We Rent Movies, So Why Not Textbooks? 398
Hugh Pickens writes "Using Netflix as a business model, Osman Rashid and Aayush Phumbhra founded Chegg, shorthand for 'chicken and egg,' to gather books from sellers at the end of a semester and renting — or sometimes selling — them to other students at the start of a new one. Chegg began renting books in 2007, before it owned any, so when an order came in, its employees would surf the Web to find a cheap copy. They would buy the book using Rashid's American Express card and have it shipped to the student. Eventually, Chegg automated the system. 'People thought we were crazy,' Rashid said. Now, as Chegg prepares for its third academic year in the textbook rental business, the business is growing rapidly. Jim Safka, a former chief executive of Match.com and Ask.com who was recently recruited to run Chegg, said the company's revenue in 2008 was more than $10 million, and this year, Chegg surpassed that in January alone."
