 History itself began only when men carved their exploits and visions in stone and clay, and traced them in crude ink over parchment and papyrus, striving to live in eternal memory through the written word. As history began with writing, it has continued with printed records. Books were the great treasures of the earliest civilizations. Today they are the great means of communication between people and nations. Oh, I didn't see you there. I was just reading this book. I know what you're thinking, Alexis, that's not a book, it's a phone. And you're right, it is a phone. I'm reading on an app called Wattpad, which allows me to read millions of e-books written by people all over the world. Just anyone can start writing. In fact, the one I'm reading right now is called High Times at City Hall. It's a fictional account about Mayor Rob Ford, which is appropriate because I'm here in Toronto, home of Wattpad. And I'm intrigued because I've got a bunch of questions for this company, like how are they so huge in the Philippines? And what are they going to do now that Amazon has gotten into their space and is trying to eat their lunch? And finally, how they can turn this passion for writing into real maple scented money for their users and their company. I'm Alexis Ohanian, startup founder and Y Combinator partner. Over the last year, I went on a 200 event book tour and met people building small empires all across North America. Now I'm back with a new season, revisiting some of my favorite stops from the tour. Don't build a feature. That's a mantra many startups hear from experienced entrepreneurs and investors. If your whole idea for a company is something a tech titan is likely to simply bolt on to their immensely popular product, then your entire company is at stake. For Wattpad, which built a platform for collaborative writing, this challenge takes the form of Amazon's newest venture, WriteOn. Amazon has a history of squeezing smaller competitors out of business, and WriteOn will connect with the company's immensely popular e-book store and Kindle devices. Wattpad has a big lead, with millions of users already contributing writing regularly. Now it will need to figure out how to stop Amazon from stealing its thunder. So anyone can be a writer. Do you really believe that? I think everyone has a story to tell. I think to tell it in a compelling way, in a way that is interesting for readers, takes practice. You need to learn that, right? And I think Wattpad becomes a tool and a platform in which you can do that. You have an idea? Write that first chapter, that first paragraph, and put it up there and see if it resonates with people, see if people want to hear more. It kind of gives you a lot of motivation to continue doing that. The way I describe Wattpad is that it's a place for people to escape, connect, and express through stories. And Wattpad stories are really unique. They are made for mobile, they are highly serialized, and they are a place for writers and readers to connect with each other. So how many people are sharing or writing stories right now on Wattpad? Well, a lot of writers are also readers, and readers are also writers. So on a monthly basis, we have over 35 million users. We've created a community in which writers and readers are extremely positive about the entire act of storytelling. So as a writer, Wattpad is a really safe place to be to not just get feedback about your story, but get a lot of positive encouragement about the whole process of writing. You find this audience, you find this community, and it's a way of sharing your writing with a low-risk kind of a way. You know, my wife did my cover design for me. I kind of started out slowly, I was getting, you know, 10, 20 reads a day, and then the day I got, like, I was on the feature on the main page, it was like a thousand reads a day. Overnight! I think I found that my calling is in writing, and Wattpad has given me the platform to grow as a person, as a writer. Without Wattpad, I wouldn't be writing, and now it's sort of my full-time aspiration, my full-time passion. What are some of your biggest success stories? Anna Todd, she started writing a One Direction fan fiction on Wattpad last year. That was going to be my idea. She's gotten over a billion reads on Wattpad, and Simon Schuster published her book, and Paramount announced a film deal. Okay, wait, so they're making a film out of fan fiction she wrote on Wattpad about One Direction? Right. All right, so Wattpad's got millions of users. Traffic is booming. When that happens, it usually gets the attention of large companies, like Amazon, which has just unveiled a new product called Write-On, which looks suspiciously a lot like Wattpad. Historically, large incumbent companies don't kill startups. Even if they copy them feature by feature, they can't replicate what that startup does. There's just too much inertia, too much momentum in that big company to adapt. So it's always flattering when an incumbent tries to copy a startup. Right, Amazon's got their Write-On product. What's the argument for using Wattpad, continuing to use Wattpad as opposed to Amazon's new thing? Amazon's Write-On is very interesting. They really repackaged their Kindle. It's still very much transactional based on the finished piece of work. So with Write-On, writers are writing their whole story, handing it over to Amazon, and praying that Amazon picks it up and decides to publish it for them. Most writers on Wattpad are not looking for that. Wattpad writers have a story to tell. The way to do that is from day one, start connecting, start building readers. So I think Amazon's approach is very much based on their existing model of getting content and selling it to readers. Yeah, Amazon has done a very good job, certainly in the e-reader market and getting penetration there. But they still started out as a logistics