Meet Canva: The platform that allows us to make our designs beautiful 🖌️

Hey Everyone - Harry Here!

Welcome to Issue #8 of Deep Dive with Inquisition. In this issue, we will cover the story of Canva, one of the world’s most famous platforms for creating beautiful designs and visuals, from its founding stories to the strategies it used to become the company it is today.

Early Days of Canva:

Canva was founded in 2012 in Australia by husband-and-wife team Melanie Perkins and Cliff Obrecht. Canva is an online design and visual platform that allows people around the world to design and publish anything, with the mission of 'Empowering the world to design.'

Back when Melanie Perkins taught part-time design at the University of Western Australia during 2006, she realized:

Based on this realization and Melanie Perkins’s experience teaching students traditional design software, she and Cliff Obrecht decided to start “Fusion Yearbooks” - a yearbook design software that allowed people to easily design their own yearbooks without spending hundreds of hours. Yearbooks were selected because Melanie saw her mom struggle and go through the long hours of the yearbook designing process because she was a high school teacher.

Melanie’s realization was the tipping point for the start of Fusion Yearbooks, which later became the global design and visual platform Canva. To dive deeper into Fusion Yearbooks, the founders were able to secure 16 schools as clients during its first year, scaling to a total of 100 schools in 3 years with millions of dollars in annual revenue.

The inspiration for Canva came when the founders realized that people were not only using the Fusion Yearbook software for yearbook designs but also for creating newsletters, posters, and more.

Overview of the Global Design Software Market, Creator Economy Market, and Office Software Market:

1. In 2023, global graphic design market size reached $49.8 billion.

2. The United States graphic design market size has reached $16.9 billion in 2023.

3. As of 2023, the global creator economy market can be estimated as a $250 billion industry, expected to reach $480 billion by 2027.

4. There are now around 50 million amateur creators around the world, and the number is continuing to increase.

5. The revenue in the office software market is anticipated to reach approximately $28.63 billion by 2024.

6. The revenue in the office software market is projected to reach an annual growth rate (CAGR) of 3% from 2024 to 2029, resulting in a market volume of approximately $33.19 billion by 2029.

Rise of Canva: How it First Started:

After the founders of Canva realized that its software was being used not only for yearbook designs but also for other purposes (e.g., users creating posters, logos, etc.), it became the tipping point for the start and rise of Canva.

Well, the story of Canva sounds like a smooth-sailing story, right? Here is the detailed version and an explanation of why the founding story of Canva can be seen as one of the most inspirational stories for every founder out there.

Foremost, the founders didn’t have any sort of “advantage” as founders because:

1. They neither attended nor graduated from top universities in the United States such as Stanford, Harvard, and MIT.

2. They weren’t from the Silicon Valley community and had their headquarters in Australia instead of Silicon Valley or NYC.

3. They didn’t work for big tech companies such as Google, Meta, Snapchat, Microsoft, etc.

The founders were so desperate and hungry that the current CEO of Canva, Melanie, even learned how to kitesurf to “fit in” with Bill (the first investor for Canva) and other investors who went to the annual kitesurfing networking party that Bill hosted.

It was a long journey for the two founders, since they not only needed to prove that their idea would change the world and become a unicorn company, but also ensure that everything would be okay with the founders being a couple. Silicon Valley investors see couples starting a startup together as a major risk due to the potential for unexpected bad outcomes in the relationship.

Apart from proving that the company would become huge alongside their love, Melanie and Cliff had an important mission directly from Bill, which was to find a technical co-founder that Lars Rasmussen, the Co-Founder of Google Maps and Google Wave, would approve. They had 3 months to find their technical co-founder, which didn’t work out, so they went back to Australia after spending around a year in Silicon Valley, going back and forth to Australia.

Then, after a long period of continuous searching, the two founders met and welcomed the third co-founder, Cameron Adams, who joined the team in 2012. After finding the perfect co-founder, the founders received a $25,000 check from Bill alongside active participation with the help of Canva’s first fundraising.

