Home 9 Featured Posts 9 Matthew Ismail Interviews Sven Fund, Managing Director fullstopp, Knowledge Unlatched – Part 1

Matthew Ismail Interviews Sven Fund, Managing Director fullstopp, Knowledge Unlatched – Part 1

by | Sep 7, 2017 | 0 comments

Matthew Ismail

(Click to view Part 2)

Matthew Ismail: Well, let’s just start then and ask you where were you born, in East or West Germany? I assume it was before 1989? And what sort of profession did your parents have?

Sven Fund: I was born in the very western part of the country, close to the Dutch border between the cities of Muenster and Osnabrueck. I basically spent my whole childhood there until I was about 18. I would say 85% of my time I was out in the fields and forests in a small village where my parents had renovated a house. So I was raised in the countryside, because my parents felt in 1980 that it would be good to move out of the city. My father is a tree person, responsible for public green in the city administration, and my mother was a pharmacist. My father’s profession made me learn Latin, walking through forests and learning all these botanical names of all these plants, so that’s a very happy childhood remembrance.

Matthew Ismail: So what brought you to publishing?

Sven Fund: I realized that the content side, the journalistic side, in which I had some experience as a student, could become boring at a certain point. I thought, “Why not look at the other side, the business side of media?” So, I applied with Bertelsmann, whose headquarters is pretty close to Muenster. The town is even smaller and it’s in the middle of nowhere – nevertheless, I applied for a job in business development there and for whatever reason they took me.

Matthew Ismail: Business development is helping the company to find customers, is that right?

Sven Fund: No, in this case it was corporate development.  It was large scale restructurings that were going on. Bertelsmann at that point had a CEO who had the goal of really growing the company significantly. They had acquired both Random House and Springer just one or two years before that and had a stake in AOL Europe and they sold all that as an investment, so there were a lot of mergers and acquisitions, restructuring, and growth plans on a rather large scale.

Matthew Ismail: Bertelsmann is one of the largest media companies in the world, right?

Sven Fund: Correct, I think at that point they were at number two or three, that’s true. They’ve probably fallen back a little bit, but at least in Europe they are one of the major players, not only by revenue size, but also by breadth of their portfolio. They do everything from TV to services and trade publishing, at that time academic publishing.

Matthew Ismail: Was your early work involved with the academic space?

Sven Fund: Not a lot. I basically did projects within corporate development across the whole group. I helped fix a TV distribution business with RTL in Luxembourg. I worked on a back-end integration project with the Bertelsmann Music Group. The last project actually was the divestiture of Bertelsmann and Springer at the time to financial investors. That was the last project I was involved in. And that’s how I got in touch with the management at Springer.

Matthew Ismail: What were the three companies you worked for between 2000 and 2008 and what were the differences between them and between the cultures?

Sven Fund: You mean the country cultures?

Matthew Ismail: Yes.

Sven Fund: I started working at Bertelsmann and did some work for the German Book Club Division, which was a very traditional business. It’s not around anymore. And it had a retail chain in which I was responsible as the marketing and promotions person, basically, to make sure that we would push our product in 330 shops around the country.

Then I joined Birkhaeuser in Switzerland as their managing director in 2004. Birkhaeuser was part of Springer then, and Switzerland is a very multicultural and open-minded region. There, Germany and France and Switzerland basically meet. It’s really interesting and exciting to see that, even though you speak the same language, between Germany and Switzerland in that area, for example, it’s completely different cultures.

Finally, in 2006 I became, in addition to the position at Birkhaeuser, a managing director at Springer in Vienna. Austria is a completely different ballgame once again. So I guess in Vienna there’s no formal business meeting without having to mention all kinds of academic titles. It’s really different. A lot of wonderful breakfasts in Austria, and so it is not only a cliché, but I think you can see that there are very different business approaches in those three countries.

Matthew Ismail: As managing director of De Gruyter— what is the position of managing director? Is that like being a CEO?

Sven Fund: Yeah, that is like a CEO.

Matthew Ismail: Okay. How did you rise so fast to being a managing director?

