Wattpad and the three-year grind to reach any traction: Product Stories #4

Part 2 out of 2

Note: This is the second part of the Wattpad story. Please read the first part here to get more context on what Wattpad is and how it started.

The first version of Wattpad

Wattpad was launched in 2006. iOS App Store was launched in 2008. Wattpad was trying to distribute its app even before the App Store existed.

This is what the first version of the Wattpad app looked like:

It was coupled with a website where users could upload their stories.

Few things to note from here:

1. They did multiple languages from the very start. Instead of focusing on 1 language, they tried multiple because they didn’t know which one would take off. Their approach might have some merit as Vietnamese apparently was the first language to take off on Wattpad. Even the founders don’t know why.

2. Had the user-generated-content flow from the start (notice the “Upload” section)

3. The messaging or value prop to their initial users they were offering was mobile reading. Users could read their favorite classics while on the move on their mobile devices. Their initial target audience was also "classics lovers”.

How to solve the chicken and egg problem of double-sided marketplaces

Wattpad is also a double sided-marketplace. On one end, they have writers who publish long-form content on the website/app hoping to get readers. On another end, they have the readers who want to read the best content. This leads to a classic chicken-and-egg kickstart problem. Why will readers come when there is no content at the beginning? And why will writers come when there are no readers?

Wattpad solved it the way most marketplaces solve it. They focused on seeding the supply first. Majorly because demand is always the biggest unknown and solving that first will ensure there will be takers for the solution. They believe if demand is solved for, supply will come.

While seeding supply also, they had two options - 1. seed with already available free content 2. contact writers who publish elsewhere and convince them to write on Wattpad. Since Wattpad was a very small 2 person company, they didn’t have the money or bandwidth to do that latter. They took all the classics books from “Project Gutenberg”. This way they built a single-player use case. This is in contrast to the strategy Discord used (the product story I talked about in the last edition) where they started with a utility use case and built a network later on.

The interesting thing to note here is that by using this as an MVP (minimum viable product) they did not validate their “Youtube for books” idea. It validated whether a mobile reader app idea works or not. It is debatable if this was the best strategy for them but worked out just fine for them in the long run.

Another interesting approach they took to build supply was to hold writing competitions for school/college students.

Wattpad and Blackberry app store ban

There is another anecdote in Wattpad’s journey that I want to highlight upon.

Wattpad relied on app store listings heavily for their initial traffic. Note that they did not use paid ads in order to kickstart demand. Paid ads such as Facebook/Google these days are a decently scalable demand engine which ensures that you have enough users to test your product idea with. On the surface, it seems like a very good idea but it makes you skip all the hard grind of getting users organically which helps you build conviction on the idea as well as an organic user acquisition strategy which works (which you will need sooner or later).

Anyways, I digress. Coming back to Wattpad’s case, Blackberry was one of the popular app stores back then. And in those days, Blackberry app store listed apps in alphabetical order. Wattpad named their app “100,000 Free Books” in order to get to the top of that list. This got them to no 1 app in “Books” category within 2 days. This growth hack like all growth hacks was available for all to use only for a very short period of time. That’s why the thought process matters more than the specific growth hack if one wants to learn growth hacks from Wattpad’s journey.

After 2 days of becoming no 1 in the Books category, Wattpad was banned from the Blackberry app store. The reason being that someone had uploaded the Harry Potter books on the app. It got restored later on when they took down the content and put in measures to report piracy.

But the important thing to note here is that till the time they were banned, they had not built for piracy protection. While when someone is thinking of building a user-generated content app, it does not require a visionary to tell that something like this would happen. I am sure the founders knew that this problem will arise sooner or later. But instead of building for that, they chose to ignore building the solution until the problem actually arrived. This “putting out fires as and when they come” strategy has its own benefits. You don’t waste your time working to solve something which might never happen.

Why does Wattpad work?

Wattpad founders talk about various reasons why Wattpad is so big today but I want to touch upon what I believe is the biggest differentiation for Wattpad as opposed to any other publishing/book platform. One of the main reasons why it works is - Serialised content. This is something that never existed in the long-form content universe.

Instead of writing a full book and releasing it at once, writers can actually publish just one chapter, see the response and accordingly write subsequent chapters. While this has some value for readers as well (since it’s more engaging when you have a say in the direction of the story) but the real value realization is for the writers. They now don’t have to waste their time working on something which might never work with the readers. It also helps in generating the buzz regarding characters and gives readers time to get attached to the characters.

For readers, they get access to long-form content (like Harry Potter fan fiction, Taylor Swift fan fiction, etc. ) which is not available anywhere else.

For writers or aspiring writers, this becomes a way to find their audience and learn about their craft in the process.

Early Metrics

Allen expected Wattpad’s user base to reach 1mn in its first month. Instead, they got just 100 users in its first month. They reached the userbase of 1mn after 3 years in fact.

In the initial 2 years, they had a 10% MoM growth. 10% MoM growth seems really slow for an early-stage startup but Wattpad did have an unusual journey (just like every successful product).

They raised their first round of funding of $600k at the end of 2009 when they had reached 500k monthly unique visitors (3 years after starting up).

The first creator: It took them 2 years to get the first original creator on the app. In mid-2008 was when they got the first creator.

As of right now, daily time spent by avg monthly active users is 9 minutes. In 2014, they had time spent per session as 30 minutes (at a scale of 40mn monthly users) (same as their session time in 2012)

Content pieces / monthly active users % age was 4% in 2012 (creator percentage should be lesser than 1-2% in that case). The creator percentage is in-line with the general 1% rule (which states that only 1% of the users of a website actively create new content, while the other 99% of the participants only lurk).

Let’s take a look at their growth:

2007: 1000 users

2011: 1mn registered users

2012: 7mn monthly active users

2015: 40mn monthly active users

2019: 80mn monthly active users

The interesting thing to note about their growth is that while it took them 3 years to reach their first million users, the journey to 80mn users was relatively much faster. Such is the power of compounding!