Chegg Testing More Services on New Site

When Dan Rosenweig took over as Chegg’s CEO, he became certain the next big challenge facing the online textbook rental company was going to come from digital course materials.

Rosenweig invested $50 million on acquisitions he hopes will turn Chegg into a digital destination that can fill every need a college student may have, from course materials to homework help to dorm decorations. The firm began testing an enhanced Chegg.com site on June 1 that brings together all the services Chegg has purchased or created.

The new site allows students to use their Facebook credentials to login, providing Chegg with information about its users, social networks used, and where each individual goes to school. New services allow students to answer questions posed by others for free or a small fee, help high school seniors narrow their college search, or receive daily-deal offers from a subscription-based service.

The new Chegg web site is what Facebook might have become had it remained limited to universities, according to Michelle Hummel, CEO of the digital marketing agency Web Media Expert, in this article for Bloomburg Business, adding that students and educators are “looking for something other than Facebook that’s more targeted to their needs.”

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.”

Book Rental Expanding Fast -- and moving into Digital

Business Insider recently interviewed Chegg CEO Dan Rosensweig who says the four year old company has services available on about 8,000 campuses and processes millions of orders a year.  Yes, the article reported 8,000 campuses. Chegg’s additional services than other their core book rental business include Student of Fortune, a Q&A homework help site, and Notehall, a class notes marketplace.  According to Rosenweig, Chegg wants to provide as much digital content to students as possible including class notes, books, and study groups.

Incidentally, Notehall ran into some legal troubles over its note taking business with some California State University students which violated campus copyright policy.  Chegg has acknowledged the policy and has agreed shut down their note taking business at specific universities effective January 1, 2012.

Finally, Kno, which spun out of Chegg, is working on e-textbooks and a related delivery platform.  Previously the company was working on a tablet type device, but subsequently withdrew that initiative.  However, this month they unveiled their "free textbook campaign" where they tend to give away one free e-textbook to every user.  A copy of their campaign ad appears below.

Chegg expands its engagement with students

In case you missed it. A couple weeks ago Chegg announced it was moving beyond books and launching a new site that also helps students to select courses and to receive homework help. The new ventures use technology that Chegg acquired last year when it purchased start-ups CourseRank and Cramster.

Many readers of this blog are probably familiar with Chegg for their book rental business which became a signficant driver for change in the business models in the higher education textbook market in recent years. The company also spun off Kno, which has been working on digital textbooks and a digital reader device.

Chegg's vision is to reach college students every day of the year. An ambitious challenge, but something stores ought to keep in mind in terms of managing their student relationships. As Chegg continues to branch out, stores should watch and learn. The company has some interesting ideas about engagement from which the industry could learn.