A couple years ago, when David Miller was himself a college student at UC Santa Cruz, he also worked at a co-op bookstore. The bookstore’s main mission was to undercut the prices of the official campus bookstore, something it more or less did. But even so, Miller himself (who had an employee discount on top of everything) didn’t buy books at the co-op. "It was cheaper on Amazon Marketplace," he says.
Miller told his friends that they were missing out on savings by buying anywhere but online. "I would tell all my friends to use Amazon," he says. "I wouldn’t tell them to support the business I was working for." But none of them listened; they all trudged off to the campus bookstore like lemmings. He found that for students of his generation, it seemed that "the Internet was this thing students used to communicate, a thing they used to submit homework." But for some reason, they just weren’t using the Internet effectively as consumers—and as consumers of the wildly expensive product that is American education.
And so it was that SlugBooks, which Miller pitches succinctly as a "Kayak for college textbooks," was born. Miller knew he could save students hundreds of dollars each semester if he could get them being savvy about price comparison online. (An intro biology book with a list price of $230 and an in-store used price of $172 will sell on average for $56 on SlugBooks.) Now, five years later, SlugBooks has just expanded into the U.K. and Australia, and has developed novel marketing techniques, launching the second season of an animated YouTube series called Dorms.
In launching SlugBooks, Miller faced two major problems. The first was to confront the puzzle of the species homo discupulus: the student. Their behavior is strange. They are short on cash, so undercutting on price should win every time (Miller says many students are especially good at buying ramen noodles in bulk). But they’re also largely affected by the rituals of campus life, and by the behavior of their peers: if everyone shops at the campus bookstore, they’re likely to as well. Also, to state the obvious: they’re younger; they have yet to enter "the real world," and so they simply have less practice at being savvy consumers.
These puzzling features of student behavior are one reason why Miller’s product has remained virtually unchanged in years, and "every pivot happened on the marketing side," whether it was hiring street teams to spread the word about the site, or putting together a web series like Dorms.
The other major obstacle Miller had to confront is what a cynic might term the "educational-industrial complex." For instance, now that Miller has expanded into the U.K., he has seen an entirely different mindset on textbook publishing. He says that a British student expressed surprise to learn that textbooks were required in American schools, something not always true in the U.K. Miller expressed his own surprise in return, since the notion of a non-required textbook seemed rare as a black swan. "The student said, ‘Well here, sometimes a student can’t afford a book, so it’s a political issue. You can’t require it if the student can’t afford it.’ I thought, ‘That’s interesting. In America, students can’t afford books either, but they just bill them to their student loans.’"
Miller thus has come to see the tactics that educational publishers use to keep their books in demand and their prices high to be a contributor to our trillion-dollar student debt load.
Some of those tactics are very clever and, Miller suggests, anticompetitive. Miller points to the example of "custom editions" of textbooks. As the likes of Amazon created a national resale market for the editions of some commonly used textbooks, some publishers responded by creating slightly tweaked versions for major universities. Instead of getting "Biology 101," you’d get "Biology 101: University of Alabama Edition," say. "They take the market for this one book that’s essentially nationwide, and they cut it up into tiny markets," says Miller.
Miller also points to publishers that have created online homework submission platforms that add minimal value, yet are used to sell new books. "If you want to buy the software license without the book, it’s $80, and if you buy it with the book, it’s $100. So they’re basically producing the software for nothing, then using it to require students to buy a brand new book," alleges Miller.
So for every step Miller takes toward creating a more student-friendly marketplace for textbooks, he knows he faces a wily adversary. Returning again to "custom editions," he speaks of textbook publishers with a tone of almost reluctant admiration. "That's the most genius thing they’ve done," he says.
[Image: Flickr user Horia Varlan]