‍

Introducing Eva and Allen Lau: The brains behind Wattpad & Two Small Fish Ventures

In this episode of The Moment, we had the pleasure of sitting down with Eva and Allen Lau, co-founders of Two Small Fish Ventures. 

Allen is also the co-founder of Wattpad, a social storytelling and entertainment company acquired in 2021. As one of the founding members of Wattpad, Eva was instrumental in helping the company tap into the budding user-generated content (UGC) market, eventually scaling it to millions of global users. 

Fast forward to today, Eva and Allen run Two Small Fish Ventures, an early-stage venture capital fund that invests in tech industry disruptors. In addition to capital, they offer founders mentorship and coaching services.

‍

Memorable moments from our conversation

How to turn naysayers into evangelists 

Dealing with naysayers and skeptics is a challenge for a lot of founders. In Allen’s case, this hurdle was a lot more personal; the first naysayer of Wattpad was his wife, Eva. 

"I remember thinking, 'Why would people want to read on a flip phone?'" she recalls. "It was 2006, the iPhone wasn’t even a thing yet."

So how did she eventually get on board? Eva says it was all about conviction and trust. Allen and Ivan Yuen, co-founders of Wattpad, were committed to their vision, even when no one else saw it. They explained the risks and when Eva eventually joined the company, they “sat down together and reflected together” to make a gameplan. 

For founders facing their own naysayers, the couple says its key is to be transparent and share both the challenges and the potential. Sit down and talk about the risks you’re taking and what’s at stake. Make sure they see your commitment and understand the bigger picture. 

But it wasn’t just about convincing others—it was about adapting, creating options, and finding solutions when faced with adversity. "Don't be a sitting duck," she advises, "create options for yourself.” The more you can show that you can pivot and solve problems, the more others will trust you.

The importance of optionality and perseverance in tough times

While it’s hard to believe given the global scale of Wattpad, for the first year of the platform, it barely had any users. "I distinctly remember sitting with Michael and Ivan, feeling completely deflated," recalls Allen. "We had a few hundred, maybe at most a thousand readers, and not a single person wrote on the platform. It took almost two years before the first writer came.” It was a really dark time when they “almost pulled the plug.”

Despite the struggles, something shifted. "We realized that our hosting cost was only $5 a month. We were basically five bucks away from break-even. So, we thought, 'What’s the worst that could happen? We lose another five bucks next month?' And that’s when we decided to keep going."

It wasn’t much, but it was enough to keep the team moving forward. "We were doing odd jobs to keep us alive,” but they kept improving the product little by little, week after week, and eventually found product market fit.

It was a slow burn, but they recall that creating optionality was key. They’d ask “'What’s the worst-case scenario?” and kept moving forward, knowing they had room to adjust and pivot.

This "optionality mindset" didn’t stop once they found some early traction. Even when the first writer joined, followed by more and more, they kept pushing, innovating, and challenging themselves.

In the end, that mindset was what allowed them to persevere through the tough times. They always embraced the idea of creating options, knowing that failure wasn’t the end – just another step in the process. 

What they look for in founders

Above all, Eva is looking for founders who “are not shy to criticism.” The founders that the couple is drawn to are those who exhibit a growth mindset and are comfortable with both giving and receiving feedback. They’re open to challenging conversations and can take criticism without losing sight of their vision.

A key part of this “growth mindset” is the ability to extract valuable insights and use that feedback to improve their ideas. Taken in part from their different ideas when starting Wattpad, both Eva and Allen understand that (potentially challenging) dialogue leads to innovation and growth, seeing the value in diverging perspectives.

Lastly, they’re looking for founders to prove their ideas in a room full of naysayers. Their ability to persevere and convince others to join them on their journey is what makes them stand out to VCs looking for the next big thing.

‍

Listen to “The importance of curiosity as an entrepreneur with Allen and Eva Lau”

If you’re interested in diving behind the headlines and into the candid moments that shaped beloved Canadian brands, subscribe to The Moment on your favorite listening app.