Startup Stars

How Inkling is banking on better books

June 29, 2012: 5:00 AM ET

The iPad is dragging dusty college textbooks into the 21st Century. Inkling wants to lead the way.

By Richard Nieva, contributor

See the light: Matt MacInnis with a textbook

See the light: Matt MacInnis with a textbook

FORTUNE – Matt MacInnis wants tablets to overhaul how college students learn. San Francisco-based Inkling, which he founded in 2009, provides some 150 electronic textbooks for the iPad. With backing from Sequoia Capital and publishers McGraw-Hill (MHP) and Pearson (PSO), Inkling makes products that sizzle compared with paper. Text is supplemented with multimedia, quizzes, and social networking for sharing notes with classmates. Inkling's textbooks are sold on the App Store and this fall will be available in the 900 college bookstores operated by Follett Higher Education Group.

The stodgy $11.3 billion textbook industry is begging to be disrupted, but nobody quite knows what a successful digital business will look like. MacInnis is betting it will take rich experiences and a break with convention. Inkling has done away with page numbers, for instance, and students can spend as little as $2.99 to purchase a single chapter rather than an entire book. (Inkling takes a percentage of each sale.) Vineet Madan, McGraw-Hill's senior vice president of new ventures, views Inkling as a testing lab of sorts.

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MacInnis may have the ideal pedigree. The Harvard engineering grad was an Apple (AAPL) campus representative in the late 1990s. Eventually he became a marketing manager at the company, helping hatch the idea of giving students free iPods with new Macs. The promotion became a smash. MacInnis left a few months before Steve Jobs unveiled the iPad, having heard only rumors of the device.

Still, Inkling faces a tough road. Digital textbook sales have exploded and could comprise up to 25% of the market in the next three years, according to one industry estimate. That has giants like Amazon (AMZN) and Apple jockeying for a piece. What's more, Inkling's focus on adding clever features slows its ability to churn out books -- one title can take up to a year to produce. To keep growing, Inkling launched an e-book publishing platform and is putting out plush travel guides for Frommer's.

MacInnis has one major advantage: his age. At 32, he can relate to his college customers. After all, it wasn't so long ago he was giving them free iPods.

This story is from the July 12, 2012 issue of Fortune.

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