investor that provides as much operational support in such an efficient way as he does. He's been already supporting us in some of our publisher deals, and is pretty involved through all aspects of the business.

***EDIT: just sent him this and he got back within 3 minutes: http://imgur.com/bAuPVRQ

Motha_Effin_Kitty_Yo636 karma

15 minutes is amazing turnaround for such a busy guy

moar_throat_yogurt110 karma

No lie. I emailed him once just casually asking for business advice and I received a response no more than 20 minutes later. I was surprised that he even responded at all, provided I'm sure he gets tons of emails from people all the time.

Thinc_Ng_Kap78 karma

Do you think it's possible that email was written by one of his staff members or just a generic copy paste email, considering the email address is that widely available?

chipperowens60 karma

No, his staff doesn't check his email. could have been a copy paste, but who knows, this is pretty much the norm on a response. I'm not really sure how he does it either.

tinynurse2306 karma

What happened immediately after you accepted the shark's offer? Did you sit down with Mark to discuss further, or was it in and out?

Also, is Damien as short as he looks on tv and is his Windsor knot as big?

chipperowens497 karma

producers did an exit interview with us, we were taken back to our trailer and then they fed us the most AMAZING bbq meal we have ever had. such a victory meal and was a great feeling i'll never forget. a psychologist came to visit us after making sure everything was ok too which is standard procedure. one of cuban's deal guys sent us an email later on to start the due diligence process

and yea haha

Bmmaximus183 karma

a psychologist? how come?

LordMcMutton273 karma

I've never seen the show, but I'd imagine the Shark guys are pretty damn hard on people that come on the show, so it's probably to ease their shattered egos, if necessary.

BenSteinsMoney379 karma

Some people go deep into debt to make their thing happen and the Sharks tell them it's worthless. That's a tough thing to handle.

Monco123173 karma

exactly. honestly its more of the show covering their asses. someone killing themselves after getting crushed on the show isn't going to be good for PR.

Advocates-Devil105 karma

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de_rats176 karma

He would, but there's nothing proprietary there.

Copperhe4d160 karma

$1 on every suicide in perpetuity

chipperowens26 karma

haha

chipperowens188 karma

ABC doesn't want blood on their hands

mozartkart265 karma

Thanks for making a difference. The text book industry is one of the worst things about university. As someone unaware of your company, how does your system work exactly and what are the major benefits for students.

chipperowens302 karma

Students spend anywhere from $500 - $1K a year on used textbooks that are rarely ever used in the classroom as professors have been empowered by a wealth of online information they incorporate into their classrooms. Students can pay per use and rent a digital book for $3 to $5 a day and rent as needed, before exams/homework/quizzes. Books are equipped with highlighting and note taking capabilities.

If a student realizes they have a greater need for the book, they can rent it for the entire semester at a discount -- any money they spent on daily rentals is credited towards the extended rental.

So a student always realizes full value out of their expenditures. In the meantime while we build out our digital inventory from publishers, we also aggregate prices from various online retailers to help students make better decisions when buying/selling books. We've got an informative video at www.packbackbooks.com too which you can check out.

ApocalypseTroop162 karma

[deleted]

chipperowens97 karma

Yup, device agnostic and accessible on any mobile/tablet/desktop/browser

GammaWorld48 karma

[deleted]

chipperowens103 karma

Publishers try and do this. But the reality of it is they are selling to conservative old professors that have been teaching the same way for years and are not about to pick up a digital platform and change their entire way of teaching a class. So this process will take a long time, but it will get there. We tell our publishers that we're expediting the digital adoption rate quickly. That's the problem with this industry...there are radical solutions to these major issues that crowd out one stake holder. MOOC's will kill all traditional universities...textbooks won't exist due to new digital platforms...textbooks will be free...etc. It all sounds great and we support many of these causes, but they will take YEARS to take off. We believe there needs to be a student-focused solution that works for both publishers and professors so we can make real traction and headway in this industry.

And this used to happen a lot years ago but there is now gov legislation that profs can't assign the books they have written.

dominion477 karma

[deleted]

chipperowens17 karma

Because 75%+ of the market is attributed to used/used-rental books, publishers and authors aren't getting compensated at all. We're reclaiming a lot of lost revenue from this segment for them, while providing students a more affordable option to a used book they rarely ever use.

Dallas_sallaD251 karma

What immediately went through your head after you realized you had counter-offered Cuban $50k less?

chipperowens377 karma

I just kind of stopped and smiled after Mark said "Deal!" knowing right away what happened. They actually made it seem much less dramatic on air than it actually was. Robert and Barbara jumped out of their chairs and said "DO YOU HAVE ANY IDEA WHAT YOU JUST DID?!". Mike's reaction was probably the best of all. I just let him do the rest of the talking.

asking_amas155 karma

Is it true that all contestants are required to give Finnmax, Shark Tank's production company, either 2 percent of their profits or 5 percent equity in their company?

chipperowens278 karma

It was, this season is the first that they eliminated that, per Cuban's demand. I think they even went back and gave back all the equity they took from earlier companies? Not sure on that

shifty1032231162 karma

Glad that Mark did this. I heard about it and its basically a swindle.

nickmoeck19 karma

The downside is that now you get people coming on the show that don't care at all about getting a deal - they just want the exposure.

EconomistMagazine53 karma

Everyone wants exposure, now the shows producer actually has to do their job (find interesting promising companies to interview) instead of just swindling everyone under the sun for 2%

chipperowens14 karma

I think they are more conscientious about who airs if they just blatantly turn down all deals. The reason why its great TV is because its "instilling confidence to the American people about the American dream of entrepreneurship". I dont think it would be that easy to just go on and turn down every deal -- or even do it after the fact that they accept a deal on TV and turn it down later. Just my theory though.

