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Toronto startup is like YouTube, but for readers
Billed as the world’s largest community for discovering and sharing stories, Wattpad goes some distance toward validating the old trope that everyone has a book in them… even if it involves Bella and Edward studying at Hogwarts or Harry Potter commanding the USS Enterprise.
It’s with that in mind that your Marketing reporter arrives at the internet startup’s North Toronto headquarters on a dark, but not yet stormy, morning. My one hope is to learn more about its progress in building a platform that allows everyday people to indulge their authorly ambitions and provides readers with a chance to stumble upon their new favourite writer.
A six-year-old company, Wattpad has been described by its founders as “the YouTube of Stories.” It is yet another addition to the corner of the internet that caters to self-expression. While its business plan remains deliberately ambiguous right now, recent “experiments” have seen it take some tentative steps towards content marketing.
The gunmetal grey clouds closing in on Wattpad’s headquarters are pregnant with rain, but their water has yet to break. That’s a relief. In my haste to leave the house this morning, I carelessly left my umbrella by the front door. I ride the elevator up to the 17th floor alone, silently assessing my appearance in the mirrored doors.
I have been summoned to a 9:15 a.m. meeting with co-founder Allan Lau, a self-described “serial entrepreneur” who first conceived the company in 2006 as a way of combining one of his preferred recreational activities, reading, with his professional acumen in mobile technology. Like many non-fiction works, the Wattpad story was slow to build, but has turned into something of a page-turner in recent months. Raising more than $20 million in two rounds of VC funding will do that.
A soft “ping” signals the elevator’s arrival and the doors open on a deserted corridor. The doors leading to Wattpad’s offices are shut tight, perhaps requiring the insertion of an ancient rune into a hidden slot or… a doorbell.
At nearly 8,000 square feet, the open concept office is Wattpad’s third in four years, reflecting its rapid rise from a small startup to one employing 50 people. Another move, this time to downtown Toronto, is planned before the end of the year.
A wall-mounted screen provides real-time updates on the number of Wattpad users (currently more than 15 million), the method they’re using to access the platform (almost 80% of its users arrive via mobile) and, most importantly, the number of content uploads. It took Wattpad from 2006 until December 2012 to achieve its first 10 million uploads. It reached 20 million less than seven months later.
Elsewhere, the office bears the de rigueur accoutrements of a 21st century internet startup: the ping pong table that doubles as a boardroom table; foosball; beanbag chairs and ubiquitous MacBooks.
Ringing the workspace are themed rooms of various sizes that enable staff—average age 26—to meet in private. The crime fiction room has a chalk body outline on one wall, while the Parisian-themed room boasts embossed wallpaper and a picture of the Eiffel Tower.
A back wall, meanwhile, is covered in actual comments from Wattpad users that have been transformed into wallpaper: “You know you’re a Wattpadder when your library card feels lonely,” reads one; “And you know what’s cool? My novel will be listed somewhere near the work of Margaret Atwood,” reads another.
The man behind the enterprise is in the kitchen. He is slender, his front teeth slightly crooked; his smile is warm, handshake firm. He’s wearing a grey T-shirt bearing the Wattpad logo, jeans with rips at the knees and thighs that are too perfect in their symmetry to be accidental, and slightly scuffed boat shoes.
He offers me a bite-sized concoction called Korean walnut cake. It’s sweet without being sickly. So begins my meeting with the man who has inspired literally millions of stories.
With more than 20 million user-generated uploads ranging from fan-fiction (its fastest-growing category, with more than 2.5 million submissions spanning everything from Twilight to Harry Potter) to humour, horror and romance, Wattpad caters to writers—and readers—of all types.
While the majority of its “authors” are merely hobbyists seeking a creative outlet, it has also managed to entice some bona fide literary talent, including Margaret Atwood and Cory Doctorow.
Its users are also highly engaged, spending more than 3.5 billion minutes per month on the platform, with the average visit lasting 30 minutes. To date, more than 8 million comments have been made about the stories or “chapters” posted on Wattpad, though many are of the “Hey, read my story!” variety.
It has also turned some so-called “net-native” writers into stars. Jordan Lynde, who writes on Wattpad as XxSkater2Girl16xX, and whose works include Finding Love in a Coffee Shop, has more than 107,000 followers and 97 million reads. She was recently signed by Random House.
Kirsty Moseley, who writes as Kirsty1000, has more than 123,000 followers and 73 million reads of works including Stalkers Secrets & Lies.
“We’ve got a really nice list of people who are participating,” says general manager Candice Faktor, the former vice-president of strategy, new ventures and corporate development at Torstar Digital who joined Wattpad earlier this year with a mandate to grow the company.
