
On pastrami and the business of PLOS - Hooke
http://www.michaeleisen.org/blog/?p=1883
======
nkurz
_All together we have a staff of well over 100 people running our journal
operations, and they need to have office space, people to manage them, an HR
system, an accounting system and so on – all the things a business has to
have. And for better or worse our office is in San Francisco (remember that
two of the three founders were in the Bay Area, and we couldn’t have started
it anywhere else), which is a very expensive place to operate._

 _..._

 _Now I want to end on the issue that seemed to upset people the most – which
is the salaries of PLOS’s executives. I am immensely proud of the executive
team at PLOS – they are talented and dedicated. They make competitive salaries
– and we’d have trouble hiring and retaining them if they didn’t._

From the outside, it seems obvious that having a hundred-person office in the
one of the most expensive cities in world is simply incompatible with having a
low-cost high-quality international journal. While it's understandable how
they ended up in this situation, the question now is whether their original
mission is important enough to sacrifice the "good thing" they have going.

It seems unlikely to me that the current executive team would ever decide to
cut their own salaries in half (or more) and decamp to a lower cost location.
But it also seems certain that there are lots of talented people in more
affordable locations who would have a good chance of doing an equally
excellent job at a much lower cost. But given the (possibly legitimate) self-
interest, I don't see any way they can make that transition.

Perhaps instead of trying to cut their costs, their best hope going forward is
to keep their prices and profits high, and use the proceeds to fund some new
completely independent "startup" journals to achieve their admirable original
goal? And perhaps dedicate what they can of their current team to developing
software and processes that others can use to run a lower-overhead journal?

~~~
shalmanese
It doesn't seem incompatible to me at all.

As a general rule, the parts of your staff that scale O(n) with revenue should
be cost sensitive but the parts that scale O(log n) or O(1) should be quality
sensitive.

As long as they can keep their growth rate up, the ratio of their staffing
expenses to revenue should go down over time, regardless of how high the
original denominator was. Thus, if you're a high growth potential company
(which, if you compare the size of PLoS to Elsevier, seems plausible), you
should pick the city that maximizes your growth potential.

Since traditional publishing was such an intrinsically distributed process in
the first place, PLoS has an unusually easy time building a distributed
workforce for all of its journal specific workforce like editors which keeps
those costs low. At the same time, the team working on functions that span all
journals like software or marketing can centralize in a city like SF which
bats above it's weight in those areas.

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thenewwazoo
I'm not sure I agree with Kern's implication that a not-for-profit company
should be eating the figurative Ramen and running on shoestring budgets. His
description of their assets reminds me of something that's very common, very
valuable, and very useful in the NPO world: endowments. So they've got
capital? Great! The more they make off their investments, the less they must
charge in order to pay for opex (they're light on capex partly because of
gratis support they get from similarly-minded companies).

I'm also not sure I agree that under $400k/yr is "big salaries". _Especially_
in a company that can't offer stock, doesn't offer big bonuses, etc. I was
offered a job there a couple of years ago, and spent some time talking to the
CTO. She was remarkably candid with me about PLoS' financials and their plan
for growth (which, I note, they've executed on marvellously). I have never,
ever, ever been more impressed by an executive. If the rest of the executives
are of the same calibre as Ms. Rayhill, they deserve every red cent.

~~~
dsr_
> I'm also not sure I agree that under $400k/yr is "big salaries".

It is. Your perspective is warped.

~~~
beachstartup
compared to what? in this world, there are lots of executives who get paid
literally millions of dollars to do nothing at best, or actively destroy value
at worst.

~~~
vonmoltke
These people are a tiny minority at the tail of the income distribution. Using
them as a metric is the statistical definition of the warped perspective.

Having a six-figure _household_ income at all puts you in the top 15% in the
US. Having a $400k salary puts you very close to the top 1%. I would say
anyone making enough to put them, _by themselves_ , in the top 15% is arguably
making a "big salary". The Valley has really warped the perception within this
industry in particular and the US in general as to what "normal" money is.

~~~
thenewwazoo
Right, but we're not talking about whether a median employee's salary is big
in a median market. We're talking about executive comp in the SFBA. I'd
estimate the CEO of PLoS is making ~2.5x what the average employee makes,
which is a completely reasonable multiple for executives that are reliably
hitting their goals and doing good work. You may think comp in the SFBA is
warped, but I don't think it's fair to dismiss context out of hand.

