He envisioned a mobile service that would let you read books on the go, and the content would largely consist of stories posted by other Internet users, not big name authors.
That was before smartphones, before Amazon's Kindle and other ebook readers, and before the unexpected success of the initially self-published "Fifty Shades of Grey."
It took him a few years until he'd launch the idea, which he called Wattpad, and several more until it really started to take off. Now, there are about 20 million Wattpad users who spend a total of about 4.5 billion minutes a month reading content. And while the site is mostly the domain of still-unknown writers working at their craft, it's also attracted attention from some of the literary elite, including fellow Canadian Margaret Atwood.
"I love to read so I tried to find a solution for a problem I faced myself at that time, which was, I was very busy and wanted to read but had no time to read," Lau says of his original idea for Wattpad.
"So I wanted to bring my reading material on my mobile phone so I could use my fragmented time while waiting in line or something to make use of that five minutes."
The first year that Wattpad launched was tough, Lau admits. So was the second. And the third.
"It was so painfully slow in the first year and I think we were stupid to not give up, in a way," he says with a laugh.
"But we persisted. The first three years were very painful. In the early days I knew every single user."
There was no big event that sparked Wattpad's popularity, says Lau. Instead, it was a gradual process of more users discovering the content on the site and more writers flocking to the platform.
When Atwood joined Wattpad last year it certainly gave the site a major boost of credibility, Lau says.
"Margaret is like the cream of the crop, she is one of the best writers, one of the top writers in the world, so having Margaret on Wattpad ... implies the target audience is not just aspiring writers — like me for example — everyone on this planet can use it, whether you're a 13-year-old teenager living in Toronto, or a writer of Margaret's calibre and everything in between."
To celebrate the site's anniversary, Wattpad is highlighting seven users who have found big success sharing their stories online. Among them is Toronto's Romi Moondi, who began writing on evenings and weekends before quitting her corporate day job to move to Paris and pursue her dreams full time.
Her most popular title on Wattpad, "Year of the Chick," has about 2.8 million reads. While she made no money letting Wattpad users read the book — which was previously sold as an ebook through Amazon — she considers the exposure invaluable for her other work.
"I've had a lot of fans that crossed over and bought the sequel so it ended up being a great way to hit a market that I wasn't hitting before," says Moondi.
"I've done promotions on Amazon where I give away 15,000 copies of the ebook and the majority of people who download it are probably never going to read it. But in the two weeks after a promotion like that, I see sales of my subsequent books spike like 300 per cent, 1,000 per cent in the following week."
Moondi is now back in Toronto and hoping she can continue to write full-time, although she's not sure that's possible yet.
She's encouraged that Wattpad is exploring ways to let authors get paid by fans on the site.
Among them is Fan Funding, launched in August, a crowdfunding feature similar to the Kickstarter and Indiegogo platforms that allow fans to contribute money toward a project.
"We have six fan funding projects going on and every single one of them has exceeded the goals, so we are very happy," says Lau.
"The money can be used to write a next book in a series or hire an editor or polish what's on Wattpad or in some cases we actively work with the publishers to use the Fan Funding platform as a pre-order mechanism."
Moondi believes there are online readers who are willing to support their favourite authors, although you have to work hard to win them over.
"I think there's always going to be people that don't want to pay for anything," she says.
"But there are people who use a free book to try out an author and then get hooked on the writer's style and they will buy. Those are the readers I'm after."