Sven Fund: I would say it’s other people’s fault and not mine! I think De Gruyter at the time was in a situation where the former CEO had to retire for age reasons, and they were looking for a managing director. I applied because Bertelsmann, to get back to that, has a very entrepreneurial culture. They’re always looking for intrapreneurs, as they call them, who are willing to take things on their own responsibility.

Matthew Ismail: So, your own entrepreneurial tendencies were an attraction for De Gruyter and it was something that was encouraged by Bertelsmann?

Sven Fund: Yeah, I think so. I think Bertelsmann really had the interest in these corporate development positions, and also in assistant positions to board members and so on to basically raise future managers. They want to make sure that they would find independent managers that will take on challenges and not just follow a certain order. I guess I’ve always acted, I hope in the best sense, as if the companies that I was responsible for, or the part of the company that I was responsible for, were my own company. It seemed that this would be a good match with De Gruyter and indeed I have to say it was really impressive also from today’s position. I was at the time 35, and the shareholders would really say, “Here’s the responsibility for 220 people and for €37 million in revenue. You go for it and you transform it into something different.” I like that a lot and I still ask myself sometimes whether I would have had the same generous approach if it would be my money and the people working for my company?

Matthew Ismail: So, you were there as managing director at a point where there was very, very fundamental transition going on in academic publishing, certainly. That must’ve been interesting times.

Sven Fund: Absolutely.

Matthew Ismail: Dealing with a company that had been no doubt for centuries printing on paper and whose expertise and particular genius was all in a previous era. How did you find yourself able to help in that transition?

Sven Fund: Well, from my perspective there were two elements. First of all, I think that once you are in such a situation and probably also with the experience that I had back then, you don’t see it as a problem but as a challenge. There were probably two groups of people within Springer. There was the much larger group which was very experienced in editorial–people in some cases who are still there today–whom I worked with very well because whenever I had a problem such as how to exchange an editor-in-chief in a board of a journal I would just turn to them and say, “How do I do this, I have never done it before. Can you help me?” And there was a great spirit of working together on these kinds of things.

Sven Fund

On the other hand there was a team coming in with the merger from Kluwer that was much more orientated towards technological change and innovation. The CEO the COO and a few other people knew exactly what would need to be done to create the “big deal” and to make as much content as possible available in a digital format and to do the math behind it and so on. So I never felt that I had to do something which was undoable. I always had the impression that there were situations where we didn’t really know whether it would turn out positively or not but at that time Springer was a very innovative and a very brave organization so they would simply say, “We don’t know. Let’s go for it. Let’s try it.” And I liked that a lot. I think that is hopefully brave and not ruthless. In any case, you can imagine that means a lot of internal conflict and discussions. I always tried to help by bridging the two camps,  trying to explain to people and transform corporate strategy down to what it means for a journal in a given field. I think it was always back and forth between very detailed work on having a meeting with an editorial board and explaining to them why we would do back files, e-books, all these kinds of things and at the same time making sure that not everybody continued to do what they’ve done for the last decades because that was clearly not the future.

Matthew Ismail: So in many ways, your willingness to change things and to act as an intermediary was a big part of your work.

Sven Fund: I always had the impression looking at customer’s behavior in other fields…I mentioned that I had been working in the music industry within Bertelsmann and if you would just imagine what was going on there! I just assumed that this transformation would not be limited to music and this will not be limited to business behavior, but at a certain point your researchers are completely normal people who buy Campbell’s Soup in the supermarket like everybody else. So I assumed at Bertelsmann that what happened to music industry through Napster could happen to publishing at any time, particularly to academic publishing. I always felt very comfortable about change because I had the impression that it is better to fail with change than with doing nothing because nobody is being paid for doing nothing but to do something.

Matthew Ismail: So, you had eight or ten years of dealing with an international business sector in publishing that was undergoing–particularly academic publishing–very fundamental change in how it works with its customers and also internally. So what led you to leave your CEO position at De Gruyter and become an independent?

