Two Small Fish Ventures Goes Big With Third Fund

Today is a big day for Two Small Fish Ventures as we reach first close of $24M for Fund III that targets $40M!

With the new and bigger fund, TSFV will continue to back early-stage startups using game-changing technology to achieve global scale. That has not changed. The difference is that we’ll be writing bigger cheques and leading more rounds. It’s a great time to invest as tech touches everything. It creates previously unthinkable opportunities for massive disruption. We will back early-stage companies that shift paradigms.

You can read the announcement here. You can also read the coverage on Globe and Mail and BetaKit.

TIFF 2022

It’s a wrap! The massively successful 47th edition of TIFF is in the history books. For lack of a better term, this is the first ‘fully in-person’ TIFF since the beginning of the pandemic. There were many ‘behind-the-scene’ challenges that might not be obvious to the public. Kudos to the TIFF team for pulling this off.

A massive success also meant a disappointment to some who couldn’t get tickets because many screenings were sold out. For those who couldn’t get tickets, make sure you become a member before the next TIFF 🙂 In addition to supporting this iconic charitable organization, membership will give you many year-round perks, including early-access.

P.S. Don’t forget to check out this wonderful wrap-video!

It’s The Final Curtain Call. A New Story Begins.

After spending 15 years at the helm of Wattpad, today I am starting a new role as Executive Advisor to the WEBTOON family of brands. That’s right, I’m stepping aside as CEO of Wattpad to apply my experience and skills to this new role alongside my other activities as an investor and board member.

As I reflect on the journey of building Wattpad over the years I am amazed at what I’ve accomplished together with my co-founder Ivan Yuen and the entire Wattpad team.

What started as a place to read and write stories on your mobile device, has grown into a product and community loved by close to 100 million people.

We pioneered storytelling technology, changed how people read, write and engage with fictional stories, and transformed the entertainment and publishing industries. Leveraging our massive built-in fandoms and data, we turned numerous top Wattpad stories into hit movies, TV shows, and bestselling books. These movies and shows have topped the box office and ‘most watched’ charts on streaming services, gone on to win Teen Choice Awards, a People’s Choice Award, and even received Emmy nominations, and all have changed the lives of a new generation of creators. It’s been an honour and privilege to democratize who gets to tell their story and redefine how the world reads and shares fiction.

We raised record amounts of capital at the time from top-tier investors in Canada, US, and Asia. We were one of the first to commit to scaling our company in Toronto and then successfully proved you could build a world-class tech company here. We played a part in re-shaping the overall narrative of the innovation ecosystem in Canada.

These are the things you simply don’t think about when you’re starting out, writing code, and bringing an idea to life. To say I am incredibly proud is an understatement.

The past year was record-breaking for Wattpad. Since the acquisition – one of the largest for a Canadian technology company – we have never grown faster. With the Grand Plan in place, it’s the perfect time to pass the baton to Wattpad President Jeanne Lam and Wattpad WEBTOON Studios’ President Aron Levitz in leading the team to achieve the vision. With such strong leaders, Wattpad is in great hands.

I’ve always been a natural builder and I will continue to help build the “next big thing” as Executive Advisor to WEBTOON, as a venture partner of Two Small Fish Ventures, and board member of two of Canada’s most important cultural and innovation organizations, the Toronto International Film Festival and MaRS.

It has been a life-changing 15-year journey for me, my family, the Wattpad team, and millions of Wattpadders around the world. Thanks for all your support. Thanks for sharing all the emotions. Thanks for all the wonderful times and good memories. Thanks for being here with me. I can’t say thank you enough.

Calling this a new chapter or the next season would be a misnomer – it’s the final curtain call of my career as a CEO. But I’m not done yet! I’m still at the top of my game. I’m still hungry for more wins. I still want to make an even bigger impact. My new story begins today.

Little Canada

Recently Eva and I were able to take in the iconic Toronto skyline, hear the roaring of Niagara Falls, see stunning fireworks display against the backdrop of Parliament Hill, and visit the cobblestone streets and charming architecture of Quebec City — all in under an hour. 

How? We visited Little Canada, an exhibit that takes you on a journey of discovery through the sights and sounds of our great country in miniature scale. A scale of 1:87 to be exact. 

The Laus personally invested in Little Canada a few years ago, and one that’s been incredible to see come to life. We remember visiting the workshop in January 2018 and seeing the skill and dedication of Jean-Louis Brenninkmeijer and his team in creating the beauty of Canada’s vistas, its famous landmarks, and iconic cityscapes in miniature form. Now that the exhibit is open, it’s jaw-dropping to see the level of detail involved: every time we looked there was something new to discover. 

