Wattpad's 15 million unique monthly visitors spend a combined three billion minutes on the site per month. Sounds like a gold mine—but CEO Allen Lau won't monetize his startup.
At least not yet. To Lau, Wattpad is still in the phase of building users, even though it's also the top-ranked e-reading app in all major app stores, according to the entrepreneur.
The Canadian founder says he doesn't plan on monetizing until he reaches his standard for critical mass: hundreds of millions of users, which would place him in the same league as Twitter, Facebook, and LinkedIn.
A few years ago, Wattpad was nothing more than scribbles on a wrinkled napkin in the Vancouver International Airport. But instead of becoming forgotten trash swept up by the broom of a janitor that evening like most napkin-based ideas, Wattpad went on to become Canada's Best Overall Startup in 2011.
Lau's story is the classic two-step beginning of most startups: he observed a problem and envisioned a solution.
"I was trying to solve a problem that I faced myself," he explained to Techvibes in an interview. "I'm not a writer but I read a lot. My iPod is pretty empty. If you look at my recently watched movie list, you would see Jurassic park in there. Reading is my main thing. [I thought], 'how can I bring my reading material on my mobile device?' Because that is how I can best utilize my time effectively."
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Unlike most startups in Canada, which often take the first exit they can get, Wattpad is a decidedly long-term play. The company is now in its seventh year and has barely begun to focus on monetization.
"No one is giving me any pressure," Lau remarked last year. "In fact, investor Vinod Khosla [co-founder of Sun Microsystems and venture capitalist] said, 'if I were you I would focus on building an amazing, transformative product—don't worry about monetization for now. You are building something very special. Your user base, I can tell, they have some permanency, unlike a lot of the other social networks that can become obsolete in two years. You are building something that looks like a permanent fixture, so build it before you monetize.'"
If Wattpad isn't planning to be acquired anytime soon, does that mean it will also remain in Canada? Yes, Lau says. Contrary to popular belief, there's no reason to.
"I've proved that I can build a super amazing, super disruptive company right here in Canada," Allen states. "I would argue that in Silicon Valley, there is too much silicon and not enough art. Wattpad is not only a technology company, it's a blend of arts and science."