Textbook Case: A Startup That Does Good

When Christopher “Kreese” Fuchs graduated from the University of Notre Dame with a mechanical engineering degree, it was just after the dotcom bust in 2002, and the economy and the demand for workers with technical degrees had gone south.

Fuchs couldn’t find a job and, with bills to pay, he needed to act fast.

“I realized that I needed to get some cash quickly, so I took my textbooks to the college bookstore and they wouldn’t buy them back,” Fuchs said. “At the time, the online-book marketplace was just opening up to sell and buy books.”

By the time he had listed and sold his and a roommate’s books online, the soon-to-be entrepreneur realized he could make several hundred dollars from books no longer useful to the college bookstore or to the students who pitched them in the garbage. A campus-wide book drive brought in $20,000, of which half went to a local literacy program and half to Better World Books, the business that Fuchs, 32, cofounded with fellow graduate Xavier Helgesen, 33.

Now in its 10th year, the Mishawaka, Indiana-based company collects books from more than 2,300 colleges around the United States and Canada and has raised $10 million for literacy and education programs around the world, such as Books for Africa and Room to Read, founded by a Microsoft exec who left it all behind to start a literacy program in Nepal. The company has also moved beyond textbooks, thanks to Helgesen’s discovery that libraries routinely throw out books to make way for new editions. It now has partnerships with 3,000 libraries. For every book sold, the company donates a book to someone in need.

This week, Better World Books, which also sells general-interest books, is launching its second annual “Shop from Work Week” to encourage cubicle dwellers to shop from their workstation for books. Last year, the company’s customer acquisition rate went up 30 percent during the event.

Although it helps not-for-profits, Better World Books is itself a for-profit business that has this year gone into the black for the first time—and it is looking at international expansion.

“For the last several years, we were just breaking even, but now we’re excited to be generating a profit because it shows that we have the ability to grow,” Fuchs says. “We’re also on what appears to be a new forefront of investing and social investing. Investors don’t want to feel like they’re putting money into [ventures] that are not sustainable.”

The company started out with $7,000 from a Notre Dame University business-plan competition that it won in 2003, and it brought in a third cofounder, Jeff Kurtzman, who has a background in finance. Good Capital, an investment firm in San Francisco took a minority stake in the company back in 2007.

But with companies from Apple to Amazon now in the textbook business, and startups looking to bring books to e-readers, will the interest continue?

“We’re going to be offering e-books through our website, but with the used books, we’re still really well-positioned, and we feel like there’s tremendous room to grow,” Fuchs says. While new textbooks are being hit hard by the switch to e-textbooks, the used textbooks are priced lower than e-textbook versions, and the company offers free shipping too.

Then there are also those cubicle dwellers who like to shop when they ought to be working.

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Teresa Novellino writes for Portfolio.com