As part of the Little Canada experience, Eva and I also got to try out the Littlization Station. We were scanned and our likeness will be 3D printed into our very own Little Me figurine that will get placed inside Little Canada. Way cooler than a bobblehead! 

But perhaps the coolest thing about visiting Little Canada was this:

Can’t see it? Hang on, let’s get closer:

That’s right: Wattpad HQ exists in Little Canada, too. It was so fun to see our logo on a miniature building in the miniature St. Lawrence Market area of miniature downtown Toronto. 

Here are a few more pictures from our visit. I hope you have a chance to explore Little Canada soon and see for yourself how this tiny experience delivers a big wow factor. 

C100 Dinner

Last evening the Laus hosted an intimate dinner with a dozen of fellow C100 members in our backyard. After locking down for 18 months, we all appreciate what in-person gatherings can bring while pixels cannot. We had meaningful conversations about how the fantastic Canadian tech ecosystem can win in style on the global stage even more and many other topics. Thanks C100’s Lauren Howe for organizing and Andre Perey from Osler for co-hosting.

Look forward to more in-person gatherings as we are slowly but surely winning over the virus!

You are the CEO of Your Own Career

In honour of Asian Heritage Month, BenchSci hosted Showing Up, a discussion that delved into the experiences of four Asian panelists: Kepler’s CTO and co-founder Wen Cheng Chong, Wealthsimple Foundation’s CEO Leen Li, Backbase’s Regional VP of Customer Success Yuko Naka and me.

It was a wonderful conversation. You can find the summary on BenchSci’s blog or watch the whole panel on YouTube.

One thing I said that I would like to highlight: ‘You are the CEO of your own career.’

Culturally, many Asian parents have a strong influence on their children’s careers. Of course, it is great to listen to parents’ experiences and leverage their wisdom. However, your career decision is all yours. You are not your parents. Your interest is not the same as your parents’ interest. Most importantly, your career aspiration should not be a projection of your parents’ career aspiration. You are accountable for your career. Listen and learn, but chart your own path.

Because you are the CEO of your own career. 

Naver/WEBTOON + Wattpad

Last week, Naver, the South Korean internet conglomerate, announced the acquisition of Wattpad in a transaction valued at more than an estimated USD $600 million. The acquisition is expected to close in Q2 2021.

It has been an incredible roller coaster ride. So grateful that we have a fantastic outcome for everyone involved in this action-packed thriller! 

The acquisition is all about accelerating Wattpad’s growth and taking our business to the next level. It is a match made in heaven because it aligns Wattpad and Naver’s WEBTOON, a leading digital comic publisher, under the same umbrella. Wattpad’s multi-platform stories are already available across audio, book, TV, and film formats. By joining forces with WEBTOON, our combined audience has almost doubled to 160 million people overnight. In one stroke, we also gain expertise in new formats like digital comics and animation. As a result, our entertainment ecosystem has greatly expanded. The synergy is so obvious.

The last few days certainly feel like winning the Oscar. The next step is to win the real one! Yesterday was the Season 1 finale of The Wattpad Story. Today is the first episode of Season 2.

We’re not done yet! 

Sustainable Living

This blog post is sponsored by BMO ESG ETFs

The pandemic has forced many people to work from home. This can pose a challenge for people like me who are running a global business as travel is no longer possible. Well, the impact on me is less than you might think. Many people assume that I must be a globetrotter. This is anything but true. In the past few years, I have made a conscious decision to travel only when it is absolutely necessary. Even before the pandemic, airlines do not consider me as a top-tier frequent traveler anymore because I have already been using phone or video calls whenever I could to do my part to save the planet. 

However, the unintended consequence is that I am glued to my electronic devices all the time. Although this is only natural as I run a digital business, if I could, I would always try to escape from the screens and be close to nature for a few minutes during a break. 

This is one of the advantages of living in Toronto. Despite being the largest city in Canada, the large amount of green space has led to some people describing the city as a ‘city within a park.’ For us to continue to enjoy nature, I believe it is our collective responsibility to protect the environment and live a sustainable lifestyle. Not only do we have to battle with global warming, we also have to choose between planet or plastic. For example, I try to avoid single-use plastic whenever possible. The coffee that I drink is mostly fair trade, organic and it is filled in a reusable cup.