ChiTownCRAZY03120 karma

You're somehow part of the Mavericks now.

chipperowens92 karma

totally bulls. jimmer fredette's a fan too https://twitter.com/jimmerfredette/status/448078661497810944

krixo111 karma

What's to stop me from renting it for one day and screenshotting every page?

chipperowens37 karma

We do some things that make it pretty difficult to make that useful or a viable option.

SalvatoreLeone102 karma

Is it true that before you start your pitch, there is a 30 second stare down between the sharks and entrepreneurs? What interesting things happen behind the scenes that viewers wouldn't necessarily see?

chipperowens155 karma

Yes, it's one of the coolest parts ever about pitching - being able to size up the Sharks. We stood there smiling at them for 30 seconds and dove right into it.

There's a psychologist that visits you in your trailer immediately after the pitch making sure you're OK.

You get assigned a team of producers that help you refine your pitch, your image, etc. They were really helpful for us and were great folks to get to know. The casting crew is hilarious. A lot of odd characters...

Coolest part of the experience was being surrounded by all the entrepreneurs and startups. We're embedded in the Chicago tech startup community and don't get to interact with physical product startups much. It was great getting to hear their stories and some wild concepts.

We saw some WILD concepts that probably will never make it to air.

FKTrey81 karma

How is the Cubes 1 on 1?

chipperowens140 karma

in regular meetings? My cofounder Mike and I met with him a few weeks ago with the rest of our board in a group meeting which was great from a strategy perspective. We email him regularly and he gets back right away...his business instincts are sharp. He respects our opinions and is totally collaborative with new ideas, which is always probably the first thing you question when signing on an outspoken investor to be highly involved in the company. He's been awesome.

NorbitGorbit37 karma

what does he give you in logistical support? mostly his contacts in the industry?

chipperowens69 karma

We're pretty well connected so it hasn't even gone that far to ask him for contacts. Lots of advice in helping us navigate licensing agreements with publishers and business development. Strategic partnerships we should have our eye on. Support on user acquisition and marketing strategies. Team structure and our hires we anticipate. We're growing pretty quickly and there's always a new challenge every week.

okokimback80 karma

Hi Kasey. You said on your Shark Tank pitch your data showed the average college student only used their book "x" number of days or hours per semester. Can you remind me what that number was and get a little more specific on how you got that data? I just remember thinking to myself that it seemed very low and I know some of the other Sharks felt the same way.

chipperowens114 karma

Sure. We found that in a given semester at your average state school, about one in every two students will buy a textbook that they open zero to four times per semester. It varies greatly per student, per semester, and per book. One of our earliest investors was a top-tier research firm that houses us and incubated our company...validating our concept/model and tying an extensive research project around our pilot program. The research-based approach to launching a startup has been huge for us since our business relies on licensing content from textbook publishers, who place a lot of value in research from an established firm. Their name is Shapiro: http://ljs.com/insights/28-white-papers-a-articles/58-packbackselected

It's 100% due to a trend of professors introducing more online content/resources into their classroom. The amount of info out there for profs is incredible. Our research also found there is no significant correlation between GPA and textbook usage -- it's all driven by the professor and structure of the class, so these students aren't procrastinators

monkeyman8013 karma

[deleted]

chipperowens10 karma

yes, the books are used as the skeleton and basis for the course, but other materials are primarily being used on a day to day basis. it's still at the center of the course though and is very much so a requirement.

chipperowens61 karma

just got up out of my chair for the first time in 6 hours to pee...

ilovebukkake55 karma

I've read a lot of AMAs. (and i mean a lot of them) and I've never seen anyone who answers as many with as much detail and optimism as you. Props to you sir.

PS: I watch that shark tank and had to walk out of the room it was so cringe worthy.

PPS: How has your business expanded since the show aired and as a college student who uses his books regularly (depending on the class) will you offer packages that allow for non-daily usage (like a semester basis) because on the show you guys were pretty intent on that day by day idea.

chipperowens40 karma

Thank you! My first time really being on reddit so I appreciate it. This has been a super fun experience and I hope we can do another one if we ever become a household name around college campuses : )

You cringed?? Check out this reaction from our viewing party of our team as well as 250+ people from the chicago tech community http://bluesky.chicagotribune.com/originals/chi-shark-tank-chicago-packback-bsi,0,0.story

Yes, we do offer semester long rentals in addition to daily rentals. It's just what differentiates us as a company. We also allow you to compare prices when buying or selling books if you prefer physical books (we don't actually buy/sell, we just allow you to compare prices to find the best deals from popular retailers), so we have the entire experience covered. If you have old books lying around, try out our new free sell tool we just launched if you want to cash them out. www.packbackbooks.com/sell

Would love to hear your feedback if you use any of the features!!

Rerichael47 karma

Shout out from Normal, IL! I'm really excited to try your service out, especially knowing you guys went here!

2 different questions:

  1. I saw that you guys are looking for campus reps, but I was hesitant to apply, since I assume you have many from this area. Is that true, or should I try anyway?

  2. What was your favorite part about ISU, and how vital do you think it was to your success? Meaning, if you had gone to a different college, or forgone college period, do you think you would have had the same idea, and eventual success?

Thanks again!

chipperowens57 karma

yes!! definitely apply. you can find info on our homepage. we have a great amazing team at ISU that you would learn a lot from if interested in the vision/cause, entrepreneurship, or marketing.

