chgg founded 2005 headquarters santa clara ca founder s osman rashid aayush phumbhra josh carlson key people dan rosensweig ceo aayush phumbhra founder industry education products online textbook rental etextbooks homework help course scheduling and review and scholarships via zinch . employees 300 july 2012 slogan s save time save money and get smarter find cheap textbooks website http www.chegg.com chegg is a company based in santa clara california that specializes in online textbook rentals both in physical and digital formats homework help online tutoring scholarships and internship matching . it is meant to help students in high school and college . the company was created in the united states by three iowa state university students in 2001 and was founded by entrepreneur aayush phumbhra . 1 the name chegg is a contraction of the words chicken and egg based on the founders experience after graduating from college ; they could not land a job without experience but could not get experience without a job a chicken or the egg type of quandary . 2 contents 1 history 1.1 ipo 1.2 ingram partnership 1.3 acquisitions and investments 2 board of directors 3 business model 4 competitors 5 finances 6 services 7 green marketing promotion 8 see also 9 references 10 external links history edit in 2001 josh carlson mike seager and mark fiddelke create the precursor to the business called cheggpost.com a craigslist type classified service for college students at iowa state university . aayush phumbhra who attended iowa state university and was an avid cheggpost.com user approached carlson in late 2003 with the idea of taking the company national . phumbhra mentioned the service to a friend osman rashid who saw potential in the idea joined as chief executive officer to help fund the company in 2005 and formally launched chegg inc. which was incorporated in august . carlson remained until february 2006 and then left to pursue other interests . in april 2006 chegg found some initial investors including sam spadafora mike maples and others . the co founders quit their regular jobs to focus on chegg full time . they tested services acquired three college classifieds businesses and publicized chegg via campus campaigns at suny canton and word of mouth . in summer 2007 the firm launched textbookflix.com which used a textbook rental model modeled after netflix . 3 rashid and phumbhra decided to switch the textbookflix name to chegg.com in december 2007 . according to a company spokesperson chegg rented its two millionth book in 2010 . 4 ipo edit chegg began trading shares publicly on the new york stock exchange on november 13 2013 . according to the san jose business times the ipo raised 187.5 million and gave it an initial market cap of about 1.1 billion . 5 ingram partnership edit in august 2014 chegg entered into a strategic partnership with ingram content group to transfer ownership of both current and new textbook inventory to ingram equaling approximately 10 % of chegg s anticipated textbook volume for the fall 2014 semester . the partnership is a significant change in direction for chegg and reduces the overhead costs of handling storage and direct shipping . 6 in february 2015 chegg announced that it would deepen its partnership with ingram by making them responsible for purchasing 100 % of textbook inventory . chegg continues to market the books to students directly as well as control pricing and catalog selection while ingram handles distribution logistics and warehousing of the books . the intention of the strategic move is to cut costs and work towards 100 % digital revenue . 7 acquisitions and investments edit 2010 courserank a service that allows students to review courses and plan their courses for upcoming semesters ; 8 cramster a provider of online homework help and textbook solutions ; 9 notehall an online marketplace for purchasing or selling class notes . 10 2011 student of fortune an online tutorial marketplace for homework help ; 11 zinch a service that matches high school students to college recruiters ; 12 flux software co. 3d3r a mobile app development firm . 13 2014 campus special a coupon distribution service for promoting deals for local businesses to nearby students and campuses ; 14 instaedu an online tutoring service ; 15 internships.com a division of careerarc group llc and the largest student focused internship marketplace . 16 board of directors edit as of april 2015 the board of directors is 17 dan rosensweig president ceo and chairman jeffrey housenbold president and ceo shutterfly marne levine coo instagram barry mccarthy former cfo netflix richard sarnoff senior advisor kohlberg kravis roberts & co. ted schlein partner kleiner perkins caufield & byers john york ceo san francisco 49ers nfl business model edit it is estimated that in 2009 college students spent an average of 667 on their textbooks . 18 a second estimate was 1000 per year 19 with signs that textbook prices were increasing faster than inflation . 19 moreover some college bookstores would offer to buy back the used books for a fraction of their original price . 1 the founders began noticing the trend of online rental from the success of services like netflix . 20 consequently in the summer of 2007 rashid and phumbhra re positioned the company along the lines of netflix as a way to rent textbooks to students . 1 21 since chegg had little money initially when an order came in rashid would buy the book using a credit card and have it shipped to the student until automation came later . 22 at one point with a huge volume of traffic on his credit card his credit card firm suspected fraud but rashid was able to persuade the credit supplier to extend credit using multiple numbers of cards . 