Canva CEO Melanie Perkins thinks the design world needs more alternatives to Adobe

2024-07-08 10:00

Business


A photo illustration and portrait of Canva CEO and co-founder Melanie Perkins.
Photo illustration by The Verge / Photo: Canva

To her, AI is just an extension of what Canva has always done: make accessible design tools that cost less than Adobe’s.

Today, I’m talking with Canva CEO and co-founder Melanie Perkins. Canva is a design software company that makes it really easy to do design work, and that means it sits at the intersection of some big conversations right now — especially when it comes to AI and how it might radically change creative work.

Canva got its start more than a decade ago as a different form of disruptive tech for creatives. It’s a web-based platform that makes design tools cheaper and more accessible than, say, Adobe’s Creative Cloud, now one of Canva’s biggest competitors. It’s used by a lot of small businesses, a lot of social media marketers, and now even in settings like sales, HR, and increasingly, professional design.

But that means that Canva isn’t really experiencing the same kind of tension around the introduction of AI tools that Adobe or other big software makers are facing because its core audience has always been firmly outside the traditional design world. AI is just another tool to make the lives of Canva users easier. Melanie and I spent a lot of time talking about what that means for Canva’s business and how it intends to use that unique position to break into office and productivity apps with its new Enterprise tier.

Canva’s push into enterprise, which it launched alongside a big redesign in May, is central to how the company plans to keep growing from the roughly 185 million monthly users it has now. Melanie and I talked about how Canva has transitioned over the years from its freemium beginnings to now having a number of subscription plans — and how she plans to juggle the needs of big Fortune 500 customers with Canva’s role as a more cross-platform, mobile-friendly design tool.

You’ll also hear Melanie and I talk candidly about how being based out of Sydney, Australia, has affected her approach to company culture. It’s given her the freedom to stay above the ever-changing whims of Silicon Valley and its mercurial VC class, even if it’s still a lot of Silicon Valley money that’s pushed Canva to a $26 billion valuation.

Oh, and I just had to ask her about that very cringey Hamilton-style rap from the Canva Create conference that went viral a couple of months ago. Melanie says the cringe was the point and that it was actually quite successful as a marketing tool for enterprise software.

Okay, Canva CEO Melanie Perkins. Here we go.

This transcript has been lightly edited for length and clarity.

Melanie Perkins, you’re the co-founder and CEO of Canva. Welcome to Decoder.

Thank you so much for having me. Excited to be here.

I am very excited to talk to you. There’s a lot to talk about. You recently launched a redesign of Canva, which is a big deal. You made a big push into enterprise software, which I want to talk about. In general, I would say the world of design is a bit angsty right now because of AI, and Canva is right in the middle of that, too. You’ve had AI features for quite some time, and I want to talk about how you’re thinking about that and where the audience is. But let’s start at the very beginning. Canva is now 11 years old?

Yeah, we had our 10th year since launch last year.

Tell people what Canva is, why you started it, and how you’ve gotten here.

Canva is an online design platform. Many years ago, I was at university teaching design, and it was really complicated and hard. I thought it was ridiculous that people had to spend so much time learning the very basics and wanted to make it collaborative and online and simple. We spent the first decade doing exactly that, and it has gone pretty well. We’re now used by 185 million people around the globe each month.

You started the company in Australia. There are a few pretty high-profile startups in Australia, but Canva is pretty global. It’s used everywhere. How have you thought about that aspect of it, and why haven’t you been forced to immigrate to Silicon Valley yet?

We feel like we really get the best of both worlds. We have built an incredible team here in Australia, but then we have offices around the world, including in the United States, and we have a lot of investors over in Silicon Valley. It feels like we’ve been able to get amazing talent and amazing investors and build a really great team headquartered here in Australia.

This idea that you were teaching students in graphic design and the tools were too hard to use so you built a tool that made it easy to do graphic design — that plugs into a pretty long history of software democratizing hard creative tasks. There’s always some angst about that. That’s just the way it goes. Do you feel like you’re participating in that process?

This is a lead-up to the questions that will come about AI, but in the beginning, 10 years ago, people said, “These Canva templates, they’re letting the kids do this work that I usually do,” and that is the story of this company. Is that still what you’re doing — democratizing design — or have you moved up the chain?

