Lessons From Building A $600M Startup And Funding Innovation- Allen Lau, Co-Founder of Wattpad

Allen Lau is a self-described 'recovering' CEO, and 3x entrepreneur, an engineer by training, a rocket scientist at heart, and a venture capitalist by profession.

He was the CEO and co-founder of Wattpad, the world's largest social storytelling company with 100 million monthly users.

A few years ago, the AI-powered company was acquired by Naver for over US$660 million.

Allen is now co-founder and operating partner at Two Small Fish Ventures, an early-stage venture capital firm that is investing in the next frontier of computing and its applications.

TIMESTAMPS:
00:00 Trailer
00:51 Allen's Founding of Wattpad
06:49 The Cold Start Problem To Building A Marketplace
13:57 Persisting Through The Trough
15:26 Scaling Up: The Decision to Expand
18:35 Securing VC Funding
25:18 Wattpad's Refusal To Enter Silicon Valley
33:07 Lessons As A CEO
36:41 Why CEOs Need To Constantly Communicate
40:05 Wattpad's Strategic Growth and Evolution
42:28 Navigating Naver's Acquisition
48:10 Investing In Deep Tech
57:18 The Future of Technology and Innovation
01:03:47 What Singapore and Canada Share In Common
01:08:08 Book Recommendation & Advice

Keith 00:51

Peter Thiel has a statement where he talks about contrarian truths. He asks startup founders to find what kind of contrarian truth they hold dear that no one agrees with.

When you first started Wattpad in 2006, what was the contrarian truth that you believed to be true back then?

Allen 01:14

Let me spend 30 seconds to explain what Wattpad is. Many of you know already, but in case you don't, it's an online platform for people to read and share fiction, from science fiction to romance stories and everything in between. We grew from zero users in 2006 to 100 million users when the company got acquired.

It's a mobile reading app, but it's also a user-generated content platform for people to share their writings. The most obvious opposition we faced was "this idea won't work. No one will write for free."

This was the most common objection because the publishing industry has been around for hundreds of years. The traditional process is you write, find an agent who presents your writing to publishers. A few gatekeepers, sometimes just one person, would decide whether your work is worth publishing. That's how the system worked for many years.

From the publishing industry's perspective, people write to make money. Why would anyone write for free on a platform? That was the most contrarian view at that time.

There were other objections too: "Why would anyone read on a tiny phone?" Remember, 2006 was two years before the iPhone came out. The screens were tiny.

In hindsight, I don't think anything is truly contrarian. It's almost like the best opportunity is in plain sight but nobody can see it. By definition, startups, especially outlier startups, are outliers because they do things differently. That's why Peter Thiel and many successful startups can tell you one or two things they did that were completely different from others.

Keith 04:00

What was the smallest market you thought you could target and then grow from?

Allen 04:05

In 2006, the iPhone didn't exist. YouTube was only one year old, and Facebook was a 200-person company. The concept of user-generated content was nascent—I'm not even sure that term existed then.

As I mentioned earlier, the publishing system is about gatekeeping, while the internet has very different characteristics: it's free, ubiquitous, real-time, and global or borderless. It's anything but gatekeeping.

That was the market gap we saw. If everyone else was gatekeeping, perhaps there was an opportunity to open the floodgates and let anyone who wants to write share their writing freely. On the demand side, mobile reading meant easy access—everyone could carry what they want to read on a device they have all the time. Now this is table stakes, but 20 years ago, it was a crazy concept.

These were the two gaps we identified.

Keith 05:58

When PayPal started, they targeted eBay power sellers who would transact the most on an e-commerce platform and needed a digital payment solution. When Facebook first started, they targeted universities and high schools. How did you conceptualize who to start with?

Allen 06:25

I wish I knew more about that approach back then. To be honest, we weren't that savvy. Our thesis was different—we didn't target a specific group or segment.