company, and in many ways they still are, like moving physical things, whether it's by drone or by messenger, whatever. They still move its physical atoms. Going forward, without all of the baggage of physical infrastructure, you all are seeing the world pretty much how I think most of us will assume it is going to be in 10, 20, 30 years. So I wonder, what is the new world of publishing 10 years from now, when Wattpad is the incumbent? Five, ten years from now, the content is going to be free, and then it's about how do writers make money after they've given away their free content. Not all that different from musicians today. So we started back in 2006. Imagine a time, 2006, before iPhone, before the Kindle, before Android. Social media didn't really exist. I love reading, I read a lot, and I wanted to read wherever I happened to be, and there was really no other way to do that. All I had on me was my old Nokia candy bar phone, and I thought, well, I'm an engineer, I can figure out a solution to this. So over a weekend I put together this prototype that was really the first cloud-based e-reader. That is, you go to the website, upload your story, and then poof, you can read it on your phone. And I pinged a bunch of people that I knew, reached out to Alan, my co-founder, and he said, you know what, I'm working on a similar idea, we need to get together. Wow, and cloud wasn't even a buzzword back then, it's ahead of the game. We were really excited, and then we blasted it out to all our friends, posted it on blogs and forums and the like, and then nothing happened. Nobody was using it. Everyone thought it was crazy, like why would I want to read on my tiny mobile phone, it didn't make any sense. So I would say the first couple of years was a pretty slow grind. And then when did you know you were on to something? I think as the devices got more sophisticated, the screens got larger, data plans became more available. That's when we started seeing users really adopt this in the way that we had originally envisioned, that is, using a mobile phone as a primary reading device no matter where you were. This is Wattpad? This is Wattpad. And I'm told there are millions of authors using this to write stories and they're all here? No, they're all over the world, but we have about 100 people who are full-time employed here. Okay. All of the titles that are on here are titles of actual stories that are on Wattpad. Zombie Rock, that's really good. We've got a product team in here, we've got a community team working in here, no office is really open concept, open layout. And that just allows us to all collaborate and connect with each other. How did you end up here? I actually wrote a story on Wattpad. What's the story? It's called What's Next. I made it sound fictional in tone, but it was essentially going over my resume. It was two chapters long, the third chapter said, look, you can't hear the rest of the story if you don't bring Danielle in for an interview. So right then and there, I kind of followed all of my potential bosses on Wattpad. I said, this is the story of why I want to work for Wattpad and I got called in for an interview. That is such an unconventionally awesome way to apply for a job. How long ago was that? That was two years ago. Wow. Yeah, and I was employee number 23. These are real quotes from Wattpad users about their connection to Wattpad, so you'll see that throughout the office. I have always loved reading, but never had confidence to write anything myself. That feeling you get when someone leaves a nice comment on your profile. So rare in the internet these days. Anytime you create a platform, there's no way to know how people are actually going to use it. When Wattpad started out, they thought people would love to just read e-books. It turns out they wanted to write them too. Now, no one could have predicted that it would be so popular in the Philippines. It's such a success, Wattpad has actually got a TV show where every week they take one of those user-generated stories and turn it into a TV episode. That's the thing about the internet, once you put something online, you lose control. And that's a good thing. I am Felicity Sandoval, but you can call me City. The city I live in is FBCity. Is the Wattpad show in the Philippines in Tagalog or is it in English? It's in Taglish. It's half and half. What? Yeah, so you can watch it and figure out what's going on until you go into these monologues and you have no idea what's going on. What if you can just tag the super heartthrob on your campus? Guys, you're going to Vista? OMG! I'm supposed to tag Kaivan Bertolome. It's just a really particular demographic, really particular audience. I will tell you, you'd say that, except it trends worldwide. So it is massively socialized. Because of expats? No, because of the Philippines. If the Philippines is that strong socially, then they can drive worldwide trending on Twitter when Wattpad presents. Did the show come about because some producer in the Philippines was like, this thing is amazing, everyone loves this content, we want to produce a show out of it. Which comes first? Does Wattpad see all the traffic and then find people in the Philippines to produce the show or is it the other way around? This one was pretty organic. Wattpad was already really big in the Philippines and so it was already at that household name phase where people are spending billions of minutes on Wattpad and so they really already knew about Wattpad. And then within the Philippines, many of their top movies, many of their top films all came off of Wattpad. So the natural extension was to bring it to the small screen. Did you all go out of your way to try to build this community in the Philippines? I think one of the things that we did early on was we really made sure that the localization, the translation in Tagalog worked really well