21 Questions from Aussie Startups: Highs, lows & lessons learned during Canva’s journey so far [Part 1]
Following Canva’s announcement last week, I posted the question below in an Aussie startup forum (Sydney Startups):
I’m thinking of writing a blog post to share a few of the lessons we’ve learnt the hard way in case anyone is battling through some of the same challenges we’ve faced... It’s still very early days for us yet — and I know we have a heap to learn yet, but hopefully have learnt a thing or two that we can pass on.
I was blown away by the breadth and depth of the questions everyone asked and how well-rounded they were. There were so many great questions, that I’m sure there’s a number of blog posts to be written!
I’ve kicked things off in this post. Hopefully one of the lessons we learnt the hard way will help anyone going through their own startup journey.
Also, a *huge* shout out to our amazing team who work tirelessly every day to make our community happy. They’ve scaled rapid growth like champions and continuously taken the ever bigger challenges in their stride. I’m so incredibly lucky to work with them, for a long while it didn’t seem it would ever be the case…
1. How did you get things off the ground and get your first customer?
When I was at university in Perth in 2008, I was teaching design programs part-time.
I found that the design tools I was teaching were really clunky and difficult to use. I thought it seemed silly that they were all desktop-based and absurd that it took so long to use them. Facebook was taking off at the time — people could jump in and use that so easily and yet design tools took years of training to learn. I wanted to make design software simple, online and collaborative.
However, with very little business, marketing, software development experience — to be fair, any relevant experience— taking on some of the biggest companies in the world didn’t really seem like a very logical thing to do.
So instead, I decided to apply this concept to school yearbooks, and let students and teachers in Australia easily design and print their own. It seemed like there was a huge need — my Mum is a teacher and had always been responsible for the yearbook at her school which took her hundreds of hours. Often the yearbook coordinator is a teacher trying to oversee a major project (pulling together a book!) while still teaching full time, and with no prior design experience. The huge need for a better solution was obvious.
My boyfriend, Cliff, became my business partner. My mum’s living room became our office. And we set to work.
We got a loan to develop our first piece of software. We went to every software development company around Perth that would take a meeting with us. Most people said it would be impossible or cost an astronomical amount. Eventually we found a great company called Indepth (now called Cirrena), led by an incredible guy, Greg Mitchell. He wrote to me recently and said:
I remember your first pitch so clearly. Before you told us anything you tested us… you made Peter (our dev) do a drag and drop grid zone, which in Internet explorer 6 was incredibly difficult.
I drew detailed wireframes of what I wanted to create, and it felt like magic when we saw the first piece of software come to life.
In those days, both Cliff and I were studying full-time, and working a couple of part-time jobs to get some money together. We’d work on Fusion Books whenever we could- in the morning, the evening and on the weekends. This video explains what we were trying to do:
Our first customer found us through the web in March 2008 — which was incredibly exciting! We had no idea about SEO, so the fact that someone found us on the other side of Australia was remarkable:
Hello, I wanted to obtain a quote for 200 minimum (250 maximum) yearbooks for my school... I look forward to hearing from you soon.
When she sent her deposit for $100 we were absolutely over the moon. We couldn’t decide if we should frame the cheque or cash it. We opted to cash it because it might seem a little strange if it wasn’t cashed and also, we needed the money.
We used our tax return, and any money we earned from our part-time jobs to fund our (very modest) marketing budget. We experimented with direct mail campaigns to schools around Australia. Our families helped us to fold every letter, stuff every envelope and stick and lick the post-stamps. It was all very manual, but we learnt the ropes and got to learn about running and growing a business, developing software and marketing. Importantly, we learned the fundamentals of how to create a product that provides enough value that people are happy to pay for it.
We were trying everything we knew how in order to find our customers. We flew over to attend an education expo in Sydney, there were more exhibitors than attendees so that was definitely a flop!
In the end, we found calling schools and sending them a sample yearbook proved to be the most effective way to generate leads. We continued doing this every year, with our very kind families.
2. You and your partner seem to work seamlessly together — any secret sauce to that? :)
There’s definitely no secret formula, though great communication is critical for every relationship. Before we started Fusion, we’d done a lot of backpacking and worked together doing spray-on tattoos at carnivals, so we knew we worked well together.
When we started chatting about the idea for Fusion, it seemed natural for us to work together on that as well.
It’d be nice to paint a glossy picture that we have the magic formula and never disagree about anything. But that’s far from the case, as in any personal or business relationship when you are working really closely together there’s going to be tension. In fact, it’s these different viewpoints and the spark that it creates that often helps to fuel a company forward.
Cliff and I are very aligned on the things that matter — the vision, the way our team should be treated, our desire to have a positive impact on the world, our work ethic. But it’s a constant work-in-progress, and with anything worthwhile it’s critical to continuously invest in it.
I love this video clip below — I sometimes feel a little bit like that crazy guy dancing alone on the mountain and Cliff helped to turn me from being a ‘lone nut’ into a movement.
3. Interested in knowing how you figured out what roles you needed to fill first in the early days and how you did that.
The first team members we hired were graphic designers to help prepare our yearbooks for print as we desperately needed people to help during our ‘yearbook season’ — from October to December — when all of our yearbooks were printed, and we ran our printing presses 24/7.
We hired our first staff as contractors as we didn’t have the funds to sustain full time wages. We put an add up and somehow this amazing graphic designer, Ainhoa (who is still with us today as one of our incredible product coordinators at Canva), rocked up at my Mum’s living room door.