Our initial thesis was simple: there are five billion people on this planet who can read or write. Let's target them all. Without realizing it, we were building a marketplace between readers and writers, and we faced a classic chicken-and-egg problem. Without readers, no one would upload content because there's no audience. But on the reader side, there was nothing to read.

We realized this problem just a few weeks before launch. One of us—either my co-founder or I—thought, "Wait, we can use classic books that are copyright-free and make them freely available on our platform." This aligned perfectly with our mission.

We spent a few days finding digital versions of Pride and Prejudice and other classic books. We imported about 17,000 copyright-free titles to get things started. Unintentionally, classic book readers became our first target market.

Keith 08:47

People didn't think about startups back then in terms of finding the smallest addressable market to start with. You were probably the earliest solution for reading classic books online, and then the platform evolved from there.

Allen 09:15

Yes, precisely. We didn't think that way initially, but we found that niche. To validate what you're saying, after importing those 17,000 titles, we realized that if you searched Google for "mobile reading classic books" or "Pride and Prejudice mobile app," we ranked very high.

There was probably a very small segment of the world's population interested in that, but we were the best because we were the only one. That's how we started to attract users in that very small niche, and then over time, we expanded to adjacent spaces.

Keith 10:31

The difference between a startup and a small-medium enterprise is really the rate of growth. When was that first moment when you felt this wasn't just going to be a small business? When did you feel it had a chance to take off and hit escape velocity?

Allen 10:46

Reading classic books on Nokia phones or Motorola flip phones was such a small niche. Despite our ambitious vision of targeting five billion people, the reality was we had minimal traction. We struggled for three or four years.

Interestingly, while Wattpad is a platform for reading and sharing stories, the "sharing" part didn't happen initially. No one uploaded anything for the first two or three years. The first upload came in 2009, almost three years after we started the company.

That moment of realization came maybe six to nine months after the first writer showed up. What happened was this first writer told her friends to check out her story on Wattpad, bringing maybe 100 readers. Those 100 people told a second writer, so one became two, two became four.

It multiplied, but not quickly. The second writer only appeared a few weeks later, and the third writer showed up maybe two weeks after that. In the early days, I would check every evening to see who was signing up and if they had uploaded anything. I wanted to know all the writers on the platform, which wasn't hard when there were only five of them.

I continued doing this for six to nine months. Then one evening, I kept discovering new people in the community endlessly. I could no longer keep track of all the new writers because there were so many. That's when I realized we were building something special, something that could attract millions of writers. If I remember correctly, that day was in late 2009. That was the "aha" moment.

Keith 13:57

It's so hard because you had two years of zero traction. How did you know this was the right path to follow?

Allen 14:06

In fact, we knew it was the wrong path because it wasn't working. After one year, my co-founder Ivan and I had a conversation. He was living in Vancouver and came back to Toronto for a wedding. We sat down and said, "Ivan, it's not working. We have to figure something out." We were so deflated, we almost gave up.

Then one of us said, "Our hosting costs are only $5 because no one is using it, but we have some ads on the website generating some revenue. We got a $2 check from Google, so we're $3 away from breaking even. Let's not give up."

So in a way, we did give up, but we also didn't because it cost us nothing to maintain. We downgraded Wattpad to a side project for a year or two while doing contract jobs and part-time work. We were even crazy enough to start another company with a different product idea. But that's how we endured those two years.

Keith 16:03

When you hit the aha moment in 2009, when did you decide you needed venture capital funding to expand?

Allen 16:12

We raised our angel round in early 2010. Once the first writer came, followed by the second, growth became exponential over six to nine months. By late 2009, we had close to half a million users and a few thousand writers.

That was enough traction, and our original big vision was starting to become reality. We could visualize the future clearly. That's when we raised our first angel funding in 2010.

Even then, all our angel investors expected an exit value of maybe $10-20 million, and everyone would have celebrated that outcome. In 2011, we started to seriously consider venture funding and raised our Series A.

