Inside the Shark Tank

Edupreneurs endure intense, rapid-fire inquisition to emerge victorious.

INTERVIEW | by Victor Rivero

CREDIT Michael Ansell ABC Oct 2013In just the past few years, the way readers consume media has changed, so it makes sense that the entire education sector must therefore lead, follow or get out of the way. To that end, a couple of students decided to take matters into their own hands, daring to disrupt an outdated college textbook market. Along the way, they won a business plan competition, appeared on national television, enlisted the help of billionaire investor Mark Cuban and are moving forward at breakneck speed. “As college students, the problem was so clear to us and all of our peers,” says Kasey Gandham, co-founder of pay-per-use digital college textbook company, Packback. “Students are under an immense amount of pressure the first 2-3 weeks of class to make a purchasing decision, without much transparency into how often the professors will be utilizing the textbook,” says Mike Shannon, a co-founder. “As a result, cost-savvy college students either rush into the secondary used book market or make the judgment call not to purchase the book at all.” In both scenarios, the learning companies which develop the content lose out, according to Kasey and Mike. The secondary college textbook market is over $5.5 billion, and “the dynamics of the pricing have kept the digital adoption rate in higher education stagnant,” says Mike. “We built Packback as an affordable alternative to the used book market, which would make for a healthier industry solution — helping learning companies recoup revenue lost to the secondary market — which also incentives organic student digital adoption,” he says. But that’s just part of the story. In this EdTech Digest interview, Mike and Kasey share the rest.

Victor: By now, you’re likely used to rapid fire questions, so let’s get things rolling: What’s something interesting about its development history? Was it a shock going from development theory to practical realities? Did you make some key adjustments at that time due to student or customer feedback? Anything interesting about your own background that informed your current approach?

Kasey: The shock wasn’t so much on our end, but we did spend 12 months incubated out of a research firm, working hand-in-hand with a team of PhD research experts. The researchers we worked with, performing extensive focus groups and surveys, were shocked to find that students were so stronghold on the physical textbook. It became clear that a student-centric digital-first solution is necessary for the industry to reach the full potential of advances in learning technology.

Mike: We won first place in a business plan competition at Illinois State University our Junior/Senior years in college. At the time, we had helped build the University’s largest business fraternity, both of us serving one year as president, and spoke with hundreds of students before realizing the Packback model could solve the one uniform issue for all students: uncertainty in textbook purchasing.

Kasey: Within a year, we were selected as entrepreneurs in residence under Chicago’s premier market research firm, Shapiro & Associates. Throughout a 12-month process of working hand-in-hand with PhD research experts, we refined our model based directly around student learning behaviors.  

Victor: What’s your 60 second pitch to someone on what exactly it is, benefits? Also, let’s talk about your appearance on and association with the entrepreneur-in-the-hotseat show, Shark Tank. How many times did you rehearse for it? What’s your lead-up story, how was it in the tank, and what’s happened since? Do you Skype regularly with your newest investor, Mark Cuban? Anything more you want to say about that experience, lessons learned, etc.?

Mike: Short pitch: We enable learning companies to maximize revenue on underperforming titles while providing students an affordable alternative to the used book market which allows them to “pay per use”. Students win. Learning companies win.

Kasey: We refined our Shark Tank pitch over a month-long period in which we had phone conferences with our team of producers. Probably rehearsed about 100 times. The lead-up story was basically that we received a call from a producer who animatedly exclaimed “I needed this in college!!” That’s why we were picked, because so many people can relate with the problem and support our solution. The tank was an intense, hour long battle of non-stop rapid fire questions. Since being in the Tank, we’ve grown our team of campus ambassadors to over 100 students nationwide and have been meeting with every major learning company to work on increasing our catalogue of digital titles.

Mike: We email Mark every week with progress updates and meet with him in person periodically. He’s extremely hands on and has been an excellent mentor for us in this growth stage of Packback.

Kasey learned a simple math lesson (laughter)*…but seriously I think we learned that everyone, even billionaires, can relate with the textbook problem we’re working on solving. As entrepreneurs, you learn that even the big timers are personable, logical people and at the heart of every successful entrepreneur is a fix-it mentality.

