🎨 How did Canva’s founders succeed?

Founders Factory Startup Bulletin #33

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We bring you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.

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Mission or profit? 

The belief has been for a long time that this is a trade off, that you can’t 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 ‘impact investments’. 

But Canva’s founders have proved that wrong. In just over a decade, they’ve 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 business—500k charities and non-profits use it for free, while the founders have pledged 30% of their wealth to charitable causes. 

So how did Canva achieve this? Earlier this year, we hosted a fireside chat with Melanie Perkins, Cliff Obrecht, and Cameron Adams, Canva’s founding team, who shared some of their biggest learnings from over a decade in the game. In today’s Startup Bulletin, we pull apart some of the most valuable quotes and what that tells us about their success.

Also in today’s Startup Bulletin:

• Our top recommended reads

• Highlights from the Founders Factory portfolio

• Opportunities in tech

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💡 Understanding Canva’s success in five quotes 

1. Achieving mission is about “breaking it down into smaller steps, like rungs on a ladder”

From the outset, the Canva team set themselves a pretty lofty mission—to 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. 

This is no mean feat. But they’ve 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 languages—potentially more with their new Magic Translate tool. 

2. “The best ideas come from finding real problems that people are willing to pay for, and going out and solving that problem.”

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. 

As soon as revenue started coming in, they realised they’d found PMF. In short, monetisation is a proxy for a good product. 

3. “We’re trying to help people express their ideas, communicate visually, and do all this easily, conveniently, and quickly. AI is a huge asset to this.”

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 ‘shiny thing’ and something worth pursuing. 

AI has been a no brainer for them from the beginning, as a huge accelerator to their users’ creativity. As Cameron says: “It shortens the time between an idea popping into your head, to being able to get that thing out into the world.”

4. “Your ‘cake’ is the problem you’re solving, but small moments of delight are the icing. If you don't have the cake, then there’s no need for the icing.”

This is a valuable way Canva’s team thinks about designing their products. At its core, the product needs to be functional, it needs to respond to users’ needs. But on top of this, there are moments of magic and delight that can make you really stand out. Canva’s 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. 

These are ultimately the experiences that make people share your product with their friends, colleagues, and will keep them coming back time and again. Canva’s benefitted greatly from this—adoption has largely come from individuals using their free version before persuading their employees to pay for company access. 

5. ”Being 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.” 

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. 

Perhaps even more significant than this was the nature of the ecosystem, not driven by the ‘growth at all costs’ 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. 

For more lessons on product, fundraising, and building a mission-driven unicorn, read our full excerpted fireside chat with Canva’s founders. 

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📚 What we read this month

• Building out your finance function (Founders Factory)

• A Founder’s 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)

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🚀 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 £1.5 million in seed funding led by Howden Ventures with participation from the Chaucer Group

• Kayna raised €1 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 Children’s 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 TechRound’s Best PetTech of 2023

• We announced our first three investments with Fastweb—Fantix AI (building a federated knowledge engine for AI), CTRL Energy (modular, reusable batteries), and Utpatti (decentralised predictive maintenance for industry)

Opportunities

🛠️ Jobs

• COO / Co-Founder at Gridshare—fractional renewable energy ownership, being built out of our Italy Venture Studio with Fastweb. Find out more and apply here

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See you next month 👋

Interested in reading more of the same insights? Check out the Founders Factory blog, and previous newsletters.