I tell this story a lot, but I wouldn't be where I am today if I didn't go to ISU. I had an opportunity to go to an ivy and actually picked ISU to go to school with my girlfriend (and now wife). I went to private prep schools my entire life...kids were totally spoiled and entitled. I never worked a day in my life before I went to college. When I came to ISU I found a great crowd in my business fraternity AKPsi of students not only super sharp but that were working/paying for their own school...all my friends definitely taught me a lot about hard work.

College is all about surrounding yourself with the right people. The school was super supportive of Packback and what we were doing. I graduated with a 3.95 and never went to class my senior year...my teachers understood as long as I got my work done and took tests, and my business fraternity totally covered for me in helping me get through my last year.

will be forever grateful to ISU. enjoy every minute of it, and hope to see you around if you apply!!

ChiTownCRAZY0342 karma

How were you feeling when everyone backed out, before Mark Cuban made a deal?

chipperowens89 karma

mark was our only one we were interested in and we knew would be the only one that would 'get it' so we weren't too concerned. but it was totally go-time at that point, so adrenaline was higher than ever

CFOPhilPostYourBook31 karma

Hey kasey!

Greetings from the team at PostYourBook.com

We're a social networking platform for college students to buy and sell textbooks directly to one another. (Around 250,000 registered students.)

We love the idea of introducing one day ebook rentals. Really helps students save money on books if they don't need it for the whole year. If you guys ever want to work together give us a shoutout.

No questions just good luck on the success.

chipperowens38 karma

Thanks, been following you guys for a while. Would love to chat, do me a favor send me a note at kasey at packback dot co (not .com)

Classy_seal23 karma

Did you already know the outcome (is the show rigged)

chipperowens82 karma

nope, all real. but they can make you look as dumb as they want to by editing that random segment with your mouth open and putting it in random places with crappy music -- our segment turned out pretty good, but this is the norm in reality TV.

advalor21 karma

Many school libraries have whats known as a "course reserve". Basically the course textbook available for short-term loan. Doesn't this make your business model unfeasible?

chipperowens27 karma

Most typically only have one copy of the book available on reserve, at least from what I've seen. There will always be a minority of students that will go out of their way to camp out in the library for it, photocopy the book, or pirate the book, but I don't see it impacting the business.

TheShahman20 karma

Have you talked to Kevin O'Leary or Robert Herjavec at all since filming/has Mark Cuban? They seemed so against what you were doing..

Also, have you found that mostly older people don't think what you're doing is possible and won't work because they say their kids are using their textbooks all the time (like Robert did)? And what are you going to do to get those people that actually do use their books frequently to use packback? I get that what you rent gets credited to the cost of the book but if they know they will be using the book why wouldn't they just buy a used copy for cheaper than the price of the new e-book? Do you think that's just a lost cause and that you understand that you can't be the one-stop shop for someone to get all of their textbooks, just the place to go for those that don't use them often?

chipperowens27 karma

Would actually love to talk to Kevin sometime to see his insight about publishers. At the time we taped we were in a closed beta. We now are a national product and have over 2500+ titles we distribute from major publishers. Robert was a super nice guy, they edited him to be a little more negative on TV. But yeah will probably try and talk to Kevin sometime soon.

re older people...yes this is a big challenge. several of them are very receptive to it though. once they ask their kids the question, "so how often do you actually use your books?" they warm up to it right away. We went through this exercise regularly when pitching investors early on.

for people that reliably use ALL their books, honestly Packback just doesn't make sense for them. At some point in time, the entire industry and student population will be digital. When that time comes we'll hopefully be winning students over with our technology/platform. Right now, we're in a total niche serving a big need...but it by all means will not work for all students.

Right now though, we are a one stop shop. If you look at our site, you'll see we do a lot of other things too with price comparison features.

gofl120 karma

How long was the whole process from walking in the doors to walking out and how much detail did you go into about the business? I've always heard they really condense the footage.

chipperowens47 karma

We were in there maybe about an hour and fifteen. Kevin O'Leary's rant about how he hates the textbook publishers was ridiculously long. We talked a lot about the business strategy, our traction to date, and our existing investors. A lot of our stories came out that didn't air too...we cold called the president of McGraw Hill Higher Ed, Brian Kibby, who was extremely receptive and gave us our first breakthrough into the publishing industry while giving us a lot of great advice...Mike is a ball boy for the Bulls and almost pitched Cuban once in the guest locker room but never got around to it. It was a fun pitch.

Quinndaffi19 karma

https://www.youtube.com/watch?v=Xn6uB1mRZuw

Did you perhaps learn bargaining from Patrick Star?

chipperowens38 karma

Patrick has been a pretty big role model through out my life.

brochaos16 karma

where's the insanity wolf for making a lower counter offer??

chipperowens25 karma

lol thanks for that

StephenPAdams15 karma

I'm curious from a technical perspective...how are you handling the protection of documents for a 24 hour time period? What form of DRM are you managing? Also, from a technical perspective, what technology stack are you using?

chipperowens15 karma

We have an amazing technical team...our CTO is a 500 startups mentor/investor and was formerly Microsoft/Coupons.com. Our DRM locks down the books to prohibit copy/paste, multiple sessions on different computers at the same time, and a number of other things publishers expect us to have. Building a custom eReader by yourself is no easy task. We have a partnership with Box where we use some of their technology.

Our stack is LAMP. It's hard to find good PHP developers in Chicago for startups but we've been fortunate to have been able to attract good technical talent.

FootZerg9 karma

Those God dam Alamo II books are expensive am I right? (ISU Go!)

chipperowens15 karma

they got pretty upset at us one time for standing outside of their bookstore handing out fliers for a free textbook exchange program we were running senior year haha...

konaitor8 karma

This is an interesting idea, but I have just a few questions: How are you guys negotiating rights with the publishers?

