I first spoke with Victor Henning (pictured above, in the middle) about Mendeley two years ago, in March of 2012. The company he co-founded was four years old at the time, with a vision of making science more open and collaborative – and disrupting the academic publishing business in the process. Their competitors were large, well-established – and very old – companies. Heck, one of them – Elsevier – was started almost a century-and-a-half earlier, in 1880.
Victor and his co-founders Jan Reichelt and Paul Föckler (right and left on the picture, respectively) had started Mendeley in 2008 out of a huge frustration, one shared by researchers and scientists across the globe.
They found it incredibly difficult to manage and share academic information. There were no platforms for collaborating with other academics when writing papers.
Academic publishing at the time was a giant yet outdated business, built on 17th century principles.
The incumbents – such as Elsevier, Thomson Reuters and Nature – were stifling academic and scientific development by charging huge fees for access to academic journals. The content in these journals – academic and scientific papers – was in fact being written by researchers and scientists, who were not even getting paid for their trouble.
Victor, in fact, at one point had to purchase a copy of a journal containing his own article because the publisher’s policy was not to provide even authors with a free copy of their work.
The co-founders, three PhD students from Germany, decided to change all this. Mendeley would tear down these ancient walls by providing researchers with an open access platform where they could publish and share their work with the world for free. Researchers could manage and index their papers, and then aggregate data about them on a cloud-based platform.
If enough people were attracted to the product, extremely valuable information could be generated by various means and methods of analysing, connecting and comparing the data on the system.
A classic example of great product-market fit
This vision struck a chord with the academic community. Mendeley grew like crazy, fueled by users’ passion and helped along with seed investment from Passion Capital, Ambient Sound Investments (an investment vehicle for a group of early Skype engineers), Alex Zubillaga and Len Blavatnik (American – Ukranian businessman, said to be the second-wealthiest person in the UK).
When we first spoke in 2012, Mendeley was well on its way to disruption. It had surpassed the biggest commercial online databases of research papers – Elsevier and Thomson Reuters – in sheer number of records only two years after getting founded. By the time of our chat two years ago, Mendeley’s database of 60 million had outpaced the competition by 50% and was still growing very rapidly.
One year later, in April of 2013, Mendeley was acquired by Elsevier.
This caused quite some controversy in the academic publishing community. Mendeley’s many loyal users were deeply concerned that the freedom of publishing and scientific expression promised by the popular system would now be endangered by the large, conservative buyer. As might be expected, the founders were accused by some of “selling the dream“ for cold, hard cash, estimated by the press to be anywhere between $70 million and $100 million.
I spoke recently with Victor about these and other concerns, Mendeley’s position one year after the acquisition, and his own responsibilities. Victor’s time is now divided between Mendeley’s London office and Elsevier’s HQ in Amsterdam, where he is Vice President of Strategy.
Ivo Spigel: How did the relationship between Mendeley and Elsevier develop in the early stages?
Victor Henning: We used to have a fairly schizophrenic relationship with Elsevier. Obviously they had done things we didn’t agree with, such as the lobbying for more restrictions on academic publishing that resulted in boycotts. On the other hand, their platform team, which runs all the products such as ScienceDirect and Scopus, has always been interested in working with us. They were one of the first companies and the first publisher to use our API.
So, when they approached us, we were of course suspicious. What’s the plan here, where is it going to go? What they said was: “What you have built is a spectacular success story. Obviously you are doing things right, and we’ve been doing something wrong.“
They were very clear about what they wanted from us, which was to keep building Mendeley. One indicator for that is: when we were acquired we were approaching 50 people, we are now 75 and we will hire another 30 this year. It’s still the same team and place, including Jan, Paul and myself.
When I came to Amsterdam for the first time and started meeting people from the different business units I was expecting a similarly schizophrenic relationship, that some people would go “Oh, here is the upstart, they just got acquired and they are going to tell us how to do things“. Actually, my experience was that pretty much everyone was incredibly excited that we were joining and they all have ideas of what could be done with the Mendeley platform, and how they and their business units could benefit from what we built. So, it was an incredibly positive and quite surprising experience.
In terms of new ideas and projects, I’m kind of walking through opened doors – there isn’t really any territorial thinking or different culture in the sense that they see things completely differently than we do. I mean, they do realise that publishing is going through a fundamental change.
What were some of the things you did to communicate the acquisition to your users and the wider community?
Of course we were aware of the Elsevier reputation so we spent quite a bit of time planning and preparing the communication. As you know, Mendeley works closely with a group of key users called “Mendeley Advisors“. They are our lead users, our most vocal ones. On the night the acquisition was announced, we immediately sent out a message to all our Advisors inviting them to share their concerns and biggest fears, and how we could address them. We invited them to the office a month or so later to reassure them that Mendeley would continue to deliver on our original vision.
