Last month, SAGE announced that it has taken a minority investment in Publons, a start-up that collects and validates peer reviews to help researchers gain credit for them. I interviewed Publons co-founder Andrew Preston and SAGE Deputy Executive Chairman David McCune after the deal was announced, and I’ve published the transcript of that interview here. It answers some background questions about how Publons works, addresses some general concerns about opening up reviews, and touches on the use of firewall and NDAs between SAGE and Publons to protect confidential publisher information. Here in the Kitchen, though, I’m sharing broader thoughts and conjecture about why deals like this get done.
An obvious question is why Publons would take money from a “strategic” investor, i.e. one operating in the same industry (rather than, say, investment from angels or venture capitalists with no direct involvement in the sector). Business veterans will tell you consistently that strategic investment is risky. You might find it hard to sell your product to competitors of your new investor. Next time you are raising money, you might find other possible strategic investors unwilling to share a bed with your existing partner. If you end up wanting to sell your company, potential purchasers will question why your existing partner isn’t choosing to buy the rest of the business — and your existing partner, knowing this, will have you over a barrel on the sale price. So why might Publons have taken investment from SAGE? Conjecture, your honor:
- Confidence. Maybe they know they’ve got a gold dust product and they know people will be clamoring to buy it, and / or to invest in them, regardless of a strategic investor.
- Security. We’re not in the best climate for raising income. A strategic bird in the hand is worth two more neutral birds in the bush.
- Funding gap. Another thing business veterans will tell you is that there is a yawning chasm between the maximum amount you can manageably raise from angel investors, and the minimum amount that a venture capitalist will be interested in investing. If you’re looking for something in the middle, a strategic investor may be your only option.
- Funding strategy. Alternatively, perhaps Publons don’t expect their next round to involve strategics. Perhaps they don’t plan to sell but to float. (See point 1).
- Domain expertise & connections. Shared vision. Alignment of chakras.
One way or another, the obvious answer to the obvious question is that Publons couldn’t continue to grow without an injection of cash, and they took the best option available to them. And obviously what they will say publicly about this is mostly point 5.
Now let’s look at this from the other side. Why would SAGE want to take a minority stake in Publons? Because the future’s bright; the future’s workflow. For publishers, it’s a smart move to make the transition to tools. Read a few of their annual reports and this new positioning is clear. Springer’s got its Papers, Holtzbrinck its Digital Science, Elsevier its Mendeley, its SciVal, its PURE. Even non-behemoths are making moves, such as ASPB’s launch of Plantae. Given how difficult it is to reinvent from within, investment in workflow tools is not only about gaining footprint, but also about embracing disruption (albeit at arm’s length). In my email interview, David McCune gives a passionate explanation of why SAGE is putting an egg or two in this particular basket:
“I think increased transparency and less anonymity and confidentiality is good for scientific discourse and research. I understand the need for anonymity and/or confidentiality of reviews in some cases, e.g., the case where a junior scholar is reviewing the work of a senior scholar who might exercise influence over the junior scholar’s job or funding prospects. However, I would like anonymity or confidentiality to be the exception, not the rule. I believe that the quality of reviews would go up if they were published. To be sure, public reviews would probably take longer to write than hidden ones. It is already hard to entice enough scholars to do the ever increasing number of reviews required to keep up with the ever growing stream of scholarly research. But this is precisely why Publons is necessary. If scholars get credit for the work they put into reviews, then they might be more incentivized to participate in the review process. My hope is for a world with ever more research, evaluated by ever more scholars, in an ever more open and transparent way. Anything that increases the amount and transparency of scientific discourse is a good thing. Publons does that. That is why I wanted to encourage and invest in Publons. “
Meanwhile, what are the immediate, practical advantages for Publons?
- The sum is undisclosed, and the stake is sufficiently minority that SAGE is not even in the top 5 in terms of holdings in Publons. But it’s likely still a sufficient amount for Publons to be able to accelerate its product development, sales and marketing substantially – meaning it can increase uptake, and move closer to financial viability
- The investment demonstrates market confidence that will attract other investors (for example, it could play well in a venture capital round) and, while those Publons publisher prospects that compete with SAGE may be more wary, other prospective customers may find themselves more confident of the company’s longevity and viability.
- Meanwhile, publishers are only one of Publons’ target customer groups. Institutions seem keen — Publons gives them greater visibility of a previously hidden activity, such that they can not only credit academics for their reviewing activities, but also guide them more closely (“don’t waste your time reviewing for that journal — aim for these ones instead”). Institutions (who I think find SAGE more palatable than some other possible publishing investors) may also therefore be reassured by SAGE’s backing.
In summary then, Publons gets a bit of time to focus on building its business rather than chasing funding, and the trend for publisher investment in workflow tools continues. SAGE has planted an acorn that may one day be the biggest tree in its wood — or perhaps to stretch the sylvan metaphor, it’s setting the fire that will enable future seeds to grow.
Thanks to my colleague David Sommer for that final analogy!
