A Piece of the Publishing Revolution
An Interview with Wattpad’s Co-founder Allen Lau
By: Herbert Lui, Staff Writer
Publishing isn’t the necessarily first industry that comes to mind when you think of the word “revolution”. Yet there aren’t many other terms that describe the changes taking place in the publishing industry so precisely; services like Lulu are offering authors the ability to publish physical books themselves, while Amazon and KOBO battle fiercely to retain eBook reader dominance.
… Wattpad was developed as a brand new place to engage in the act of storytelling and reading.
On the community front, we are watching social networks like Wattpad blossom. Wattpad is a service that brings authors and readers together. It gives authors the ability to share their work with a huge audience and gain feedback, and it also enables readers to discover new content. It has well over a million users, with one user comment being posted every second, and 300,000 stories being added monthly to its total collection of over 3.2 million. Audiences have spent over a billion minutes on Wattpad every month.
I first met Wattpad’s co-founder Allen Lau when I was volunteering at the National Business and Technology Conference a few months ago (and, I quickly discovered it was not selling a power mat alternative). After chatting briefly with him, I learned that this veteran entrepreneur had much to share and it’d be selfish of me not to share it with the world. Lau graciously accepted my request to interview him, and provided most of the substance for this work you are about to read. (Thanks Allen!)
Let’s dig in.
Prior to Wattpad, you were involved with mobile companies FeedM8 and Tira Wireless. What prompted you to create Wattpad with Ivan? This was back in 2006; why eReading?
Before Wattpad, we both worked together at Tira Wireless (I was one of Tira’s co-founders and Ivan was one of the first employees). Tira was a multinational mobile content publishing and deployment company that raised $30M in venture capital from prominent investors and quickly grew from 2 co-founders to 200+ employees as mobile phones were first being adopted en masse. At the time, Tira’s main focus was mobile gaming publishers, and I wanted to see if the same technology could be used for other type of mobile applications.
Selfishly speaking, I wanted to solve a problem I was facing myself – quite simply, I wanted to be able to read while I was on the go. So I prototyped a mobile reading app on the most popular Nokia Java phone that was available at the time. Unfortunately, very little text could be read on the small grainy screen and the experience was so rough that I knew the market wasn’t ready for this type of product.
Fast forward to Nov 2006, as I was about to leave Tira, mobile phone capabilities had drastically improved. So I resurrected the mobile reading app idea in my basement and started coding again. Ivan remained a close friend but had relocated to Vancouver.
One day out of the blue Ivan instant messaged me and asked me to check out the prototype of a new product he was working on. Coincidentally, it turned out to be a mobile Java reading app with a corresponding website where people could easily upload and share their writing. It’s hard to believe, but independently we had come up with the same idea!
Two days later I flew to Vancouver to meet with Ivan, and Wattpad was born in the Vancouver airport.
Where do future opportunities lie? And, conversely, what is Wattpad struggling with at the moment?
Although we have almost 10M monthly unique visitors, I believe we are only 5% of where we want to be. If you think broadly about entertainment, there are perhaps 5 big media types:
For each media type there will be a dominant social network; you can see this emerging with YouTube for video, SoundCloud for music, Pinterest for images etc. We are building Wattpad to become the dominant player for people to discover and share long form stories by connecting readers and writers directly.
It is important to note that we are creating a completely new digital entertainment category. Something like this has not existed before. Storytelling is inherent to human nature; it has been since the days of cavemen and Wattpad was developed as a brand new place to engage in the act of storytelling and reading.
At the moment, scaling Wattpad to serve tens of millions of users is one of our biggest challenges. We have to put a lot of effort in enhancing the infrastructure and these improvements are not necessarily noticeable to our users. While building the product is difficult, building the company that builds the product is equally challenging. When we were 5 people, everyone knew what everybody else is working on. It is getting harder to make sure the train runs smoothly when we are at close to 20 people. We also have to think about what type of people, skill, experience and even personality we need in our next steps, and sometimes the answer is not that apparent.
How did you grow Wattpad after the initial spurt of users?
An important factor in Wattpad’s early adoption came when we seeded the service with 17,000 free, out-of-copyright classic novels from Project Gutenberg. This helped us kick-start the Wattpad library and attract more users at a key point in the adoption of mobile phones – many online services were using these texts, but Wattpad was the first company to offer these well-known stories in a mobile format on people’s handsets!
As cell phones proliferated, more and more users began to share their own stories on Wattpad and a small number of them actually turned out to be great writers. Fans of those writers shared their stories with friends, who in turned shared the stories with their friends… which created an atmosphere where new writers felt comfortable and compelled to share their work and the viral cycle continues today!