Which publishers do you currently have distribution deals with?

Do you guys use a proprietary client to display the books, and control Access?

Do you process payments as they come in (every day a user decided to access the book) or do you keep a balance for each student and charge monthly, weekly, quarterly, etc?

chipperowens6 karma

sorry missed this trying to catch up

we have 2500+ titles and its quickly growing every month as we sign on more publishers. can't announce publishers just yet as press releases haven't gone out yet, but they are on our platform. we will be at about 5K titles in two weeks here.

yes, we built our own e-reader with DRM's

yes, as payments come in

humpier8 karma

How has the publicity from the show helped you out? Do you think it was worth it?

Also, have you been able to raise more money from other investors because of it?

chipperowens12 karma

We would have raised the capital we have regardless of going on the show. In fact, I would say that most startup investors at first hand cringe to the idea that you are going on shark tank...but ours have been very supportive.

The publicity has been nuts. We've had thousands of new visitors and users signed up on the site. A huge influx of students applying to be campus ambassadors to help us launch on their campuses.

jamforce27 karma

Hey Kasey, you spoke with the DePaul CEO club earlier this month. Just wanted to say thanks again. My question is, how has Packback changed before and after the show aired?

chipperowens8 karma

thanks! looking forward to keeping in touch with you guys, let us know how we can be helpful as we're of course big proponents of student entrepreneurship.

We've had an incredible influx of not only users but also students wanting to get involved to help launch packback at their campuses which has been the most encouraging thing of all as an entrepreneur.

monkeyman807 karma

[deleted]

chipperowens12 karma

We were totally after Mark Cuban. He has to be one of the greatest operational investors in the country period. We wanted to go on the show because ANY time Mike (my cofounder) or I would speak in front of a group of students, they ALL wanted to support is in any way they could because they felt so passionate about the issue and our solution. If we could do the same thing in front of 8 million people and rally support of students across the country, it would do wonders for our business. And it has.

Process of the show...

We first had a discussion with a casting agent after applying, then filled out a ridiculous amount of paperwork and pretty much signed our life away.

Once we heard back we created a video which we filmed half at Illinois State University and half at 1871, Chicago's startup hub. Producers loved our video, energy, and story, and then started working with us in preparation for flying out to LA. I'm not sure what else I'm able to publicly disclose so I'll stop there, but once you pitch to the sharks it's not guaranteed that you'll air. We get a 2 weeks heads up notice before our air date.

dialhoang6 karma

What other strategies for making textbooks cheaper do you support?

chipperowens12 karma

there are these wonderful initiatives around "OER" - open educational resources. these are basically free open source textbooks that are foundation/government backed and funded. we distribute these for free as well. (for more info...http://www.reuters.com/article/2014/03/25/20mm-digitaltextbook-idUSnPn1xkKJT+87+PRN20140325)

we also allow students to compare prices from popular online retailers when buying/selling physical books on our website.

dialhoang4 karma

That's great!! I'm part of a group working to promote Open Source textbooks as well.

chipperowens5 karma

Awesome! What group is that?

dialhoang4 karma

I'm part of CALPIRG UC Davis, a student run public interest group which works on many issues, from environmental protection to engaging more young voters in the political process.

chipperowens2 karma

We are huge fans of PIRG's. Would love to work with you on initiatives at UC Davis which is a major target school of ours. Please send me an email at kasey at packback dot co (not .com)

SilverMcFly4 karma

How would someone get involved if they're not a student?

chipperowens4 karma

Every single student/professor you could support us in informing and educating about the textbook problem and our solution would go such a long way. Our video does a good job of explaining: https://vimeo.com/89744514

Thanks so much!

Ty13r3 karma

I know this is a long shot, but if you are ever in the Indianapolis area, would you mind speaking about your start-up and entrepreneurial insight with the Entrepreneurship and Innovation Club and Epsilon Nu Tau at Purdue University in one large event? Either way, your path to success is really inspiring! Thanks for the AMA!

chipperowens5 karma

Yeah definitely. Email Mike and I:

mike at packback dot co kasey at packback dot co (not .com)

Mike handles all of our publisher relations and travels to Indy every now and then. Thanks for the kind words, we love speaking to entrepreneurship groups.

spennyiskenny3 karma

I absolutely love your idea, and the fact that you went after it! As an aspiring entrepreneur myself, what advice can you give me in regards to just getting organized/actually doing what I'm thinking. I have an amazing idea for an iphone/android app but its only an idea. I have no idea how to program, do business etc.

chipperowens5 karma

We were a few college students, operating in a high capital intensive business that would have required us to raise hundreds of thousands to even get off the ground, were non technical and couldn't code (though operating a technology company) and were attempting to negotiate licensing contracts with a conservative industry.

The one thing I can tell you is you CAN do it.

Talk to as many people as you can in your immediate network to get advice and support. Don't be afraid of telling the world your idea in order to get as much feedback as possible. Talk to your end users. Figure out how to create a minimum viable product and start getting customers. Sky's the limit if you can get that far!

Feel free to shoot me a message and I'm happy to help.

TheGhostPope3 karma

Just wanted to say that I watched the episode and it appeared like everyone in the room knew what you were trying to say so don't feel too embarrassed. We all do things like that from time to time only they usually aren't televised!

I really liked your business. It's cool that you guys snagged Cuban. Was that the shark you were hoping to get or were there others you had your eye on?

chipperowens3 karma

haha yes usually are not televised to 8 million people.

