Cranking up the Wattage on Mobile Reading

Cranking up the Wattage on Mobile Reading

Lifestyle | Posted by - May 7, 2014 at 1:00 am

The literary scene is rapidly changing with e-books on the rise. Allen Lau is helping lead these changes with Wattpad, a free online writing community that boasts more than 25-million monthly visitors.

Allen Lau has been working on a thriller since 2002.

Literary icons have showered it with praise. It’s got publishers salivating. And bookworms bemoaning the untimely demise of the written word have already come to one hyperbolic conclusion: this creation could be their ultimate salvation.

Wattpad, a free online writing community that currently boasts over 25-million monthly visitors in over 30 different languages, is Lau’s contribution to the literary scene. The site functions as a kind of YouTube for the readin’ and writin’ crowd, offering aspiring Hemingways a venue in which they can freely post their creations for the world to see and comment on.

The story began to take shape more than a decade ago when Lau, Wattpad’s co-founder and CEO, then the busy co-founder of Tira Wireless, wanted to be able to read on his phone.

“I’m sure you remember the Nokia candy bar phone,” he says with a laugh. “You could only read five lines of text at a time, so clearly the device capability was too primitive to serve this [reading] purpose.”

He parked the idea for a few years until he got a call from Ivan Yuen, employee number one at Tira. Yuen had been independently working on the same concept as Lau – mobile reading – but by 2006, the idea was no longer just a Jetsons-like vision of the future. The technology existed to make it happen: Yuen had already built a mobile reading app for the Motorola Razr in addition to a website where users could upload content to be shared and read on mobile devices. Wattpad had moved from fantasy to reality before the Kindle and the iPhone had even been announced.

Uptake was slow in the early years (there were months where revenues topped out at $2), but as consumers caught on to mobile reading, Wattpad’s audience grew exponentially as writers from around the world began to recognize the value of sharing and creating online.

As a writer, the number one motivation is having someone appreciate your creation. Wattpad can bring 22-million people to potentially read your work.

“As a writer, the number one motivation is having someone appreciate your creation,” says Lau. “Without the internet, that’s a very, very hard thing to do. You can share it on a piece of paper with your neighbours or your friends, but that’s pretty much it. Wattpad can bring 22-million people to potentially read your work.”

That idea of exposure, anonymous or otherwise, is what prompted Margaret Atwood in 2012 to pen an op-ed in The Guardian lauding Wattpad – where she has posted new poetry and collaborated on zombie fiction, among other things – as the modern gateway for new writers to find publishers.

The size of Wattpad’s community has, of course, attracted more than the literary crowd. Investors have flocked to the Toronto-based startup, whose core demographic is the under-25 crowd, 80 percent of whom are accessing the site via mobile devices.

In September 2011, a group of investors led by New York-based Union Square Ventures sunk $3.5-million into Wattpad. That allowed Lau and Yuen to scale the company up to 20 employees from the 6 or 7 they had working full-time, accelerate some of Wattpad’s social features and improve their mobile and desktop sites simultaneously, but there was still room to grow. The following June, Wattpad secured $17.3-million in additional financing, this time led by San Francisco’s Khosla Ventures and Yahoo! co-founder Jerry Yang.

“That helped us scale to 65 people,” says Lau. “We can do things faster, but if you look at the amount of traffic we have today compared to two years ago, [it’s just enough] to sustain activities. We are servicing 22-million people every month so the number of users each employee has to support is in the range of hundreds of thousands. If you look at it that way, it’s still a pretty small team right now.”

Currently, traditional advertising remains the primary revenue source for Wattpad, but Lau, like many of his peers working in the mobile sphere, expects native advertising – digital-age advertorials that look like content, but are produced in conjunction with or by an advertiser – to play a large role in driving revenues in future. In the meantime, the team is focused on growing its user base.

“The long-term vision is that there are 5-billion phones out there,” says Lau. “There are 4-billion people on the planet who can read or write or both. And every one of them can be a Wattpad user.”

Unbridled by the bandwidth restrictions that make YouTube less functional in many parts of the world, Wattpad, says Lau, simply needs to continue to grow – the money will follow.

In April, Lau’s company secured an additional $46-million in Series C funding in a round led by OMERS Ventures, money which will allow the company to expand its Toronto team and move to a new downtown office space that will help Wattpad accommodate more staff.

“One percent of 4-billion people is 40-million people and we are not even there yet,” says Lau. “Our focus is to grow the user base so that we’re closer to the 4-billion than the 22-million [that we have now]. Once we have such a sizable user base, making money is the easy part, in my opinion.”

Tags: allen lau, literature, online reading, tira wireless, wattpad, profiles, yahoo

Pat Lynch
Pat Lynch is a Toronto-based writer and editor. The editor of Damage Control: How to Tiptoe Away from the Smoking Wreckage of Your Latest Screw-up with a Minimum of Harm to Your Reputation, he has also written or edited for The Globe and Mail, The Grid, Toro, Ski Canada, Reader’s Digest and Cottage Life magazine.