As we start a brand new year, one can only hope we've seen the worst of the recession.  Although predictions for the economy are optimistic, the aftermath of last year's layoffs have sent much of the workforce back to school.  Classrooms are crowded and budgets are tighter than ever.  Today's student needs to learn on a dime.  On top of the cost of tuition, supplies, transportation, room and board, textbooks are one of the overlooked expenses students are forced to burden in order to get a quality education.  Students spend an average of $900 per year on textbooks which is 20% of tuition costs at an average university.  There's even an entire campaign dedicated to making textbooks more affordable.  For years, buying and selling used books was an option, but now there's another solution.

Once again, renting comes to the rescue!  Over the past couple years, several startups have emerged to alleviate student wallets by applying the successful Netflix model to textbooks.  A recent USA Today article featured Santa Clara-based Chegg.com, a leader in the growing space of college textbook rentals. Although they are yet to turn a profit, Chegg has raised $25M in venture funding and already has hundreds of thousands of customers on more than 4,000 campuses.  Through the simple idea of renting textbooks, Chegg saves its customers 50 - 70% the cost of buying books new.  That's a lot of money to a cash-strapped college student!

But Chegg isn't the only one.  Similar startups like eCampus.com, BookRenter.com, CollegeBookRenter.com and CampusBookRentals.com attempt to solve the same problem.  Even traditional university bookstores are jumping on the bandwagon to capture a piece of the pie and give progressive students what they're now asking for.  My wife, a PhD student at UC-Berkeley tells me the local bookstore, Ned's Books (which has multiple locations across the country) is now promoting textbook rentals on their homepage and in their store.  I have a feeling this isn't a fad.

It's often the simplest ideas that have the biggest impact.  Rent things, save money.  There's your economics lesson for the week.

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Anyone who has spent more than 30 seconds browsing YouTube understands the power video has as a persuasive communications medium.  Viral videos can turn ordinary people into television stars overnight (the now famous JK wedding entrance dance clip was recently spoofed on The Office).  And catchy consumer skits can make or break a brand (like the amateur music video United Breaks Guitars).  Video has the ability to appeal to multiple senses and can make complex points quickly.  Which is why, when you come across a good one, you can't help but pass it along.  But with the millions of amateur film makers out there, good quality isn't so easy to find.  Standing out from the clutter requires a certain level of polish and content that can hold a viewer's attention. 

It's no different in the business world, where film is becoming more and more of a requirement -- especially for those just entering the marketplace.  Today's consumers are strapped for time and are easily bored by text heavy marketing collateral.  If you can't make your point in 60 seconds or less, you may be losing potential customers.  Having visual pitches, promos and demos are a must.  Unfortunately, well-produced films can cost upwards of $1,000 for a 60 second clip.  To a startup, that's a lot of cash!

Luckily, I was recently referred to a great resource for getting professional video production services on a startup budget.  A company called TurnHere runs a special offer for small businesses and startups where you can get a 60 second video filmed, edited and produced for free.  That's right, FREE!  You then have 6 months to use this piece to promote your company in any way you'd like.  After which time, you decide whether you'd like to purchase or stop using the video.  This try-before-you-buy approach is perfect for startups trying to get off the ground and is a smart move on the part of the video production company since it gets new customers (like me) to consider professional video production without the up-front cost.  Check out the promo they helped me put together for Rentcycle:

I had an excellent experience working with TurnHere and highly recommend them to other startups.  Their professional staff has an eye for telling powerful stories in a short amount of time.  Their turn around time is super fast -- it only took four days from filming to final delivery.  And obviously, the price is right.  I'm looking forward to maximizing this promo to get the word out about Rentcycle.  I'm confident this video will help me bring in enough additional revenue in 6 months time that the film will pay for itself.

See you on YouTube!

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As the founder of a new rental startup, I've always been a fan of the Netflix model.  I loved watching this company shake things up after years of complacency in the movie rental industry.  I enjoyed the David and Goliath style competition that developed between nimble Netflix and monstrous Blockbuster.  And I continue to be impressed by the innovations Netflix continues to push out.  Maybe it has something to do with their unique corporate culture -- if you wanna peek, check out this fantastic Netflix culture presentation.  Clearly, I'm an admirer.  Which is why I was pleased to see a new startup applying this same simple model -- mail-order renting -- to another sector.

A new website, Rent the Runway (RTR) mixes Netflix with high fashion.  Check out this great feature from last week's New York Times.  Geared toward trend-conscious women on a budget, RTR offers dresses from A-list designers at a fraction of the cost.  Rather than blowing an entire paycheck for one night out on the town, RTR provides options for single-use stylings that don't break the bank.  Rentals run between $50 and $200 for four days of use.  The concept is simple: find a dress you love, schedule delivery, wear it, drop it back in the mail.  They even take care of the dry cleaning for you!  The founders, who just finished the testing phase on Monday, were particularly smart with the roll-out of their product -- making it invitation-only, creating a sense of exclusivity and attracting 20,000 women to the wait-list.  Very clever and perfect for the gotta-have-it mentality of the fashion world.  I didn't expect any less from two HBS grads.

Like any startup, RTR has its share of challenges -- quickly changing styles, divergent tastes, covering costs for each dress, delivery fiascoes, sizing and fitting issues -- but I believe they've got something here.  Reminds me of a couple other luxury rental companies I'm also a fan of, Avelle (formerly BagBorroworSteal) and BorrowedBling.  The economics of renting make so much sense, and I think companies like these are opening up opportunities for the everyday person to enjoy the finer things in life.  Kudos.

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