ResearchGate: “Forget About Revenue Until The Network Is Valuable Enough To Command It”

ResearchGate's Ijad Madisch lifelong ambition of winning a Nobel Prize for changing the way scientific research is undertaken piqued the interest of Valley investors several years ago.

Now with more than $35 million in funding from investors like Bill Gates, Benchmark, Founders Fund and Accel, he's running one of Berlin's flagship startups with 3 million scientists using the site.

It wasn't such an obvious journey. Madisch had been working as a medical doctor in Boston several years ago. He asked for permission to go half-time on being a doctor, so that he could spend the other part of his time working on what would become ResearchGate, a LinkedIn-like social network for scientific researchers.

His manager told him it was a "birdshit" idea and that scientists by nature weren't very social.

Madisch went his own way, ultimately relocating back to Germany to build the company. Today onstage at TechCrunch Disrupt in Berlin with Benchmark's Matt Cohler, he shared a few nuggets of wisdom from his path so far.

"I always was convinced that ResearchGate can change the world," Madisch said. "The World Wide Web was created to exchange knowledge and now you can buy shoes online, but science is still the same."

Cohler, who sits on the board, brought experience from his days as an early team member at LinkedIn and Facebook.

The pair really synced on the idea that ResearchGate needed to put off building a revenue model in favor of focusing on product and generating network effects.

One of Cohler's early pieces of advice to Madisch was to forget about revenue until the network was valuable enough to command it.

"We need to really create value for the scientists first. If we succeed with this, then we can start worrying about making money," Madisch said. "You have to be very brave and experienced to give this advice. I wouldn't have gotten it from any East Coast or German VC investor. And it was the best thing we could have done."

Madisch said the site, which attracts 1.4 million uploads of papers per month and 1,300 data sets uploaded every few days, had led to a few breakthroughs.

There was a Nigerian scientist named Emmanuel Nnadi, who was studying pathogens and found a baby in a local hospital who had died in 28 days.

The cause of death was a mystery. Nnadi collected samples but had no equipment to analyze them. However, he connected with an Italian scientist on ResearchGate named Orazio Romeo, who agreed to study the samples. They discovered a new type of deadly pathogen that had previously only affected plants. It had mutated somehow to affect humans.

Now Madisch is working on ways to surface data to the right groups of scientists in a more automatic way.

"There are all these different connections, which we can draw using new technical architecture," he said "We will find results, which we can only find because we connect the right data without doing any more research and this will change the whole world."

As for the somewhat contrarian decision to relocate back to Germany and base the company in Berlin instead of Boston or Silicon Valley, ResearchGate's board member Cohler said that Boston lacks the foundations for helping consumer Internet companies grow.

"We always ask, 'What's the best place in the world for a particular company given its culture, values?'" Cohler said. "We've got a pretty strong point of view that Silicon Valley and San Francisco is the right answer for many companies and that's why most of what we do is based there."

He went on, "But I only had one strong point of view — that Boston was not the best possible place to build this company."

Cohler said there were many reasons for this, but went on to say that Massachusetts labor laws have a chilling effect on how employees can move from startup to startup. Massachusetts strongly enforces non-compete agreements, unlike California. This affects how knowledge is transferred from generation to generation of startups and entrepreneurs.

Cohler said that Berlin has many of the right ingredients to be a strong startup hub, with a decent pool of technical talent, a low cost of living and a place at the intersection of technology and many other industries and cultures.