Book Smart 2 bookworms capitalize on a novel idea: putting the library online and book rentals in the mailbox.

VItal Stats: Shamoon Siddiqui (l.), 26, and George Burke, 26, of BookSwim.com
Company: Online hardcover/paperback book rental service
Projected 2008 Sales: $800,000

Freeload no more
College friends George Burke and Shamoon Siddiqui spent a lot of time in bookstores reading books but not buying them. They didn't have room to store all the books and didn't necessarily want to own every book they read. Then they thought, why not rent books Netflix-style?

In 2006, after Burke had sold a web design company and Siddiqui had completed his master's degree in computer engineering, they launched BookSwim using personal savings and book donations. By April 2007, they had their first customer.

Burden of Proof
Not everyone was enthusiastic, though. Bloggers said, "These guys are trying to take over the library." Others described the idea as "extremely ambitious" and even "insane." But "most libraries close at 6 p.m.," says Burke, "and not everyone lives near a library."

Check It Out
To make sure their idea would work, Burke and Siddiqui did some grass-roots market research. "Anywhere we saw someone with a book, we whipped out a questionnaire," explains Siddiqui, who adds that they felt vindicated when "one of the first customers was a librarian."

Off the Shelves
For a flat monthly fee (starting at $14.99), subscribers can pick from 200,000 titles on the website. The 20-employee company keeps about 15 percent of its inventory in a warehouse, which started out in Siddiqui's basement. The rest of the books are ordered on demand. Most inventory comes from distributors, but as volume increases, publishers are starting to approach them directly. Since launching BookSwim, the pair has greatly increased the number of books they purchase daily, and company growth is more than tripling monthly.

Liz Hamburg helps entrepreneurs launch new businesses as the founder and president of Upstart Ventures. She can be heard on WOR radio (710AM in New York) on Launchpad, a weekly segment focusing on entrepreneurs and small business.