She messaged my Mum and I on Facebook last weekend, and said:
Just remembering, Lyn checking books word per word (my Mum), Mary doing accounts (Cliff’s Mum), Stan picking up the mail at the PO Box (Cliff’s Dad). I actually don’t think I deserve the title of first employee 😂
Our families were very, very supportive of our wild dream. Mum would even ‘babysit’ our printers sometimes when we needed a break from the 24/7 printing.
We learned to be efficient in those days. Hiring contractors, using a software development company, employing people through Odesk (now called Upwork), doing all of our own marketing and working from my Mum’s living room and doing our own printing (Fuji-Xerox had kindly lent us a printer and we only had to pay for consumables) and the very kind help from our families, was essential to getting our company off the ground, and ensured that our overheads remained low enough that our company could survive.
Each year, we completely redeveloped our software from scratch, as the available technology improved, and we found better ways to simplify and improve Fusion’s interface.
All of this development used almost all of our available capital. The government’s R&D tax concession was absolutely essential. NAB (National Australia Bank) also provided a $20k bank loan for small businesses. Without both of these, we would have run out of money in those early days.
4. What triggers your capital raise events vs when you decide to bootstrap it?
We didn’t really ‘decide’ to bootstrap Fusion, we just didn’t know there was an alternative. However, in retrospect I’m incredibly glad that we did go down that path. If it wasn’t for those years of figuring things out on our own, learning the ropes of business and being deeply focused on our customer’s needs I don’t think Canva would be anywhere near where it is today. We were so inexperienced when we started that the lure of ‘what’s popular’ and ‘proven’ probably would have drowned out our own opinions.
However, a serendipitous moment occurred after a few years of building Fusion which I’m incredibly grateful for. We had entered a competition in Perth called WA Inventor of the Year. We came runner-up and as pictured below wore dorky suits everywhere at this stage, as we thought it made us look more professional.
The concept all the way back then was very similar to what we’re doing today, but we were trying to make it sound very “inventor-y”:
The following year we were invited back to attend the awards and after the event, we had a quick chat with Bill Tai, an investor who was speaking at the event and had flown over from Silicon Valley.
He was the first investor we’d ever met, and the short five minute chat felt like a window had opened into a whole new world. He sent me his contact details and said if I ever went to Silicon Valley, he’d meet. I couldn’t believe my luck. There was a whole world of companies out there who were trying to create software. I sent him a bunch of emails trying to set up a Skype chat that elicited no response, but then decided I was going to just go all in and say that I was going to visit San Francisco — trying to act somewhat cool by pretending I was just going to be in the hood rather than making a special trip to meet with him:
Hi Bill, hope all is well. I’m going to be in San Francisco from 21st May to 1st June. Are you still interested in an investment in my area? If so, would be great to meet up and have a chat.
He said he’d meet. I could not believe it, I was over the moon. He also said:
you should also meet up with Lars Rasmussen at Facebook (ex google wave lead) ill intro you separately.
I could not believe my luck. My eyes almost fell out of my head. My nerves kicked in immediately and stayed for the next few months as I prepared for the scariest and most high-stakes meetings of my life. I printed out my plans for ‘the future of publishing’ on the printing presses in my Mum’s living room and packed to go to San Francisco. The email Bill probably nonchalantly wrote with one hand changed the course of my life…
We didn’t really make a conscious choice between being bootstrapped or being funded. We bootstrapped because that was the only thing we knew when we started and we pursued funding because it seemed like the only feasible path to truly pursue our vision and build out ‘the future of publishing’.
5. Why did you pursue investment?
As soon as I met Bill I started to research as much as I possibly could about this brand new world of venture capital and these so-called ‘startups’.
My brother, Greg, was studying in San Francisco at that point, and kindly let me crash on his floor for my two week trip. Bill organised to meet for lunch. He suggested a cafe called University Cafe, on University Avenue in Palo Alto. I was so nervous in the days leading up to the meeting that I made a mental deal with myself that if I was able to successfully catch the train and get myself to the meeting I would award myself some brownie points, even if the meeting was a flop.
I had been researching the business attire of people in Silicon Valley before I went there and learnt that people dress casually there, even in a business setting:
Whatever makes you feel comfortable, but at the same time err toward smart casual rather than just casual — its what you are saying that’s important at this stage, not whether you have a jacket on.
Hmm it sounded like my pantsuits wasn’t going to cut it. So I went out and bought a business dress and just wore my suit jacket. I thought this would fit the criteria of a more casual dress code. Needless to say, it didn’t… The first thing Bill said was ‘you didn’t need to get dressed up’. I was mortified!
I then pulled out my printed pitch deck to explain the future of publishing and Bill asked if I had an iPad or an iPhone. I didn’t have either at this point. Again, I felt my heart sink into the floor.
Something that we could never be criticised for is our lack of ambition. This was one of the slides I presented…
I cannot imagine what Bill must have thought as this girl from Australia nervously presented her paper pitch deck over lunch and said that she and her partner were going to beat Google Docs and Microsoft.
Our lunch arrived. I then tried to eat my lunch while flipping through the pages in my pitch deck and explain what I believed would be ‘the future of publishing’.
I’d also read that if you mimic someone’s body language they’ll like you more. So I tried to do that too at the same time — when Bill put one arm behind his chair, I realised it was too far. I didn’t have enough hands to flip the pages in my deck, eat my lunch and put my hand behind my chair. It was quite distressing!
Bill was also on his phone throughout lunch and I felt like it was a complete flop. I left the meeting feeling like I had failed badly.
However, after the meeting I looked at my emails and realised Bill had sent me a number of intros. Maybe it hadn’t been quite as bad as I had thought. I went and forked out for an iPhone and iPad too.
