Chapter one: starting a book business

Wednesday, July 27, 2005 at 1:00am

Gene and Cassie McCabe have started a business for booklovers that is part, part garage sale and part buyers' club.

The genesis for their enterprise,, came about from Gene McCabe spending money on books from bookstores, reading them and then seeing them sit on his bookshelf.

"A book is still in pretty good shape when I finish reading it and I don't generally read a book twice," he said. "Someone might like to read that book, but I don't know where that person is."

Frugal Reader is designed to match readers and books. Essentially, people trade books on the site, becoming members of the service merely by listing books to trade and receiving credits as they fulfill "orders" for their books from other members. They can then use those credits to order books for themselves. When a member finishes a book they received through the service, they can keep it or list it again.

There are no subscription fees, no shipping fees and no transaction fees. Members pay only the cost of mailing the books via low United States Postal Service media mail rates.

The McCabes began the process of putting together the Web-based service with no investors and just Gene and Cassie as co-owners, working out of their house in Franklin.

Gene works fulltime for Accredo Health and Cassie is a stay-at-home mom. This is the couple's first business venture, although Cassie has an M.B.A. degree and has worked in real estate and financial management. She is responsible for the marketing and creative aspects of the service while Gene takes care of the technical and financial components.

"This was a multi-month process and this isn't something where we had a lot of money lying around," Gene McCabe said.

He said he and Cassie have invested something less than $100,000 in the startup. "It's our money. We earned it over the course of our careers, so it is a significant risk," McCabe said.

After working with Nashville-based Monster Labs Inc. to build and test the Web-based service, the company "opened for business" on the Web in mid-December.

"It actually had a very nice start," Gene McCabe said.

The company has promoted itself by placing advertisements on Internet services like Google and Yahoo!

McCabe said he is not comfortable disclosing specific numbers, but he did say membership in the service is growing in a pattern that is typical of Web-based businesses that eventually survive. "Growth at a slow, low slope, then it begins to grow dramatically," he explained.

The business currently has "hundreds" of members and McCabe anticipates "thousands before year's end."

Even though McCabe acknowledged that there are other companies with somewhat similar business models, he said he has confidence in the concept because "it is so new and there's a big market out there."

McCabe said the business is approaching a critical mass where there will be enough people offering enough books that others considering the service will be able to find the books they want.

"Already, we have thousands of books available," he said.

"The response has been huge," said Cassie McCabe, "because it's a new idea. It's very novel, no pun intended."

She also said kids represent a growing part of the market. "Kids wear out books like they wear through shoes," she said.

With all the books being shipped hither and yon and credits floating through cyberspace, how does Frugal Reader make money? "That's a good question," said Gene McCabe, who has a ready answer.

"First of all, I never intended to make money right from the get-go," he said.

The way the service will make money is that once it reaches a certain point, they will add "premium services" to members for a nominal annual fee.

"I want to try to pull in the author side of this so premium members can connect with the authors of the books they love. Also, to localize the service and to help members connect with one another," McCabe said. "I don't want it to be just a place to go flip a book."

And he is looking for ways to help aspiring authors.

"If a reasonable number of people don't want those services or the others we might come up with, then I'm out of business," he said.

Filed under: City Business