*This is in reference to a counter offer made by Kasey to Mark Cuban where he accidentally lowballed the offer initially made. Have a look at the clip here.

Victor: Do you have any direct or indirect competition?

Kasey: Our primary competition is the range of used book retailers. We are essentially offering students an alternative solution so that they do not have to purchase used books and thus the content providers can stay financially stable. The aggregate impact of the used book market over the years has, in reality, resulted in the price increases we’ve seen and most recently the pain of a lagging digital adoption that the industry is feeling as next-gen learning technologies are being developed but lacking widespread adoption.

Victor: Any highlights about test marketing it or starting out; any interesting feedback, reaction to it?

Mike: We performed a beta launch at Illinois State University across 21 titles working primarily with McGraw-Hill Higher Education. The result was a 58% increase in Learning Company revenue and a tenfold increase in digital adoption.

The primary feedback we received from students was asking when we will be offering the rest of their books on Packback! …soon!

Victor: What else can you say about the value and benefit of Packback?

Kasey: Packback essentially offers the “bridge” towards the digital future of higher education. Our role is to get students on digital format, in the most affordable manner possible, to ultimately start introducing some of the great new learning technologies being developed by our partners. One of the things we’ve enjoyed brainstorming with McGraw-Hill Higher Education is the potential to start introducing some of their state of the art new learning technologies directly to students in their moment of need. It’s an amazing industry when you start talking to the major learning companies and taking a deep look at what the future holds for the new technologies. Packback’s role is very clear: incentivize students to try digital!

Victor: Anything else in the works? Additional products, features or series/angles?

Mike: We’re working on a range of exciting new partnerships with major learning companies on the digital content side. We’ll be finalizing the revamped catalogue throughout the summer.

In addition to daily digital rentals, Packback offers a price comparison service to show students where they can get the best value across the web. We also provide a unique “Sell Your Books” tool, in which students can find the absolute best prices being offered to SELL their books and receive better value than they otherwise receive from the book store. This is another huge pain point students have reached out to us for.

Victor: Your thoughts on education in general these days?

Kasey: It’s a thrilling time to work in education! As we mentioned before, our partners are developing learning solutions which merge education and technology to a degree that’s never been seen before. It’s been interesting to watch as students and professors gradually navigate over to the digital future, and the role of Packback as a “bridge” comes at the perfect time.

Mike: From an industry perspective, we’re also seeing an immense emphasis on enhancing the actual learning quality in the classroom. “Efficacy” will be the golden term for the next decade to come. Some of the figures around students dropping out of class or knowingly taking a lower letter grade to avoid the cost of content have gotten out of control. With Packback, we place a huge emphasis on efficacy by ensuring that every student will have affordable access to their content, and stays actively engaged in their course.

Victor: Any guidance or advice to educators these days?

Mike: Putting on my student hat for a minute, I think it’s incredibly important to utilize new technologies. There’s an immense amount of value to be gained out there, and I couldn’t believe how much of it was not introduced to me in the classroom. We’re living in a world where kids are scrolling through TED Talk videos and self-teaching themselves computer programming on Codecademy.org. We need to bring the innovation inside the classroom at a massive scale. It’s a revolutionary time to be an educator if recognizing and utilizing the available tools.

Victor: Anything more you’d like to add or emphasize?

Kasey: While in the Shark Tank, Kevin “Mr. Wonderful” O’Leary essentially told us we would have an impossible time working with higher education publishers. This is an absolute misconception and outdated view on the industry. We’ve found that the Learning Companies (they are not merely publishers at this point) we’ve developed relationships with have filled their ranks with innovative technology leaders and even former entrepreneurs in many cases. Does it take a little while to develop these relationships? Yes, as is expected in any business-business scenario. However, as soon as we find the right contacts at each company, we’ve found it to be not only a tolerable, but a fun and exciting industry to work with.

Victor Rivero is the Editor in Chief of EdTech Digest. Write to: victor@edtechdigest.com

* * *

CASE STUDIES are one of the best ways to get the word out about your company. They make all your hard work really real to readers, and quickly open up revenue-generating possibilities. Get attention, attract interest to your company and do it through case studies. They can be time-consuming to produce, so get some help. Request more info.

This entry was posted in interviews and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s