I should clarify that terminology was different 15 years ago. What we called Series A then would be considered seed now. The angel round would be pre-seed. Our Series A back then would be Series B or C today.

In 2011, we raised our first institutional round, and fortunately, Union Square Ventures in New York became our first institutional investor. They had backed many iconic companies, including Twitter, Zynga, Coinbase, MongoDB, and Cloudflare. They could see the future.

Having that venture capital backing was crucial, not just for the capital but for having smart investors around the table. They helped us grow the company in ways we hadn't originally envisioned.

Keith 19:47

What was your pitch to them back then, and what do you think they saw in you?

Allen 19:52

That's a good question. We pitched to about 40 different firms, and most said no.

The typical objection was, "How do you make money? It's free." Thirty-nine of the 40 firms asked for financial projections, and I was honest with them. I said I could provide numbers, but they would just be made up. If they wanted higher revenue projections, I could simply change numbers on a spreadsheet.

It wasn't because I had no clue, but because that wasn't our focus at the time. In hindsight, I can articulate it more clearly: we built the technology first, then the platform and mobile app, and then we productized it. Our first version wasn't great, which is why no one uploaded content initially. It took time to refine it into a usable product for readers and writers.

Once we formed the community, we could focus on commercialization as the next phase. We believed we could do these steps sequentially rather than simultaneously.

Union Square Ventures was the only firm that didn't ask for financial projections or focus on revenue numbers. Despite having some ad revenue already, they actually asked us, as a condition of investment, to remove all the ads. When I saw that email, I called them immediately to confirm it wasn't a typo—they were actually asking us to become a zero-revenue company again.

They confirmed that was exactly what they wanted because it was the right thing to do. They felt our user experience was suffering from too many ads. Their view was that for this type of company, the better approach was to ensure the best possible user experience to attract readers and writers. Once we had that network effect and millions of users, we would have a defensible business and could figure out monetization later.

We already had some of these ideas, but they articulated them much better. It was amazing validation for us.

Keith 23:59

You had such a tier-one venture capital firm backing you, but instead of moving to where they were in New York City or going the standard Silicon Valley route, you chose to stay in Toronto. Why?

Allen 24:13

I have to give credit to Union Square Ventures. Many other VCs I pitched to, especially Silicon Valley VCs, told us we had to move there or at least open an office there.

When I asked Union Square for their opinion, they said, "We don't really care. You have to like where you live. You live in Toronto because you choose to live there, and that's what matters most."

When we raised our Series B, we spent more time in Silicon Valley, and faced similar objections. By then, I could better articulate why building in Toronto was actually an advantage.

My message to VCs was that the company was already taking off. We had an amazing employer brand in Toronto, which isn't a small city—yesterday I saw that the Greater Toronto Area has passed seven million people for the first time.

I didn't need to hire a million people, just the best few hundred in the foreseeable future. This was easily achievable in Toronto. Whereas in Silicon Valley, it's ultra-competitive. Not only would I compete with established giants like Google and Facebook, but also up-and-coming companies like Airbnb and Uber. I'd likely get lower-quality talent there.

The "big fish in a small pond" effect worked perfectly for us in Toronto. In hindsight, I was absolutely right. We attracted some of the best people and built the company primarily in Toronto, even until just before the acquisition.

Keith 27:05

You also expanded to Halifax, which most people in Singapore probably have no idea about. Why make that counterintuitive move?

Allen 27:15

We expanded there as our second headquarters. For those unfamiliar with Halifax, it's the largest city in Atlantic Canada, though with a relatively small population of about half a million people.

It's a sweet spot between too large and too small. Looking back to 2019, we had been able to attract top talent in Toronto between 2011 and 2019, but something changed during that period. Not just Wattpad, but 10-20 other companies had become successful scale-ups in Toronto, making talent competition fiercer.

Around 2017, Silicon Valley companies started coming to Toronto. Instacart opened an office there—their founders were actually Canadians from Waterloo, so they knew the ecosystem—and they planned to hire 300 people.