We wanted to calm their worries like “Oh God, what does this mean? Does it mean that Mendeley will disappear?!”
The Advisors had spent a lot of time building local communities around Mendeley, and they were afraid that was going to disappear and that we were, as you said, being folded into the monolith. The result of the invitation to the office was that there were the couple of very nice blog posts afterwards from the attendants, saying it was nice to see that it’s still the same faces, still the same vision and mission. I think that was one of the challenges that we fortunately managed to handle quite well.
How about Elsevier itself? The upstart’s co-founder is now its VP of Strategy. But will such an old and large company be willing to change?
Elsevier has actually been one of the more forward-thinking publishers, technologically speaking.
Since the boycott happened some two years ago, the company has made a massive push towards Open Access, which is not always visible from the outside. It has more than doubled the number of Open Access journals and introduced Open Access publishing options across pretty much all of their titles. They are rewriting their author posting policies and investing heavily in technology, in Mendeley and other platforms, because they realised that’s where a lot of value is going to be created in the future.
Mendeley is also becoming a test-bed for new Elsevier initiatives. As an example, we are experimenting with new, collaborative forms of peer review, and there are other ideas for new Open Access / Open Data projects under the Mendeley brand.
Are there any key metrics you’d be willing to share, and how are they performing since the acquisition?
Growth has accelerated in the past year. We’re starting to integrate closely with other Elsevier properties like ScienceDirect and Scopus which draw in 6, 7, 8 million unique visitors a month.
They are sending traffic and users our way. The current number is about 2.8 million registered users and 525 million documents uploaded to the service. I think that’s pretty impressive.
It is, but what about the business? Mendeley was on track to be profitable by Q2 or Q3 of this year. Now that you are part of a larger organisation, what’s the new timeline for profitability?
There is none, to be honest.
Ok, so you are going to make losses for as long as you like?
Well, I wouldn’t put it that way. Of course the idea is that we want to make money and we are rolling out a couple of new paid products and particularly around the university business that we have, the Mendeley Iinstitutional Edition. Sales for that have been going strong, we signed up more prestigious universities like MIT and Harvard, so that’s bringing a fair amount of the revenue.
The goal for Mendeley is basically the metrics that we are measured by and this is not revenue, it’s user growth. Our pretty much only key performance metrics are user growth and engagement. Making money is nice, but it’s a secondary goal so we aren’t measured by that.
That’s a comfortable position to be in.
It is! I have to say it’s almost like being able to have your cake and eat it because we have more resources now than we had before. You’re able to double your team but, simultaneously, we don’t have to deal with that daily pressure of “are we going to be profitable next year”, or “is there enough money in the bank before we need to go for the next funding round”.
What were some of the more difficult issues with the integration?
There were a couple. The biggest challenge was probably aligning roadmaps. Previously it was a fairly quick decision. Usually it would be myself and Jan and Paul and maybe the engineering leads getting together in the meeting room, saying, ok this is our strategy, this is how we achieve it, etc. You can change the roadmap that very same day.
Now that we are a part of a larger company, there are a lot of different roadmaps that you have to combine. Getting approval for hiring can take weeks now instead of being a decision made on the same day. That is something that hasn’t been easy to deal with if you are coming from an entrepreneurial background where you get to decide everything yourself on the spot.
A positive challenge, in a way, is that we had to significantly ramp up our hiring, but hiring takes a lot of time as well. As you know, you spend days poring over CVs and interviewing candidates, and if you are starting from a base of 50 and you are basically trying to double your size in a year, a lot of your time is going to be spent hiring.
Simultaneously you want to start the integration with some of the back-office stuff, the architecture around data sharing. That leaves very little room for your core roadmap. So we are really struggling around how do we still have enough time to improve the core Mendeley user experience while simultaneously trying to, you know, roughly double the team size and start a back-office integration which will only bear fruits in a year or two years from now.
Finally, what about the long-term plan?
Our vision of making science more open and collaborative remains the same. We are putting a lot of effort into making the platform more open than ever. All our data is still available under a Creative Commons license. We are adding new APIs that will make it easier for app developers to integrate with us. We just announced a new partnership, for example, with LabFolder, a German lab management startup. Many more things like this are on the way.
The long-term plan is indeed to keep Mendeley independent. You can quote me on that: the Mendeley brand will continue to exist in the same way as before.
Featured image credit: Team Mendeley / Flickr (cc)