How Wattpad CEO Allen Lau Used Diversity and AI to Redefine Which Stories Get Told

By Sam White

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In 2011, 24-year old Anna Todd began typing One Direction fanfiction on an iPhone in a supermarket checkout line. Without proofreading, she posted it a chapter at a time on Wattpad, a Toronto-based story sharing platform. Three years later, her finished novel, After, received a six figure book deal from Simon and Schuster. By 2019, After and its sequels had sold more than 15 million copies. The novel’s movie adaptation opened on Netflix that year—after changing the lead hunk’s name from “Harry Styles”—and its sequel dropped in September, 2020.

In the traditional model of mass entertainment production, this story isn’t possible. But Wattpad’s CEO Allen Lau has built a $400 million business by bringing storytelling—one of the oldest and most universal forms of human expression—back to the masses. 

It turns out that the tastes of literary and Hollywood gatekeepers don’t matter when your story already has hundreds of millions of fans

In some ways, Wattpad’s meteoric rise mirrors that of its stars. In 2007, Lau and co-founder Ivan Yuen placed a bet on the persistent appeal of text-based storytelling as smartphones began to take over the world. “I don’t play video games,” Lau says. “That’s kind of a secret.” Lau intuited an audience for a democratized platform where authors can fine-tune their stories based on real-time feedback from readers. 

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Today, those readers number over 80 million. They spend 23 billion minutes a month reading and writing over stories in over 50 languages. Many of Wattpad’s most popular stories are in the Sci-Fi, Romance, or YA genres. Many are way more sub-culturally-specific than typical big-publisher fare. Think “gay teen wizard romance,” or “afro-futurist drama”—stories that the still mostly-white, mostly-male entertainment industry gatekeepers would never greenlight for mass consumption. 

Wattpad CEO Allen Lau on cover of Bay Street Bull with purple background
How I Did It 2020: Wattpad CEO Allen Lau

Wattpad Studios, the company’s media arm, connects its most successful storytellers with Hollywood studios, literary agents, and big traditional publishing houses. To date, it has adapted almost 1,000 stories into books, TV shows, or movies. By defining itself as part platform, part media company, and part community, Wattpad has created an ecosystem that elevates original IP in an industry dominated by characters in capes. 

Hollywood has spent decades relying on hunches from a handful of people about what will hit—sinking millions into flops. For Lau, Wattpad’s success relies in part on the power of the crowd to flip this model. Find original stories that already resonate with a mass audience, and then invest. 

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This real-time feedback has surfaced stories (and writers) that are far more diverse than those who typically make it past the gatekeepers. As he’s built Wattpad into a global brand, Lau has built a team that mirrors the diversity of its audience. “We recognize the impact this has on our business. We can make decisions quite differently because we can see things in a much broader perspective,” he says. 

That diverse team draws insights from Wattpad’s prodigious artificial intelligence (AI), which collects a billion data points about user interaction every day. Wattpad feeds this data into a natural language processing algorithm that can pinpoint trends before they surface, identify popular themes, and offer feedback to authors. Lau recognizes that an unchecked AI might quickly become biased towards stories that are just as conventional as the old model. “If we skew too much towards the data, we’ll have a similar effect as in the past,” he says. For a mode of expression as fundamental as storytelling, the human eye is still the most powerful tool. 

Still, Wattpad’s AI has identified some successful tropes as old as storytelling itself: 

“A lot of the stories, they have a good cliffhanger at the end.”

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