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Michael Palin, Russian oligarchs, backpackers in the US …just some of the people Victor Henning and Jan Reichelt have met on the road to creating Mendeley.
But it has been the strength of their business school connections that has been critical to signing up 2m users who have uploaded more than 310m documents to the Mendeley site, making it one of the largest research databases in the world.
The co-founders met on the MBA programme at the WHU-Otto Beisheim School of Management in Koblenz, becoming friends as they worked on projects and term papers together, before starting a local chapter of the German Entrepreneurship Club.
“At business school, people tend to have relatively similar backgrounds and ambitions to enter consulting or banking,” says Dr Reichelt. “But our entrepreneurship group had a different way of thinking. Victor and I shared the same attitudes about what we expected in terms of friendship and how we might leverage our complementary skills.”
After graduating in 2004, the pair went their separate ways, but both decided to pursue PhDs: Dr Reichelt at the University of Cologne to research information management and Dr Henning at Bauhaus-University Weimar to research media economics, consumer behaviour and social psychology.
“We remained friends and kept talking about possible projects we should be doing, even though we were focused on our PhDs and the careers that might come out if that.” says Dr Henning.
Dr Reichelt was consulting for software giant SAP, which offered to employ him, while Dr Henning was busy publishing research papers and considering a career as an academic. Yet neither could shake the entrepreneurial bug. Dr Reichelt co-founded a small travel agency offering luxury bespoke travel and Dr Henning opened a café-bar opposite WHU while writing his masters thesis.
But as they continued their PhDs, they realised they were struggling with the same problem: managing information efficiently.
“We were finding it difficult to keep track of the hundreds of PDF documents that we had to manage,” says Dr Henning. “We were doing collaborative work too with researchers in Germany and the UK and found that discussions and emails often got lost as documents were emailed back and forth. That’s what brought us to the idea of Mendeley.”
The first question was whether they could extract meaningful information from documents. Dr Reichelt, who was supervising masters thesis students at Cologne, commissioned two students who proved it was possible to turn a PDF into plain text, then use algorithms to extract information from it. “It reinforced our belief that it would work and convinced us we could build a prototype without funding,” says Dr Henning.
The reason for their optimism – and their decision to jump full-time into developing Mendeley – was a hunch that researchers would find the service valuable once their individual research libraries were crowdsourced into one large searchable database.
While the pair admit to being “nerdy”, neither is a programmer. Luckily, their friend Paul Föckler is. Mr Föckler has a masters in computer science from Bauhaus, although he met Dr Henning in 2005, while backpacking across the US. He also has an entrepreneurial streak and had created a museum app for Nokia handsets but had moved to London to work on freelance projects. He and Dr Henning kept in touch.
“I remember sitting on the stairway outside the office where I was working while Victor told me about the potential of this ‘iTunes of research articles’ and I realised that he and Jan would do everything to make it a success,” says Mr Föckler.
The three founders split the equity three ways and each invested a similar sum in 2006 to pay for a Belarusian outsourcing company to build a second prototype that would help their pitch for seed funding.
Dr Reichelt and Dr Henning had met Stefan Glänzer, chairman of the music streaming website Last.fm and a founder of online marketplace Ricardo, at WHU when he gave a lecture on entrepreneurship. They pitched Mendeley to him as a Last.fm for research. In the same way that Last.fm extracted data from music files, analysed it and then made recommendations to users, Dr Reichelt and Dr Henning said they could do the same for research.
Mr Glänzer became the first angel to invest in 2007, followed by Eileen Burbidge, Skype’s former head of product development, and Russian oil billionaire Len Blavatnik.
In 2008 the Mendeley trio moved to London. The city had “the biggest concentration of venture capital and academic publishers in Europe and one of the biggest research hubs in the world,” adds Dr Henning. Their first base was Michael Palin’s production office in Covent Garden, where Mr Föckler had been working on the former Monty Python member’s travel website. “It was brilliant, full of Spanish Inquisition dolls belonging to Palin, who would occasionally pop in to say hello,” Dr Henning recalls.
Mendeley is now located in London’s Clerkenwell and has a team of 45, plus a small office in New York and an agent in the Bay area.
“At the start, when we were settling on a common direction and vision …we had a lot of shouting matches, primarily because we were in three different locations,” Dr Henning says. “We had a weekly Skype meeting to catch up, share progress and have heated discussion on next steps. Once we moved to London we became more harmonious.”
“We’re all …entrepreneurs who want to make decisions – clashes were unavoidable,” says Mr Föckler. “Now we have data to support our ideas.”
“Many companies that fail do so because founders fall out,” says Dr Reichelt. “But we have an agreement that we always sort things out ourselves first before moving forward.”
Dr Henning says the challenge for the next three years is to make money. And his advice to other entrepreneurs? “Try working with each other beforehand, to ensure you can work through conflict.”