With Canva, we really set out to fill a huge gap in the market, and this gap was that people that wanted to create an amazing design and turn that into something awesome didn’t really have any tools unless they went and learned really complicated software that would take a very long time. Canva sits in the middle of the Venn diagram, right between productivity and creativity, and there was nothing on the market that really filled that gap. That’s exactly what we’ve been doing for the last decade and will continue to do for decades to come: to enable people to take their idea and turn that into reality in the end product and have very little friction between those two things.

When we were starting out, it seemed crazy that people would have to go and design a different product for a presentation and a whiteboard and a social media graphic and printed products and presentations in videos and websites. Every single product that they wanted to create would be something completely different, which seemed ridiculous. What we’ve done with Canva is build one unified platform that enables you to create all of these things with absolute ease so you don’t have to go and learn a new tool each time. I think that was really serving a huge gap in the market then, and it still is today, and that’s why it’s been growing as rapidly as it has.

On the one hand, that gap, which is democratizing creativity, is very empowering. A lot of people get to open the software; it’s just on the web, so you can just use it. If you’ve made a lot of assets for your small business, you’re off to the races. On the other hand, it’s creativity on rails. You don’t need to know a lot about graphic design. The templates do a lot of the work for you. Some of the new features you’re rolling out in Canva push people into best practices of design. That stuff is really interesting, but you don’t need to know about design. The software knows for you. That’s a tension, I think, that’s really interesting.

I would hazard, though, that creativity isn’t knowing a specific software and it’s not a specific brand of software. Creativity is the ideas that you’re wanting to express, and the tools that we use to express those ideas have changed greatly over the years. One of the first pages in our pitch deck was that [in publishing] there were first metal pages. Then that changed with typewriting and typesetting, and then that changed with desktop computers, and then that changed again with the web. So this transformation that happens every few decades in the publishing and design industry has been going on for a long time and will continue to do that, but I don’t think that it is changing creativity at its essence.

Bob Iger is on our board, the CEO of Disney, who was telling us about how they used to create animations, which were all hand-drawn to start. And then obviously they brought in computers and they could do all sorts of amazing things. I think that transformation is just constant in our industry.

But that piece of it, which is the core of what Canva enables people to do, is that the software knows a lot about how to make design. The knowledge is embedded in the software, and then you can instruct the software to make what you need. That lets a lot more people create things. But at some point, the professional design community also has to adopt Canva.

Do you think of this as a disruptive product in the classic sense, that you’re cheaper, faster, good enough, and then, over time, you will expand the use cases until you can more directly compete with a professional tool like Photoshop?

Our intention always was to work from the bottom up, but right from the get-go, we knew professional designers had challenges that they were contending with as well. So a professional designer would typically go and send a PDF back and forth with a client, marking up text to be like, “Change that there.” We wanted Canva to become the format that a professional designer could use to collaborate with their clients. So the professional designer could create an amazing template that then the client could be marking up changing the names in it for business cards or whatever it might be. There was always the full story of what we would love to be able to offer for someone that had no design experience and someone that was a professional designer as well. And we’ve really seen that play out.

When Canva started out, the first people using it were social media marketers, and then it became all marketers. Since then, we’ve really grown and been investing heavily in enabling Canva to be used for sales teams and marketing teams and HR teams, especially with our most recent launch of courses. Professional designers can now, and they are, create those templates for the rest of the organization to use. Rather than their brand guidelines collecting dust, they can actually embed that through the whole organization and have the organization designing on-brand. We really feel like it gives designers superpowers. So yes, to your point, it is changing the paradigm of what people are doing in their day-to-day job, but it also is giving them more power to be able to own the touchpoints throughout their entire organization and to ensure that the whole organization is designing on-brand.

You said you started with social media managers. That’s how I think of the classic Canva user. Is that still the primary customer base? How are you acquiring new customers? Where’s the growth coming from?

The growth is coming from all over the world, all over pretty much every industry. We just hosted our event in Los Angeles, and it was actually interesting diving into the LA use cases. So we rolled out in the [school] districts there. Now, Canva is used by 70 million teachers and students in the classroom. We have 600,000 nonprofits using it. We’re used by 95 percent of the Fortune 500. From marketing teams to sales teams to HR teams, it’s really covering the full spectrum.

