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Small Empires: can Wattpad's DIY writing empire survive an invasion by Amazon?

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A scrappy Toronto startup has helped millions write novels. But now they are battling the biggest name in ebooks

When venture capitalists are considering whether or not to invest in a startup, there's a stock question many will ask the founder: What would you do if Google decided to enter your business? You could swap the name of any tech titan — Apple, Facebook, Microsoft, Amazon — into that query. The bigger picture is figuring out whether the thing you're building is a unique and defensible business or just a cool feature these companies haven't bothered to focus on yet.

This hypothetical challenge has just become a reality for Wattpad, a Toronto startup that has built a community of writers and readers creating millions of new stories each month. Amazon jumped into the game last month with the debut of WriteOn, a service offering the same mix of author tools and a readership composed of the huge audience already using Amazon for ebooks.

What Wattpad has going for it are two things: focus and community. Unlike Amazon, Wattpad is squarely focused on solving a single problem, not stretching itself across everything from drones to phones. It also has 75 million stories and 35 million users already churning out work on its platform, while Amazon's WriteOn is still in private, invite-only beta.

"Everyone has a story to tell. To tell that in a compelling way...that takes practice. Wattpad is a tool, a platform where you can do that," says co-founder Ivan Yuen. Sometimes that fan fiction can go a long way. Anna Todd started out writing One Direction fan fiction on Wattpad. A billion reads later, she has a book and movie deal based on her work. With successes like that, it's no wonder Wattpad is facing down increasing competition.

From Our Sponsor Inside Small Empires: Wattpad