Thanks so much! Mark was the only one we would have accepted an offer from. Kevin surprised us with how much he knew about the publishing industry, but he clearly wanted nothing to do with it after some seemingly bad experiences.

NauticalxDisaster3 karma

HAHAHAHA you killed me when you offered less! Glad you guys were able to get someone to buy into your company. As an..um... returning university student, my comment on your book plan was this(it was a whole freakin' discussion at my house): The only books I have that are truly 150 bucks are things like math and science books, these books, I would use far too often to pay $5.00 a use. As an English Major most of my books are in the form of Shakespeare or Screenwriting and these rarely cost me more than $15.00. I think you have a great plan but I can see a lot of cases where it wouldn't actually turn out beneficial for the student to use your services. I truly hand it to you though, gotta love people trying to make their own way, I hope you guys make millions :)

chipperowens1 karma

There are certainly a lot of cases where it won't make sense to just rent by the day if you need your book often. That's why we have our rent-to-own model on top of $5 rentals (you're always welcome to extend your rental to a semester-long rental if you realize you need your book often and we'll refund you any money spent on daily rentals). This way students always realize full value on their books instead of rushing into an uninformed purchase.

For cheaper books we rent them for $3 a day. Most students just purchase the ebook version from us instead.

We also allow you to compare prices when buying physical books to find the lowest prices on the web, and let you compare buy-back offers when selling books to maximize your cash back. Check it out on the website! Would love to get your feedback.

MonkeyUranium2 karma

Yo kasey! its John D, Ryan Ts friend. It was nice to see you on shark tank. I kept telling people that I played basketball with you freshman year haha

chipperowens1 karma

yeah! we should play if ever around lagrange. I live in Chicago now and rarely get some hoop time in.

RPace1232 karma

What did you not expect to happen when you were on the show. Other than countering 50k lower than what you were offered.

chipperowens10 karma

So not to be a complete asshole, but we understood that some of the Sharks would totally not "get it" in the industry problem and our traction to date. But the excuses they came up with of why some of them were out were pretty comical. I couldn't tell if it was because of a TV thing or if they actually felt that way...because for most of the pitch they were speaking straight up with us.

ApocalypseTroop2 karma

This sounds like a fantastic startup. I really hope you guys take off years down the line. This is where the textbook industry SHOULD be going.

A couple of questions:

How are you getting publishers to license you their books? The exorbitant selling price for textbooks now seems like your current model would be a difficult sell to older people not as in-touch with technology.

Do you plan on offering rentals to be compatible on multiple platforms? Sometimes it's much easier to read on a tablet in bed than on your computer but the option to have both would be nice.

How do you plan on incorporating supplemental materials like MyStatLab? Would there be different rental models that give you the base book and then more expensive models with all of the material? I know things like StatLab are a one-time buy and that's usually because you're buying the book up front.

This is a longshot but I'm looking into getting my MBA and pursuing a marketing career post-graduation. Any chance you'd be hiring?

chipperowens2 karma

How are you getting publishers to license you their books? The exorbitant selling price for textbooks now seems like your current model would be a difficult sell to older people not as in-touch with technology.

Publishers need to transition students digital for the sake of their future product offerings. Students haven't been so far. They also suffer from 75%+ revenue holes due to the used book market. We help reclaim them lost revenue, transition students digital, and save students money (which they do actually care about contrary to popular belief).

Do you plan on offering rentals to be compatible on multiple platforms? Sometimes it's much easier to read on a tablet in bed than on your computer but the option to have both would be nice.

Yep, our ereader is device agnostic.

How do you plan on incorporating supplemental materials like MyStatLab? Would there be different rental models that give you the base book and then more expensive models with all of the material? I know things like StatLab are a one-time buy and that's usually because you're buying the book up front.

We will be selling those platforms outright on our platform. Doing different models on these platforms are far more tricky to get right. I honestly don't even know what the pain point is for students that use these platforms in terms of how we could maximize value with different usage periods. Would love your feedback if you have any on it, feel free to message me.

This is a longshot but I'm looking into getting my MBA and pursuing a marketing career post-graduation. Any chance you'd be hiring?

Maybe! Keep in touch, find me on linkedin - Kasey Gandham. Good luck with your MBA!! Hopefully we can save you money on books there too.

Bmeye42 karma

What prevents users from paying for one access and taking an hour or two to screen shot the whole book needed? Sounds like something many desperate college students would do (including myself). Also, is there a time-limit for the paid-usage? For example, I pay one time for a one time use and I keep it open all semester on a spare laptop I have in my room. Would it eventually time me out? Log me out?

chipperowens1 karma

Yes, for the $3 to $5 rentals its 24 hours. For semester rentals its 180 days. It would time you out yep.

We do a lot of other cool models you can check out on the site as well.

jconstantine912 karma

I spent $450 on textbooks last semester, that I only used three times. Wish I had found out about you guys sooner.

chipperowens2 karma

Sorry to hear - were they all used books? We just launched this awesome new free Sell Tool that helps you find the best buyback offers when selling books...hope it helps www.packbackbooks.com/sell

chelsea072 karma

Wouldn't it make more sense for students to take textbooks out on loan from their school library (assuming a school has a course reserves system) rather than renting the e-book? This is what students at my school do when they don't want to buy a textbook & only need it for short periods of time. How does this business differ/compete with course reserves in libraries?

chipperowens2 karma

Libraries typically only have one book on reserve. In fact a librarian provided really good insight on this somewhere earlier in here. There will always be some students that will camp out to grab the textbook in the library, just like there will be students that will opt for piracy or sharing their books. But for the general population and the industry at large, we're hoping to provide a viable solution.

cjgrl12 karma

I just watched y'all's episode while eating cereal today! Good times.

