Shadowing the CEO of Wattpad for a day
At Creative Destruction Lab’s February session, I had the chance not only to observe and interact with entrepreneurs and mentors alike, but to also gain an insight on what truly makes a successful startup. The day featured company pitches of pioneers in the AI world trying to make their mark with startups that employ technologies at the forefront of machine learning research. From shadowing Allen Lau, the CEO and co-founder of Wattpad, as well as exchanging ideas with entrepreneurs and venture capitalists, here are some of the key takeaways I gathered from the experience.
Allen himself has had his fair share of venturing in the business world. Before Wattpad, he founded two other companies, but it was the third one that really struck gold. When we talked about the main factors that contributed to his success, he said that there isn’t one key to success when it comes to starting a business. It starts with a great idea, then becomes successful through hard work, perseverance, dedication, and just the right amount of luck.
Timing is everything
Wattpad’s goal was and still is to revolutionize how people discover, share, and connect through mobile, on the go stories. However, when the company started in 2006, the idea behind Wattpad was just a bit before its time. Although the idea was without question a brilliant one, mobile apps were not a common concept at the time. It wasn’t until two years later that apple announced its iPhone, through which the idea of “on the go” became popularized. Now, everything could be done from your mobile device, including storytelling. Yet if Allen and his co-founder, Ivan, had given up before the launch of the iPhone, Wattpad wouldn’t even exist today, much less have 65 million users.
If you ask anyone who’s as much as taken a business course, they’ll tell you that in the business world, the customer always comes first. What makes your idea a great one is that it fits the needs of your market. You need to ask yourself: what about your company makes people want to buy the products? What I’ve seen some startups tend to do is they work backwards. They find a cool technology that they feel will be impressive, and they’ve found the solution without having a matching problem. Then what often happens is they force their solution onto a problem. You can clearly see the issue here.
In the term product-market, both are equally essential. If you have a bad product, you can’t expect any market to just welcome it with open arms. Yet some companies tend to focus too much on the product that they neglect the market part. Having a good product is not enough; you need to find the suitable market and convince them to not just want, but need your product. Find your target demographic and make sure the product appeals to them. Who is your client? What is your point of entry?
Be clear with your objectives
Yes, there are a lot of things out there that need to be fixed. No, you can’t fix them all. Let’s say you’re in school. You want to be good at science, math, and english. Your friend only cares about succeeding in math. You have the same amount of time and resources, and while you’re killing yourself balancing the three, your friend is focusing their time and energy on one subject. When the semester ends, who do you think will be more successful?
What I’m trying to say is, focus. Narrow your scope down to a few key insights that your customers can’t live without. Then, build a dataset that pulls information on that specific insight. Narrow your company down to a few key questions they want answered. Be specific and let your customer base know what you’re offering them. Customers want insight into your company. Focus on solving one meaningful problem.
Once you know your objective, stick to it. Resist the temptation to customize your product for every customer: if this is the case, your company will never grow. You should have a product that solves the problems of everyone in your target demographic without having to change it. Have a broad audience but a narrow objective.
Talk to people
No, there’s no way you could start a business without making any mistakes. But, there is a way to avoid as many as you can, and that’s talking to people. Startups tend to make similar mistakes, and learning from the mistakes of other companies can help your own have a smoother journey. Here are some of the common mistakes I saw that startups tend to make:
- Valuing revenue > building customer base: when you’re just starting out, don’t put your focus on gaining as much money as possible, as soon as possible. This takes away from you trying to build a loyal customer base. If you have the right product and a good base, the money will come to you.
- Not being patient: in reality, statistics show that 90% of startups fail. A huge chunk of this is probably people who gave up. They start over. But if you really believe in your idea, grow it. Figure out why it’s not working, and work on improving it. Wattpad is a perfect example of how waiting a bit and giving your idea another shot can be totally worth it in the long run.
- Only focusing on the big picture: as Allen put it, management isn’t going from being an awesome individual contributor to asking other people to get tasks done. Sometimes you have to work alongside your team, care about the little things, and help them stay motivated. As someone who started managing employees at age 26, he believes that management isn’t a glorified version of your old job — being a good manager means “ensuring your team works on the right things at the right place to deliver the right outcomes.”
- Neglecting existing clients: it’s totally understandable, but many companies tend to focus more on gaining customers. Which is fine, except they forget about the existing ones. Prove that existing customers will continue to benefit from your product. Investors want to see proof that your company will survive in the real world, and that means satisfying older customers whilst attracting new ones.
- Not having a plan: a lot of startups don’t know what they’re doing. They have no idea where they want their company to go. A successful startup knows what they want, and how to deploy the team/resources you have to get it. Even though Wattpad has become the world’ largest storytelling platform, they’re still constantly improving. Allen believes that it’s important to get rid of old features if they’re dragging you down, and continue to implement new ones. For example, for Wattpad, he hopes to implement more machine learning into the app, as well as distribute their stories on different platforms. And he knows how to get there. Currently the team is working on developing new algorithms to be able to sort through the 500 million uploads on Wattpad and better recommend new stories to readers based on their past stories. What other forms of storytelling are popular? Movies. What company both produces and streams movies? Netflix. Netflix’s The Kissing Booth? Adapted from a Wattpad story. The new After teen romance? Adapted from a Wattpad fanfiction. Have a future goal — a vision for what you want your company to look like, and set smaller ones that will help you get there.
- Blending in: some companies might be scared to try out new ideas because, well, no one else is doing it! But honestly, being part of the crowd is probably the worst thing you could do. Even when you’re networking with other entrepreneurs, you have to cut the fluff. Make yourself memorable! They meet so many people in various fields, and they can’t remember every single one. Say something that makes you different, that makes them remember you. And it’s the same with your company — some of the companies I saw yesterday that were sadly cut from the sessions had a similar idea to other startups. Yes, it’s a great thought, but unfortunately, there are 500 other companies thinking the same thing. Here’s the harsh black and white truth: everyone out there is pitching their ideas, and if you don’t find a way to make yourself stand out, you will be left behind.
What it really comes down to is the people, market, and your product/service. We all have great ideas. But sometimes, we tend to shove them to the backs of our brains because we simply believe it won’t work. Well, if no one ever hears about your idea, of course it won’t work. Any of the big names you hear today: Apple, Amazon, Facebook — you name it, all started from one idea — a single, random thought the founder probably had one day. But at the end of the day, it’s what you do with that idea that matters.
Thanks for reading! I hope that was helpful to anyone out there thinking of starting a business. Feel free to leave some constructive feedback, or shoot me an email at firstname.lastname@example.org.