In Season 5 of business reality show Shark Tank, Chicago-based Kasey Gandham and Mike Shannon of Packback appeared with their big pitch: An affordable study solution in the form of pay per view e-textbooks.
The idea met with resistance as most sharks thought that there was no way the publishing industry would agree to digitize books and cut profits. Besides, won’t signing deals with publishers prove to be a long and arduous process? 4 out of 5 backed off. Except Mark Cuban. He made a deal of $250,000 for 20% equity. It was 2014, a year since the company was launched and along with Cuban, Packback signed Lakewest Venture Partners, Jumpstart Ventures, and others. In all, they raised $1 million.
Now, four years later, the company has launched a new digital Q&A product and secured a Series A funding of $4.2 million led by University Ventures.
So has the sharks’ interrogation proved irrelevant?
The students, Shannon has explained, “scour online and go to secondary used book retailers. These publishers are losing huge portions of what should be their core revenue.” It’s this potential outreach and a large chunk of profit (Payback gives publishers 75% of the revenue) that has lured publishers like McGraw Hill, Sage, MacMillan and Cengage Learning to partner with Packback. But it’s not just about selling e-textbooks online, students can also compare the rates of textbooks on the platform.
The textbook industry is a $10 billion industry, out of which $6 billion are used books. As professors ask students to refer to a wide array of books in college, an average student spends $1,168 on books annually. Packback’s digital, pay-per-view textbooks, therefore, makes buying expensive books, that may not be referred to as often, a thing of the past. Packback users can rent digital textbooks for $3-$5 for a 24-hour period. $5 is most common price point.
The Textbook Solution
Gandham and Shannon were students at Illinois State University when the idea of e-textbook rentals struck them. They saw the lack of innovation in the textbook industry and decided to go from campus to campus and publisher to publisher to change it. In fact, Shannon got their first publisher on board through a cold call. It’s this experience that has got him to claim, “There’s a severe public misperception of the higher education publishing industry as being overly conservative and stagnant in evolving towards digital. We’ve found this to be simply untrue…,”
However, in 2015, Packback moved from being entirely focused on digital textbook rental service, where they are competing with companies like Amazon, to a social learning platform powered by artificial intelligence. Gandham told Forbes that it was the desire to shift from a metric-driven approach in education to one powered by curiosity and critical thinking. “Listening to students and professors ultimately prompted the question of the pivot, but our drive to solve the problem of curiosity in education is what gave us conviction to go all-in,” he said.
Its digital discussion platform is called Packback Questions and is only available for students whose professor has adopted the platform. Packback claims that a professor’s 15 minutes a week spent on the platform significantly improves student engagement. In a respite from large, impersonal classrooms and dispassionate discussions, teachers and students use Packback for online interaction and follow the Socratic Method.
For example, the General Microbiology students at the University of Illinois at Chicago use Packback to share and discuss science. One of their recent discussions explored how vaccines are perceived – “their effectiveness and why some people distrust vaccines”.
What propelled the interesting discussion was a student who shared a video from Mayo Clinic Radio talking about the ineffectiveness of the December 2017 flu vaccine. The student asked, “Is it still necessary to get vaccinated even if a vaccine isn’t effective?” Another student responded by sharing an NPR article that said that even when a flu vaccine is ineffective, it still provides protection to some flu strains and helps symptoms to be less intense.
The discussion didn’t end there. When one student asked how responsible are parents in making their children susceptible to serious illnesses? Another answered by putting out a post discussing the top reasons of fear.
While this discussion could have happened anywhere else on the internet, what makes this platform unique is the presence of the professor. The professor can manage this online channel as his/her personal classroom. Not only can s/he pin posts, decide on which posts are going to be featured, but also offer individual feedback through the ‘praise’ and ‘coach’ button.
AI also plays a role. Every post is scanned by AI algorithms built by the company and if someone, say, asks a closed-ended question, the human moderators are notified, who can then contact the student and get it corrected. The discussion platform also has a button comparable to Facebook’s Like called ‘Spark’ but unlike Like and its variants, Spark an be only used for five questions per week.
While already present in 100 universities, Packback hopes to reach more than 100K students across more than 100 universities this year.
Like other ed-tech startups, Packback is painstakingly building its business and community. However, its innovation lies in wanting to put students in the driver’s seat and and nurturing their appetite for curiosity instead of passive consumption.
But like with other startups, AI could prove to be its golden goose. Packback’s founders have proved prescient in understanding that as classroom sizes increase and online education takes over, “improving access and affordability for the masses is going to be heavily hamstrung by poor assessments beyond multiple choice and a lack of student engagement.” This is where an AI-driven digital teaching assistant which can offer constructive suggestions can prove useful.