For the record, I love this idea! I've bought textbooks before only to open them once....or not at all, so now I just never buy them. This would be great for that one time the professor says you need it AND that's a great looking website, guys.

Question (although I'm sure it's been asked): how long were you actually in the room? We see like 15 minutes, but was it more like a few hours with multiple takes? Thanks!

chipperowens3 karma

Thanks!!

You are spot on with this. This is the trend...by the time students get into their jr/sr year after getting burned they just stop buying.

Thanks so much for the website comment, our designer is going to be thrilled : )

We were there for about an hour 15

Con0rr2 karma

Describe the set on the show? Is it an actual elevator? In "the shark tank" what does it look like where the cameras are at? Any other interesting things about the set?

chipperowens9 karma

Not sure what I can actually say or not publicly here...but without saying too much I can tell you it's probably not too different than any ordinary TV set of any TV show. It's filmed at sony picture studios in LA.

There are cameras all around but you definitely do not notice it when pitching to them due to all the high energy.

raoalbany2 karma

Albany Academy in da house.

chipperowens1 karma

haha no way! what year grad are you?

OscarGrouchisMyHero2 karma

Does Mark know you're doing this AMA?

chipperowens3 karma

I didn't let him know, but if there's any interesting comments that come out of it to him then I'll pass it on : )

jwalker19991 karma

Openstax is a free textbook option for students and professors.

chipperowens1 karma

Yup. They're our great friends and we actually will be distributing their content within the next few days here. We're huge supporters of OER and several different textbook models. Check out this recent article on our partnership with them and a non profit foundation called 20 Million Minds.

http://www.reuters.com/article/2014/03/25/20mm-digitaltextbook-idUSnPn1xkKJT+87+PRN20140325

slinky4201 karma

Textbooks for colleges are going to be open source and free in the future, how will you compete with that?

SisterRay1 karma

Coke or Pepsi?

chipperowens6 karma

i'm from new york but when I moved to the midwest found this awesome soda called RC.

JohnnysGotHisDerp6 karma

haha hell yea RC all the way

P.S. Recent ISU alum here, current grad student. Its great to see fellow redbirds out there doing amazing things.

chipperowens2 karma

seeing all these ISU comments makes me miss maggie miley's, medici wednesday's and all the great uptown joints. thanks so much!

MylesNorth1 karma

Would you admit it if this "mistake" was an agreed upon bit prior to filming to make your segment more memorable/marketable?

chipperowens1 karma

It was not fake at all. Not every company that pitches the sharks actually airs on TV. I wonder if we would have even aired if it didn't happen though, so I'll forever be thankful that it did happen : )

darbbycrash1 karma

5 dollars a day is a little stupid to be honest.....i think it should be something more along the line of 10 dollars per book, per semester, and 1$ per viewing of that book durring the semester

chipperowens2 karma

If it worked the publishing industry, we would be all over it. We think we've found something that finally works for both students and publishers though.

VitaminG_addict1 karma

I saw that episode. Good thing your friend recovered for you. Mark would have taken advantage of your confusion, which I thought was not so cool.

I'm trying to get on Dragon's Den myself. I have an idea to revolutionize sit ups.

chipperowens2 karma

hah if I ever make some real money in a few years, send me a message and I'll paypal you a few hundred to help get you on Dragon's Den.

cmbyrd1 karma

I'm sure I could do some math on it, but its late and I'm lazy.

Given your pricing model, how much do project saving an average student over an average BS degree? Do you have any insight on the varying cost between types of majors?

chipperowens1 karma

Average student with us pays around $100 for all their books each semester. There's such big variance in that figure, but that's the average.

Typically students currently pay around $250 to $500 per semester.

cmbyrd1 karma

And then make back pennies on the dollar selling the books back to the same store they bought em from.

I might just be pretty glad I saw this AMA by the end of my degree.

chipperowens1 karma

Awesome, spread the word!!

We also have a pretty cool free Sell Tool you should check out when selling books. www.packbackbooks.com/sell

Absorbing1 karma

Shark Tank, is that like an Americanised Dragons' Den?

Edit: by that assumption I'm hoping there's more explosions than the usual none

chipperowens1 karma

yea. my wife told me the other day how she thought it was so silly its called Dragons Den in canada. I argued they probably say the same thing about Shark Tank?

HeLivesMost1 karma

Greetings, Brothers! ಠ_ಠ

What experiences in college (other than your classes) helped prepare you to be successful, going so far as to make a deal with Mark Cuban?

Edit: Also, is it true you were on Jimmy Neutron?

chipperowens3 karma

Great question. Mike and I founded and were presidents of a business fraternity called Alpha Kappa Psi at ISU. We built it up to be the school's most prominent/successful organization and allowed us to surround ourselves with some pretty bright students that pushed us to do more than just going to classes every day. We owe a lot of our success to founding that business fraternity together.

HeLivesMost1 karma

Thanks! Xi Psi is in good hands, I hope we never cease to impress you.

chipperowens1 karma

They still tell that Jimmy Neutron story??!

rascalmonster1 karma

I have my own website for college students and plan on using college students to help on campus. Before the show how did you find students to help? Do you give them a cut of what they help sell/rent? I might be able to help with my school my site is focused on, pm me and we can chat.

chipperowens1 karma

We have an ambassador program, you can learn more about it on our site of the value prop in applying.

We also have a Packback Partners program where we give selective partners (typically student groups) 100% of any of our profits from traffic they drive in. We track it through specific tracking URL's we've made. If you're interested in either, shoot me an email kasey at packback dot co (not .com)

drivendreamer1 karma

Wanted to say it was sort of funny. I am sure that looking back on it you were embarrassed, but not a big deal. If it were me there, I probably would have done something similar. Good news is you made the deal.