Sven Fund: Well, as you know it’s not always your own decisions in life that matter! In this case I guess the supervisory board at De Gruyter felt that it was time for a change and to fire me, which I found surprising, given the development of the company at that point. But at the same time, if you have, yourself, moved people on within a company, fired them and hired new ones, I guess you are kind of mentally prepared for that moment.

Matthew Ismail: So, what opportunities did you see in the market when you founded fullstopp?

Sven Fund: If you look at the continental European journal landscape you’ll see that a lot of publishing companies are family-owned. They have been around for several dozens or hundreds of years, and they’re not very open to innovation. Nevertheless, from 2008 to 2014 or 2015, more and more people realized that something is really changing and that they have to react to it. I felt that that was a good situation to be in with consultancy and I also feel that in some fields–between librarians and publishers, for example– there’s a situation not only in Europe, but also in the U.S., where it’s really difficult for them to talk. So we’re working in that space, helping with restructurings and change management, mergers and acquisitions, working with vendors like printing companies or distribution companies, but also at the interface between libraries and publishing houses.

The set-up that I’ve chosen is really trying to make sure that we do both restructurings and other traditional consultancy but also mergers and acquisitions. It’s pretty unorthodox because I thought in the end what an entrepreneur wants is simply to move her or his business forward. He doesn’t care whether he has to expand an existing business line or buy a new one or sell one off. So I wanted to see it rather from an entrepreneurial perspective and that is why I launched a company and found a few people I’m working with now.

Matthew Ismail: What relationship do you have to the library world and is it mostly in Europe or in Germany?

Sven Fund: It’s pretty international, even though I have the impression that it’s really difficult to talk about librarianship or publishing as global phenomena. Of course it’s the same problems, issues and products that they’re handling, yet at the same time there are huge differences as well. So if you see, for example, how business-savvy librarians in North America are compared to their colleagues in some European countries, I would say that there are some huge differences between their mindsets. So I’m trying to travel between different geographies to really see what you can take in one geography and apply to another. A good example is approval plans. As far as I see in North America, approval plans are not the “flavor of the day” anymore, but under a lot of scrutiny and criticism. That’s completely different in Germany. One major vendor is now implementing approval plans here and didn’t do that for the last 30 years even though they were present in the market. Nobody knows why and so I would say there’s a lot to learn from just observing behavior of different sectors in different territories.

Matthew Ismail: In my position I find myself moving more and more out of approval plans and out of discretionary spending into on-demand purchase of books and we’re even getting out of the “big deals” to a large degree because we just can’t afford them anymore. Have German university libraries not felt under pressure to get books through approval plans?

Sven Fund: It clearly is a different culture and also due to the funding structure of the academic system in the U.S., it seems patrons are queen and king. Students seem to be king in the system and that is not necessarily true in the German university. Derk Haank,  Springer’s CEO, has a very good image comparing librarians to squirrels who basically collect everything they can collect, and I guess squirrel is much more true for Germany than it is for the U.S. My impression is that ownership of content is something that is incredibly important in continental European thinking for librarians and also for academics, by the way, while it’s not so much an issue in North America. I think access is much more important there and it’s much more the moment in which you use the content that it has to be there. But I think that is changing dramatically so I think demand driven acquisition models have had the comparable success in Europe as they have had in the U.S., with all of the positive and negative implications.

Matthew Ismail: So, the approval plan is not important but demand driven acquisition has been. That’s interesting.

Sven Fund: Yes. It seems to be the business model in between generations that is falling out and so it seems that the current business models across the world are more in sync in publishing than they’ve ever been before. Probably they were in alignment when it was just a printed book and a bookseller, but I would say that they’ve kind of realigned over the last eight or ten years.

Matthew Ismail: You bring an entrepreneurial, forward-looking, can-do attitude to a situation that doesn’t necessarily have that drive to change. Yet there’s going to be a demand that something new happens. How did you contribute to that?

