After securing a $250,000 investment from Mark Cuban during an appearance on ABC’s popular show, Shark Tank, the founders of Packback are on the rise.
The company, which makes it possible to rent, buy and sell textbooks quickly and without breaking the bank, started at Illinois State when Kasey Gandham, Mike Shannon and Jessica Tenuta had an idea.
“We want to become the Redbox for digitial textbooks,” Gandham said.
Gandham, Tenuta and Kelsey Lutz, a partner at Dashfire and one of Packback’s first investors, visited Northwestern May 13 to talk about their experience as a startup, Shark Tank and more.
The event, which was hosted by the business fraternity Alpha Kappa Psi and Entrepreneurship in Action (EPIC), drew more than thirty people.
Because the founders of Packback were in the AKPsi chapter at Illinois State, they reached out to other chapters in the area.
“They chose us more than we chose them to come speak,” Northwestern AKPsi President Chris Miller said.
Dashfire, which is a business that helps start-ups launch, helped mold Packback into the budding company that it is today.
The founders of Packback identified a hole in the textbook market — used books. Because they are financially the best option for many students, the majority of all textbooks purchased are used. The only problem with that is that students are still overpaying (compared to the rates on Packback) and the publishers get none of the money.
“Textbooks are an $8 billion industry, which is insane,” Gandham said. “You guys especially get the short end of the stick, as you’re on the quarter system.”
The company offers $5 day rentals for online textbooks because, according to one of their surveys, more than 70 percent of students don’t open their books at least once a week.
They also offer quarter, semester and year-long rentals, in addition to selling books through their website.
Despite having a solid business plan created, they were having trouble getting their foot in the door. Before appearing on Shark Tank, they had to go to extreme measures to get the company off the ground.
“We would go to classes Monday through Wednesday and do our internships at night,” Gandham said. “Then we would skip classes after Wednesday, drive up to Chicago and memorize the faces of the investors on their LinkedIn pages and sneak into 1871. There, we would try to talk to investors and give them a really quick pitch.”
Their breakthrough moment came through just as they were about to give up hope. They cold-called the CEO of McGraw-Hill Education, and he picked up.
After securing that investment and facing off with Mark Cuban, the company has grown significantly.
“We now have 11,000 users,” Gandham said. “Getting about 1,000 per week since Shark Tank aired.”
Gandham said that they actually taped that episode of Shark Tank last September and had been secretly working with Cuban afterwards.
“I was worried initially when they showed up without a slide deck to present,” Miller said. “But I think the informal nature of the event actually helped a lot. It made it so that people there could really direct the conversation where they wanted it to go by asking questions about things that they are specifically interested in. I think that the speakers really enjoyed the event and those who attended were able to get some good advice.”