Wattpad founder Allen Lau brings years of experience to his new life as a venture capitalist

I call myself a recovering CEO. Being a CEO was very intense. As a venture capitalist, I’m one level removed. But I have to deal with tens of companies all at once. It’s a very different skill.

When Wattpad was just me, my co-founder and Eva, plus a few founding team members, it was a scrappy corner store, with everyone, including me, wearing 10 hats. When we grew, the most important thing was no longer the sausage; it was building the factory building the sausage.

Every month, we signed up a new Toronto. You just feel excited, and you cannot stop.

Our most important demographic was women under 25, and I’m anything but, right? Eva understood our users naturally, and she is also a product person who could translate how to fix the pain points.

We made a lot of the right strategic decisions. Before iPhones existed, we anticipated that people would be creating and consuming content on their mobile phones. We bet on user-generated content when YouTube was only a year old, and before Netflix started to blow up, we started to think about expanding into movies and TV.

My biggest mistake was growing too fast, and the revenue wasn’t coming in fast enough. We addressed that in 2016—I had to say goodbye to many, many good friends. It wasn’t a fatal mistake, but it was close.

We were pretty close to profitability in 2021, so we didn’t need to raise capital—it was more for acceleration than necessity. The movie business is very, very capital-intensive. Naver Corp. was a good fit. They were already doing exactly what we were doing, but in Asia.

The day I stepped down in 2022, a year after the sale, it was on an all-hands Zoom call with 300 people. I couldn’t stop crying. I hadn’t experienced, and probably never will experience, this type of emotion ever again in my life.

I was not sure I wanted to start another company. I know how hard it was, and it was such a high bar we set. Was I going to spend my next 15 years trying to build something even bigger?

Assessing a new investment is maybe one-third of being a VC. We have an acronym—the three A’s. You have access to amazing opportunities, you need to assess those opportunities, and then you need to assist the founders.

World-class science is table stakes. But if you cannot turn it into a product that other people can use, and if you cannot build a company around that, it’s not investable.

The skills you learn in school might be obsolete in two or four years. But if you are a steam-engine engineer, you embrace electricity, right? If you’re an accountant, don’t get stuck with your pen and calculator—embrace Microsoft Excel. The most important skill, I would say, is the skill to learn new skills.

As a sovereign nation, we have to think about optionality—what we own and how we can differentiate ourselves. Ironically, it’s not that different from running a company.

Canada has been complacent for many years, and we are paying for that now. But at the end of this period of turmoil, we will be stronger.