Fortunately the meeting with Lars went much, much better. We spoke for hours about the future of publishing. We found a lot of similarities between his mission with Google Wave, and what I wanted to accomplish with my concept. He said he’d be happy to help me find a team, I emailed Bill after that meeting:
I just got back from my meeting with Lars and it went really well. He was excited by the idea and thinks we are on the right track. It sounded as if our ideas are very much in line with a few particular issues/opportunities they have been considering lately. He has said he will help me choose the engineers to recruit as well, which was very generous of him.
I forwarded my email to Cliff and he responded:
You are the best business woman in the world and I am so proud of you, well done you WILL SUCCEED I HAVE NO DOUBT. I can call you if you want :)
Cliff’s unwavering support, constant optimism and work ethic has been absolutely foundational to our success over the years.
Bill then responded:
GREAT to hear Melanie!! I thought it’d be a good connection for you… I truly am excited he will help recruit coders for you. if the tech team looks solid, I’d be excited to back you and team. I know its a bit of a catch 22 but let’s see if you can pull it all together with a little bit of networking help from me and others!
I called Cliff immediately, we danced with teary eyes whilst on the phone. I could not believe our luck. Next mission: find a ‘tech team’… I deferred my flight home and set to work.
So in answer, to the question — why did you pursue investment? Well, it was just the next stop on the train and seemed like the only path towards building out our incredibly over-sized vision.
6. Biggest turning point or Aha moment.
There’s been so many, but meeting Bill for the first time at the conference in Perth, when he said he’d be happy to invest, meeting Lars… this was a very pivotal time — realising that it might be possible to create this wild outlandish dream.
7. I’d be interested to know how many times (if any) you thought it was all over and a lost cause before something changing the game with an answer, an intervention or a new idea.
That two week trip to San Francisco, quickly turned into three months — the entire duration of my visa. I attended every single engineering conference that I could. I reached out to people on LinkedIn. I cold-called people. I set up my ‘office’ in the food court at the Nordstrom shopping center as I had a table, I felt safe, had space to work and a little portable WI-FI connection. Oh, and it was free!
I found a bunch of people that I thought seemed like great engineers. I almost even convinced a team of engineers to move from Europe to join me.
Lars had offered to screen people for me. But no resumé I brought him was up to scratch. No person I found on Linkedin was good enough. I even brought him people in person and after an interview he said they wouldn’t cut it. I felt incredibly frustrated as I just wanted to get started: I needed Lars’ endorsement of the engineer in order to get Bill’s investment, that would enable us to start building out this thing.
I was taking any intro I could and going to every meeting. One meeting was at 7.30am. Catching the train there meant that I’d have to be on the train at 4.30am. It didn’t feel that safe walking around San Francisco at that hour or walking home from conferences at night, but I did it anyway.
I’d promised Bill that I’d send him my business plan by a certain date, a few days later. Between going to conferences and trying to find my ‘tech team’ it hadn’t come together as quickly as I’d hoped. I ended up staying up for 36 hours straight to send it to him by the arbitrary date that I had set. I’m sure he didn’t mind when I sent it or even care. But when I say that I’m going to do something, I do.
My eyesight started to go fuzzy — looking in the mirror I could hardly see myself. It scared the hell out of me. I certainly don’t recommend this route. Fortunately, I woke up the next morning and everything was working again. Extreme sleep deprivation is definitely not recommended.
The business plan I put together was pretty good though — and one we’re still delivering upon to this day. Here was one of the sections:
I was also learning to kitesurf, as I knew Bill ran a conference called MaiTai which was a gathering of entrepreneurs and kitesurfers. Kitesurfing scares the hell out of me, and learning to kitesurf in the dreary, cold, shark-invested waters of San Francisco was far from enjoyable. But I wanted to get Canva off the ground, so it was just a small inconvenience. It also gave me another reason to email Bill:
So pumped, just got back from kite-surfing- I can’t believe how much fun it is… On a side note, I have found a really great potential tech lead. He is very keen to work on our concept, he is happy to work for much less than his current wage ($200k+) in order to get more equity, he wants to help recruit the rest of my team and can start full time in a month. Lars is going to give him an interview tomorrow morning at 8 to test his technical competence.
Despite my optimism, the guy didn’t pass Lars’s test the following day. I was gutted…
Naturally, I’m an introvert and constantly putting myself out there and not making any progress started to get to me. I had this idea that I thought would become the future of publishing yet nothing in the world seemed to want to let me make it happen. It was really frustrating.
Flicking back through my iPad years later I found a note that I had written to myself while I was in San Francisco in 2011. The constant rejection was difficult to deal with, the long days were exhausting and success seemed like a world away, an impossible world away. It was one of my deepest darkest moments, I’m impressed that I was able to give myself some good advice:
Eventually, after three months of learning about the startup world, accosting engineers anywhere I could and being rejected more times than I would have thought possible, my visa to the US expired. I felt like a complete and utter failure though was resolved to come back and try again.
I’d spent $9k over the three month period, on my flights from Australia, on my iPad and iPhone, buying a ‘smart yet casual but not too casual’ dress, on my transit, even though I was catching the train or walking most places, on food, even though I was trying to eat cheaply. I felt like I’d let Cliff down. I felt like I’d wasted so much time that I should have spent growing Fusion. Cliff was in Perth holding the fort with Fusion Books. He’d even moved out of my Mum’s living room into our first proper office, hired more staff and our first developer for Fusion Books, Olivier Bierlaire. I felt completely stupid and naive for pursuing this route. I mean, who am I to have such outsized aspirations?
