Entrepreneurs Casey Gandham and Mike Shannon pitch their textbook rental service called PackBack Books in Shark Tank episode 523 on March 21. Casey and Mike are co-founders of PackBack Books, a third co-founder, Nick Currier, didn’t make the trip to LA for taping. All three guys are Illinois State University students turned entrepreneurs who started the business to help students combat the high price of college textbooks.
packback books claims that textbook prices have increased at 4 times the rate of inflation. college students spend about $1,000 per year on average, but textbooks are not used every day. Packback Books rents e-textbooks online for just $5 a day. students only rent the book when they go to read it and save a lot of money. if a student decides to purchase an e-textbook, previous rental fees for that book are credited to the purchase. they even have a patent pending on their process!
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The guys started the business in 2011 and it has gained momentum. they are probably looking for a shark to help build their electronic platform and get help with advertising.
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The boys of the pack appeared in the shark tank in episode 21 of season 5, seeking a $200,000 investment in exchange for 10% equity. They feature the fact that textbook prices have increased 812% in recent years.
The company enables students to gain pay-per-use access to their textbooks, micro-packaging the e-book rental model. they have a leasing deal with a major publisher so far, but they believe that once they are successful with the format, they will get deals with the other publishers. Currently, the publisher takes 75% of the rental price, the average offer in the industry.
casey and mike say amazon and chegg won’t offer the microtransaction model they’re dealing with because it would cannibalize their used book sales. publishers, however, will prefer the micromodel because it gives them a new source of revenue that they lose on used book sales.
who’s signing up?
daymond john leaves early, citing his own lack of a college education and dyslexia and saying he “likes to invest in businesses where I have some experience.”
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barbara corcoran thinks “it’s costing them a lot more to sell this than you’re telling us.” she doesn’t think the editors come in and she leaves.
kevin o’leary has extensive experience dealing with the educational market, but he doesn’t want to “go back there”, saying he would “tear the rest of my hair out”. he says it will take too long to negotiate the deals that support his business model. “It’s a very noble quest,” he says, but adds, “both of you will look like me when you get out.” is out.
only mark cuban and robert herjavec remain. robert does not “share the vision with this project”. is out.
mark is already in the space with some of his other investments. is interested, but says “10% is not enough.” he wants the couple to make him a higher capital offer. casey and mike take a few minutes to talk it out. They decide to offer a 17 1/2% markup for $200,000.
tick the counters at 20% for $250,000. the couple, after a minor error in answering “would you do 20% for $200,000?”, accepted the offer and got the $250,000.
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After appearing on the show, entrepreneurs were able to secure more than $1 million in additional investments. the company continued its path of slow growth and reaching publishers and universities. In February 2016, they rented real office space for the first time, moved into physical offices, and laid the foundation for their long-term success. The other sharks may have been skeptical, but it looks like Mark Cuban got an A+ on his investment in Pack Back books.
In August 2018, this statement appeared on the company blog:
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On August 7, 2018, packback will end support for packback books, our e-textbook rental service and textbook price comparison services, to focus all of our engineering efforts on asking the questions. from packback the best and most curious discussion platform for students on the web.
all rentals still active when the packback books etextbook rental service is turned off on August 7th are eligible for a full refund.
packback questions is a kind of online pedogeological discussion forum where people pay a fee to participate and collaborate in high level educational discussions.
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