With news of Canva completing its huge $2.4B secondary share sale last weekend the timing is good to revisit a comment I posted on Linkedin 3 weeks ago.
Mehmet Karakus’s original Linkedin post highlighted ~50 companies founded by Atlassian Alumni that had raised US$800M in venture capital.
My response in a repost on my own account was as follows:
This is the power of successful startups — the compounding effect of talent that has developed experience in fast growing, excellent, businesses.
There’s a lot of talk (in Australia at least) about the wealth that will be generated by Canva’s secondaries and eventual IPO. From experience, much of that money will probably find its way into real estate and other more traditional assets. Some will end up in early stage investing too, of course, and that’s a good thing, but Australia is an expensive place to live and much of that new wealth will be sufficient to create financial stability and not much more.
On the other hand, when you have experienced talent that starts creating new businesses, or goes into other early-stage fast growing businesses and shares learnings, it has a much more material impact on the economy as a whole. And the good thing? You don’t need exits for talent to start recycling and creating that value.
For years we’ve been talking about experienced talent as the one remaining thing the Australia startup ecosystem is missing. The success of Atlassian, Canva and the many other amazing Australian startups will hopefully change this.
Last week I overheard someone referring to Canva as a money tree. While that’s true, it also led me to a better understanding of my earlier comment: successful, fast-growing startups aren’t just money trees, they’re also “People Trees” and in many ways that’s more valuable.
People Trees are organisations that, by their very nature, help people grow.
I think large, established, businesses struggle to be People Trees. Not because there’s anything inherently wrong with that type of business but because startups and other resource-constrained (whether time, money or anything else) businesses lead to stresses that can help people develop in very positive ways.
By “stress” I don’t mean the usual stress of the 9–5 grind, I mean the catalysing stress of fast-growing businesses. There, many employees, founders included, often feel out of their depth, are doing things for the first time and doing them all while dealing with the competing tension of constrained resources and the overwhelming drive to create something new. Something worthwhile.
That type of stress has an excitement and ownership to it. It’s not for everyone, I acknowledge, but for the people who can thrive under those conditions the outcome is the invaluable experience of staring into uncertainty, trying things out, then learning there can be light at the end of the tunnel if you persevere.
It’s like the difference between a parent who gives a child a safe environment to experiment and make mistakes and a helicopter parent. The latter deprives their child of the ability to learn by trial and error, affecting their resilience later in life. Large established corporates, because of their need for efficiency, process and control, leave little room for experimentation and dislike even trivial mistakes. The antithesis of how we naturally grow.
I suppose the shame is that as a result of any long-term success, fast-growing startups must undergo a metamorphosis into large traditional corporates which inhibits their ability to continue to be People Trees.
That’s OK though, as the broader value of People Trees is in the seeds they drop, not in the fruit that clings on too long and rots on the branches.
So congrats to all the Canva employees and investors who sold shares over the weekend and just as importantly congrats to all those People Trees past and present. Irrespective of what happens to your business, know that by merely creating the correct conditions you’re contributing to a better society.
