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 textbook prices have risen 4X the rate of inflation. College students spend about $1000 per year on average, but textbooks don’t get used every day. PackBack Books rents e-textbooks online for just $5 a day. Students only rent the book when they’re going to read it and save a pile of cash. If a student decides to buy an e-textbook, previous rental fees for that book are credited toward the purchase. They even have a patent pending on their process!
The guys started the business in 2011 and it’s gained traction. They’re likely looking for a Shark to help build out their e-platform and to get help with publicity.
PackBack Books Shark Tank Recap
The Pack Back boys appeared on the Shark Tank in episode 21 of Season 5, seeking an investment of $200,000 in return for 10% equity. They present the fact that textbook prices have risen by 812% in recent years.
The business allows students to gain pay-per-use access to their textbooks, micro-packaging the e-book rental model. They have a leasing deal with one major publisher thus far, but believe that once they prove successful with the format, that they’ll land deals with the other publishers. Currently, the publisher takes 75% of the rental price – the average offer within the industry.
Casey and Mike claim that Amazon and Chegg won’t offer the micro-transaction model they’re dealing with because it would cannibalize their used-book sales. The publishers, however, will prefer the micro-model because it gives them a new revenue stream that they lose through used-book sales.
Who’s In?
Daymond John goes out early on, citing his own lack of a college education and his dyslexia and saying he “likes to invest in businesses I have some experience in.”
Barbara Corcoran believes they’re “having a much harder time selling this thing than you’re telling us.” She doesn’t think the publishers will come in, and she’s out.
Kevin O’Leary has extensive experience dealing with the educational market, but doesn’t want to “go back there,” saying he’d “rip the rest of my hair out.” He says it will take too long to negotiate the deals that support their business model. “It’s a very noble pursuit,” he says, but adds “You will both look like me when you come out.” He’s out.
Only Mark Cuban and Robert Herjavec are left. Robert doesn’t “share the vision with this project.” He’s out.
Mark is already in the space with some of his other investments. He’s interested, but says that “10% isn’t enough.” he wants the pair to make him a higher equity offer. Casey and Mike take a few minutes to talk it over. They decide to offer Mark 17 1/2% for $200,000.
Mark counters at 20% for $250,000. The pair, after a minor fumble of responding “would you do 20% for $200,000,” accept the offer, getting the $250,000.
Pack Back Books Shark Tank Update
After appearing on the show, the entrepreneurs were able to land over $1 million in additional investments. The company continued on its path of slow growth and reaching out to publishers and colleges. In February of 2016, they rented actual office space for the first time, moving into brick-and-mortar offices and laying the foundations for their long-term success. The other Sharks may have been skeptical, but it looks like Mark Cuban scored an A+ on his investment in Pack Back Books.
In August, 2018, this statement appeared on the company blog:
On August 7th, 2018, Packback will be ending support for Packback Books, our eTextbook rental service and textbook price comparison services, to focus all of our engineering efforts toward making Packback Questions the best and most curious discussion platform for students on the web.
All rentals that are still active when the Packback Books eTextbook Rental service is turned off on August 7 are eligible for a full refund.
Packback Questions is an online pedogeological discussion forum of sorts where people pay a fee to participate and collaborate in high level educational discussions. They’re also developing an AI software that teaches critical thinking and curiosity by analyzing students’ written work. It also helps professors grade paper.
The company raised $2.5 million in January, 2019 bringing its total funding to $10.7 million. They’ll use the funds to expand its university user base. As of November, 2022, Packback Questions is in use in over 250 universities and has annual revenue of $4.2 million.
Posts About PackBack Books on Shark Tank Blog
PackBack Books Information
Video
Packback Questions has plagued my college career… forced to pay money for a discussion forum that is offered for free on Canvas. Of course this business model works, you don’t have a choice but to buy.