Sven Fund: Well, I think what’s interesting–and that is why I like academic publishing so much. I can’t think of any other industry where you have customers that are so willing to trade their experience and what they want in a nonaggressive way with the sellers or the publishers. What I’ve always tried to do–within De Gruyter, for example–was set up library advisory boards and also vendor advisory boards.  We need to understand what the other party wants. I completely understand that nobody wants to pay high prices. So let’s not discuss the price first, but let’s understand in which structure a library wants to acquire content, how they want to preserve content–because I think in the end that got lost somehow in academic publishing. No industry can have their business model directed against their customers and I sometimes see that there are elements of that within academic publishing. I’m trying to balance between the legitimate interest of publishers, which is to make money, and the legitimate interest of librarians, which is to spend their institution’s, even in Germany’s case, public money wisely and I think that is something I’m trying to focus on.

Matthew Ismail: So, you have an intermediary role in many cases with fullstopp?

Sven Fund: That’s true, and not only for us at fullstopp. There is an interesting article by Peter Drucker entitled “What Only the CEO Can Do,” and he compares the CEO to the doorman of the organization who basically decides what has relevance to the organization, what is relevant for strategy development, and what is not. I think that it is really important right now for entrepreneurs to understand that, with all these changes going on, they have to adapt to the

 situation where there is suddenly change and where there are different demands. They have to take an active stewardship of the change within their organization. What we’re trying to do at fullstopp is to help with change, because a lot of entrepreneurs talk to us and say, you know, “We think we have great product. We have great brands, etc., but we don’t have people within our organization who are good at technology so what do we do about that? Where do we start? Whom do we hire?” It is interesting times we live in, both in publishing and in librarianship. That’s no different in libraries, right? How many programmers, how many great programmers want to work in libraries? Not so many. So obviously we need to find a way to make this attractive not only financially but also from what this is all about.

Matthew Ismail: Yes, absolutely. So how did you then move from your work at fullstopp to the creation of Knowledge Unlatched?

Sven Fund: I didn’t create it, Frances Pinter did, I was just happy to be found by Frances and Knowledge Unlatched. De Gruyter has been supporting Knowledge Unlatched from its first pilot round in 2012 on. I found it a very interesting model. It keeps what works in the library world, which is the financing mechanism of large parts of content in a relatively efficient way, and it adds on the new element which is access to everybody. So Frances and I got in touch. She wanted to step down and do other things, which she does from early in the morning to late in the evening now, so I said, “Yeah, that is something I’m interested in.” I was interested to further professionalize the organization and to make sure that it keeps its balance between the library and the publisher sides–one of the two parties always pulls on your coat, right, to make you move into their camp? We’re trying to really balance that. By the way, if you come from the commercial side of things, as I do, it’s a great feeling that suddenly you’re not the enemy anymore. People like to talk to you about something which they find exciting and I can’t get enough of it.

Matthew Ismail: So, in many ways then the experience you had transforming businesses such as De Gruyter and Springer and mediating between different parties who needed to work together for things to work well–that could be regarded as a contributing factor to the success of Knowledge Unlatched?

Sven Fund: Yes, I would say so. I think I can be extremely polarizing at times and I like to be, I have to admit, because I think it really can bring a conversation to a point where you then have to make a decision. But in principle in a networked world–and I don’t just mean a technical network by that– which is so much dependent on each other on all kinds of levels, it simply doesn’t make sense to work against each other. You might win, as a publisher, for another two years until the next general shareholder meeting, but is there really a long-term plan behind it? And I guess the same holds true for libraries. You can always win against publishers, you can always put pressure on them, but in the end does it really create a balanced situation where everybody wants to continue working together?

To me, the question is always what are we doing this for? The goal is not to make publishers and librarians happy, but the goal is in my view to make research better and to speed up research, make it more efficient.

Matthew Ismail: You’re involved now with open access and also with the interests of publishers. We could think of open access as being the interest of readers. At this point, libraries are an intermediary between readers and publishers because fundamentally they have funding for this. Could you see a time when Knowledge Unlatched didn’t work with libraries?