The entire process of finding the right technical co-founder and getting rejected over a hundred times by investors never deterred the founders. They kept pursuing their dream of “building the future of design and visual platform.” They successfully fundraised $1.6 million from angel and venture capitalists alongside receiving a $1.4 million grant from the Australian government in 2012.

After the fresh fundraising and onboarding the best possible technical co-founder and engineers, the first version of Canva was launched to the public in August 2013 after an extensive year from fundraising to development.

The results from the first year were great - Canva had onboarded around 1 million users with over 3.5 million designs being created.

How Did Canva Become One of the Fastest and Biggest Online Design and Visual Communication Platforms Meanwhile Becoming the “Go-To” Place for Designers, Marketers, Students, Creators, and More?

Nothing was able to stop Canva from growing, whether it was a journalist writing a negative article about Canva after its launch or 100’s of rejections from investors. After the stabilization from the foundations, the founders kept pushing forward; this allowed Canva to additionally fundraise its Series A round for $15 million from investors in 2015, reaching over 2.3 million users and 3.2 million designs being created every month.

Since its launch, Canva has achieved over 170 million global monthly active users from 190 countries, surpassed 20 billion designs created on Canva, expanded into entirely new markets such as the office software market directly competing with giants such as Google and Microsoft, and ultimately created an ecosystem that revolves around design and visuals.

Below are the strategies that contributed to Canva’s growth:

1. High Quality Disruptive Product:
    → Canva’s product was revolutionary, allowing users, specifically targeted towards non-technical people (e.g., marketers, students, non-designers, etc.), to create beautiful designs without needing to know how to use the software because the platform was extremely simple and easy to use.

2. Super Powerful Platform with the Implementation of the Freemium Model:
   → This is one of the major reasons why Canva was able to gain traction during the early stage. It is simply because of the freemium model that solved the needs and wants of the users.

3. Actively Listening and Implementing the Needs and Wants of its Users:
   → This is one of the things that is still being done today. Canva listened to and fulfilled the needs and wants of its users by asking them what their purpose was when it came to using the platform, providing over 250,000 templates to customize from, and continuously improving the user experience through adding real-time collaboration features, and more.

4. Creating and Establishing a Community-Oriented Ecosystem:
   → One of the things Canva aced was the involvement of its community. One example can be the Canva Creator Program - a program where independent designers can upload their template designs for the Canva platform and monetize from it. This allowed the platform to have more templates for its users and foster an environment where the community was built. Not only the Canva Creator Program, but the company also expanded into the Developer Community, where it provides a Software Development Kit (SDK) to allow developers to build applications that benefit the users and Canva or integrate Canva into their own platform as a third-party platform.

5. Finding the Right Target Users:
   → Remember how Canva was started? It targeted users after realizing that people were using the Fusion Yearbook software for designing posters, newsletters, etc., which was a validation point for the potential demand for a new, easy, and simple-to-use design platform. This is why Canva focused on providing various design templates for its users, such as specific templates for Instagram, Facebook, YouTube thumbnails, A3/A4 posters, and more, to fulfill the demand the founders saw from the target users. So, having crystal-clear information about your company’s target users will be crucial for success.

Challenges for Canva:

1. Surviving the Extremely Competitive Markets:
   → Canva isn’t only active inside the global graphic design market, it is also active with its expansion towards the global office software market with the connection of allowing users to create beautiful visuals such as presentations and team documents unlike Google Docs or Microsoft PowerPoint. Expansion for Canva also means new opportunities but at the same time, it also means that the company needs to compete with existing and new emerging competitors such as Adobe, Google, and Microsoft - who are giants with huge piles of cash to deploy anytime that can seriously impact Canva.

