Allen Lau says that if you want to understand the power of WattPad to inspire writers, there is probably no better example than his wife, Eva.
Having no experience as an author, Ms. Lau started to write a book that she is publishing chapter by chapter on WattPad, an online service that lets people share and discover stories. So far, Ms. Lau’s Chocolate Umbrella has grown to 70,000 words, and attracted more than 40,000 reads and 300 comments.
It’s just one example of the enthusiastic and increasingly large community that WattPad has developed over the past five years.
As a user-friendly and accessible way to tell, read and share stories digitally, WattPad now has one million registered users, as well as several million unregistered users who are happy to read free content.
In many respects, WattPad is one of Canada’s best-kept digital secrets. With little fanfare, the Toronto-based company has created a community that not only sees writers share their work but community members actively provide comments and feedback.
In other words, it has become a vibrant social network for writers and readers.
WattPad’s low profile is likely a thing of the past after it announced earlier this week that it had raised $3.5-million from a group of investors led by New York-based Union Square Ventures, best known for its investments in Twitter, Tumblr and Foursquare. WattPad’s other investors are Golden Venture Partners and W Media Ventures.
Mr. Lau, who co-founded the company with Ivan Yuen in 2006, said the financing culminated a six-month process during which WattPad talked with 40 venture capitalists.
One of the challenges, he said, was to find investors who could offer more than just money.
“I didn’t want to get a capital provider,” he said during an interview over coffee. “A lot of entrepreneurs make that mistake of getting too excited about getting VC funding and money in the bank. I was looking for more than a capital provider. I was looking for a VC who bought into our vision, who could support us, and who had our interests aligned.”
Mr. Lau said that Union Square is a great fit because its vision is investing in large networks of highly engaged users, reflected by its investments in Twitter, Tumblr and Foursquare. As well, he said Union Square is very entrepreneur-friendly.
He added that Golden Venture Partners’ Matt Golden provides insight into the mobile world from co-founding Tira Wireless with Mr. Lau, and being a partner with the BlackBerry Partners Fund, while W Media Ventures founder Boris Wertz has valuable publishing experience from being a key part of AbeBooks.com, which was sold to Amazon.com in 2008.
WattPad’s origins go back to 2002 when Mr. Lau was working at Tira Wireless, which developed technology to deliver content on mobile devices, and which shut down in 2008.
As a side project, he created a prototype for a mobile Bible reading application. The problem was that it only displayed five lines at a time on a Nokia phone, which was great for geeks like Mr. Lau, but did not resonate with consumers.
The idea was shelved until 2006, when Mr. Lau decided to resurrect it. By luck or serendipity, he received an e-mail from Mr. Yuen, who had also developed a mobile reading application, along with a website that would make it easier for people to upload their stories.
Mr. Lau said WattPad has resonated with users because it has democratized the booking publishing industry.
“Storytelling used to be boxed in by the book,” he said.
“To write a book, find an editor and a publisher and then have it printed used to take one and a half years,” he said. “This is crazy because we live in such a fast-paced environment.”
As social media started to emerge, WattPad added new features such as customizable user profiles and video introductions for their stories, and let people leave comments about stories, as well as rate them. With little marketing, the WattPad community started to see hockey stick-like growth.
After being bootstrapped for the first three years and working with angel funding over the past 18 months, Mr. Lau said the new financing will let WattPad move into a new office, as well as double its work force to 20 employees.
It will also give WattPad more resources to grow its community and, at the same time, continue to work on new ways to generate revenue beyond advertising, which has already made the company profitable.
“Our vision is to be the best place for readers and writers to share and discover, and, to fulfill that vision, our business goal is to become the largest community of highly engaged readers and writers,” he said.
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies to create compelling and effective messaging to drive their sales and marketing activities. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.
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