That was when I realized our "big fish in a small pond" advantage was diminishing because there were many other big fish in the same pond now. The turning point came in 2019 when Google announced plans to hire 5,000 people. More importantly, they bought a building literally a 30-second walk from the Wattpad office.

Having Google's hiring presence right next door meant all my employees and job candidates would see it daily. This triggered my thinking about establishing a second headquarters.

Why Halifax? First, I wanted to recreate that "big fish, small pond" effect without having to consider third, fourth, or fifth headquarters. I looked at different cities across Canada, expecting some employees would relocate. Opening in the US wasn't considered.

Coincidentally, I met a friend in Toronto who had moved to Halifax. He complained about how hard it was to travel to Silicon Valley because there were no direct flights. I asked, "Wait, there are no direct flights between Halifax and Silicon Valley?" He confirmed this.

I realized this was actually an advantage—Silicon Valley companies wouldn't easily come to Halifax because it was so inaccessible to them. Other Canadian cities like Calgary had direct flights to Silicon Valley. Halifax was farther from Silicon Valley but only about a 90-minute flight from Toronto. I could do day trips there and be back home for dinner.

All these factors, especially the inaccessibility to Silicon Valley, became our competitive advantage.

Keith 31:59

How was the talent concentration in Halifax? Did you find the tech talent you needed—software engineers, coders, and so on?

Allen 32:07

Despite having only half a million people, Halifax has seven universities within driving distance. It's a university town. One of the biggest, Dalhousie University, has a computer science program with 1,200 students.

I didn't need to hire all 1,200, of course. The city produces many talented graduates, and because it's smaller, Toronto is very expensive by comparison. Even before opening our Halifax office, we already had several employees from Halifax working for us in Toronto who wanted to move back.

This gave us the insights and conviction that opening in Halifax was doable.

Keith 33:07

Throughout your journey from 2007 to 2021, you were the CEO from startup to scale-up to what many might call a unicorn. How did you understand your position as CEO? What should the main role of a CEO be?

Allen 33:34

I had started three companies, but Wattpad was my first CEO job. The learning curve was extremely steep.

I recognized a few important things. First, as CEO of a fast-paced company, you almost have to become unrecognizable every two years; otherwise, you're not growing fast enough and being left behind by your own company. My calendar and how I spent my time changed every year or two.

The most important realization, which one of our investors shared and I now agree with completely, is that a great CEO only does three things:

First, set the vision and strategy of the company and communicate that to all stakeholders—investors, customers, users, employees, and partners.

Second, hire the best possible talent you can afford at each stage. Different stages allow for different caliber people, but the principle is to hire the best possible talent and let them execute your vision and strategy.

Third, make sure there's enough cash in the bank.

It sounds deceptively simple, but if you don't get these three things right, you cannot be a great CEO. In the early stages, a CEO wears multiple hats, doing everything the few employees can't do. As you grow, you must delegate almost everything. But to make delegation work, you must give your team sufficient context and direction, then let them focus on execution.

This evolution in mindset happened around Series B, when we had 20-30 people.

Keith 36:26

You spent 45 minutes to an hour writing a daily update. That seems counterintuitive. Was that your way of communicating the vision and strategy to your team?

Allen 36:41

Yes, that fits perfectly with the first responsibility—vision, strategy, and communicating to all stakeholders. The daily blog posts, five times per week, were one of my many tools to communicate, clarify, and repeatedly reinforce our vision and strategy.

In hindsight, it was one of the most powerful things I've ever done. If you had walked into our company and randomly picked any of our 300+ employees around the time of the acquisition, every single one could tell you our vision: "to entertain and connect the world through stories." Everyone could also articulate our strategy of expanding into movies and TV shows to become an entertainment company.

The blog posts were very informal, not like formal emails or instructions. Sometimes I'd share interesting stories from Wattpad, what writers were doing, and how readers were enjoying their work. Not everyone would know these anecdotes, but sharing this context meant employees could make high-quality decisions aligned with what others in the company were doing.