Question though- how much has it helped you? Having Cuban as a partner should open doors

chipperowens2 karma

Cuban has been great. I've mentioned some of the value he brings in earlier posts, but he has been a game changer for us. The amount of exposure has been huge...we've had literally thousands of students pour in their support through messages, wanting to get involved to help us launch on their campuses, signing up for the service, etc.

drivendreamer1 karma

That is great. I got to meet him a few months ago, and it was really interesting to see him outside of the show.

Good work, keep it going

chipperowens1 karma

awesome, and thanks!!

lobjawz1 karma

I just watched that episode today, your partners expression was off the charts hilarious. Sorry I won't be using your service, but thanks for filling that void! Good luck!

chipperowens2 karma

thanks! Yes Mike's response was by far the best haha.

Are you a student? Curious to know what would turn you off.

0fubeca1 karma

What was shark tank like? What was it like behind the scenes? How did you go about getting on the show?

chipperowens1 karma

behind the scenes was pretty hilarious. the casting crew on the show are some pretty wild characters...I think its like that on any TV show, but was a great experience.

carebear71 karma

I enjoyed your pitch, and that episode in general. My question is, how do you get publishers on board with your company, when they could just offer rentals themselves? Do you think this might happen down the line?

chipperowens2 karma

Publishers want to do what they do best, create great content. It's the same reason why a record label or movie studio wouldn't make their own Spotify or Netflix. I don't see it as a likely scenario, but anything's always possible.

DynastyTexas1 karma

Hello Kasey Gandham, I am actually competing in a competition in a couple of weeks in an entrepreneurship competition and we had a similar idea and I was wondering if you could get with my group at some point soon and help us out. It's not the same thing so It would not be competition, but you could provide is valuable insight.

chipperowens3 karma

Sure, even if competitive I'm happy to help.

Send me a message and find me on linkedin. We've been pretty slammed as of late so might be a while to get back.

victorgrigas1 karma

Do you have any plans to push open-source textbooks?

drifteresque1 karma

How is packbackbooks.com better than openstaxcollege.org ?

chipperowens1 karma

They're actually our great friends. A press release just came out about our partnership here: http://www.reuters.com/article/2014/03/25/20mm-digitaltextbook-idUSnPn1xkKJT+87+PRN20140325

It will take some time for open source books to get mass adoption which is why we've pioneered a microtransaction model. We're pretty big supporters of a lot of innovative models, from publishers or OER proponents, as long as it benefits the student.

SeekStella1 karma

Wow, what a great idea! I'm definitely going to check it out.

chipperowens2 karma

thanks!! definitely check out the site, we have a ton of other cool features that might be of interest to you as well.

NiceSteakDinner1 karma

When did filming for the show take place? Was it hard to keep it a secret that Mark invested in you? Btw, from a current redbird, congrats!

chipperowens1 karma

We taped back in September and have been working with Mark for some time now. We're so heads down focused on running the company we try not to get caught up in 'start up life' or all the gossip but yea to close friends and family it was tough...my mom was pretty upset I never told her haha.

Thanks man, hoping to visit ISU again soon here to speak!

emmapkmn1 karma

THIS IS FUCKING BRILLIANT! As a college student who is broke and needing to save every penny, I thank you all. I hope this explodes and I'm able to sell, rent, and buy books via packback. Thank you. Also, when you put in the ISBN's to see if someone is offering to buy the book, do you have to include the dashes? Do we search using the ISBN 13 only?

chipperowens2 karma

ISBN10 or 13 and no dashes

Thanks so much, greatest part of doing this AMA is reading comments like this. Please spread the word!!

Filan1 karma

What were you thinking! And what would you have done if he said DEAL?

I just saw your episode and remember thinking you guys should utilize reddit.

How have things been since? The pay per view catching on with students?

chipperowens1 karma

For one, he did say DEAL haha. I have no idea what I was thinking. In fact I was probably thinking about 82452873589235 things and as a result said what I did : )

Yes, we've been pretty much blowing up on new visitors and users, response has been huge.

sarahtara1 karma

Haha I remember seeing this episode last Friday. Congrats on getting the deal... We should go out and celebrate :)

chipperowens1 karma

beers for sure

cuntpolice1 karma

I watched you present early on, you're a really smart dude- funny you made that goof, I'm sure I would do the same. Did you just start from scratch, getting everything going, or did you already have connections? It seems such a monumental task to overtake such an industry, especially with the barriers in place. You made some really nice connections, how hard were those to get in place? This is idea I've had before, but everything just seemed impossible. How do you manage to get past that? Also, are you guys still taking investments?

chipperowens2 karma

We were non technical cofounders operating a tech startup. It was going to be a high capital intensive business. Had to negotiate major deals with publishing executives. We were in college when we founded the company...developers wouldn't work for free...publishers needed to see investors...investors needed to see publishers.

We literally started skipping classes, driving 2 hours north to Chicago every week and pitched various Chicago angel investors/startup advisors.

We cold called the president of McGraw Hill Education Brian Kibby and impressed him, getting our first start in the publishing industry.

Partnered with a company called Dashfire (www.dashfire.com) who was one of our first investors and served as our interim CTO, trained us on how to build websites/gave a lot of operational advice.

Our first investor was a guy known as Alan Mathew who wrote us a $15K check just because he believed in us and our ability to make deals happen. We didn't even have a website up at that time, or a publishing contract. Look him up...a wild personality and someone we will forever be grateful for.