To help rally myself mentally on the flight back to Perth, I listed out my accomplishments from my time in San Francisco. One of them included staying alive…
8. What was your approach in getting an ex-Googler on board as a co-founder — was this your intention all along to get someone at that level to help drive the product and funding?
I tried absolutely every single thing under the sun to find an amazing engineer that would meet Lars’s bar that appeared to be inordinately high.
After three months of not finding a ‘tech team’ in San Francisco, I returned to Perth. It was another year of not finding an engineer. But at least we had a lot of things to keep us busy. We had another yearbook season in Perth in our brand new office.
I loved working. It felt so nice to make forward progress. We decided to give the whole thing another crack. We moved our office to Sydney which we’d heard had a lot more engineers and thought would give us a better chance, we also knew that it was where Lars had based Google Wave so it seemed like a pretty strategic place to be located.
Here’s a video from when we just moved to Sydney, we thought it’d be fun to create a one minute video every Monday, though this is one of the few we created:
We were invited to a kiteboarding and entrepreneurship conference called MaiTai. We wanted investment, so thought it would be worth a crack. Kitesurfing scares me a lot, I hate feeling out of control, but it didn’t even feel like a choice — when a door opens, even if it’s only a little crack it’s important to wedge your foot right in there even if it’s a struggle.
While meeting as many people as possible, Lars introduced me to Cameron Adams. In Lars’ email, he said:
Cameron is a world-class designer and web developer. He was the Google Wave team’s designer, is a co-founder of fluent.io, and is the man in themaninblue.com.
We met up and Cam seemed really nice. Looking at his work on Fluent (an email product he’d built), I was amazed by the beautiful way he’d coupled design and development. The little icons filled up magically, the finishing touches on his product were absolutely stunning. I wanted to work with him and cheekily asked if he did any consulting work. He responded:
I don’t do too much consulting work with Fluent going on. But if it’s a small project I can consider it.
Yep, a very small project indeed 😉 I persisted:
I didn’t think you would do much consulting these days, though Fluent has such a nice UI I would love to get your opinion on some things for Fusion Books and Canva one day. In good time.. :)
I guess that was to be expected Cam did have another startup that was trying to raise funds.
We desperately wanted someone to join our team before we went to the conference so we could say that we had a tech team. We were pitching someone else that Lars had introduced us too at the same time, and he seemed like he was going to join our team. As we sat at the airport waiting for our flight to take off, he said unequivocally ‘no’.
We went to the conference at MaiTai. We were petrified of all of the people at the event, there were a lot people who had created well known technology companies.
One evening at an event we accosted Bill, and asked if we could do a pitch in the morning.
With a bit of championing from other people at the event, he agreed. We stayed up all night preparing.
A few people seemed to like what we were doing. Dave Bagshaw, the former CEO of Shutterfly, approached us afterwards and said he was interested in ur concept. Another told me that I should smile more when I did my presentation. He was probably right — I was petrified presenting!
We met some other lovely people at the MaiTai conference, including Kaya and Chris Moore, and Jean Sini, who both generously said we could stay with them when we went to San Francisco. My brother’s apartment floor was probably going to be a little tight for both Cliff and I, and I had definitely stretched my brother’s generosity when my two weeks trip turned into three months the year before, so we took them up on that offer.
After MaiTai we were back in San Francisco pitching every investor that we possibly could. I decided to give Cam another cheeky try:
Very random thought… Would you and your team be at all interested in becoming part of the founding team of Canva and integrating the beautiful technology you have developed? I think if we joined forces it would make us both much stronger.
To be honest, it wasn’t that random 😂. With a heavy heart I read his response:
I’m certainly very fond of Canva and can see it doing great things, but I’m not sure my teammates would have the same passion for the area it’s going after… I’m certain you guys will do great things with or without us.
Cam was in SF trying to land investment and I asked him to keep us posted. We had a couple chats and Cam asked to see our pitch deck, I responded that I’d send him our ‘44th’ pitch deck, it’d already been through a lot of revisions. I must have tried again to convince him again during a Skype chat, because the next email changed the course of our lives.
We got a message from Cam, the subject line was:
‘The Answer…”
And the body of his email read:
…is YES :) We should jump on Skype to figure out a few of the loose details, let me know when you’re free. (btw, that’s “yes” to you guys, just to be clear)
My goodness. We could not believe our luck. We were absolutely beside ourselves with excitement. As he’d been intro’d from Lars he already had the approval we needed. Cam became our co-founder and we had the start of that ‘tech team’, albeit just one amazing person, surely now it would be easy to raise investment and finally get this company started!
I don’t think I ever found the playbook to finding a tech cofounder. I just kept on planting seed after seed, and in some cases the same seed in different patches of the field, until eventually eventually one grew!
9. Would you say finding a tech cofounder is crucial to your success / success in fundraising especially in the early days?
YES! Absolutely critical 😊 Cam gave us the credibility that we needed to land the investment, but he’s also incredibly talented and a genuinely great guy — it’s been a privilege working with him for the last five years.
I would add that using a software development company was really useful in those early Fusion days. It meant that we could learn, explore and gain some skills. It would have been impossible to get Cam to join us in those very early Fusion days. I think hiring software development companies in your very early days as you figure the basics out is probably underrated.
10. My questions are at which stage of the product cycle did you seek your first funding round, ie. Prototype, private beta.
So here we were, we’d landed our tech co-founder, we’d proven we could build a product and become profitable. We were ready to raise funds, or so we thought. We thought it’d just take another two weeks in San Francisco…
We hadn’t written a line of code yet, and the book, The Lean Startup was in vogue — where the common interpretation was that everything should be incrementally tested, scientifically proven and that you could and in fact, should, A/B test your way to success.
