If you didn’t learn from failure, you haven’t really failed. So, RIP Rafter – but there is so much to learn from its demise. Rafter, when firstborn, was named “BookRenter”. It started off really well, with an innovative idea of affordable textbooks for students. It was a solution to high priced college textbooks – like ‘I would stop reading than buy textbooks’ at high prices. Rafter came in the picture as a broker to bulk sell the digital or printed textbook at low prices.
In 2006, Colin Barceloux, founding father of rafter, started up in the geographic area with 2 engineers – Chris Williams and Philippe Hulbonhoa. In 2010, Netflix co-founder Marc Randolph joined the board of administrators. In 2012, BookRenter was rebranded as Rafter. In 2014, Sara Leoni stepped up as chief executive officer.
Companies like Chegg, TicktBox, and CampusBusRentals were Rafter competitors. But its real competition was the evolution of technology and its prevailing use. Colleges did need Rafter any more to deal with textbooks online. Most colleges started using technology to create their individual online platform, which gave them more control. They should have read more textbooks before getting into the technology-driven business.
Funding and Investor Details
Rafter was funded by Storm ventures and Adams capital in the days of infancy. From there on rafter raised USD 86 million in about seven rounds of funding from several different investors. That’s quite a cash they gathered from an innovative idea – even though it didn’t work. Their business model was profitable for students, and a financial suicide for the business.
Business was a single source model, Rafter would pursue college to sell their textbooks via rafter on low price to all the students who enrolled in their courses (yeah, all the students, even if they didn’t want it). Many students didn’t like this model as they could get a better deal elsewhere or the fact that they had to return the book after the end of the course (or some students don’t even bother reading textbooks).
Through the autopsy report, it is observed there are two reasons for death.
- Rafter created a system that benefited students and college. But after the technology-for-all era, they kicked rafter out of the system cause now they could do it by themselves.
- Rafter bled heavily when students protested against their model to their colleges as they didn’t compulsorily want to purchase textbooks.
You don’t just need to start running to win a race, you have to run fast. Rafter’s model slowly turned obsolete as college caught upon technology. A tweak and tricks in the model or innovative additions in the model could have saved a life. They could have started the MOOC trend (which is an amazing model) if they moved a bit faster.
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