22 books normally rent around half the retail price ; for example a macroeconomics textbook priced at 122 at a college bookstore would rent for 65 at chegg . 23 but savings varied from book to book . 24 stories in campus newspapers helped spread the idea . one senior at arizona state university calculated he would spend about half as much renting books than buying them for one semester . 2 the idea clicked . in 2008 the firm hired the former chief executive of match.com jim safka to run the firm . 25 in 2008 revenues were about 10 million ; in 2009 revenues in january alone were 10 million according to safka . 25 the firm has raised additional capital from venture capitalists . the company also started a campus representative program which paid the enrolled college students per referral for purchases made by other college students . 26 in january 2009 usa today reporter julie schmit described chegg as a leader in the burgeoning arena of college textbook rentals . 27 the firm had 55 customer service reps at that point . 28 since many textbooks become out of date quickly often replaced with new versions a key to profitability will be how long a book can be re rented or recycled ; in the market for rental cars for example firms such as hertz and avis buy new cars but sell them after about a year or two of service . but what is the useful life of a rented book the market can be tricky said market analyst kathy mickey because professors must use the same books for several semesters in order for book rental companies to make money on the programs . 29 competitors edit the college textbook market has a variety of competitors . while the main source of books for college students is college bookstores there is an increasing number of options . 21 bookseller barnes & noble which owns 636 college bookstores began its own textbook rental program in january 2010 largely patterned along the lines of chegg s service . one report is that barnes & noble will rent books at about 42 % of their original price on average . 18 students can also rent textbooks from their college bookstore or online with orders shipped to their college bookstore for pickup according to one associated press report . 18 the u.s. congress set aside 10 million to encourage college bookstores to rent textbooks 29 so bookstores are starting a up rental programs as well . follett higher education group started up a rental program in 2009 . 29 wall street journal reporter peter king compared several options for textbook rentals in april 2009 . 30 he compared firms such as bookrenter.com campus book rentals chegg and textbooks.com which sells textbooks online but offers a guaranteed buyback later making these books quasi rentals . 30 king compared offerings related to an expensive accounting textbook 31 and noted some confusion with book packages with return labels differing from the firms which had been ordered from ; figuring out that the original sources were campus book rentals and chegg required matching the shipping tracking orders with the email invoices . 32 a chegg spokesperson said the firm sometimes uses strategic partners such as ecampus.com if a particular book isn t in its warehouse but the reporter wondered whether the use of third party suppliers might cause confusion when books needed to be returned at the end of the semester . 33 chegg was the most expensive rental and charged sales tax . 33 the least expensive alternative was textbooks.com although this firm required an upfront expense of 117.50 ; king surmised the upfront payout would mean college students had less money available during the semester . 33 in all cases books had to be returned by the deadline to make the cost savings worthwhile . 34 the online alternatives were substantially better than buying the book from the college bookstore and selling it back to that bookstore at the end of the semester . 35 in a test using a different book chegg had the lowest price while other firms did not even carry the book . 36 textbooks.com according to the report does not offer buyback chances to all books it sells . 36 other competitors include rafter warehouse deals and apex media . 37 finances edit one report is that the firm first received 2.2 million in financing in january 2007 led by mike maples through maples investments now called floodgate fund and gabriel venture partners . in august 2008 oren zeev is believed to have invested 4.7 million 38 then with primera capital led the series b round of 7 million which included participation from prior investors gabriel venture partners and mike maples . one source suggests the firm raised 57 million in november 2009 . 39 another suggests total equity financing since inception as of january 2010 is in the range of 150 million primarily from venture capital funding . 40 investors include foundation capital insight venture partners kleiner perkins caufield & byers pinnacle ventures and triplepoint capital . 40 services edit chegg ships textbooks from a warehouse in shepherdsville kentucky which is close to ups s worldport air hub facility . students order books by entering the isbn title or author on the chegg website . textbooks can be rented by the term such as a quarter or semester . 41 textbooks are mailed in branded bright orange boxes . at the end of the term students receive by email a pre paid postage barcode which they print and affix to any box . 41 students must pay late fees if the book is not postmarked by the deadline . chegg permits reasonable highlighting in books but doesn t permit writing in them . 42 the company offers a 21 day money back guarantee for any reason . further chegg has a program of buying used textbooks from students to increase inventory . chegg also sells books that may not be rental candidates because of student kits or other consumables . citation needed green marketing promotion edit