At the same time it was widely known that investors look for ‘patterns’ of successful entrepreneurs — Mark Zuckerberg’s success meant that most were looking for a replica. We didn’t tick *any* of the boxes that investors were looking for. Here was an excellent article that we read at the time:
[Investors] look for patterns. They look for things they’ve seen in other successful companies… Harvard, MIT, Stanford educations… Google, Apple, Facebook former employee… up and to the right graphs… Every abnormality from these patterns, though, is a negative mark for you.
Well, it would appear that we got a lot of marks, albeit negative ones. We didn’t come from the ‘pedigree’ of universities or companies and we didn’t have pretty looking graphs.
But we did have a lot of experience working with hundreds of schools across Australia- building the product, doing the marketing, sales and customer service which gave us a lot of deep insights. We also had a pretty clear vision of what we thought the future would look like and deeply knew the problem that we wanted to solve. However, I’m sure most investors thought our vision was quite ridiculous, even in Silicon Valley where thinking big is the status quo.
Well, in fact — it wasn’t just me ‘thinking’ that investors didn’t take a liking to Canva, the many rejections we received were a testament to the fact that raising funds was really, really hard when you don’t fit the mould on any account, well except for the fact that I’m a drop out from university and a human.
For example:
Regarding stage and timing, unfortunately right now I do not think that it is quite the right fit just now. This is mostly because of geography and distance, but also, given the nature of the product, I am keen to see how the technical side of the team develops.
A lot of investors explicitly said they were only focused locally:
I am not sure it’s going to make sense just yet. I talked with a few of the team this week about it and for our discovery program, we have been focusing more on local bay area companies
Here’s another:
My biggest issue is physical distance… I’m honestly, and unfortunately, not comfortable doing a deal in Australia
Others didn’t really give much of a reason:
Would love to stay in touch to see how things progress but we are not going to get there for your seed round.
Every single one of the rejections hurt a lot:
…it does look like we’re going to wait out the seed round.
Others thought we were over-priced at the valuation:
We have reached the conclusion that the $8 million cap (15% discounted) is above the top end of what we think is fair value for the early stage risk of Canva and after much debate we have decided not to go ahead with an investment.
Others had a multitude of reasons:
The short story is that we won’t be able to participate in the current round. There is not a lot of excitement amongst my partners to invest in a pre-launch international seed investment.
I mean, I don’t really blame these investors. But each rejection was incredibly painful. We were as far from the cookie cutter mould as you could be…
11. Would be great to learn about your journey of product iteration and pivoting. Initially how many times to find that sweet spot…?
We’ve had a very consistent vision for a long time, though the way we express that vision has changed dramatically over time. I thought it’d be fun to share with you the way our pitch deck has evolved over the years to illustrate this.
My pitch deck from 2008 where we were trying to sound inventor-y:
In retrospect it was pretty terrible. I knew nothing about the norms of startup pitch decks, but had been told to include an ‘exit’ slide.
Another thing we had to start doing was speaking a little more American swagger. We had a lot of generous people giving us their advice, this exchange with Ash Fontana who went on to become an angel in Canva was particularly useful, he told us to include our revenue in our deck and I said:
I don’t think our revenue is hugely impressive at the moment as it will be $2m this year and just under $1m last year. We had 50,000 pages made on the system 2011/12 do you think this is a better stat to include?
He responded:
Include Revenue — those ($2M and 100% YoY growth) are awesome numbers. Very few startups ever reach that, as surprising as that may be. You really need to push that to credentialize yourselves as successful entrepreneurs.
We then went through a very awkward stage when we were trying to find a business name and for a short period of time settled on the name Canvas Chef.
I liked the idea that we gave users lots of high quality ingredients (beautiful stock photography, illustrations, fonts etc) and that users could throw them together like on a cooking show. I like visual metaphors a lot, but took it way too far in the deck below 😂. While the name was incredibly dorky, if you can squint you can see that the concept was quite consistent all the way back here. Funny fact, I entered a pitch into a competition in Perth and we didn’t even make it through to the finals. So if you are entering competitions — don’t worry, they don’t necessarily account for a lot.We were also very concerned that people might steal our idea — hence writing ‘strictly confidential’ on the cover. Someone who reviewed our deck was pretty apt in his feedback:
In the valley, all angels/vcs will tell you that nothing they accept is confidential and they won’t sign an NDA either just because they hear ideas all the time and need to usually share this. If someone wants to share the deck, they will regardless.
I felt a bit embarrassed that I’d sent Bill an NDA not once, but twice. Maybe that was why he didn’t respond to those initial emails I’d sent.
In retrospect, our pitch deck was on point, except for our timeframes — I thought rebuilding the entirety of the design ecosystem would happen much more quickly than it has.
Every time we’d get a really tricky question from investors we’d iterate on our deck to put the hardest questions they asked right at the front of the deck. For example, a lot would say that they don’t understand the design industry, so we added this slide to explain the complicated process:
They couldn’t imagine there would be a ‘billion dollar opportunity’ in the market, so we added this slide:
We wanted to take the entire design ecosystem integrate it into one page, and make it simple and accessible for everyone across the globe (no biggie):
Our solution was going to feel like magic for our users:
In our early pitches they’d listen to our entire pitch and then at the end say ‘ah but that’s just the same as [some company]’. So we added this page towards the front so they’d stop asking us the same question:
They’d say but what if a big company threw $500 million dollars at this problem, well, we felt like that’d be a pretty scary — but anyway, we added this page at the very start of our deck to help explain that in fact, no dominant player has survived between the huge tectonic shifts that had occurred in technology, each era a new market leader would emerge.