on Wattpad and that fostered some of the community and then we had a community specialist on our team who is Filipina and that helped as well. And so what's funny is that if you're on Wattpad, it's not very long before someone writes you from the Philippines and says welcome. Alright, so you guys obviously don't produce dead tree books and it is quite lovely to see here this sculpture of a tree featuring what appear to be Wattpad stories. Yes, that's right. So all of the leaves on the trees are all Wattpad stories. Actually, if you look all around the bottom, these are all stories that originated on Wattpad. This is Abigail Gibbs and if you look at the inside inscription. For Wattpad.com. Harper Collins ended up publishing this book but probably never would have looked at a draft of anything she would have mailed in. And you know, in Abigail's case, she wouldn't have mailed in a draft. She wasn't writing at all before Wattpad. So doubly cool. What does this mean about the role that traditional publishers are playing where, you know, in theory, right, you have these tastemakers who are very smart, very hardworking people who sourced the great idea, who knew, aha, that's going to be big, right? Does that threaten the status quo? Does that threaten their industry? I think they're diversifying their bets, so to speak. So they still do a lot of more traditional publishing, but at the same time, they see that stories like Anna's After is getting over a billion reads online. They know, okay, there's something here and they want to make sure that they're in tune with the current audience space, right? But also, in a sense, a safer bet for them. They know automatically, yes, there's going to be millions of readers from the get go. So I'm Mark Young. I'm a writer and father and professional in the insurance industry. And I've been a writer my whole life, but always have had the full-time job thing going as well, you know, feed the family and all that. But yeah, my writing career has kind of taken off in the last few years, and Wattpad's been a big part of that. What did Wattpad do to change the game? The platform and how the reader interaction was kind of so easy to have happen. If you get a lot of readers on Wattpad, it's almost like you have a huge team of beta readers. You can get feedback, you can get encouragement, and all that's important to writers, you know. If you imagine the physical bookstore, there are some viewers who have never been inside of a physical bookstore, right? From the olden days. There were shelves, there were, you know, a lot of things that you could do with a physical bookstore. There were spaces that were divided in sections by genre. It would have been rare, I think, in a purely physical world for someone who is into, you know, young adult, One Direction, fan fiction, to have stumbled into, say, your section. What does it mean that you get exposure to just a broader audience, that sort of serendipity? Is that helpful for you or is it frustrating? You're just like, get off my lawn. Not at all, no, I think that's good, and I think that kind of cross-genre pollination that Wattpad allows, it's like everybody's all in there together, and somebody follows you today, and you kind of go and look on their profile, you see what's on their reading lists. It's a very collaborative kind of everybody's sharing interests and enthusiasm. Everybody's a really enthusiastic reader, which is amazing. This day and age, teenagers are out there reading a lot. They're just not reading in the way people used to think about what reading meant. What kind of feedback do you get from the Wattpad community? It makes it mean so much more, because the stuff I write sometimes may be limited in terms of what I've envisioned, but readers come in with their own perceptions, their own backgrounds, their own education and ideas, and it becomes a collaborative process. What does a company like Wattpad do for you as a writer when, I mean, you could be publishing every day? So it kind of liberates me from the need to have perfect writing right off the bat and just bring out the first draft, and it takes a lot of courage to do that. But I think when you keep practicing, you can get a lot of techniques and learn a lot of skills that you need. Even in an age where we all have mobile devices now that are full of games and distractions, how does something like Wattpad compete against Candy Crush? It has been. That's the fun thing. And I guess maybe part of it is this gamification of it, like getting more reads, getting more likes, getting more comments. Maybe it's a way of people putting up their own fiction, and they'll go and read six pieces of fiction and try and get those people to read them. So there's an incentive for authors to even be reading, because that virtuous cycle. Yeah, exactly. And as a reader, I would just say to you, why not add a Kraken to that or some zombies? Maybe, that's possible. What kind of stuff is spiking right now? So One Direction is still definitely very strong, but we're seeing other pop culture references come up. For instance, vampires was a very hot topic a couple of years ago, but not so much now. What about werewolves? Werewolves also on the decline, I think. Jeez. Mummies? Zombies, more so. So you're looking at all this data. If you see here's an area that's clearly on the rise, are there things you do to encourage writers to draw writers in to help get those things moving? A couple of things that we try to do, we certainly promote that to readers. We know that this topic is very popular amongst certain demographic people in certain countries. Then we can promote that to them so that we're kind of pouring fuel to the fire, so we can connect them with the right audience. And writers respond well to this because at the end of the day they want people to read their stuff, so you're giving them the