When choosing my investments, I would also like to invest my savings in a sustainable way. I believe companies should be held accountable for good management and sustainable business practices. That’s why I am excited to know that BMO has launched seven ESG (environmental, social and governance) ETFs, including the first balanced ESG ETF (ZESG) in Canada, to empower its customers to invest their savings in a sustainable way. These seven funds include:

  1. BMO Balanced ESG ETF (ZESG): The first ESG asset allocation ETF in Canada, providing a one ticket low cost solution that includes both major equity markets and fixed income securities through a balanced asset allocation of 60 per cent equity and 40 per cent fixed income exposure.
  2. BMO MSCI Global ESG Leaders Index ETF (ESGG)
  3. BMO MSCI Canada ESG Leaders Index ETF (ESGA)
  4. BMO MSCI EAFE ESG Leaders Index ETF (ESGE)
  5. BMO MSCI USA ESG Leaders Index ETF (ESGY): These ETFs deliver ESG exposure by following the best in class approach of the MSCI ESG Leaders Indexes, while capturing market returns, by targeting the top 50 per cent ESG rated equities within sectors and industries, while excluding severe controversies and industries such as alcohol, gambling, tobacco, and weapons.
  6. BMO ESG Corporate Bond Index ETF (ESGB)
  7. BMO ESG US Corporate Bond Hedged to CAD Index ETF (ESGF): These ETFs invest in investment grade corporate bond fixed income issuers that have the highest MSCI ESG Ratings.

Every individual’s situation is different and hence the risk profile is different. These seven ESG ETFs deliver a full range of investment solutions across broad markets. From Canadian to global markets, from bond to equity, BMO has it all covered, which means we should be able to find one or more ETFs that align with both our financial and social values.

The Dot-com Bubble, Sept 11, SARS and the Financial Crisis

Note: This blog post was originally shared with Wattpad employees in early April. The following is the modified version for external consumption.

Quite a few people asked me what these previous crises looked like. I am fortunate enough to experience all four crises as a leader. I say I am fortunate because these experiences will help Wattpad navigate through the rough sea this time. Yes, this COVID-19 crisis is different because of its astonishing speed and magnitude. That said, crises always have an end date. This post will tell you how it was in previous crises and the lessons learned.


Don’t panic, but we need to be vigilant. We will get through this, but I need your full cooperation.

In late 1999, I was about to leave my job at Symantec. At that time, I was a young engineering leader building Windows products. But I was fascinated by the potential of internet products. In 1999, the most trafficked internet company was Yahoo. Amazon was a startup. Google was one year old. It would take another 2 years before Wikipedia was born. 5 more years before Facebook was born. That’s how early it was.

In March 2000, I joined Brightspark Labs, an internet incubator (somewhat similar to today’s Techstars and Y-Combinator). At any given point in time, there were about 10 different internet companies under the same roof, and I would be assigned to a couple of companies at a time to help them start or scale. It was fun. It also gave me the visibility of multiple companies.

March 2000 was also the peak of the dot-com bubble. Look at the peak in 2000 in the following chart. That was me standing there! It took another 15 years before NASDAQ to reach this level again.

You might also notice that the market didn't crash overnight

You might also notice that the market didn’t crash overnight. Nasdaq lost about 80% of its value over a period of two years. When Nasdaq started to fall in April 2000, most companies actually kept hiring people. One of the Brightspark portfolio companies that I worked closely with (as their acting Head of Engineering) grew from 3 co-founders in March to over 50 people by summer. It was wild!

As the tech-laden NASDAQ continued the downward trend, investors started to panic. Funding started to dry up. All of a sudden, companies that were heavily relied on raising more capital to fund their operation discovered that the well had gone dry. When high profile companies like Webvan (the largest online grocery company, the Instacart at the time) and Excite@Home (the largest broadband internet portal and service provider in North America at the time) went bankrupt, the negative sentiment started to snowball.

Lesson 1: Never assume you can find investors to fund you.

As NASDAQ continued to fall, the negative sentiment started to spill over to other sectors. More and more consumer targeted dot-com companies started to lay off people or shut down. The aforementioned company that I worked for shrank from 50 to 3 in multiple rounds of layoffs (also within just a few short months). It was even wilder! When there was no investor and the revenue or profit couldn’t support the operation, layoffs were the only option.

Lesson 2: Revenue and profit do matter. A lot.