As a scale-up CEO, I couldn't be involved in 99.99% of company decisions, but the blog helped provide context for what I wanted.

Keith 39:19

Those 1% of decisions are the ones that move the needle for the company. Throughout your years of scaling up, what were some of the big pivots you made to grow beyond just a fast-growing startup to a full scale-up?

Allen 39:40

I wouldn't use the word "pivot" because, interestingly, those classic books we added on day one are still available on Wattpad today. We didn't really pivot, but we kept finding interesting adjacent opportunities to expand into.

For example, we became an AI company very early, in 2012. With almost 20 million users by then, we had lots of data but didn't know how to leverage it. So we hired our first data scientist, Brandon Tsau, who's now one of our partners at Two Small Fish Ventures. He introduced us to artificial intelligence in 2012, and we used AI to find the best stories and turn them into TV shows and movies.

We started Wattpad Studios in 2016 after experimenting with TV shows in the Philippines and other places for two years. Those experiments worked, so we doubled down. That was our boldest and most ambitious initiative ever—a mobile reading app company making movies? How do you connect those dots?

But if you follow the evolution, it actually made sense. It was another contrarian bet that nobody saw coming, but in hindsight, it was logical.

Keith 42:02

Maybe "evolution" is the right word rather than "pivot." It's like if Goodreads suddenly went into movies—that might seem weird. But Amazon did evolve from books to eventually include streaming services.

Now that you had built up to a scale-up, in 2021 you exited to Naver, which seems unusual since you're in Canada and they're a South Korean tech conglomerate. Why did Naver acquire you for $600 million?

Allen 42:41

We weren't displaying a "for sale" sign at that time. I distinctly remember in 2020, exactly a year before the acquisition, setting a company objective to be "IPO-ready."

I explained to the team that being IPO-ready didn't necessarily mean we wanted to go public, but that we would be self-sustaining with multiple options: we could choose to IPO, raise a growth round, or maintain the status quo. We wanted that optionality.

We were close to becoming profitable and breaking even at that time. We had the option of raising more capital to fund the movie business and expand into adjacent areas like comics. We were experimenting with audiobooks and other forms of entertainment because we had already evolved from a mobile reading app to a multi-platform entertainment company selling books in stores, producing movies and TV shows, and exploring audiobooks, gaming, and other entertainment forms.

We were at a crossroads where we could be more conservative and self-sustaining or raise more capital to expand faster. Then COVID hit, and our business grew even faster as people had more time to read. Our traffic grew by about 50% practically overnight.

Our thinking about expansion accelerated, and then an acquisition offer came in. My co-founder Ivan and I decided to run a process to see if we could find a partner as an alternative to raising capital.

That process led us to Naver. We'd known them for a while and quickly realized after our first conversation that they were very similar to Wattpad. They had a webtoon division focused on comics, which was exactly like Wattpad except with comics instead of novels. They also turned their best IP into TV shows and movies.

From a product perspective, we were very complementary. Geographically, we were also complementary. Wattpad was a global company but had few users in China, Japan, and Korea, while Webtoon was strong exactly in those markets. It was like yin and yang.

There were many other synergies, and it made sense to join forces because with Naver and Webtoon's help, we could expand much faster into other areas.

Keith 47:41

Now you've transitioned to Two Small Fish, investing in deep tech startups. It's a remarkable evolution from a mobile reading service to investing in deep tech. Why did you decide to focus your efforts and energy on deep tech?

Allen 48:10

That's a good question. It came naturally, but I should provide more context. My wife Eva and I met in engineering school. She's an industrial engineer who worked in semiconductors before joining Wattpad when we were struggling in early 2009, a year or two before we raised capital.

After we raised our Series B, she left—she's not a big corporation person—and we co-founded Two Small Fish Ventures in late 2014 or early 2015. In practice, while I was running Wattpad 99% of the time, she was running Two Small Fish. And for those curious, we are the "two small fish"—though I have to say I'm the smaller fish.

