Science Startups meet at Le Web 2014

Axon

Since becoming Elsevier’s VP of Strategy, Mendeley Co-founder and CEO Victor Henning has been up to a lot of exciting stuff. Here he tells us a bit about his latest project, Axon, which is stirring things up by bringing together the best and brightest new startups in the fields of Science and Research at Le Web 2014.

Over the last few years, I have watched something interesting happen in the world of science: Tech startups and VCs suddenly care about scientists. Strangely, this wasn’t always the case.

When the World Wide Web was invented at CERN, its original purpose was to help manage and share scientific information about particle accelerator experiments. Yet, with the exception of a few search engines, document repositories, and journal databases, the web remained barren of well-designed tools and applications engineered for scientists.

Instead, the last 15 years witnessed the explosion of the consumer web and mobile apps, fueled by advertising revenue. Jeff Hammersbacher, an early Facebook data science employee (and now founder of Cloudera), summed it up as:

“The best minds of my generation are thinking about how to make people click ads. That sucks. If instead of pointing their incredible infrastructure at making people click on ads, they pointed it at great unsolved problems in science, how would the world be different today?”

How indeed? We might be watching hilarious cat gifs on the screens of our flying cars.

Around 2008, things started to change: A small wave of bootstrapped startups began building document management tools, social networks, and recommendation engines for scientists. Among them was Mendeley, my own company. Grown out of our own frustrations as researchers, my co-founders and I built Mendeley to make science more open, more efficient, and more collaborative. Getting started wasn’t easy – many VCs turned us down because they saw research as a “niche”. We nonetheless managed to convince a couple of angel investors (among them the founders of Skype) to invest in us.

After launching in 2009, we came to LeWeb to participate in the startup competition. I have the fondest memories of the event – a freezing, pre-Christmas Paris in December, and Dave McClure, the famously foul-mouthed Silicon Valley angel investor, tweeting his sexual arousal at seeing our pitch:

//platform.twitter.com/widgets.js

Events like LeWeb helped put us on the map with international investors, press, and potential users. From there, Mendeley grew to a research platform connecting more than 3.5 million researchers in 180 countries, with institutional customers like Stanford, Harvard, and MIT. In April 2013, we were acquired by Elsevier, the world’s largest publisher of science and health information.

Without wanting to claim undue credit, quite a few Ph.D. students and Postdocs who became entrepreneurs themselves have told me that Mendeley was an inspiration for them: It proved that tools for researchers could go from garage to global audience, and it proved to potential investors that the “niche” could also deliver sizeable exits.

We are now seeing the emergence of a second wave of venture-backed research startups, offering a much wider range of scientific workflow tools. They help scientists keep electronic versions of lab notebooks, organize and share experimental data, order lab materials, write papers collaboratively, outsource experiments to other labs and to the cloud, get credit for peer reviews, launch their own journals, and even raise crowdfunding for their research projects.

It’s time to give this movement more visibility. Elsevier and LeWeb 2014 are teaming up to run a half-day event called Axon@LeWeb (in case you’re wondering – in the brain, axons are the fibres that carry impulses from neurons to other nerve cells). We want to bring together the most exciting science and research startups – the ones that build tools for the best minds of our generation, to help them crack those great unsolved problems.

Startups can apply online here, and we already have applications from amazing companies in the US, Canada, Sweden, France, the UK, and Germany. The 15 best startups will receive a free ticket to LeWeb 2014, as well as the opportunity to present at Axon@LeWeb and network with the hottest companies in this space. Even if your startup is not among the 15 selected to present, Elsevier is sponsoring a €200 discount on the regular startup ticket for all science and research startups that want to join us at LeWeb.

Applications for Axon@LeWeb close on Sunday, 16th November, at midnight CET, and the winning startups will be announced by Tuesday, 18th November.

Hope to see you in Paris in December!

Getting Grant Funding for Your Startup

Jan Reichelt

Jan Reichelt, Co-founder and President of Mendeley, talks about his experience of using grants from funding bodies such as EUREKA and the Technology Strategy Board to help grow the company.

Ellie

By: Elitsa Dermendzhiyska, Co-founder of Grant Central

Is there such a thing as a free lunch when it comes to startup funding? That’s the question hanging in the air as I sit down with Jan Reichelt, co-founder of Mendeley, a research collaboration platform boasting over 3 million users and touted as one of the startups most likey to change the world for the better. If anyone had the answer, that would be Jan: on top of a Series A funding and acquisition by Reed Elsevier, over the past 6 years Mendeley has won a slew of national and EU grants whose precise number Jan seems to have lost track of.

Equity-free money in the form of grants holds a special allure for bootstrapped, cash-starved startup founders – an allure Jan is quick to dispel. Grants are like a sweetener, he says. They are nice to have, but startups shouldn’t count on them. Even if you get one, the money can be slow to come in, so you need to have other funding sources ready at hand.

Back in 2008, when Mendeley applied for the EUREKA Eurostars grant scheme, the startup had already secured seed funding and was eyeing VC investment to develop its research collaboration platform. The grant wouldn’t make or break Jan’s vision; rather, it just turned out to be the right fit at the right time.

Jan wouldn’t recommend the grant route for most startups, invoking the somewhat laborious process of obtaining and managing the funds. The amount of time you have to dedicate to writing the application through to forming a partnership to reporting and monitoring the project is only justified if you can find the right fit between your goals and the purpose of the grant, he says.

Grants such as the ones offered by Eurostars exist for two main reasons: to encourage research or to facilitate collaboration between academia and businesses. Mendeley fit both requirements, as the startup was looking to engage with academic experts in crowdsourcing and modern semantic technologies in order to provide real-time impact analysis for its platform users.

With the grant, the startup was able to create a win-win consortium by partnering with the Estonian Technology Competence Centre in Electronics-, Info- and Communication Technologies (ELIKO) and Austria’s Competence Centre for Knowledge Management (Know-Center).

Besides fit, another consideration businesses need to keep in mind is the rigidity of most EU grant schemes vis-a-vis VC funding. Grant applications often call for specific development plans and growth projections over 2 to 4 years down the line – something almost unthinkable for startups used to changing direction (or “pivoting”) on the go. A grant entails pre-committing to a certain course of action and any later changes, while possible, require reasonable justification and official permission from the government funders. A helpful strategy, Jan offers, is to make up a story and define your roadmap broadly enough to leave room for flexibility.

Grants require founders to maintain constant communication, as rules call for regular financial and technical reports to keep the funding authorities apprised of any progress, delays and changes to the project. Consortium agreements and allocation of responsibilities among partners also come with their own set of communication challenges. One example is deciding who would own the IP developed, – an issue that can become tricky if there are two or more commercial partners involved. Further still, aligning academic and business needs may require careful treading – or what Jan aptly describes as “hand holding” – in order to keep the theoretically appealing in line with the practical commercial realities.

Grant funding can appear rather rigorous to founders tied in the day-to-day running of business, and Jan, who tackled the initial Eurostars application by himself, concedes that the initial learning curve can be steep. Apart from hammering out a comprehensive application, he needed to then setup solid management and reporting processes in the post-grant period. And yet grants, while no free lunch, offer an opportunity for startups to grow on their own terms if they can muster the management skill, clear vision and R&D potential.

Have you had any experience of applying for similar grants? Share them with us in the comments!