Our team slide even started to look a little more fleshed out. Even though three of the spots were filled by advisors at the time:
Finally we got a pitch together that we felt like it captured our vision. It was really long, but pre-answered so many of the investors’ trickiest questions, that by the end of it they had a lot less.
12. I’m curious about your funding journey. Was it extra hard without having a presence in the Valley?
Yes, it was incredibly hard for every reason under the sun. Almost every investor insisted we moved over. When we were getting push back about being located in Australia we added the slide below in our Appendix so we could talk about the grant from Commercialisation Australia that would essentially double their funding:
It didn’t stop investors from telling us to move there, or even rejecting us because of it, but it did give some sound rationale as to why we were choosing to be based in Australia. In retrospect it was one of the best decisions we have ever made — as we’ve been able to create the best team I could possibly imagine, with people who have moved from every corner of Australia and across the world.
13. Your early pitching days required hundreds of pitches to even get noticed. What was the turning point?
After a while we realised that rather than explicitly asking investors if they’d like to invest we’d simply ask them for advice. So rather than getting rejected, we’d just get them warmed up — so they could give us their advice and then we could go and make whatever revision to our deck or strategy was required, and then hopefully leave the door open so we can come back and ask for ‘advice’ again.
After a while we started to get less ‘advice’ and people started to tentatively say that they liked what we were doing. Our pitch deck was seeming more and more together.
We realised we needed to start to pull the round together. A few people said that they’d invest and finally after years of getting ‘advice’ from Bill, we asked him directly if he’d invest. He said ‘yes’ — we were ecstatic. We asked how much — $25k…
I thought that when Bill said the previous year, “I’d be excited to back you and team,” it meant that we’d have enough capital to build the whole thing. Well, we soon learned that unfortunately that ain’t how angel investors work. After an hour long chat and my absolute best debating skills using every objection I had at my disposal, he generously raised his investment to $100k, but that still wasn’t quite enough funding to build out ‘the future of publishing’…
We continued to pitch our hearts out to anyone we possibly could in Silicon Valley, our visa expired and we flew home, we continued to pitch our hearts out in Australia.
Eventually, we closed a round of $1.6 million USD with some great investors like Bill and Lars, but also some VC funds such as Matrix Partners, InterWest Partners and Blackbird Ventures. I created this chart to illustrated the many investors in our seed round and the introductions that saw it come into fruition:
We worked hard on our Commercialisation Australia grant application, a body set up as part of the Department of Innovation. We had to prove we had a ‘need for funding’ and ‘matching funding’ at the same time — two tricky hoops to jump through at the same time. But that was the case and we landed a further $1.4 million dollars.
We now had $3 million to build the future of publishing, all we had to do now, was build it…
14. Who assisted you with technical expertise?
Having the team, albeit a small one and the funding to make it happen, felt incredible. The ball was all of a sudden in our court, rather than having to wait for the approval of others.
However, we still needed to build out our engineering team in order to build and launch Canva! While we’d been scrounging for any intros we possibly could, one of the intros from Lars was to an amazing engineer from Google, Lars said:
David is top engineering talent! In fact one the smartest and hardest
working engineers I have ever worked with….
Lars was very accurate in his description, he truly is one of the smartest and hard working people I have ever met. After a period of months Dave said he was interested in joining us, and we were ecstatic:
We are excited for you to join the founding team of Canva. The coming months are a very exciting time for us, as we will be making the critical development decisions, deciding upon our architecture and our road map ahead.
However, Google was less than pleased:
I told Google on Monday that I’m leaving, and it has caused some panic in the office this week…
They wanted him to stay on at Google for much longer than he’d intended. I responded:
I had a chat with Lars to see his perspective and he seems to think it shouldn’t be too hard for Google to find a replacement, even considering your incredible awesomeness. I completely understand wanting to leave Google on good terms…
We then decided to go down a different tact and sent him this:
Hey Dave, our team wanted to share something with you (see attached).
Here was the attachment:
Yep, we’d raided his Facebook account to put that deck together. It could have gone either way, but fortunately it seemed to have a positive impact:
That really put a smile on my dial. You guys are incredible. The good news is that a replacement for my role has already been poached… I’m doing everything I can to get this wrapped up, so that I can leave cleanly and quickly. I’ll be in contact with more details tomorrow. I want to come and help you change the world :)
Somehow we’d convinced Dave to join us! The ‘future of publishing’ here we come…! This pitch deck became subject of an article that called ‘This Bizarre Recruitment Pitch Deck Convinced A Senior Google Engineer To Leave For An Australian Start-Up’ 😂.
15. Who are your mentors?
While in our early days most of the advice we were getting was coming from outside our company, this quickly changed as we started to build out our incredible team.
All of the rejections we’d faced acted like an intense ‘bootcamp’. It meant that we had to refine every part of our strategy and had to explain every single decision over and over again, which meant in the end we really knew what we were doing and why we were doing it.
We started to build out an amazing team. We found our team members in all sorts of places, Mike Hebron, was an amazing developer who was backpacking from the US — his first stop was Sydney, and we convinced him to make it his last for a little while at least. We got our own office and we started to turn Canva from an idea into a product:
However, building Canva took a long time and investors started to wonder what the hell we were doing with their money.
16. What have been your most important lessons in growth?
The most important growth tip I can give is to create a product that solves a problem for a lot of people.
While our basic product had started to come together, we didn’t want to launch until we knew it would be a great experience for our users. Because we had some high profile investors we’d been fortunate to receive a bit of press around our ‘stealth startup’ and had 50k people signed up on our waiting list. We desperately wanted to ensure they liked our product when we launched.