In fact, our goal is to get to 1 billion monthly active users in the years to come. When we first set that as a goal, it sounded completely ridiculous, but we knew we needed to be used by 1 in 5 people in every country. It’s been pretty exciting to see that number go from one in hundreds to now in the US where we’re used by 1 in 12 people each month. In Australia, we’re used by 1 in 9, and we’re leading the charge in countries like the Philippines and Mexico as well, where we’re 1 in 8. We’re starting to march toward that 1 in 5 number. If you start to look at 1 billion users, we need to be in every single profession and every single industry.

Expanding in countries is very hard. Why is your goal to have 1 in 5 people in every country, which requires you to have a presence in infrastructure in every country, instead of 2 in 5 in a smaller number of countries?

I’ll explain the framework that we use. Our mission is to empower the world to design, and what we do is break that down into what we call our “mission pillars.” Our mission pillars are things that we’ve been investing in for the last decade and will continue to invest in for decades to come, which are: empowering everyone to design anything with every ingredient in every language on every device.

What we’ve been doing is picking off a goal every single year to take steps in that direction. On the “every languages” front, we started off in English, then Spanish, then 20 languages, then 100 languages, then hard languages like Arabic, Hebrew, and Urdu. We’ve been really investing in the localized experience across 40 countries. To empower the world to design, we need to be in every country, and we’re growing rapidly in developed and developing markets. So there isn’t a specific type of country that we focus on. We think that design is very universal, and that’s certainly what we’ve been seeing play out.

Localizing all those languages in all those countries, that’s a lot of effort. Do you have a full-time Urdu translator on staff? Is that something you’re outsourcing? How are you working on that?

We have a huge team of hundreds of people. It’s a very big initiative. The internal strategy now is truly local, so we want to have everything localized. In Japan, you have localized billing, localized templates, localized fonts. It’s a pretty large initiative, but obviously it’s a critical part of both our mission and our two-step plan.

We’re going to come to the two-step plan. That’s a hint. That’s a tease. There’s a big reveal coming. So that’s the goal: 1 in 5 in every country. How many users do you have now?

185 million.

And how many people is Canva?

We have 4,500 employees.

Wow, that’s huge. And then the valuation right now is $26 billion, which makes you one of the more valuable private companies in the world. You’re talking about a pretty wild corporate structure here with everything localized, even at 4,500 people. How is Canva structured?

As I was mentioning before, we’re very much mission-driven. What we then do is we have our teams organized around goals, the long-term goals that we want to achieve. I touched on one of them: we have a big goal of being truly local in 40 countries. We’ve got a centralized team that’s working on being truly local, and then we also have parts across the entire company that are also working toward that same goal.

As you can start to see, as I talk about all these different mission pillars, there’s quite a complicated organizational structure to ensure that we’re able to achieve so many things across our goal of empowering everyone. And we’re picking off all these new industries and professions at any given point in time to design anything and continuously coming out with new design types. A couple of years ago, we launched docs and whiteboards. There’s a lot in the works there. And then another goal is to empower everyone to design anything with every ingredient, so we’re continuously making investments around these new ingredients and partnerships with incredible music companies and so forth.

Then we need to have all of our product teams making sure that Canva is available on every device. That was, again, a decade-long investment, where we started off with web and then iPhone and then Android and then tablets. Then we had a huge cross-platform project where we brought the same product across all of our platforms, which was another multiyear effort. What we’re continuously doing is figuring out the structure that can enable us to achieve our goals in the most effective way.

We’re going through that process right now where we’re looking at all the goals that we want to achieve over this next decade. Our first decade was about empowering every person. This next decade is going to be about also empowering every organization and then ensuring that our entire company is structured around those big company-moving goals for the next decade.

Walk me through the specifics of that structure. You have a centralized product team that’s going to ship some new features. You might have a team in Japan that’s like, “This set of enterprise users is the first target market for us.” And then you have a team in the United States that says, “Actually, it’s this set of enterprise users.” In Japan, it’s the sales teams, and in the United States, it’s the HR teams. How do you reconcile that, or do they both get to develop the product independently?

