This was a pretty scary idea for us back then, when we were still studying and, like a lot of students, we didn’t have any networks, money or corporate experience to start a business right off the bat. The particular business idea that we were looking to create and introduce to Australian university students was textbook rental.
This business model required money, however, and a lot of it at that. Here is a quick video on what a business model is, which is a pretty important concept if you are a budding entrepreneur. With a capital-intensive business model like textbook rental where we have costs like inventory, storage, shipping, rent, and so on … we needed money, and fast.
The bank laughed at us when we asked them for a loan. Our friends and family offered us a small amount, but we really needed a lot more than this to give our business a real go. The only thing left was to pitch investors our business and hope that someone would believe in us, our team and our vision enough to back us with cash.
When we were creating our pitch deck using powerpoint slides, we became quite anxious as we realised how small we were in such a big world. We did not have any significant working experience or large, global networks that could give us the edge in business. All we had in fact, was ourselves.
The student advantage
We had to make do with this, and so we brainstormed ideas about what we had within us that could inspire and compel investors to believe in our vision and our ability to execute on our vision. We probably pitched 100 times in our first year, and I quickly realised that the only thing we had was actually the most important thing; not experience or networks.
Our team was comprised of four people – all university students at that time who had also personally experienced the pain of purchasing expensive textbooks semester after semester. If we distill this fact down into two principles, you can begin to understand why an investor would have confidence in us to execute our vision to become the largest educational platform in the Asia-Pacific.
Leveraging on these principles, in our first year we were able to raise US$1.5 million from venture capitalists, and have since raised over US$5 million in total – from Australia, Israel, Silicon Valley and more recently, from Singapore.
This has allowed us to generate tens of millions of dollars in revenue this year and also have a paying customer database of over 40,000 customers. I will now talk about these two principles which you can use going forward.
Two key principles
Firstly, the team were all students at university, which meant that we understood students. We were living, breathing students who understood what students liked, what they did not like, where they hung out, how they studied, and how they partied.
Our closeness to the target market meant that we could use our inside knowledge to create strong business tactics that we know would work much better on the student demographic. This is something that adults or non-students would have much more of a hard time coming to terms with. This was our first key strength.
Our next key strength was personally experiencing the problem that we were trying to solve. We knew from our first day at university that textbooks were heavy and expensive. There were no lockers to store them in and, being a student, I was not earning money – so spending over US$100 on a single textbook caused a lot of pain for me.
Wouldn’t it be great if someone could send the books to me? Wouldn’t it be great if instead of shelling out $100 for a new textbook, I could access the exact same textbook for half the price? Personally experiencing the current problem provided us with a lot of motivation and understanding of how to solve it; much more so than anyone who had not personally experienced this problem before.
Combining these two factors made for a compelling pitch, and fortunately we were able to start a relationship with some amazing investors, who have also become good friends and mentors. Now, in saying this, just because you have personally experienced the problem and you are close to your target market will not guarantee a successful capital raise or a successful business.
You may also be successful building a business in which you have not personally experienced the problem you are solving or you are not close to the target market demographic. There are no guarantees in business.
It is a slow, daily grind with many ups and downs – the most important thing is you do not give up. We have pitched hundreds of times over the years and even to this day we still hear no’s. But we keep moving forward and never give up.
Remember, Mark Zuckerberg was a student when he started Facebook. Larry Page and Sergey Brin were working on Google out of their classrooms at Stanford. There has been no better time to be a student and future global entrepreneur than now.
There are some really exciting businesses being built by students at the moment, such as Aimazing or Experience Ace from students at Nanyang Technological University (NTU). I am very inspired by their courage and vision to start building something and working hard to hit big goals.
Following start-up, technology and investment updates
If you are interested in following news related to start-ups or technology, I would recommend Tech in Asia – the team over at Tech in Asia are young and energetic people who provide a lot of useful content for student entrepreneurs and the latest updates or investments in the region.
I just attended their amazing annual conference in Jakarta where there were hundreds of students from universities and high schools just like you there. I’ll hopefully see you at the Singaporean conference next April.
Which areas would you like me focus on for future articles? Let me know here in the comments below. I welcome all suggestions and will get back to all of you :)