This week I had the wonderful opportunity to talk to the founders of a student startup, Freenters. Their premise is simple – instead of spending a lot of money printing reports, books or lecture notes, you can make money from it. Sounds impossible? Not really.
If you install their driver on your computer, you’ll print ads and coupons along with your own documents. Your printing costs are backed by their advertisers and partners. Definitely an ingenious idea with the potential to help thousands of students.
Here’s the full interview with Rho Kook Song, one of the co-founders of Freenters.
Who are the founders of Freenters?
Our team is a mix of young passionate entrepreneurs from UChicago College who have been operating the company for several years, and industry experts from the Chicago Booth MBA program who have joined recently.
- Rho Kook Song is the co-founder and CEO. He is currently an MBA student graduating from UChicago College two years ago. He is born and raised from South Korea.
- Paul Park is the co-founder and VP of Product. He graduated from UChicago College three years ago. He is born and raised from New York.
- Adam Freymiller is the co-founder and Lead Dev. He is a junior student at UChicago College.
- Steve Huh is the co-founder and CTO. He is a current sophomore student (because he took several years of absences to focus on Freenters).
What’s the elevator pitch for your startup?
Students print on average 6,000 pages during the four years of college and spend $1,200 on printing, which is about 5% of their discretionary spending. Campus markers, who spend $17 billion annually on capturing these students’ attentions, are looking for a more direct and targeted one-to-one campus marketing solution. To solve these problems, we distribute a universal print driver that inserts ad pages in between the documents. For students, the driver serves as a way to monetize from their everyday activity – printing – as each ad page credits them with 40 cents and as it often contains deals and coupons. For campus marketers, the driver serves as a direct and targeted ad venue, delivering brand content into the hands of the students through the documents they are printing to read.
What made you think “Yeah, we’re definitely doing this, we’re going with this Freenters idea”?
Couple years ago, we, like millions of other students (we are grad students now) out there, were poor college students. But the ugly truth is no matter how poor you are, you have pages upon pages of printing to do. We realized that we were still spending hundreds of dollars every semester on printing pages upon pages of assigned readings and documents. Through a survey we distributed to about 500 students, we realized that this is a common problem. According to the survey, an average student printed 20 pages a week, which translates to 4,000 pages during the four years of college. This can cost a college student up to $1000. This kind of money could have been spent on things that college students actually care about, like 1,000 cans of beer or 12 years’ worth of Netflix.
Can you tell us a little bit about your project’s timeline?
From September 2013 to September 2015, we operated a hardware prototype of the idea, installing printing stations on campuses that were free for students because every paper printed at such station contained a highly targeted banner advertisement on the bottom. Freenters achieved minor successes with the prototype which was even featured in the Wall Street Journal, expanding to 22 different campuses, receiving more than $125,000 from advertisers, and being used by approximately 15,000 students. However, we realized it was not as scalable as we thought because we needed to place the kiosk in the school. Selling to schools was a lot of work, with a long time to get to a full decision. We also had lots of Capital Expenditure and Operating Expenditure as well. Many VCs have voiced these concerns, so we decided to pivot into a software model from September 2015.
We have just launched the beta of the software a month ago (March 28th), but we already have more than 2,500 sign-ups (including the early sign-ups). We have been having the luxury to work with advertisers like Sage Summit, Go Commandos, and Refme.
What’s your business model?
The Freenters business model revolves on two networks: advertising and reward. Brands pay Freenters to gain access to the college audience. Freenters in turn pays students for providing such exposure to brands, and, by providing coupons and deals, Freenters is incentivizing students to go directly back to the brands.
From my point of view, your startup is almost completely dependent on strategic partnerships. Is that a curse or a blessing? What has been the response from potential advertisers?
We face a two sided market, the college advertising market and the student market. Because we have two markets to penetrate, it is definitely more difficult than working with a single market. However, we believe there is a positive network effects that we can benefit from as long as we execute the strategies right. The advertisers will be bringing in student users; student users will attract more advertisers.
Our advertisers love us because of our directness and targetability. In fact, in regards to media platforms that can provide access to the college market, Freenters has competitive advantages in direct targeting and the immediacy of the advertisement exposure. By placing ads within documents that students are printing to actually read, Freenters is able to reach a new level of immediacy and directness that other forms of marketing like direct mail cannot compete with. Moreover, Freenters is able to micro target advertisements to specific users based on their profile information provided to Freenters during the sign-up process and the additional information provided when users connect their social media platforms to their Freenters account. With Freenters, brand advertisements are not materials that are avoided by students; they are materials that students voluntarily receive.
In a world going digital, don’t you fear that you’ll lose customers? Won’t people print their essays, reports and CVs less and less?
I think we are in a unique market that is partly insulated from the downside risk. There has been a general undeniable decline in the printing volume worldwide, but the decrease in the student’s volume has been relatively small, about 0.35% every year. Of course, it is not a growing market, but the decline is not worrisome at all. As current students, we know that printing is a necessity in colleges and universities. Some professors do not allow electronic devices in classes, meaning that students have to print out the lecture notes to study effectively; some professors require students to submit the homework in print version, not electronically. Also, according to a recent study by LA Times, 92% of students prefer print books to e-books.
You must spend a lot of time working for your startup. Do you find it hard balancing startup life and college life? What strategies do you guys have in place to make that work?
Definitely! I have been a student entrepreneur for the past four years, doing full-time work along with full-time study. Time to time, I had skip classes, homework, or even exams when it coincided with an important business event. However, I believe I developed a valuable skill of prioritizing and time-management. Time is limited and you can’t do all the things you want. Thus, you need to keep an organized milestone and to-do list so that you can take care of the most important things first and worry about the less important things later.
Should more students start their own businesses?
I would definitely recommend creating and operating a startup to students if they already have an idea they want to work with. I don’t think one should try to come up with an idea just because he or she wants to do a startup. In such case, you should try to maybe work in a startup, learn what a startup life is like, and the idea will naturally come to you.
If one already has an idea, I want to tell him or her that as a student, you are less experienced than people who are starting a venture in their 30s, but you also have less risk. If your idea does not work, you can easily go back to the job market; moreover, you will be able to learn valuable skills and think of it as a learning experience. However, I would also advise to ask themselves, is it something that they want to devote their energy and time for at least next 5-6 years of life.
What does the future hold for Freenters?
Since we just launched the software model, there is a lot to learn from the users. We are trying to contact as many users as possible to earn valuable feedback to improve the platform over the summer. We are hoping to reach 22,000 user mark by the end of this year. In order to make this possible, we need to get the Mac OS driver out by the end of summer vacation (currently the software is only available in Windows computers). We are also actively seeking campus reps for the 2016-2017 academic year.
This was one of my favorite TSP articles ever! Great experience talking to Freenters, I really liked their idea and wish such a service existed in Portugal.