Our product team is very centralized, and I’ll give you a metaphor that we use internally, which is about having cupcakes and icing. What I mean by that is that we want to have the same cupcake for every platform for every country and then different localized nuances for each of those, so different icing for different countries, professions, and industries. We spend a lot of time making sure that most of our effort is going toward having a really solid cupcake that is able to be expanded and can serve all of these different needs — and that it’s very consistent.

I’ll give you an example of being truly local: we want to have different billing methods, different payment methods, and there’s a team that’s focused on enabling all of those things. Or we also have an ecosystem of developers to be able to have local plug-ins for different platforms and to be able to create really cool AI apps and all sorts of things. We also have a huge thriving developer community that is able to cater to local nuances.

The cupcake is the centralized product team, and then we have different teams that are focused on adapting that for education markets, for enterprises, to ensure that we’re able to cater to all of those different things. Our product team is 2,500 people — engineers and product designers and researchers. And then we have teams that are focused on the different variants of the icing for the different audiences and professions. So we have local teams that are focused on, say, marketing and sales across Europe and in the United States and Japan.

That seems very complicated. It seems like you need to manage an awful lot of communications to make that work. It’s also kind of familiar. You have a core platform and then it’s expressed in different ways in different markets to different audiences. A lot of the time, the conflict there is the decision about whether something should be built into the platform, part of the cupcake, or expressed in some weird way as part of the icing. Does that decision land with you? That’s usually the tension. How do you resolve that?

I think because of the deep platform investment that we’ve made, we’re in a pretty good spot to be able to do that. Obviously there are conflicts because one country would like a specific thing and another country would also like a specific thing. So firstly, we have a centralized map of the countries that we’re investing in, so countries that we’re already doing exceptionally well in, and other countries that we consider seed investments that we’re wanting to invest in and we know will play out over the next five years. We have this centralized philosophy about the way we’re tackling markets and the way we’re investing and harvesting fruit, and then we are able to make those decisions with both the leads of the truly local team and then the leads of the particular icing.

How much Canva do you use to run Canva? Because when I describe something as a communication problem, you make a communication tool. Are you dogfooding Canva internally all day long to make this work?

Oh, you have no idea how much we use Canva. Or maybe you could guess — we use Canva for absolutely everything. So yes, I would say we use Canva extremely extensively. It powers all of our operations. It empowers our whole product framework. It empowers our marketing team, our sales team. We use it extremely extensively.

How often do you file feature requests for your own personal use?

Pretty regularly, I have to say. In fact, we have a program called Customer Zero, which means we use our product very deeply even before it’s at the standard that we would have it released to the public. We’re continuously road testing it. The amount of bugs that I file or that our whole team is filing to each other is pretty extensive, but it means that the product is really road tested by 4,500 people before it’s even getting out into alpha or beta hands.

You mentioned being a two-step company. One of the pieces of the puzzle here is that you first want to build a giant successful business and then you want to tackle social issues with the profits of that business. You and your partner, Cliff Obrecht, who is the COO, have signed Warren Buffett’s Giving Pledge to give your money away.

Is that at all in tension with the fact that you’ve taken a bunch of VC money in the business? You have a valuation, the valuation has gone down. You haven’t done layoffs, but to get to the excess profits funding social initiatives, you need to have the excess profits, and then your investors might want some of that back. How are you managing the two-step company piece of the puzzle against having to grow and attract enterprise users and grow in every market to even get to the profits in the first place?

Well, I think what’s quite wonderful about the two-step plan is that the steps work very well in tandem. So, for those that don’t know, our two-step plan is: step one, build one of the world’s most valuable companies; and step two, do the most good we can. The great thing about building one of the world’s most valuable companies is that it’s obviously very aligned with investors’ interests.

But then step two, being able to take all of our equity and ensure that it’s being used to have the greatest impact, has been really interesting because it also has meant that people who would like to help contribute to the world in a significant way are really attracted to Canva and what we’re doing. We can take the education program or the nonprofit program and the deep investments that we’re doing there to attract people who want to come to Canva and help achieve the things that we want in the world.

