Friday, June 22, 2012

Chegg Spots a Need, Changes an Industry

Chegg, the Silicon Valley textbook rental company, started as an on-campus classified service listing everything from electronics to kung fu lessons to hamster sitting. But its most popular category was buying and selling textbooks.

The company founders noticed that and decided to try an experimental rental web site offering 2,000 textbooks to its users. It proved to be such a great success that now Chegg rents millions of textbooks each year and employs 150 people.

“We had raised $3 million and we had hired a great team and we were sitting on a problem that was still unsolved,” said founder Aayush Phumbhra in this FastCompany video series called “The Pivot” which looks at decisions that helped companies turn into successes. “The cost of textbooks was still very expensive and the market was just waiting to be disrupted.”

The message should be a powerful lesson for those in the textbook industry in general and collegiate retailers in particular, according to Mark Nelson, chief information officer of the National Association of College Stores and vice president of NACS Media Solutions.

“I think the idea behind how they recognized an opportunity and unmet need provides interesting insight into the minds of entrepreneurs and the types of folks who are trying to disrupt our industry,” he said. “Whether stores like it or not, our industry is viewed as one that is ‘ripe for disruption’ and we need to learn to think like these guys.”

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