Allen Lau wants Wattpad to be to Internet publishing what YouTube is to video; The Wattpad site, which allows contributors to upload and share their writing, now has 15 million unique monthly users, double the number from 2012

How Toronto’s Wattpad is handling the challenges that come with fast growth

Quentin Casey | 13/06/24 10:24 AM ET

Tyler Anderson/National PostWattpad CEO Allen Lau at the company’s offices in Toronto.

Allen Lau doesn’t hide his ambition. He wants Wattpad to be to Internet publishing what YouTube is to video – a global giant with a billion users. The Toronto-based startup, founded in 2006, is backed by several top-tier investors, including New York-based Union Square Ventures, which has invested in Twitter, Foursquare and Tumblr. Last year, Wattpad received $17.3-million from OMERS Ventures, Khosla Ventures and Yahoo co-founder Jerry Yang, bringing its funding haul to $20-million. With 50 employees, the company is growing at an impressive clip. The Wattpad site, which allows contributors to upload and share their writing, now has 15 million unique monthly users, double the number from 2012. Those users spend a total of 3.5 billion minutes on the site each month, up from 1.4 billion a year ago. But heady growth brings challenges, including deciding on when to monetize the site. Mr. Lau, Wattpad’s chief executive, recently discussed the company’s outlook and plans with Quentin Casey. The following is an edited transcript of their conversation.

Q Take me back to the beginning. How did Wattpad start?

A Ten years ago I was the chief technology officer and co-founder of Tira Wireless. We made mobile games to correspond with feature films from Disney, Sony and Time Warner. In my spare time I was trying to combine my passion for reading with my profession — mobile software development. But at that time you could only read five lines of text on a phone. The market wasn’t ready.

Q So the idea was dead on arrival?

A Yes. But fast-forward to 2006 and the phone capability was much better. I resurrected the idea and started coding in my basement. One day, Ivan Yuen, a former colleague from Tira, messaged me. He said, ‘Hey Allen, I’m working on a new prototype. Can you give me some feedback?’ When I clicked on his link my heart was pounding like a hammer. He was trying to do the exact same thing. I saw his prototype and two days later I was in Vancouver meeting with him at the airport. Wattpad was born in the food court of the Vancouver airport.

A There is a publishing element but we want to be a storytelling company. For 2,000 years people have been telling stories regardless of the changes in technology, from the Gutenberg printing press to e-books. We want to recreate the environment where a storyteller would go to the town square and tell a story one chapter at a time. We want to create that environment on the Internet, with a billion people.

Q So you see Wattpad as a global business?

A We are seeing a lot of growth in many countries and in many different languages. English is our No. 1 language, but we are seeing very strong traction in Spanish and Dutch. Filipino is second: On a per capita basis, we are more popular in the Philippines than in the U.S.

Q So in your mind Wattpad represents the future of sharing stories?

A Absolutely — no different than people sharing videos on YouTube or 140 characters on Twitter. Securing a billion users is totally achievable. Look at YouTube — it has a billion users. We what to replicate their success.

J.P. Moczulski for National PostWattpad co-founders Allen Lau, left, and Ivan Yuen.

Q You’re receiving close to two million uploads a month. What’s the biggest risk in growing quickly?

A Maintaining our friendly, supportive online community is becoming more difficult. It was relatively easy for us to limit cyber-bullying and trolling in our early stages. But now we have 15 million monthly visitors. It’s like hosting a party. When you have a party of 10 people it’s easy to make sure everyone is friendly. It’s a lot harder when 10,000 people show up.

Q Will monetizing Wattpad be a challenge?

A I don’t see it as a challenge. Look at Twitter or Facebook, it’s critical in the early stage to focus on user growth rather than monetization. If you flip the switch too early it hampers user growth. I’m a firm believer that when you have a billion users there will be a million ways to make money.

Q You’ve raised money from many top-tier investors. Was it easier to find cash outside of Canada?

A In the early stages an investor wants to be more hands one, so the geographic distance actually makes a difference. But as the company grew that barrier broke down. When you have sufficient traction, it doesn’t matter where the investors are located. They will invest. Plus, the Canadian investment climate has improved a lot since I was raising money in 2009. It’s still hard to raise seed money here. But it’s no longer mission impossible.