Given that article submission is something of an endpoint in research workflow, might we say that publishers are merely building upstream from that point in developing other, that is prior, workflow tools?
Then too, after publication often comes new funding requests, which can be quite laborious. Is anyone building tools for this vital flow step? I would sure like to see one that integrates with the US NSF proposal submission system, or the Energy Department’s, which is of course different.
Posted by David Wojick | Feb 23, 2016, 10:55 amI wonder which tenure committee is going to give credit for a review. It seems to me that the committee would more than likely say: Rather skimpy publishing record, perhaps you should have spent your time more wisely researching and writing rather than reviewing what others have done!
Posted by Harvey Kane | Feb 23, 2016, 12:14 pmI think there’s value in demonstrating that you are a good, contributing member of the research community. But the idea that a committee is going to go and read your peer reviews as part of your evaluation process for tenure or hiring is a bit absurd.
To my mind, all we need is a simple checkbox, orchestrated through ORCID. Each time you do a peer review, the journal pings your ORCID page and shows that you did a review for journal X. Anything more than that is overkill.
Posted by David Crotty | Feb 23, 2016, 1:23 pmPerhaps it would be more of interest when recruiting a new faculty member who many have just a few publications. That candidate X also has reviewed for some of the discipline’s top journals would send a positive message to the committee.
Posted by Phil Davis | Feb 23, 2016, 1:39 pmI have seen VITA which list reviews. Thus, the hiring committee is knowledgeable of reviews the candidate has done.
Posted by Harvey Kane | Feb 23, 2016, 4:08 pmOne reason why start-ups in this field may end up taking intra-industry investors, is that many angels and VC’s have never heard that academic publishing is a business in the first place.
And thus their reply to the pitch is: “Sounds great, but I will not invest in something I do not understand”.
It is easier to get, and probably easier to work with, an investor to whom you don’t have to explain the basic rationales of the whole industry.
Posted by Janne Seppänen | Feb 23, 2016, 1:17 pmI thought there was a fair amount of VC activity here, in part perhaps because of the loud complaints about high profit margins. Bears to honey as it were, except these are bulls.
Posted by David Wojick | Feb 23, 2016, 1:37 pmIt is probably better in London and Silicon Valley, but I can tell that here in the deep dark north they are quite unaware of all this. But yes, you can see their faces lighting up when they hear those numbers. But they still are reluctant to enter something where they would be totally dependent on founders to understand how things are going.
Posted by JanneSeppanen | Feb 23, 2016, 1:57 pmOne reason why so many startups tend to be attracted to scholarly publishing is that our industry is a rare example of one that provides high value online content, particularly content that customers are willing to pay for. So many of the new ventures need to be fed by that sort of content, which is sorely lacking in most other areas (newspapers, magazines, music, etc.).
Posted by David Crotty | Feb 23, 2016, 2:03 pmThe comment that tenure committees won’t take notice is on-target. They may take notice if there are revolutionary new metrics for article reviewing. A (hypothetical) example might be measuring brownie points for an academic whose positive review results in a journal article which later becomes highly cited. The reviewer, here, is certainly a most critical part of this picture–perhaps even more so than the journal Editor. Does this hold water?
Posted by Bill | Feb 23, 2016, 1:39 pmAgain, I could see this as a sign of being a contributing member of the community, but there’s a bit of randomness that’s introduced by the example you suggested. A researcher has very little control over what papers they get asked to review, and rewarding this would further concentrate power over careers with journal editors. I’ve written at length about these issues here:
http://scholarlykitchen.sspnet.org/2015/06/17/the-problems-with-credit-for-peer-review/
Posted by David Crotty | Feb 23, 2016, 2:07 pmDavid said
Ah, but this should not be so. Open Engagement!
Posted by JanneSeppanen | Feb 23, 2016, 2:14 pmDoes that negate the signifier that’s being sought here? And does it then mess up the process of peer review altogether?
If there’s some status to be determined by a researcher being chosen by their peers/established journal editors as a key reviewer for important papers, then making it an open call for reviews would remove that signal.
And if there was a system where one was rewarded for reviewing “important” papers, then wouldn’t all reviewers gravitate solely to those papers, and not spend any time on average papers, and even completely ignore any papers likely to be rejected? You’d end up with high profile papers having hundreds of reviews and poor papers having none.
Not sure the two are compatible (not that I’m in favor of peer review performance as much of a signifier).
Posted by David Crotty | Feb 23, 2016, 2:29 pmYou are right, that signal is valuable, but it can be maintained in an open environment too. The way we do it is encouraging Recommendations, and these show up in person’s profile. So you can show who trusts your judgement and expertise – regardless of whether you had the time to do the review or not.
But Open Engagement allows someone who would not have been asked (due to being young, or from non-anglophone university, or any number of other unconscious biases) to demonstrate expertise and excellence, and earn the recognition they deserve.
Posted by JanneSeppanen | Feb 23, 2016, 2:35 pm