We initially invested only in ad tech companies and AI companies, which we knew well. After Wattpad was acquired by Naver, I didn't think I had another startup in me. Spending another 15 years on a new startup wasn't appealing, but I wanted to work with startups and amazing entrepreneurs. That gives me energy and motivation, so I became a full-time operating partner at Two Small Fish.

Since we're both engineers who understand technology and have hands-on experience with products and commercialization, we naturally looked at areas we knew well technically. Semiconductors became interesting to us, and we started investing in semiconductor companies before the recent AI hype.

Brandon, Wattpad's founding data scientist, also joined us, so we doubled down on AI. More recently, Albert joined us too—he's a PhD in biomedical engineering and was CTO of a robotics company with experience in photonics and smart glasses.

Our DNA hasn't changed—we only invest in things we deeply understand and have domain expertise in. That expertise has expanded to include robotics, semiconductors, and smart energy. It's not that we invest in deep tech because it's cool; rather, we invest in things we understand, and these happen to be the most impactful technology sectors right now.

Our one-line description is that we invest in the next frontier of computing and its applications. That's why we became deep tech investors.

Keith 53:37

What filter do you use to assess and evaluate the deep tech startups you choose to invest in? For deep tech startups, the incubation period is much longer, and your payoff is much more uncertain.

Allen 53:52

You're not wrong, but there's a misconception that all deep tech startups are difficult, capital-intensive, and hard to monetize. While most might be like that, you just need to find the ones that aren't.

It's somewhat contrarian, but sometimes the best opportunities are in plain sight, visible only to you. For example, with semiconductor investments, people still think you need an enormous factory. While partly true, it's not entirely accurate. You design semiconductors on computers—all you need is a computer. When you need to test or manufacture a chip, you outsource that.

For testing, some of our portfolio companies have access to accelerators where they can use equipment for free. It's not that different from a SaaS software startup. The notion that deep tech or "hard tech" is always hard isn't entirely accurate. If you know what you're doing, it's actually not that difficult.

Keith 55:37

Maybe it's different because your team at Two Small Fish has concentrated technical talent deploying capital, which might not be the case for most VCs. Spotting these opportunities seems to be your superpower that other VCs might not have.

Allen 55:58

Every VC must have an edge. Our edge isn't in growth stage investing but in seeing the future—determining whether a product will take off when there might not be any commercialization or traction yet.

As a VC, if you rely solely on traction, you're not differentiating yourself. Anyone can ask how much revenue a company has. That's not a specialized skill. I'm not saying traction is unimportant, but if you rely on it, you might be great at growth-stage investing. For early-stage VCs, however, that's probably not a very differentiated skill.

Keith 57:11

What glimpses of the future have you seen so far in investing in the next frontier of technology?

Allen 57:18

This is actually one of the best times for investing because the foundation is in place—high-speed internet and computing devices are ubiquitous, providing a solid base for collaboration and development.

We saw a similar phenomenon during the internet boom. The dot-com crash wasn't really a crash; the technology was just ahead of its time. The internet has since proven pervasive and powerful. What's interesting is that back then, the costs of computation and connectivity were perpetually dropping, driving up demand. Once costs reached a tipping point, behavior changed, leading to innovations like TikTok, Instagram, and others we've seen in the past 20 years.

Now, in the AI era, the cost of intelligence is also decreasing. AI is the first technology in human history that can learn, reason across domains, and make decisions without being pre-programmed. Until AI, devices like smartphones were "smart" only because engineers pre-programmed them. But AI is genuinely intelligent.

As a result, AI can now handle routine tasks that previously required human intelligence. As the cost of intelligence drops below certain thresholds, it makes sense for AI to take over these tasks. That's why we're seeing humanoid robots and self-driving cars emerging. We're only scratching the surface—there are many innovations yet to come as the cost of intelligence continues to fall.