forecast for what they should be writing about. That's something that we're spending a lot more effort on. How do we make use of this data? How do we make use of this information that we have to make it better for our readers and our writers? It's easy for user-generated content platforms to put making money on the back burner while they have high growth. That's what Wattpad's been doing, but now is the time for them to start thinking about how to actually make money. Now the last thing they want to do is do that in a way that just ruins the user experience, because after all, the users are the ones who are creating all the value on Wattpad. But the best case scenario is one where Wattpad makes money and their readers are the ones who are creating all the value on Wattpad. But the best case scenario is one where Wattpad makes money and their authors do too. Let's go a few years in the future, right? Let's assume this momentum continues and this continues. What is the next logical step? Are you thinking ahead, how can I make this into a career? I would love to find a way to make it into a career, but it's a crowded space, it's a game, latest TV show, people are watching on the subway, there's a lot of content out there. So I think storytelling is a kind of content driven thing, no matter what the space is you're trying to fit it into. So I'll keep on working on that. Are you making any money from it? Currently not yet, but hopefully soon. What is your dream scenario? You're putting in serious hours producing stuff that people clearly love. It seems like there should be a way for you to be able to get compensated for this in some way, so that you can keep doing it. I was actually just in a meeting with another Wattpad staff, talking about ways to monetize the writing process and help authors out on a career. So I think that's something we're still working on. I have a lot of multimedia work that I'm doing. I've created, with a local artist, collaborated on these cellphone charms, coffee bean cellphone charms. We want to really help writers close a loop. So for the writers that are very, very serious about writing and want to make a career, we want to give them options and opportunities to actually monetize. So what are some of those options? There's a number of things that we're experimenting with right now. I don't really know if I can talk about it in too much detail, but really the main motivation is that we want to help writers make money off of, not just their story, but also the relationship that they've built with their audience. Last year we tried this experiment that was sort of a fan funding initiative, where we gave writers this platform where they could sort of activate their fan base to help them fund their next story or their next book that they were writing. So that was one way in which we helped writers actually make money off of that community. So kind of like the crowdfunding model. Right. So a writer, because she already has the relationship with her fans, doesn't have to take them to another platform, can say right within their platform, Hey, I want to write this book. Yeah. All right. What motivates writers, people who have other jobs in some cases, to spend all this time and energy writing for free? To get their story heard. In the old world, you spend weeks, months, years writing your manuscript. You send that around to the publishers and they reject sending you a letter of thanks, but we're not interested. That's very demotivating. So the main motivation is really telling the story, having people read it, and appreciating it. That's the main motivation for writers. And like you said, at the end of the day, yes, there are going to be people that are looking to make money from their work. But I believe, first of all, that's a small portion. And secondly, we're going to evolve new ways for these types of writers to make money after they have given away their content for free. What do you want to be doing? What is the dream gig for you? Five years traveling the world and writing a novel in every country I go to. Do you think Wattpad is going to be part of that vision? Definitely, yeah. I think reaching out to readership online is part of the industry now. We can't be separate from that. People no longer just pick up a book and read it, but they're involved in social media, they're involved in the author's life. So that's definitely going to be part of it. I think first drafts will always go on Wattpad and see what readers think about it. I always believe in what Cory Doctorow says, is that the worry is not that people will read you for free, it's that they won't read you. So just getting your work out there is... Just be read. Yeah, be read. It's fitting that here in an international city like Toronto, Wattpad has been able to build a global platform for authors to write works that can be read all over the world. They've been able to connect millions, give people a voice that doesn't require a book deal, and that's awesome. They've built a great platform, and the question is, can they build a great business too? Wattpad thrives because of its devoted users who continue coming back to the service. Whether you run an online community like Wattpad or a brick-and-mortar retail store, building customer loyalty is essential to getting returning customers. Try giving your business a personal touch by sharing photos of you and your staff on your company website, or why not offer specials and online discounts for returning customers? Loyalty cards and giveaways are easy ways to bring back customers and costs next to nothing. If you have a brick-and-mortar store, use the space to host special events for customers. From workshops and demos to guest speakers, these events are a great way to offer more and remind customers why they should be coming back. For more business advice, visit AT&T's Business Circle.