Chegg
An education company that began with textbook rentals and moved to online homework answers.
Chegg grew from textbook rentals into online homework answers, with 70 to 80% of Chegg Study revenue paid directly by students. Free instant answers from ChatGPT and Google's AI mode undercut it, and its stock fell from about 50 to single digits. Early on, a fake-site price test ($35 to $75) showed students paid more than expected. Test pricing early, and don't sell what AI gives away free.
- 1Rented textbooksOffline starting business
- 2Sold online answersPivot around 2015
- 3Students paid for StudyRoughly 70 to 80% of revenue
- 4Free AI gave answersChatGPT and Google's AI mode
From S1 cited in Chegg page notes
What was said about Chegg
Chegg moved from textbook rentals to selling online answers around 2015. S1 cites Chegg as an answer-selling company that pivoted from offline textbook rentals to online solutions around 2015.
The same source argues that fast answers may lift grades but not learning, which makes the product's value depend on speed and convenience rather than on learning outcomes.
Chegg Study depended on student payments, and free AI answers undercut it. Chegg Study brought in roughly 70 to 80% of revenue directly from students. ChatGPT and Google's AI mode then undercut it by giving free instant answers.
Jack McDermott led boot camp growth at Chegg before leaving for ElevenLabs.
How StudyFetch Used Creator-Led Growth to Hit $10M+ ARR in 3 Years
Cited as an answer-selling company that pivoted from offline textbook rentals to online solutions around 2015. Its fast answers may lift grades but not learning.
Chegg moved from textbook rentals to selling online answers around 2015. S1 cites Chegg as an answer-selling company that pivoted from offline textbook rentals to online solutions around 2015.
The same source argues that fast answers may lift grades but not learning, which makes the product's value depend on speed and convenience rather than on learning outcomes.
How ElevenLabs is Building Consumer Apps on its $11B Voice AI Platform
Chegg Study brought in roughly 70 to 80% of revenue directly from students, and ChatGPT and Google's AI mode undercut it with free instant answers. McDermott led boot camp growth there before leaving for ElevenLabs.
Chegg Study depended on student payments, and free AI answers undercut it. Chegg Study brought in roughly 70 to 80% of revenue directly from students. ChatGPT and Google's AI mode then undercut it by giving free instant answers.
Jack McDermott led boot camp growth at Chegg before leaving for ElevenLabs.
How Brad Jacobs Built 8 Billion-Dollar Companies
Jacobs passed on it because he expected AI to hollow it out, and its stock fell from about 50 to single digits.
Pattern Breakers: How to find a breakthrough startup idea | Mike Maples, Jr. (Partner at Floodgate)
Tested rental prices from $35 up to $75 on a fake site that showed a 404 at the cart. Students would pay far more than $35, which changed the pricing model.
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