ASK STEVE #2 – Invest Your Time to Make Millions, Not Dollars

Steve,

I’m in the process of developing a Facebook application that helps students save on textbooks. The idea is that almost every teacher requires that you buy a textbook for the class, but many of them never use the textbook. I’m going to collect information on which teachers don’t use their textbooks so students don’t buy them in the first place. With the cost of textbooks exceeding $100 in most cases, not buying simply one book is a huge savings. The value creation is clear.

My idea for monetization is for students to be able to click and buy the books they do need from Amazon and for me to collect the affiliate fee. However, I fear that most students will get the information about which books not to buy and then simply buy the remainder of their books from their college bookstore, thus depriving me of any revenue. How do I increase the conversion rate so I’m maximizing the revenue I receive from these students? Do you have any other ideas for monetization?

Thanks.

Tyler

Tyler — walk away :) If you’re going to spend time on something, why not spend time on something that’ll make millions of dollars, as opposed to hundreds? [That goes for anyone.] I don’t think there’s much of a business here — is your expectation that after students are done with a class, they are going to tell you that they didn’t use their book? I’m sure there are some students that won’t use their book, but others that will — I’m sure 98% of classes with a book, use the book in some way or another.

And I don’t know about you, but back when I was in college, when I was done with a class — I was DONE. I wasn’t about to think about it again — nor go online and give my feedback on the class.. unless you were going to pay me or buy my book back, then maybe I would have.

Most everyone uses their book in class. Also, everyone (majority — what 95%???) buy their college books at the college book store. Plus, they typically use a new book every year (if not more than that) — and if on your site, a teacher was stated as not using their textbook … you better bet that they will find that out, or their superior, and force that teacher to use their book again.

Stick away from college text books online — nothing seems to really work here (remember bigwords?). What about college note taking though? Not sure if anyone (Scribd?) is getting into that market, but there’d definitely be some opportunity there I’d think.

Although once again, with the same amount of effort/time on your end, can you make millions — as opposed to hundreds of dollars?

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  • Tyler

    Steve,

    Thanks for taking the time to evaluate my idea. This is actually what I expected to hear from you because they are all things I have considered. Please allow me to critique your critique.

    First, I do not intend to become a millionaire with this idea. My goals are to see if this idea has any legs, establish some credibility by actually creating something, and finally to pull in some side money. Essentially, an internet lifestyle business. Low risk, low startup costs, low reward. I’m perfectly happy with that.

    Second, it may be true that 98 percent of classes use a book in some way, but that some way may be a small and insignificant part of the course. I know students that refused to buy a book that was the central part of the class. If you only use the book once and pay $100 most students would probably not purchase the book.

    Third, the idea is that everyone benefits from sharing their experience. Yes, I’m done with my classes and ready to move on, but if someone in another class takes the time to share what books they use then I will benefit. There is a true network effect.

    Fourth, I don’t know how long ago you graduated from college but to say that 95 percent of students buy their books from the bookstore is simply not true anymore.

    Fifth, I agree that most businesses trying to make money on college textbooks fail. That is why I’m redefining the meaning of success. This is not a business intended to be venture funded. Do less with less and expect less. That is success in my mind.

    Sixth, how can you simultaneously shoot down my idea and then suggest college notes as a business? Now that is an idea that has absolutely no chance of making money.

    Seventh, you really didn’t even address the substance of my question. Assume for the moment that this does have the potential to meet my needs for a business (not yours), then how do I increase the conversion rate so I’m maximizing the revenue I receive from these students?

    Don’t take this response as me being upset. I’m not. I’m simply trying to expand the debate and clarify my expectations for the business. Maybe your readers can chime in. Thanks again.

    Tyler

  • http://www.vestedventures.com Steve Poland

    @Tyler — One other thing you’re going to need to know is what book is used in each class if you’re going to turn them into affiliate links. If you leave it to students to input this info, I think you’re going to find that students are lazy and don’t (or will have to understand the value to them for spending their time doing that). I really don’t have an answer for how to increase the conversion with this idea, maybe others can chime in. Best!

  • http://www.ericnagel.com/ Eric Nagel

    Instead of entering book info, go w/ simply the ISBN. This’ll make things easier.

    Why Amazon? There are other college textbook sites out there, that specialize in college books. I’d look for those.

    And I completely disagree with Steve – there’s nothing wrong with making a extra couple hundred dollars vs. swinging for the fences each time. Steve knows my views on this. Most of you will not change the world – sorry, it’s the truth. But ALL of you COULD make an extra $25,000 / year with a simple idea like this. Build it, make it profitable, repeat. The extra income will be welcome.

  • http://www.techstbooks.com Colin Dowling

    Facts important to the discussion: The textbook publishing industry concedes that only 60% of students buy a book for a class. They also change editions as often as possible because they do not benefit from the sale of used books.*(

    Source – My father, a college professor who writes textbooks.

  • http://www.fafarazzi.com Chris Keller

    Tyler, one more thing to consider that was a win-win idea for the textbook world, and still is. Students who sell their book back to the bookstore usually get crap back, so the key is to have the students sell them back to students when a new book is not required to be purchased.

    The buying student pays less than they would at a bookstore and the selling students gets more back from the student payer than from the bookstore. It’s a win win. This concept started back in ’01 (my best friend started a site for this at Virginia Tech) and another guy I know now does it (and has one of the most popular Facebook apps (Grafitti)) with BooksOnCampus.com.

    I agree with Steve is not a mega million dollar idea unless you had every student on every campus using the site and you received a transaction fee for the sale, but that’s really the hard part to enforce.

    Overall, I’d say if you’re passionate idea, try it out to learn from it, even if it doesn’t make you a million dollars, you probably don’t have much to lose at this point.

    Chris

  • http://blog.juvely.com/ Luca

    “Fourth, I don’t know how long ago you graduated from college but to say that 95 percent of students buy their books from the bookstore is simply not true anymore.”

    I 100% agree with this. I have just finished my first year at uni and almost all of my books (except for one I couldn’t find) I got from Amazon. The uni bookstore was about £10 more expensive than Amazon for new books, but I saved even more by getting most of them used.

    As for your idea, it sounds good, I bought a load of books I didn’t need. But you need a way to encourage people to give feedback and the simplest thing the appeals to students is money (or alcohol, but money is simpler)!

    Also a related idea to yours is a way for students to sell their old textbooks. I doubt I will need a lot of mine again, but I am sure someone else could use them.