“I’ve had a very long love affair with Wattpad,” she says. “It’s very rare in Canada to find something this disruptive, especially in the consumer internet space. I’ve always been a huge believer in disruptive innovation.”
Just like social startups Twitter, Facebook and YouTube before it, Wattpad’s short-term focus is on growing its user base before flipping the switch on revenue generation.
“We’re getting closer and closer to critical mass right now,” says Lau, who confidently envisions Wattpad being similar in scale to YouTube. “Most mobile devices will be smartphones within the next three years; there are 3 billion people on this planet who can read or write or both—and those two numbers are growing, not shrinking,” he says. “We can reach a billion people, no question about it.”
That potential has enabled Wattpad to attract backing from funds including New York’s Union Square Ventures (an early-stage fund that has previously backed Twitter, Foursquare and Tumblr), Yahoo co-founder Jerry Yang and Khosla Ventures (a California company started in 2004 by Sun Microsystems co-founder Vinod Khosla).
All are convinced Wattpad has the potential to become a significant social network force. Union Square Ventures partner Albert Wenger calls it “potent” in its ability to compete with the traditional publishing model. “We believe it can grow to be very large,” he says.
Wattpad was the first investment for Toronto-based Golden Venture Partners, a mobile-focused early-stage fund that has invested approximately $20 million in 12 companies throughout North America.
Managing director Matt Golden has a professional history with Lau that dates back to 2001, when the two men co-founded a mobile gaming company called Tira Wireless. “We were the idiots running around saying ‘I swear to God, mobile content’s going to be big,’” says Golden. “We were definitely ahead of our time.”
At the moment, the story of how Wattpad will generate revenue remains unwritten. “It’s very dangerous to fix on a particular idea,” says Lau. “You almost have to try 10 things or, ideally, 100 things; five may work and you may pour fuel on the fire of those five, and two may become your main monetization strategy.”
But Golden says the size and engagement of Wattpad’s user base guarantees it will be able to make money in the future. “I’ve never seen a network [with a user base] as large and engaged as Wattpad’s not be able to monetize,” he says. “When you’re talking about an average session time of 30 minutes, you have such deep engagement that there are numerous [possibilities] for monetization.
“The question is when do you want to start introducing that. Keeping the user experience paramount is the idea here, to continue building this massive user base.”
While a smattering of banner advertising ensures Wattpad is not a zero-revenue company, Lau says that won’t be a key moneymaker for the company he co-founded with CTO Ivan Yuen.
One area of considerable interest that does play into Wattpad’s existing strengths is the branded content space. The company has already dabbled in the space (Faktor calls them “experiments”) with positive results.
Last year, noticing a growing trend towards fan-fiction around its boy band One Direction, Sony Music approached Wattpad about a potential partnership. The company subsequently conceived a five-part Valentine’s Day-themed story with each chapter detailing a date with a member of the band.
The series garnered more than 100,000 reads within 100 hours of its debut; a year later, there have been more than 2 million reads of the series, with more than 100,000 One Direction-inspired pieces of fan-fiction springing up in its wake.
Earlier this year, Wattpad partnered with Birdlife International, a global partnership of conservation organizations striving to conserve birds and their habits (Margaret Atwood is the honorary president of its Rare Bird Club) to solicit stories prominently featuring birds.
Billed as “A celebration of birds in storytelling,” the concept grew to more than 60 stories focused on various birds, including the Whooping Crane and the Ivory-billed Woodpecker.
While a celebration of Tide or Coca-Cola may not inspire such enthusiasm, brands do pop up with some regularity on Wattpad. A keyword search for Starbucks, for example, turns up 181 pages of results bearing titles like I Met My Mate at Starbucks (more than 1.2 million reads and 1,000 comments) and Ever Since Starbucks.
“Wattpad has enormous potential for brand content marketers,” says Lori Rosen, executive director of the Custom Content Council in New York. “As more and more brands embrace storytelling, they are looking for intuitive platforms to carry their content. Wattpad seems to be a viable solution for branded content.”
The only obstacle, she says, is the continued introduction of content platforms to the marketplace. “Wattpad has to make sure to keep up with all the technological advancements,” she says. “Competition is strong.”
Faktor says that brands have shown an interest in Wattpad (there have been positive meetings with agency networks, including OMD), but no formal deals have been signed.
“What we’re very careful about is that it’s really going to add value for the writers and readers on our platform and that [advertising] is native in its execution,” says Faktor. “It has to be in the way people use the product—not how the brand wants.”
Successful brand integration may require an extra degree of finesse, then, but Faktor believes this approach has the potential to be way more than just a dream for Wattpad.
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