So we decided it was time to do some usertesting (using usertesting.com) and see how people actually used Canva. It was extremely insightful. Users were scared to click much and when they did they wandered around aimlessly, struggled with a few things, created something that looked pretty average and then left feeling dejected. Not quite the fun journey we were hoping for users to experience.
It became quickly apparent that it was not just the tools themselves that were preventing people from creating great designs, but also people’s own belief that they can’t design.
In order for Canva to take off — we had to get every person who came into our product to have a great experience in a couple of minutes. We needed to change their own self belief about their design abilities, we needed to give them design needs and we needed to make them feel happy and confident clicking around. We needed to get them to explore and play in Canva. No short order! So we spent months perfecting the onboarding experience paying particular attention to users’ emotional journey.
We wanted to gamify our onboarding to help encourage play. However, a lot of people struggled with the very basics:
By simply changing the colour of the circle users were able to figure it out quickly:
We continued to make these refinements over and over again, until we were getting great feedback from our users.
Eventually, eventually, we were ready to launch. We created a launch video to help spread the word and I went to San Francisco in the hope of landing some US press.
I was back staying in my brothers apartment, sleeping on the floor in his living room. The team were up late in Sydney working incredibly hard to ready Canva for launch, as they had been for many months:
I was about to lay down for a few hours of sleep. I checked Twitter and found an article had been released that broke our embargo. The article was titled:
Canva attempts to bring Photoshop-like design power to the Web
The word ‘attempts’ stung, as did the following sentences:
…beginners will feel very much confined to the templates and guidelines, which means it can be difficult to build anything outstanding early on… stock libraries, exceedingly cheesy, if not quite rivaling ShutterStock in terms of WTFness.
My goodness. What have I done. Roped all these investors in, our whole team and no one even likes it. Many of the other media outlets were extremely annoyed with us, as they were preparing to release on the embargo. I felt shattered…
Fortunately, while it felt terrible at the time — things are never as bad as they seem and the articles that followed were exceedingly kind, like this article from TechCrunch:
And importantly, we started to get people from across the globe tweet in excitement about our product which was music to our ears:
Even one of our earliest investors tweeted that he finally understood what we’d be going on about:
The positive word of mouth was doing Canva wonders. People were tweeting about Canva like crazy, they starting blogging about Canva, even creating their own Canva tutorials and workshops.
We were amazed to see our graphs growing rapidly in the right direction. After the first 8 months over 350k designs were created in a single month! We couldn’t believe that each month was bigger than the last.
We hit one million signups and our team was elated…
The graphs continued to grow rapidly in the right direction. 20 months in those 350k designs looked tiny, compared to the three million designs that were created each month:
Very fortunately, that trajectory has continued and we now have over 34 million designs created each month. Which is completely baffling, and amazing, and crazy all at the same time…
Here’s a few other growth lessons we’ve learnt:
- Solving a real problem. I think the most critical ingredient has been providing a product that solves a real problem that lots of people care about.
- Offer a free tier that delivers a lot of value. If you can offer a free tier that provides a lot of value it will naturally help your product to spread much more rapidly.
- Start niche and go wide. By starting ‘niche’ (with Fusion) and then going wide (with Canva) we were able to really get a deep understanding of our customers’ problem and solve it well.
- Our whole company focuses on growth, but not in the short-term optimisation sense. Everyone is either working on long-term growth initiatives or shorter-term optimisations. For example, internationalising our product or launching Canva on a new platform like our iPad, iPhone and Android apps all unlocks new markets, so we consider them long-term growth initiatives.
- We structure our whole company around goals. The old school hierarchies of years gone by with rigid structures and hierarchies were certainly not made for rapidly growing startups. We structure each team around ‘crazy big goals’ with a lot less emphasis on titles. Every team has a goal and then celebrates when they hit that goal.
- Ensure great onboarding: so users get immediate value and then share your product. We use usertesting.com a lot to test our product and watch user’s reactions. We spend a lot of time refining every detail.
- SEO: when people are looking for your product it would be crazy not to let them find it.
- Learn to love every type of data: we got off to a rocky start with A/B testing, when investors were asking if we’d A/B tested our vision. It’s important to use the right data for the right occasion — from using usertesting.com, to A/B tests, user surveys, Google surveys and many others.
- Provide real value: the power of this cannot be underestimated in both your product and marketing.
- Aim to make your product affordable: while of course this doesn’t apply everywhere — a pretty apparent macro trend is that most things are getting cheaper, faster and more efficient. Doing this bring more equality and is good for business.
17. People are writing that getting bank on this funding is your greatest success yet. Is it?
Funding has been critical to getting Canva off the ground, but it’s the stories that we hear from our community that are our greatest success and the whole point of why we pursued the vision for Canva.
The huge numbers we have now are difficult to fathom, however, our team loves to hear the stories that come from our community. It’s incredible the impact one design can have, for example one design helped a lady find her birth mother and another design helped someone land a job:
We have had thousands upon thousands of emails, social media posts, letters and even presents from our community saying how grateful they are for our product.
Most of our team have experienced wearing swag and being approached by a very grateful user or spotted someone in a cafe using Canva who then can’t stop raving about how much they love Canva. Knowing that our product is out in the world helping people to achieve their goals is incredibly rewarding.
We also have over 17k nonprofits on our nonprofit program such as:
And we get messaged like this from our community all the time:
I could go on and on about the touching stories from our community. It’s why we do what we do.