Obviously, the greater we make the company, the more that we have to invest in philanthropy. We really see step one fuel step two and step two fuel step one. We’re just getting started in this domain, but we’re extremely excited about what we can achieve in the years to come. Cliff and I own 30 percent of Canva, so it means that there’s a lot of capital — if Canva continues to do the things that we expect it to do in the years to come — to be able to make a significant difference.

One of the first things that we’ve done other than the things that we’ve been doing through Canva directly is working with GiveDirectly, where we give money to people living in extreme poverty. These are people that are living on less than $2.10 a day, which is absolutely atrocious that people are not having their basic human needs met, so not enough to eat and not a basic shelter, not clean water. $550 in their hands to be able to invest and get an education or get a roof over their head is certainly the best money that we’ve ever spent. We’re certainly hoping that we can do a lot more of this in the years to come.

Is the two-step plan a Canva plan or a Canva and then Melanie and Cliff plan? Because you will make a lot of money and then you can use that money however you want, but the company using its money for social initiatives is a little different.

We took the 1% pledge with Canva a number of years ago. That’s 1 percent of people’s time, money, product, and profits. The really great thing about that is that people can spend their time getting hands-on with philanthropy. The second part is we wanted to ensure that the people that are helping to build Canva are also able to take personal pride in the work that their hard work is helping to achieve. So all of our donations are going through the Canva Foundation. Then, as we are able to do these incredible things, it’s a shared effort for the team and shared pride for the team as well.

It’s notable to me that Canva is in Australia. It feels like the culture of Silicon Valley in particular shaded in this direction for one minute and now it’s gone. We’re back to full rapaciousness in Silicon Valley. That’s fine; the pendulum swings. Do you feel insulated from that? Do you feel like you don’t have to participate in the American culture wars, that you can stay focused on this kind of mission?

Yeah, very much so.

But you have American investors. I mean, a bunch of American VCs are like, “Cut it out, just make the money for me,” and you can see that reflected in our businesses for sure.

I feel like what’s trendy yo-yos backward and forward. Even if you look at something like growth and profitability, the pendulum swings backward and forward as to what is good in Silicon Valley.

Yeah, and now we’re focused on unit economics for once.

Exactly. For us, it’s always just building a durable, valuable business and being able to have a positive impact on the world, and I don’t personally care what’s trendy. They’re basic principles that I’m going to spend my lifetime working toward.

Do you find that, as you manage a company that’s big and getting bigger around the world, those culture differences rise to your level more often? I imagine you have people in the United States. Rather unfortunately, we live in a permanent culture war here in the United States right now. You have people in other countries. You mentioned the Philippines. The cultural differences there are real. Australia has a different culture. Is that something you’re actively trying to manage, like “here’s the culture of the company versus the culture of the places you are in and here’s how much of that might be seeping in”?

People are attracted to Canva. A lot of people come to Canva for the values that we have and what we’re trying to do, and the two-step plan is a huge attraction for people to join us. That already means that we’re a lot more unified, even from the get-go, because people are coming to work for Canva for many, many reasons. People work at Canva because they’re attracted to the idea of empowering creativity and being more egalitarian. I think those things help insulate us a little from that because there’s already a unified set of beliefs and values.

One of the challenges for any creative company, especially one that is software as a service that is deployed on the web, is that people will use the tools to make bad things. When a company has really strong values, that is where you find the most tension. I always think about it in terms of Microsoft Word, and Microsoft is not going to tell you what to write in Microsoft Word. And then somewhere over here there’s TikTok, and TikTok is very interested in making sure you don’t make a whole bunch of stuff on TikTok. Where does Canva sit? Because the values of the company are often expressed in the tool, but you can’t necessarily tell people what to make or what not to make.

Because we aren’t a publishing platform, that does insulate us a little from the TikTok side of the fence. At the same time, we’ve invested very heavily in our trust and safety team for all the different reasons that that’s absolutely needed. It’s a little column A, a little column B, as far as taking precautions, and at the same time, it’s not having that same exposure.