Sven Fund: No. I think it’s difficult to imagine that Knowledge Unlatched, as it is set up now, wouldn’t work with either libraries or publishers or both of them, because it’s basically a kind of three sided business model. So we are trying in the interest of the reader to open up the content by preserving the business relationship that exists between the library and the publisher. So we’re not trying to put pressure on publishers, but give them a fair margin on their product. We’re not trying to squeeze out libraries and say, “Who needs you guys? We will talk to the federal ministry of science and education directly and they can fund OA directly.” I don’t believe in that. I think — and I’m not saying that because Against the Grain is very much geared towards librarians — if I see how difficult it is to explain a relatively simple model like Knowledge Unlatched to librarians around the world and make them buy into it, I can’t imagine doing this with millions of individual researchers, who have much less experience with research publishing and the process behind it. So as the French would say, it is probably a restorative element.

Matthew Ismail: So, open access with books is actually far behind open access with journals. What relationship do you have to others who work in the space of open access books?

Sven Fund: Well, first of all we are doing journals with Knowledge Unlatched since this pledging round as well, which started in summer. So far, Knowledge Unlatched has been focused on the humanities and social sciences, where 60% of the output approximately is in books. But we decided we want to cover the whole field of research, and next year will be moving into STM. We want to expand the model to all publications so that we don’t always have to explain this small and very limited laboratory experiment we’ve had so far to see whether it works. I think what’s really needed in the field of open access is of consolidation and a powerful intermediary that helps consolidate all these different open access initiatives.

To me, the key issue right now in making open access really work is not money from librarians. Librarians are willing to spend money–I wouldn’t say happy, but willing. The problem is that there’s always another initiative around the corner and there’s a lack of transparency in the field, as you know better than I do, so you always try to compare Luminos and OLH and Knowledge Unlatched and OpenEdition and all of those guys to each other. Then you have platforms that you have to work on for very little amounts of money. So these models are in themselves a kind of “big deal” because they have lumped together different kinds of content yet they’re so small that they are no deal at all.

I think that is something that we have to work on, and we are in active conversations with different initiatives–though it’s probably too early to talk about them–but I think we will see some consolidation. We are also trying to open our transaction platform to other players in the market and create a neutral marketplace so that everybody can take advantage of just having this one infrastructure technologically but also one salesforce, one contact partner to talk to.

Matthew Ismail: So, your participation as an open access provider is in keeping with many trends in the EU, to make a transition to an open access form of publishing. Where do you see that whole movement going and how pervasive is it in Europe?

Sven Fund: Well, I would say open access is even more advanced in Europe than it is in the U.S.  It’s sometimes difficult for us from a European perspective because we’re not used to having things move faster here than they are in the U.S.! It’s a kind of awkward situation. So, I would be happy to see America first in open access publishing because the majority of our KU receipts, which is 34%, come from the U.S. and that probably has to do with a partner like LYRASIS and our sales team, which together are very strong there.

I think in the European Union you can see that open access is gaining more and more traction. An open access component is installed in each and every research grant, on the one hand, but it’s also because of competition among the different countries in Europe. The Netherlands, for example, have very much led the pack for quite some while and would like to maintain their leadership, and others are interested in catching up. That’s probably in the interest of keeping this business model very healthy.

Yet at the same time, I think that we have had to watch out that we don’t waste the traction we are gaining by addressing too many issues at the same time. That is very much a problem of the open access discussion in Europe. Once something works as a pilot people move onto the next thing. So, open data, open whatever–I’m not saying that this is not all important and interesting, but I think we also need to make sure that what researchers care about every day–which is that the basis of the research should actually to be accessible freely to them–is something that we should focus on. So I’m all for advancement into other models, but at KU we see our role as really creating breadth of content. We believe that open access publishing through KU should be building collections and not erratically unlatching a title here and a journal article there and so on. I think it’s not all bad that librarians cared about collection building over the last centuries, but it’s probably a good idea to rethink that and see who’s in the driver’s seat. To me, there need to be criteria beyond the researcher being in the driver seat where librarians can have an organizing hand in the system, and that’s something that we’re trying to help with.


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