That's why this is perhaps the best time to invest in early-stage companies. Innovation is coming fast and furious.

Keith 1:00:45

And the cost of production or starting a company is much lower than it was in your day.

Allen 1:00:49

Yes, and just as we've seen with TikTok, Instagram, and Wattpad, creativity has been democratized. In the past, you needed Tom Cruise to make movies; now anyone can be the next Tom Cruise on TikTok.

Similarly, technology innovation is being democratized because you can ask AI to create an app for you. You still need some programming knowledge, but millions more people—perhaps billions—can now become software developers and create companies or products.

It's the best time for entrepreneurs because capital requirements are much lower. In the past, starting a software company required hiring engineers, needing perhaps half a million to a million dollars just to begin, unless the founders could build everything themselves. Now many more people can do that, which is exciting for entrepreneurs.

That's why we're increasingly looking at deep tech. With democratization comes fierce competition—TikTok creators aren't competing with just five other artists but potentially billions. It's easier to start a company, but standing out is harder, and the bar for creating an investable company is much higher.

That's why we focus on deep tech and technological moats that not everyone can replicate. Designing specialized robots for specific applications remains difficult and requires expertise. That's the barrier to entry.

Keith 1:03:47

You're still in Canada, operating mainly there and funding Canadian startups. What keeps you optimistic about Canada's future?

Allen 1:03:57

Since I'm in Singapore now, I'd first note that these two countries are quite similar. Canada is one of the G7 but has the smallest population, with a neighbor ten times our size right next door. That contrarian philosophy actually works well in smaller ecosystems like Singapore or Canada.

Many AI pioneers—Turing Award winners, the equivalent of the Nobel Prize for computing—are based in Canada. We have some of the world's best scientists in many fields, particularly in computing and AI. We're leveraging that advantage and building an ecosystem to retain that talent and help with commercialization.

These experts came to Canada for a reason, and it's easier to retain people who are already there. A smaller ecosystem is less noisy, like the "big fish, small pond" effect in hiring. I'm not saying tiny ecosystems can easily build big companies, but interestingly, Canada's largest tech acquisition—almost $3 billion—came from Newfoundland, our smallest province with just half a million people.

The internet connects everyone and levels the playing field. You can learn by listening to podcasts from anywhere in the world. Nothing compares to in-person interaction, of course, but for smaller ecosystems like Canada and Singapore, if you have capital, mentorship, good schools, and accelerators, you can find advantages that bigger ecosystems might miss.

Even in the US, the percentage of unicorns coming from Silicon Valley is steadily decreasing. Half of US unicorns are now outside San Francisco. The idea that you must be in a major tech hub to build an amazing company is simply not true. That doesn't mean you shouldn't visit—I go to Silicon Valley frequently to learn and make connections—but you don't have to live there.

Keith 1:07:55

Last two questions: since you're the founder of Wattpad, you have to give us one book recommendation, and then one piece of advice for fresh graduates entering the workforce.

Allen 1:08:08

For a book recommendation, there might be some recency bias, but I'd suggest Ray Dalio's "The Changing World Order." It uses a financial lens to examine the rise and fall of empires. In today's complex geopolitical environment, learning from history is crucial. History doesn't repeat itself, but it does rhyme. It's an excellent book that I really enjoyed.

For young people and students, I want to say two things. Everyone can be an entrepreneur, but you might not want to be one, and that's okay. You can still be entrepreneurial by thinking outside the box. Society imposes certain constraints from social and cultural perspectives. I'm not saying these are wrong, but as an outlier, you need to be different to see opportunities others miss.

Get out of your comfort zone and learn things you might not initially be interested in. This expands your "surface area" and creates more opportunities. I'm not suggesting anything unlawful—thinking outside the box means challenging conventional norms and finding your own interesting path for the future.

Keith 1:10:30

With that, thank you Allen for coming on.

Allen 1:10:32

Thanks for having me.