~~~
vonmoltke
No, we're talking about total executive comp at a non-profit. If compensation
in the SFBA is warped relative to the rest of the US it is fair to ask why a
non-profit is based there and whether the salaries they have to pay to stay
are justified.

------
astazangasta
A friend who worked for PLOS briefly described to me how they take a Word
document as input for in article and have it outsourced to some folks in China
to convert into an XML input, costing a tremendous amount of money and time to
process a simple document. My friend's suggestion that this could easily be
replaced with a script (and taking on writing that script) was met with
indifference, because the existing process "worked".

There is cruft at PLOS. CEOs running a successful business produce cruft. It
is worth criticizing this.

------
B1FF_PSUVM
Public Library of Science (PLOS)

[https://www.plos.org](https://www.plos.org)

"PLOS is a nonprofit publisher and advocate of Open Access research."

------
rubidium
Pre-PLOS "common wisdom": only way to make journals work is by paid
subscriptions and closed access articles.

Present "common wisdom": PLOS proved you can run a high-profile, open access
journal and be a real business.

Future (who wants to take on this challenge?): Run an open access, high
profile journal that charges less than $100/ article to publish.

....

Current price for each published article in PLOS: PLOS Biology $2,900 USD PLOS
Medicine $2,900 USD PLOS Computational Biology $2,250 USD PLOS Genetics $2,250
USD PLOS Pathogens $2,250 USD PLOS Neglected Tropical Diseases $2,250 USD PLOS
ONE $1,495 USD

PLOS Genetics has something like 720 articles published per year so you can do
the math on what they make from those fees.

~~~
a_bonobo
I've published an unfunded side-project in PLOS ONE for free, they have a no-
questions-asked free publication option. Back then, about 3 or 4 years ago,
there was a box with "How much are you willing to pay?", I entered 0, it was
published.

------
strommen
It's unfortunate that non-profits (in the US) have to compete head-to-head on
salary with regular corporations. They get no breaks on federal payroll tax,
income tax, social security, etc.

I suppose if non-profits _did_ get tax breaks on this stuff, there would be
lots of fraudulent organizations existing only to circumvent taxes without
doing any social good.

~~~
rubidium
The majority of non-profits don't compete head-to-head on salary.

They compete for hearts and acknowledge there will be a pay difference.

~~~
mathattack
Exactly. The big question is how much of a pay cut. This gets especially
touchy is how much when the competing compensation has outsize compensation
tied to tangible performance. Two examples are endowment fund managers (the
market price is multiple millions of dollars, and the difference of 1% of
performance can be 50+ million a year compounding over time) and college
football coaches (winning football programs are very profitable).

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dekhn
Except for the fact that they'd probably lose employees, PLOS should consider
moving their HQ to Oakland, or another location where rents aren't so high.

~~~
KKKKkkkk1
Why would they? Do they have shareholders to account to?

~~~
dekhn
Then their author costs would be lower. I could have suggested pinning their
author costs to their stock holdings value, too.

Doesn't matter if they are nonprofit.

------
julie1
Necessity is a needed evil he seems to say.

Did they thought of stopping to provide archive on the web, but just send the
whole collection of paper that requires 0$ / months to just keep them alive
and just require lenses and light to read?

Well it will require an index. But old style librarian have method for this.
You can make incremental archive, keep up to date indexes on a separate plan
... This would in turn help countries with bad internet/energy access.

[https://en.wikipedia.org/wiki/Microform](https://en.wikipedia.org/wiki/Microform)

And maybe libraries are a great invention. Maybe universities should be opened
to every one in the world to access ALL scientific papers. Maybe it is not
executive at PLOS that are the most useful agent for spreading the knowledge
but librarians.

As a great librarian once said: Oook! Ook, OOk, Oook!

