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Mission or profit?Â
The belief has been for a long time that this is a trade off, that you canât have your cake and eat it when it comes to generating outsize returns and having an impact. Many investors, or at least the more sceptical ones, will run a mile from so-called âimpact investmentsâ.Â
But Canvaâs founders have proved that wrong. In just over a decade, theyâve built a business worth $25 billion, generating $1.7 billion in revenue, with over 4000 employees. But at the same time, impact sits at the heart of their businessâ500k charities and non-profits use it for free, while the founders have pledged 30% of their wealth to charitable causes.Â
So how did Canva achieve this? Earlier this year, we hosted a fireside chat with Melanie Perkins, Cliff Obrecht, and Cameron Adams, Canvaâs founding team, who shared some of their biggest learnings from over a decade in the game. In todayâs Startup Bulletin, we pull apart some of the most valuable quotes and what that tells us about their success.
Also in todayâs Startup Bulletin:
Our top recommended reads
Highlights from the Founders Factory portfolio
Opportunities in tech
đĄ Understanding Canvaâs success in five quotesÂ
1. Achieving mission is about âbreaking it down into smaller steps, like rungs on a ladderâ
From the outset, the Canva team set themselves a pretty lofty missionâto empower the world to design. Meaning: they wanted to create a collaborative platform and comprehensive tool kit to enable anyone from any background to create powerful and engaging designs.Â
This is no mean feat. But theyâve not viewed this as some far away end goal, but rather broken it down into smaller steps. For instance, translating the platform into different languages was all about setting themselves smaller targets and building up from there. Start with English, then Spanish, then 5 languages, then 20 languages, then languages not using Latin script, then right to left languages like Hebrew and Arabic. They are now available in over 100 languagesâpotentially more with their new Magic Translate tool.Â
2. âThe best ideas come from finding real problems that people are willing to pay for, and going out and solving that problem.â
This really harks back to the early days of Canva, when they had to start turning a profit fairly quickly. This meant they had to find product market fit quickly, in order to build something people were willing to pay for.Â
As soon as revenue started coming in, they realised theyâd found PMF. In short, monetisation is a proxy for a good product.Â
3. âWeâre trying to help people express their ideas, communicate visually, and do all this easily, conveniently, and quickly. AI is a huge asset to this.â
Many startups have jumped on the AI bandwagon, without necessarily considering if it adds value to their customers. This, for Melanie, Cliff, and Cameron, is the difference between a âshiny thingâ and something worth pursuing.Â
AI has been a no brainer for them from the beginning, as a huge accelerator to their usersâ creativity. As Cameron says: âIt shortens the time between an idea popping into your head, to being able to get that thing out into the world.â
4. âYour âcakeâ is the problem youâre solving, but small moments of delight are the icing. If you don't have the cake, then thereâs no need for the icing.â
This is a valuable way Canvaâs team thinks about designing their products. At its core, the product needs to be functional, it needs to respond to usersâ needs. But on top of this, there are moments of magic and delight that can make you really stand out. Canvaâs platform has lots of easter eggs and quirks, things you may not even notice at first glance but will leave users with an overwhelmingly positive impression.Â
These are ultimately the experiences that make people share your product with their friends, colleagues, and will keep them coming back time and again. Canvaâs benefitted greatly from thisâadoption has largely come from individuals using their free version before persuading their employees to pay for company access.Â
5. âBeing one of the few big tech companies in Australia allowed us to be a big fish in a small pond, which helped us attract brilliant talent that we might have struggled to get in the early days.âÂ
Although the odds may have been stacked against the founding team, they found ways to make their outsider status work for them. For one, being situated out of the fray of Silicon Valley, and in a much smaller tech ecosystem in Australia, they were able to hire at a much higher calibre than otherwise.Â
Perhaps even more significant than this was the nature of the ecosystem, not driven by the âgrowth at all costsâ mindset that propelled much of Silicon Valley at the time and may have resulted in a completely different type of business. That Canva became profitable just four years into the business, and reached unicorn status a year later, is testament to that.Â
For more lessons on product, fundraising, and building a mission-driven unicorn, read our full excerpted fireside chat with Canvaâs founders.Â
đ What we read this month
Building out your finance function (Founders Factory)
A Founderâs Framework for Understanding Performance vs. Brand Marketing for Your Startup (First Round Review)
The Best Available Human Standard (One Useful Thing)
Where Do Unicorns Come From? (Endeavour)
Life Trends 2024 (Accenture)
đ Highlights from the Founders Factory portfolio
Shop Circle raised a $120 million Series A, led by 645 Ventures and 3VC, with participation from previous backers QED Investors and NFX
Fantix AI raised $1.6 million in their first funding round, backed by Gaingels, Notion Capital, and Connect Ventures, among other investors
Acre founder Justus Brown spoke to Growth Business about his experience of working with Aviva when building his business in our Venture Studio
Ceto AI raised ÂŁ1.5 million in seed funding led by Howden Ventures with participation from the Chaucer Group
Kayna raised âŹ1 million in pre-seed funding, co-led by Delta Partners and MiddleGame Ventures
We held the Planet Positive Lab Demo Day, a chance for our eight startups to pitch to a room of climate VCs, bringing the 10-week bootcamp to a close
We also wrapped up our Childrenâs Health Impact Accelerator with a pitch showcase, a chance for our 10-startup cohort to get feedback from a room of healthtech experts, investors, and founders
Pet health and wellbeing brand Scooch were named TechRoundâs Best PetTech of 2023
We announced our first three investments with FastwebâFantix AI (building a federated knowledge engine for AI), CTRL Energy (modular, reusable batteries), and Utpatti (decentralised predictive maintenance for industry)
Opportunities
đ ď¸ Jobs
COO / Co-Founder at Gridshareâfractional renewable energy ownership, being built out of our Italy Venture Studio with Fastweb. Find out more and apply here
See you next month đ
Interested in reading more of the same insights? Check out the Founders Factory blog, and previous newsletters.