2. Depending Less on the B2C Strategy:
   → Until 2023 (10 years after the founding of Canva), the main strategy was focused on Business to Customers (B2C). Consumers who aren’t designers nor hold experience in design were the main target, however, the company later shifted its focus to not only caring about B2C but also B2B users by creating new features and expanding into new markets (e.g., Office Software) alongside leveraging AI to create the perfect suite of tools for business-related software. This new shift in focus will be a challenge since it will be crucial for Canva to deploy its resources and focus on securing new B2B users, partnerships, and more.

Future of Canva:

1. Continuous Improvement of the New Features from the New Expansion:
   → It looks like Canva will be focusing heavily on B2B-focused products after unveiling Magic Studio - a suite of AI tools targeted for SMBs to enterprises. Canva is seeking to leverage AI to dominate the B2C and B2B sides for everything that involves design and visual content. Since the company dominated the B2C side of design and visuals by creating a revolutionary product targeted at individual users, it has officially added a focus on the B2B side. In response to this, it has rolled out many B2B targeted products and bundled them under the Canva Pro, Canva Team, and Canva Enterprise subscription plans, allowing glimpses of the many paid features inside the free plan.

2. Revenue and User Diversification Alongside Growth:
   → As mentioned above, the new introduction of a wide range of AI-based products with the entrance to the new market can be seen as a signal for Canva to heavily focus on the diversification of its revenue and user base. With continuous improvement and new feature releases, it can be expected that Canva will see a significant increase in revenue alongside user growth, especially among SMBs and enterprises.

Key Takeaways from the Story of Canva:

Canva created a profound effect by allowing non-technical people to create a wide range of high-quality designs and visuals for free. It can be agreed that Canva indeed follows and achieves its mission statement of “Empowering the world to design,” not only becoming an inspiration for companies worldwide but also for aspiring individuals and founders who want to truly impact and change the world. The story of Canva’s founders is very inspiring and serves as living evidence that anyone from anywhere can create a successful startup even if they do not fit the typical VC-backed startup criteria.

Below are the key strategies that Canva used to become the company it is today:

1. Nothing is Impossible Because Everything is Possible:
   → The founders of Canva were rejected over 100 times by investors for various reasons, such as concerns about the founders being in a romantic relationship and not wanting to back a founder without formal big tech experience (e.g., Ex-Google, Meta, Microsoft, etc.). However, the founders kept pushing forward and successfully fundraised $3 million for their first fundraising round, and the rest is history. (Canva’s highest valuation was $40 billion during 2021, and in 2024, it was valued at around $26 billion). Even though the company has offices in 6 different locations around the world with over 170 million people from 190 countries using its product, the company is still hungry and growing.

2. Have a Clear Target User:
   → The global design and office software market is extremely competitive. Competitors such as Adobe, Figma, Google Workspace, Microsoft Office 365, Pitch, etc., are all market leaders just like Canva. However, Canva targeted a specific market of users who were non-technical people, mostly identified as marketers, students, creators, office workers, and more, who simply wanted an easy-to-use and high-performing design software that didn’t require any knowledge to use it. Canva aced this approach.

3. Having a User-Centric Design is Crucial for Your Product's Success:
   → Canva is a platform designed to allow non-technical people to create stunning designs and visuals without having any knowledge about design. It provides millions of pre-made templates for posters, social media posts, YouTube thumbnails, presentations, etc. This completely eliminated the entry barrier for its users, creating a platform that focuses on serving non-technical people who need to create designs and visuals.

4. It Seems Like Business Models Always Matter:
   → As seen from other issues, such as Issue #7 (Spotify), business models matter a lot. Just like Spotify, Canva secured its first users by providing a revolutionary product for free while charging a small fee for those who needed and wanted extra features. The freemium model allowed people to explore (most importantly) and receive direct results from it, which became an attraction point for first-time users to come back and use Canva instead of other software, which required high dedication to simply learn the basics of the software while not having a free plan available at all.

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Thank you so much for reading!

-Harry