Dustin Hubbard wanted to create the Netflix for books, an online service that allowed bibliophiles to rent their favorite titles and then return them when they were done. But Hubbard, who co-founded Paperspine after taking a leave of absence from Microsoft, couldn't quite make the business work amid the tough economic conditions of the past year.

In a heartfelt blog post, Hubbard announced two days ago that he's shutting the doors on Paperspine. "While our dream of the business was not able to be realized and the financial and emotional impact of running it has been significant, there is some good that has come out of this. We’ve learned a ton and we’ve met some amazing people along our journey," writes Hubbard.

Why did the business close down? The tough venture capital financing market took a toll, according to Hubbard.

"Our goal was to get the company running and then raise the capital necessary from a VC firm to grow the business substantially. Unbeknownst to us, unfortunately the timing couldn’t have been worse with the biggest recession seen in over 50 years occurring at exactly the same time our business was getting off the ground," he writes. "Those economic conditions made fund raising incredibly difficult and substantially limited our ability to expand at the rate we projected."

Paperspine attempted to "ride out the storm" by shifting its business model. Back in August, it expanded beyond the concept of book rentals into actual book sales -- a market dominated by the online retailing powerhouse of Amazon.com.

"It's clear some people want to rent books and some people want to buy books," Hubbard told TechFlash at the time.

But, in his blog post from two days ago, Hubbard said that the "economies of scale never were able to fully kick in."

It was unclear how many members participated in the Paperspine book rental service and community. In an effort to serve the remaining customers, Paperspine has set up a special offer with its one time competitor Booksfree.

"My wife ... often tells me, 'you miss 100% of the shots you don’t take.' This was one of my shots honey and I missed, but I’m still glad I took it," Hubbard wrote.

Here's my original story on Paperspine, which offered more details on model.

John Cook is co-founder of TechFlash. Follow on Twitter @johnhcook.