Where do you see Wattpad going in the near future?
As I mentioned in the above, there are so many things we want to do and we are only 5% of where we ultimately want to be. In the near term, we are focusing on enhancing the user experience especially on our mobile application. We want our mobile users to enjoy the full Wattpad experience, including the huge amount of content and all the social interaction. At the same time, we want to ensure that we can provide a great user experience in the small screen. It is a delicate balance and that’s what we will be focusing on in the near term.
Plans for Kindle integration? (Not Kindle Fire, but more e-Ink eReader integration…)
Unlikely. It is very hard to provide the full Wattpad experience on e-Ink devices. In general, the e-Ink devices are good at content consumption but quite lacking in social interaction and content creation. Giving our users the full Wattpad experience is very important to us and hence the current e-Ink devices are not ideal.
Advice for young entrepreneurs?
Think big, start young and make the world a better place. There are so many big industries that have not been changed in decades; Finance, education or even the government, just to name a few. The mobile and social Internet can reshape these industries in a very positive way and there are lots of opportunities for young entrepreneurs to make a big impact.
Advice for young writers?
I don’t think I am good writer so I am hesitant to give advice to young writers! I can only share what I’ve learned from great writers. They write a lot, they write frequently, they revise their work endlessly and they read a lot. The good news is that Wattpad provides an awesome environment for all of the above and it is great place for young writers to start.
Where do you see the app economy growing in the near future?
Even though it feels like the app economy has already been exploded, I believe it’s just the tip of the iceberg. There are less than 1M apps in the app store while there are hundreds of millions of websites out there. There are 5 billion phones out there while only a small percentage of that are Internet enabled. I believe the real explosive growth is coming in the next 5 years.
Why do you advise entrepreneurs to start young? And yet what makes you advise students against dropping out of school to start their own businesses?
It is easier to innovate when one is young because there is no preconception of how things should work. It is just so much harder to think out of the box if your mind is already contaminated with old ideas. And more importantly, if your startup fails, you can always go back to your parents!
Although I encourage entrepreneurs to start young, life experience is also a big contributor to one’s success. College education is an essential part of one’s life experience and it helps a person to see things through different perspectives.
Even though Steve Jobs, Bill Gates and Mark Zuckerberg are all college dropouts, dropping out does not make you the next Zuckerberg!
How do you make a free app that’s addictive? Do you see any elements similar to mobile gaming that fit into Wattpad?
One thing in common among addictive apps is that people need to feel entertained. While we are very different than Angry Birds, I would say our users feel as entertained and that’s one of the reasons why Wattpad is so addictive.
What has been the most difficult part of the journey thus far? How did you manage to get through it?
Each phase has its own unique challenges. At the moment, scaling Wattpad to serve tens of millions of users is one of our biggest challenges. That said, if I have to pick the most difficult part of the journey, I would say the answer is the classic chicken and egg dilemma in the beginning. If we didn’t solve this problem, we wouldn’t have the scaling challenge today!
When your product relies on user generated content, you can’t really start attracting users without content, and if there are no users, there is no content. This problem plagued us during the early years of Wattpad, the company was bootstrapped, money was very tight and we had families to feed. There came a point when we almost pulled the plug on Wattpad. But we also came up with a great way to buy more time so Wattpad could percolate: we launched a second company, FeedM8 (pronounced FeedMate). FeedM8 was a product that helped bloggers and publishers extend their reach and monetize content. Within a short time frame that company also saw explosive growth, so Ivan and I focused on FeedM8 to pay the bills and keep the lights on. The revenue from FeedM8 gave Wattpad the runway it wouldn’t have otherwise had to reach its stride. FeedM8 was eventually sold to Upstream Systems and by this time Wattpad’s organic growth was reaching a sustainable level.
You’ve often compared Wattpad with Youtube; will Wattpad ever start paying their content creators, just like Youtube eventually did? Why or why not?
Everyone is a content producer these days, with a small percentage of content producers being compensated financially. YouTube is a great example of that. It is fair to assume that Wattpad will provide a mechanism for a percentage of our users to make money, either directly or indirectly.
Is there anything you want to add?
I feel that the Wattpad team is sitting on an opportunity of a lifetime to do something very transformative. Wattpad is creating a completely new to tell stories, and in fact storytelling has not changed much since Gutenberg invented movable types a few hundred years ago. So, we are doing something that can impact a lot of people’s lives in a very positive way and we are grateful for that.
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