A marketing research company known as Shapiro incubated and invested in us, providing a lot of credibility in research around our beta to publishers.

We later eventually rounded up all of Chicago's best in our round of funding as we kept making deals happen. We raised $250K before I graduated college, and by the time we taped Shark Tank I believe we had $350K in. It's been a pretty incredible past two years for us. We're not taking in anymore investments but will be announcing the close of our round in about a week or two.

aggzilla1 karma

Current Ilstu student, congrats my man.

chipperowens1 karma

thanks friend, we should be speaking back at ISU in two weeks or so.

JVOGT1 karma

Did you get to talk with the sharks as people? You obviously talked to Mark Cuban, but were the sharks nice people?

chipperowens1 karma

all nice people. Robert is one of the nicest, genuine investors I've ever pitched to.

swerveler1 karma

Saw you guys on the show and think its a really great idea. Do you have any plans to support bitcoin payment? I would imagine it would minimize credit card processing fees since I would think the majority of costs would be less than $10.

chipperowens1 karma

haha I was WAITING to get this question from reddit. It makes a lot of sense, bitcoin, dwolla, etc, to accept but we won't just yet until sometime down the road.

DaPuppers1 karma

Why do you think about people have an obsession with television shows with bully hosts/judges? I.e. shark tank, hells kitchen, project runway, weakest link.

chipperowens1 karma

honestly it's pretty disgusting to a point...but what do you expect when you're a TV personality in front of 7-8M+ viewers like shark tank. if they didn't obsess then it wouldn't be on the air. people like to see the drama of others getting torn down (whether having a positive or negative reaction to it). if there's success, they like to identify with it. just in our nature I guess.

jackosutherland1 karma

What were you thinking when you counter offered lower?! just caught in the moment??

chipperowens1 karma

haha yep, totally caught in the moment

OHeyImBalls1 karma

How's business going?

chipperowens4 karma

Amazing, we have been signing on more publishers than ever as we've validated the business model. Will be announcing the close of our seed round of funding/investment and have been seeing healthy growth on the user front.

bobbysr1 karma

I saw the show. Just wanted to say congratulations!

chipperowens3 karma

thanks!!

xxdraygul0 karma

It never ceases to amaze me when entrepreneurs go on shows like Shark Tank or Dragon's Den. It's just about the most difficult way there is to get the smallest amount of conditional money for your business.

chipperowens2 karma

Our episode of Shark Tank aired to over 8M viewers...it's a no brainer for a b2c company rallying students to support our vision of a major pain-point for them. We probably expedited a good 6 months worth of customer acquisition efforts. Plus Mark Cuban.

Ektaliptka0 karma

Saw that. Luckily your partner saved your ass

chipperowens2 karma

luckily mark is a nice guy : )

bferstl0 karma

I really like this video you guys have on your website. http://vimeo.com/89746909

Speaking best case scenario, how quickly do you think you might be able to expand?

Also, was going on Shark Tank something that you had to do in order to survive?

chipperowens3 karma

Thanks so much! We spent a lot of time on that video trying to get the script perfect, so that means a lot. We're 100% focused on two things: 1) signing on more publishers to acquire more textbook titles for digital distribution and 2) acquiring paid users for the service...whether it's on our $3 to $5 digital rentals or on our price comparison services.

Even if the first bucket moves slow, we have a healthy business model which allows us to launch on college campuses since we are also an aggregator.

On shark tank, no, we had already raised funds from prominent Chicago investors as well as were growing steadily on the user front. But it doesn't hurt to have $5M in free advertising as well as Mark Cuban.

bferstl1 karma

Thanks for the response. It's too bad I'm in my last semester of college, or else I don't see any reason why I wouldn't have tried your service out.

Also, I forgot to mention in my original post about the video, I really think it's great that you guys also did what you could to recognize the efforts of the authors. Not that I'm a textbook author myself, I'm just saying that it's pretty ideal how you were able to find a way to benefit not only the student but the textbook author as well, the two entities of this system that really matter.

chipperowens2 karma

Thanks friend. We just launched our new free Sell Tool which lets you identify the highest paying online retailer offering you cash back for your book. Hopefully you can use it to get rid of any of your old books! Definitely check it out and would love to hear your feedback on it. www.packbackbooks.com/sell

philmmore0 karma

I don't know if you can spill these facts but what difficulties did you encounter when trying to get on the show? or even when you were on the show was there anything that wasn't aired that gave you difficulties. ALSO what did you and Mike discuss when you stepped out of the room? I understand it was about how much equity to offer but how did you come up with 17.5%?

chipperowens3 karma

it was actually pretty easy. producers loved our story of founding our company while in school...making deals happen and overcoming a lot to get to where we are today. 40,000 companies applied and we made the cut. I think if that mistake didn't happen at the end we might not have actually aired. A lot of what we spoke about on air was how we already raised a good amount of capital, technical items, or boring strategy outlook that wouldn't have been relevant to national TV.

we knew what our lowest number was we wanted to go with to get cuban which was the only one we wanted a deal with.

BlueFalcon891 karma

Is it common for companies to go on and not make it on air?

chipperowens1 karma

yea there's a small percentage that pitch and do not air...i can't recall the exact number its somewhere out there on the internet

Someone11567-2 karma

Looking at your Facebook group.. Do you guys usually steal pictures without giving credit where it's due? That's kinda shitty

chipperowens1 karma

yeah we had interns/volunteers/friends managing our social media pages without much direction on our part. it was definitely a mistake and oversight on our part in training as we're a small startup with social media on the bottom of our priority list. We've since become pretty diligent about building a reputable content strategy across all channels, but appreciate the note as it's a good thing to reinforce to our new community managers