Initially, many of the backend focused tech companies, such as Nortel – at one point the most valuable Canadian company that employed 100,000 people – believed that they could be immune from the meltdown because they were suppliers to dot-coms but not one of the dot-coms. Wrong.

Then two planes flew into the World Trade Center in NYC on Sept 11, 2001. Good luck if you are hoping for a speedy recovery.

Lesson 3: If your customers are in trouble, you are in trouble too.

Exodus (the AWS before AWS) was another high profile causality. The following was quoted from Ben Horowitz’s The Hard Thing About Hard Things. I can’t say it better than him:

I got another sign when our largest competitor, Exodus, filed for bankruptcy on September 26, 2011. It was a truly incredible bankruptcy in that the company had been valued at $50 billion a little more than a year earlier. It was also remarkable because Exodus had raised $800 million on a “fully funded plan” just nine months earlier. An Exodus executive later joked to me: “When we drove off a cliff, we left no skid marks.” If Exodus could lose $50 billion in market capitalization and $800 million in cash that fast, I needed a backup plan.

Lesson 4: When your expenses are out of control, no one can save you. Don’t run out of cash. Just don’t. (note: this lesson may sound obvious but history is telling us that it is not that obvious to many people) 

Even Amazon was reportedly close to running out of cash.

Lesson 5: If you could stay alive during the darkest moment, you would come out on the other end much stronger because your competitors are battered and bruised.

There were numerous high profile bankruptcies in the Silicon Valley and outside of the Valley. In the Valley, the office vacancy rate was sky high – rising to 20% from 0.6% percent only 18 months earlier – because so many companies disappeared. Unemployment rate in the Valley hit 10% (note: as a comparison in Feb 2020, US unemployment rate was 3.5%). I have a friend in the Valley who spent over a year looking for a job without success. He eventually decided to change career and moved elsewhere. He was not alone.

It is worth mentioning that despite these major shocks, the collapse was mainly contained in the tech sector. Yes, the spillover caused a recession in the broader market but it was relatively brief and shallow.

Around that time, I co-founded my first company Tira Wireless within Brightspark. Fortunately, Brightspark seeded the company so we didn’t have to worry too much about fundraising initially. My Wattpad co-founder Ivan joined Tira as one of the early employees after his last employer Delano turned off the light. Delano was another high profile bankruptcy in Toronto. It employed hundreds of people at one point but it went from boom (went public in early 2000) to bust in exactly 2 years.

Anyway, Tira was nimble, scrappy and resourceful. With just a handful of people in the company (I think seven), we moved fast, found a clear opportunity in the rapidly evolving market and built something that was good enough to attract an investor in late 2002. It was really tough to raise money at the bottom of the market. Terms were crappy. But at least we could continue to build the company.

Lesson 6: Keep hustling and be nimble. Crisis and market disruption always create new opportunities. Always.

With some additional capital in the bank, we had an ambitious plan ahead of us.

Then a new virus called SARS arrived in early 2003.

Fortunately, the virus disappeared quickly. It was mostly contained in Asia. That said, the recovery momentum was slowed substantially but there was no major shock. The US didn’t even enter a recession.

Between 2004 to 2007, a new crop of internet companies – collectively called Web 2.0 companies – started to emerge. These companies include many household names such as YouTube and Facebook. Of course, Wattpad started during this era as well. It was a great time to start a company because the competition wasn’t as fierce. Tech investors became active again. Tech experienced a Renaissance. Towards the end of this era, great and not-so-great companies all get funded. Valuation became a bit out of control (in the last decade’s standard). By the end of 2007 the unemployment rate in the Valley fell back to the dot-com bubble level.

At the same time, trouble signs began to emerge in the financial sector. Multiple financial giants faced liquidity problems. Lehman Brothers collapsed in Sept 2008 and the world officially entered the Great Recession. Tech unemployment rate went up to the post-dot-com record level as many tech companies went through rounds of layoffs or bankruptcies. Consider this as the dot-com bubble 2.0. Fortunately, other ailing financial giants were all bailed out by the governments. There was a spill over to many other sectors, like auto manufacturing, which the governments promptly bailed out as well. Thanks to the bailouts, the 18-month recession was deep but given the magnitude of the problem, it wasn’t painfully long. Around that time, Apple App Store emerged. Together with Android, the smartphone era officially began. After bootstrapping Wattpad for more than three years, we raised our first round of seed funding towards the end of 2009. 2009 also marked the beginning of the longest bull run of tech and the broader market in history until it ended abruptly last month.

