College

Entrepreneur Friday: BookRenter

Posted by Jean

bookrenter mehdi WHO: Mehdi Maghsoodnia

WHERE: Santa Clara, CA

WHEN: 2008

HOW: For many students, life after graduation means facing a mountain of student loan debt. When considering all of the costs associated with college – beyond tuition and into the cost of computers and textbooks – that debt can rack up, and amount to a significant setback. Mehdi Maghsoodnia saw this problem, and made it his goal to develop a solution. “In a public community college, you can end up paying more for textbooks than you do for the course credits,” says Maghsoodnia. “Why can’t it be more affordable for students? We have to make it affordable, accessible and effective.”

With a background in working with entrepreneurs at a business ventures firm, Maghsoodnia had been looking into a variety of business options to find where he wanted to take a leap. Realizing his passion for making education accessible, he began to develop a business plan much like that of NetFlix. Investing $20,000 into a large purchase of used textbooks, Maghsoodnia started small – offering rentals locally to students in California. Students visit the website and place a rental order for the textbooks they’ll need throughout the semester. The books, which range in price from about $10 to over $200, are rented at a fraction of their cost – much like airline seats, the rental price is set according to the book’s supply and demand. Once a book is returned, it’s checked for quality, and is either re-shelved or donated to impoverished communities in need of textbooks.

logo_and_slogan “Within the first year, we reached over a million dollars in revenue,” he says, and after expanding to serving students nationwide, they’ve seen growth of approximately 400% each year. “In a business like this one, it doesn’t take a great deal of money to get started. But as you grow, it requires more capital,” Maghsoodnia explains. With new editions of books being released, it’s important to keep inventory up to date – a process that is helped by a software system that tracks nearly a million titles they have in their inventory, and notifies them when their stock is out of date. Keeping books in stock and cash on hand are issues the company has faced several times since their launch — but Maghsoodnia explains that those points are the ones that keep him excited and aware of his successes.

Today, the company is investing its profit back into the company as they see consistent growth. However, Maghsoodnia hopes to reach profitability within the next few years, and maintain their high levels of customer satisfaction. “People have returned books with notes tucked into them, thanking us for helping them save the money they needed to pay off their car loan or tuition – it’s great to see that impact firsthand.” Recently, they launched a program that allows students to open their own BookRenter.com store. They serve as a BookRenter representative for their sorority or their campus, pointing students to their “store” – and for every dollar of revenue, the student earns eight cents. “This helps students earn money on their own,” says Mahgsoodnia, “and has served well for us in expanding to more campuses across the country.”

HIS ADVICE: “You have to know yourself really well,” says Maghsoodnia. “Are you the type of person open to taking risks and enjoying them? You have to be comfortable with risk, change, and moving on a dime. If you’re that kind of person—just go for it.”