As part of my TV show The Naked Entrepreneur, I sat down with Allen Lau, founder of Toronto-based Wattpad, to discuss the strategies that brought his startup success. To date Wattpad has published 400 million stories across 50 languages, gained 65 million unique visitors monthly reading 22 billion minutes per month, and raked in more than $117 million in VC funding.
While our conversation ebbed and flowed for over an hour what really stood out to me was his commitment to immigration. Lau (who, it should be noted, has previously written for Inc.com) emphasized that Toronto is one of the most diverse cities in the world, with more than 50 percent of its residents being born outside of the country.
This unique feature, Lau claims, gave his startup a competitive edge. "I believe that Toronto's diversity gives me an unfair advantage," he wrote in a Globe and Mail op-ed in May. "True innovation is rooted in the ability to solve problems. Toronto's diversity has helped me build a team that is insightful and mindful enough to tackle the challenges that arise when you build a global Internet company."
Here are some stats from Wattpad's 2018 diversity and inclusion survey:
- 56 percent of Wattpad employees are women.
- Women make up 50 percent of Wattpad's leadership team.
- Women make up 50 percent of Wattpad's user experience and design team.
- Women make up 100 percent of Wattpad's product team.
- People of color make up 45 percent of all Wattpad employees and 41 percent of its leadership team.
Lau and several other Canadian tech CEOs explained the importance of diversity to business in a 2017 open letter, following an American presidential executive order that restricted immigration into the U.S. A selection:
"Canadian tech companies understand the power of inclusion and diversity of thought, and that talent and skill know no borders. In choosing to hire, train, and mentor the best people in the world, we can build global companies that grow our economy. By embracing diversity, we can drive innovation to benefit the world."
As an immigrant himself, Lau believes it wrong to ostracize people based on their birthplace--and told me he thinks a lot about why more companies should hire immigrants. Here are his four top reasons:
You can fill talent shortages.
The U.S. is falling short on key highly skilled workers. The STEM industries in particular often lack the necessary home-grown talent that startups need to succeed. If you are having trouble finding qualified candidates in the U.S., there is literally a pool of billions to review if you look beyond the border.
The global workforce provides local knowledge.
Today, all businesses are global. Today anyone can sell to buyers anywhere in the world using the internet. But foreign buyers may require customized local knowledge in addition to local language. Lau expanded Wattpad into dozens of countries across Africa (a seemingly underserved market) by letting new employees from those countries be involved in the expansion.
You can get more for less.
Talent, like all assets, is subject to the pricing preasure of supply and demand. Because immigration talent is often overlooked, so demand falls short of supply, such talent can often be acquired for less than homegrown staff. In some cases, credentials of newcomers are not accepted in the U.S., leading to these folks being overqualified and having skills that exceed their peers.
New perspectives are crucial.
A business with an overly homogenous workforce will have limited creativity. Hiring immigrants brings people into your business who have different perspectives born from entirely different places. By mashing up different perspectives, innovation is born.
I've seen this play out in my own experience mentoring entrepreneurs and investing in startups. The best local entrepreneurs often don't start local, which leads me to look for a mashup of cultural knowledge and fresh perspectives when trying to identify strong entrepreneurs.
Lau himself is an immigrant, and recently signed deals with major media players like Netflix, Hulu and NBC to turn Wattpad's content into mainstream entertainment. In doing so, he's proving that taking the contrarian approach and doubling down on immigration can be a long-term strategic investment.