Another thing I’m incredibly proud of is our amazing team which has grown rapidly over the years, we now have 250 people across our two offices in Sydney and Manila. Working with such an incredibly talented and motivated team everyday is an absolute privilege. I still pinch myself that we have got to this point.
One of our values at Canva is to ‘set crazy big goals and make them happen’:
Seeing our teams set crazy big goals such as ‘launch an Android app’, ‘launch in 100 languages’, ‘launch Canva Print’, ‘five minute response time on social media’ and many others — and then actually achieve that, warms my heart to no end. It’s an honour to work with such a motivated and talented team.
This week was an anomaly for me, needing to focus most of my time externally (press etc.) — my favourite thing in the world is to spend all my time with our incredible team working on our product. I feel like it’s a real privilege.
18. How do you manage to keep sane, have a happy personal life and keep going up the ranks growing a startup?
It is challenging and a constant work-in-progress. Elon Musk sent a tweet recently that I thought were really important for the startup community to hear:
One day when I was particularly tired, my very kind brother came over, made me dinner and brought my favourite snacks. He then wrote me some great *anti-motivational* quotes which I have since stuck to my wall:
Cliff works incredibly hard, but also has an uncanny knack to be able to switch off and relax as well which helps us both a lot. Here’s one of the quotes he wrote on our whiteboard at home:
19. How you deal with the pressure of such high profile expectations… being called a Unicorn 🦄 is bloody scary?!?
This week I felt really scared and nervous. This financing has been in the works for some time and I’m really confident with where our company is headed — we really have an incredible team, we have a community who loves our product, we are in a great financial position, our charts are moving in the right direction and we have some really great new products in the works. In fact, 70% of our product team have been working on a project for over a year that hasn’t yet launched, so we have some very, very large long-term bets in the works.
My nerves didn’t come from being scared about Canva’s ability to execute, but about the immense responsibility that I feel in order to be useful. I feel this on so many levels — I feel like I have a unique opportunity to have a platform and megaphone, I want to make sure that what I say doesn’t just create further noise, but is adding value. I’ve also become hyper conscientious that the things that I’d like to see changed in the world aren’t someone else’s responsibility but all of ours. Here’s a note I wrote to myself last week as I was going to bed:
I don’t think anyone truly appreciates the power that they have to shape this world, it’s certainly not their fault. When you think we’re on a planet with seven billion other people, it’s very easy to think that surely someone else has more experience, more knowledge, more power to help improve this world. But it’s a pretty frightening realisation that we are on this planet with seven billion other first timers — that are all just giving this thing called life a crack.
I feel like there’s a huge opportunity to really be useful in this life and I hope that I can live up to that opportunity.
As a company grows, the challenges get bigger and the stakes get higher. We now have 250 people relying on Canva for their livelihood. This is even more prevalent in our Manila office where often our incredibly kind and community minded team members support their family or even their extended family.
I wrote this to myself the other day:
You are built by the challenges you face.
Your wildest dreams are made of the things you don’t have.
Your sense of adventure is spawned by that which scares you.
Your strength of character is built each time you fall.
Your wisdom comes from making mistakes.
Your future is built by your past.
Your sense of justice is strengthened by things that are unjust.
Rainbows are created by rain ☔️
So in order to have wild dreams, a strong sense of character, wisdom and a sense of justice — cherish the challenges you face, the things you don’t have, the things you are afraid of, falling down and making mistakes. It’s this gap that inspires us.
20. Building a business like yours can come with immense pressure… how do you cope with that?
Here’s a few practical things:
- Writing: I really like writing. I find that when I write I have very conscientious thoughts, so rather than letting thoughts just flow through my mind as they please I can consciously focus on something.
- Sleep: I know getting a good night’s sleep is also critical and something I’m actively working on this year. My goal is 20 days each month getting 8 hours sleep a night! I have a physical calendar that I’m marking off and hope to actually succeed.
- Holidays: I find going away on holidays, even for the weekend or a week, can be incredibly refreshing. I personally like to go on quite adventurous holidays as it doesn’t give me time to let my mind think about other things. It’s important to give your brain a break sometimes so it can come back refreshed.
- Quiet times: I’m quite introverted, after a busy week I like to go home and have silence or listen to gentle meditation music. I’m also a big fan of Thai massages, going for a walk and yoga. But everyone is different, Cliff is very extroverted and loves to hang out with other people to recharge. It’s important to find your own recipe and then to do that.
21. Where to next after Canva?
For a long time, we’ve had a simple two step plan:
- Build one of the world’s most valuable companies.
- Figure out how we can have the most positive impact in the world, and of course, do it!
We still have a long way to go on Step 1. We really are less than 1% of the way there, but hopefully we are headed in the right direction! It feels insanely lucky that this even seems semi-plausible and will definitely need a huge amount of effort in order to make this a reality.
In this day and age companies have a much greater responsibility than the old mantra to ‘do no evil’. We have an incredible opportunity and responsibility to create a world that’s better for everyone who lives here.
I would love to see every business, every VC, every producer, every journalist, every single person — step up and to take heed of their power to help make this a better world for everyone who lives here. It’s easy to think that it’s someone else’s responsibility — but it’s not, it’s all of ours. One of our values at Canva is to ‘be a force for good’ and I hope that we can fully live up to this value. It’s still very early days for us yet — I have some extremely oversized plans in this space too.
I would love to see in years to come ‘Australia’ becoming synonymous with a disproportionate number of great innovators who are hard at work solving the world’s real problems with great products. These are some pretty great goals:
Thank you so much for all of your amazing questions! Hope you found something useful in this excessively long blog :)
Melanie
PS. The beautiful quote that we put on our print packaging has a little extra special meaning for us :)