This COVID-19 crisis is different in so many ways. It arrived at astonishing speed – in early March most of the world was still business as usual. Four weeks later, more than half the world is now locked down. COVID-19 is a pandemic while SARS was not. The magnitude of this current crisis is also unprecedented – it is a global, extremely severe, cross-sector recession. The following two charts clearly illustrate the magnitude of the fallout. According to NY Times, the weekly unemployment number was only capped at 6.6 million because the unemployment offices have been overwhelmed by the volume and couldn’t keep up! BTW, I now know the negative impact can be more than 100%. Please read the fine print on the second chart. I never knew it’s even mathematically possible!

6 million because the unemployment offices have been overwhelmed by the volume and couldn't keep up!
Based on these numbers, it is not wrong to say:

Based on these numbers, it is not wrong to say:

dot-com bubble + Sept 11 + SAR + the Great Recession = COVID-19 x 10%

Therefore, we have to assume that this recession is going to be prolonged and severe. If it bounced back quickly, that’s great! But there is a good chance that it is not going to be a speedy recovery.

When things look black, there’s always a silver lining that we can learn from the survivors and the casualties. The former has cash. The latter ran out of cash. As simple as that.

And there are only two ways to improve the cash position: earn more and spend less. And we have to play both offense (i.e. seize the new opportunities) and defense (i.e. conserve cash) simultaneously.

To recap: these are the six lessons I learned from previous crises that are also applicable now:

Lesson 1: Never assume you can find investors to fund you.

Lesson 2: Revenue and profit do matter. A lot.

Lesson 3: If your customers are in trouble, you are in trouble too.

Lesson 4: When your expenses are out of control, no one can save you. Don’t run out of cash. Just don’t.

Lesson 5: If you could stay alive during the darkest moment, you would come out on the other end much stronger because your competitors are battered and bruised.

Lesson 6: Keep hustling and be nimble. Crisis and market disruption always create new opportunities. Always.

Allow me to drive home the point one more time: earn more, spend less and we will survive the storm stronger than ever.

Wear a Mask to Help Keep EVERYONE Safe

I took this picture on Feb 1 when I was flying back from Paris to Toronto.

Feb 1 was:

– 3 weeks after the first death in Wuhan was (officially) reported

– 2 weeks after the second death was (officially) reported

– 1 week after Hubei was locked down and all major entertainment venues in China, including Shanghai Disneyland and the Great Wall, were closed

– 1 day after the death toll increased to 200; Russia, Spain, Sweden and the United Kingdom confirmed their first cases of the virus.

During the SARS outbreak in 2003, Toronto was one of the hardest-hit cities. The memory is still fresh in my mind. Seeing how quickly the virus spread exponentially, it was very clear to me that this new virus, now called COVID-19, is another SARS except that it spreads even faster.

Therefore, I decided to wear my mask on the 8-hour flight because I didn’t want to take any chance. There were probably 10 people on this flight who did the same. Some people gave me a weird look (yes, I caught that) but I don’t really care about the stigma.

Since then, I have been wearing a mask whenever I was in a crowded space. Since the lockdown, when I really needed to go out (no more than twice), I have been wearing a mask.

Although WHO still stands by its recommendation to not wear masks if you are not sick, it really makes no sense to me. I understand that the surgical mask that I am wearing does not seal (and hence there will be leakage). However, even if it could only capture 10% of the virus-carrying particles, it would still reduce the probability of catching the virus (slightly) – in either direction (i.e. getting infected or infecting other people if I am asymptomatic).

In addition, even if wearing a mask would not help at all (I doubt), it couldn’t possibly make it worse. People might give you a weird look. Other than that, there is absolutely no downside.

Assuming using hand sanitizer, not touching my face, etc. could each reduce another 10%, all in a sudden the probability of getting infection could be greatly reduced because they all add up. Every little bit helps.

This is very similar to funnel conversion in running an online business. To improve the purchase conversion rate, one needs to improve on all parts of the funnel – from top (e.g. awareness) to bottom (e.g. intent and transact). We might only get 2% here and 4% there. However, if we could find ~10 things like that, the conversion rate could easily double and the curve would look much steeper (rather than looking flattened).

So, for your own and other people’s safety, please wear a mask if you could. It lowers the conversion rate and flattens the curve.

P.S. I know it is difficult to buy masks now, and if you could, please don’t hoard. I am lucky that our family has always had a box of masks in the house even before the crisis. But even a homemade one is better than nothing. Remember, there is no downside.