Updated
Used textbook site, Chegg, has hit a nerve.
Chegg is undercutting the prices of textbooks at college bookstores, and a recent BusinessWeek article about the Santa Clara, Calif. company has climbed to second place on Digg’s “Top in 24 Hours” page (as of this writing). We’re not sure exactly why. One reason may be because the young audience at Digg is enjoying the story — seeing this as a way of indirectly sticking it to the publishers and Barnes & Nobles and other college bookstore owners who currently charge such high prices. We remember being unimpressed by the discounts of used books at college, so we can empathize.
Chegg provides an alternative for textbooks and other school supplies, such as computers. It has just raised $2.2 million from Gabriel Venture Partners and angel investor Mike Maples, who backed the company earlier. The company tells VentureBeat it made $100,000 in revenue in December, though is not profitable yet. It saw 44,000 unique visitors last month, and has seen a 200 percent increase in traffic each month since August.
Update: Corrected to “thousands” for unique number. Apologies.
Tags: co:Chegg, deal, inv:Gabriel-Venture-Partners, inv:Mike-Maples11 Comments
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ted said:
hehe, I read 44m and was like, WHAT?
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Osman Rashid said:
Matt, thanks for the article. We are trying to give students a clear voice about things that impact their wallets and allow them to do something about it. Clearly, the bookstore monopoly has been roughing feathers forever – we hope that this “Cheggolution†will positively change things.
On the 31st, we’ll be launching a cool money saving feature for college students – so please stay tuned.
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Ramit Sethi said:
Used textbook sites that “screw the bookstore” are one of the examples I wrote about in 8 stupid frat-boy business ideas.
How many times will this idea come up and die again?
(Other stupid frat-boy ideas: t-shirt sites, discount cards, yet another social network, anything where you plan to make money exclusively from ads…and there are a few more).
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Ved said:
What’s so special about this site ? How are they going to compete with amazon ? Funding to this and other web sites reminds that we may in the middle of bubble 2.0 era.
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Matt Marshall said:
Ramit, Ved, good questions. I’m still wondering what the big deal is….
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Sarah said:
I think chegg sucks and the only thing they have is publicity
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Robert said:
Not clear how it is better than Craigslist (free and philanthropic to a large extent). It does not look fancy but excellent in functionality.
Chegg has started partnership with book sellers to sell books (It is not a students’ market place anymore). Students will be better off using their on campus news server or bulletin boards to buy and sell used books from each other. Course recommended text books generally differ from university to university.
One thing is certain. Venture capitalists don’t fund unless they see huge potential profits which have to come from some place. Chegg used to restrict user registration to people with university/college email ids. Not any more.
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Osman Rashid said:
@ Matt, Robert & Ved, I’ve tried to respond to your comments…
Overall - our core value is simple - students save $$$ and time whenever they transact on Chegg. Proven, tested & loved by students.
i) Why is Chegg better than Craigslist?
A) We do not compete with Craigslist or say we are better (we even use Craigslist for non-student stuff!). The correct word is that we are ‘different’ since our focus is much narrower. Here are two main reasons why Chegg is different:
1) Relevancy to the student lifestyle.
2) Hyper Local - on your campus and not the whole city.ii) Is Chegg is open for all to do everything?
A) No. Non-students can only POST. They cannot BUY or proactively contact students or do what we will announce on 1/31. We got quite a few emails from people living close to campuses looking to sell used items for cheap to students. This is great service for students and we wanted to make that available. Again - a service for students.iii) Is Chegg still a Marketplace?
A) I will contend that the 50,000 plus USED item postings in the last few months makes it a marketplace. A good marketplace has both Used and New items.iv) Competing with Amazon.
A) On the contrary, we see ourselves becoming more a partner with them and others. We are looking to be a marketplace where others can come and know that their target user is in attendance. We put up a few titles to show everyone that cheaper books are possible PLUS show a working product, not to mention save students some money (we’ve had orders as high as $386 from a single student - which gave her a saving of $120 compared to other sites).Two weeks ago USA Today wrote an article on how the students today are in higher in college debt than ever before. Saving money is on most students mind, and Chegg is trying to make it easier to do just that.
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Robert said:
I liked Chegg in the beginning. Today it is not different from price scanning sites which put together text book suppliers and their asking prices. If Chegg sees itself becoming a partner with Amazon, it not going to be “different” any more.
Students are in debt today not because of essential expenses (tuition & books which in general are paid by parents) but non-essential expenses.I am not telling what is essential or non-essential expenses to students. If they are in debt they are to blame; not text book prices.
It does not make sense why saving on text books always gets priority. Is it because most hate studying or anything connected to it? They dont want to spend any thing connected to what they hate.
They never try to find ways to save on non-essential expenses (Designer Clothes, Cars, beer, i-pod, Music CDs etc.). They dont mind paying whatever Steve Jobs aks for his iPod. No problem paying whatever Budweiser aks for. No problem paying whatever sports tickets are priced. They never complain they are expensive or over priced.
Yet, they want to save whatever ($400 or so) they pay ever semester on a couple of text books. If they really want to save on book, they should use library course reserves (100% saving on books!) instead of complaining on higher book prices.
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George said:
You guys should try http://www.collegemedium.com
It’s a pretty cool site with some pretty unique features.
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ann said:
THESE PEOPLE HAVE CRAP CUSTOMER SERVICE
Chegg has terrible customer service — this is my first and last time dealing with them. Their policy is for returns within 15 days, but their lack of customer service ensures you can’t get the book back because it takes 10 days to arrive and 4 days to get email response from customer service.