One of the reasons I ask this is Adobe is a big competitor of yours. It recently took a lot of heat for changing its terms of service to make it clear that it would be doing more trust and safety work in Creative Cloud. That was misinterpreted, and it tried to clear that up. It didn’t have a lot of goodwill. It couldn’t trade on the benefit of the doubt there, and it had to just be really loud that what it was trying to talk about was trust and safety work, not training an AI foundation model.

Do you have that problem with the Canva customer right now where there’s worry about AI, and so, even if you want to do the trust and safety work, you have to be clear that some automated systems are doing one thing and some automated systems are doing another?

I’m not going to go into specifics about Adobe’s situation, but I think we’ve built an incredible amount of goodwill with our community. Our free product that is used extensively across the world has built up a lot of goodwill. We’ve been providing that service for a decade and will continue to do so. I feel like we already have a lot of goodwill and we’ve always continuously acted in the best interest of our customers. There’s been a whole bunch of things that we do that mean that our customers feel like we have their best interests at heart. We’ve been very lucky both to have invested in that and to be able to continue to have that goodwill that we don’t have quite as an antagonistic relationship with our customers, I’d say.

This is the big Decoder question. How do you make decisions? What’s your framework?

Internally, obviously, we use Canva for everything. We have a whole process called decision decks, and I’ll explain where the decision decks came from. Often, when there’s a really complicated decision to make, it’s a multipronged decision. What we now do is we build out the options and rather than just talking at a high level, we actually build them out in product. For example, we design them into little videos and then we write out the pros and cons. I feel like that means we can go deep on all of the options. Rather than it being your decision and my decision, we can all get on the same page.

We use that framework in decision decks extensively in product, but I also use it in all sorts of different ways. I find that an incredibly useful framework is: decisions, options, pros, and cons. It helps a great deal. On a macro level at Canva, anything that moves us toward our mission pillars has always been extremely valuable for our company. You can probably see from a number of the things that we’ve discussed, we’re continuously investing in the long term, and things that drive Canva toward our long-term mission have always resulted in very good things. We always try to make sure that we’re continuously investing in the future.

Alright, let me put this decision-making framework into practice. You just had Canva Create. You announced a major redesign. You announced some enterprise initiatives. You also had what I think many people have realized is a Hamilton-inspired rap. How did you decide to pay for a Hamilton-inspired rap at your enterprise software conference?

So, firstly, it wasn’t an enterprise software conference. We had 1.5 million people tuning in to this event. It was a very massive audience — from students to the full gamut of people that use Canva. I don’t know if you saw the whole event, but it was a lot of fun. It was colorful and we were going into all of our products, and we put on a bit of a theater show.

Then, at the very end, we talked about enterprise products, and it was kind of dull. It was like, “Hey, we got Enterprise. Here are the features.” No one would have cared. No one would’ve paid attention. So, in one of the rehearsals, we were like, “How could we make this a little more fun?” Because if you launch something and no one hears it, did you even launch it?

We wanted to ensure that it was something that was entertaining and fun. As a company, we don’t take ourselves too seriously, so we thought, “Why not make it a rap and present the CIO’s interests?” which is where the whole enterprise product has come from. It has been in deep chats with CIOs and admins across the world as to what they wanted. We thought it would be fun presented as the CIO rap battle, which is exactly what we did.

It got a tremendous amount of spread. There were 50 million views on social in a short period of time, 2,500 more people talking about Canva Enterprise on social, and an incredible amount of influx. Was it a little cringey? Yes, that was the point. But it certainly was money well spent. The rapper was a community member. The CIO was an incredible performer. There was a rumor going around that I was the CIO. I cannot rap, for the record.

You do a lot of things. I hear you learned to kite surf. I was assuming you were the rapper.

I did learn to kite surf, but no, rapping is a beat too far.

So you’re like, “We’re all in on raps. Every event now is having enterprise-focused raps.”

Every event is going to have a twist and a turn and be a little more interesting. I mean, how many times can people get up and say, “We want to add a little creative flair.” We’re going to absolutely be doing that at every event, so watch this space.

Let’s talk about the actual product. The decision is “let’s go attract the enterprise.” Watching the event, the people onstage were like, “If you’re an executive, your teams are already using Canva. Why not actually just make this an official part of your business?” That was the message.

Exactly.

Does that represent a meaningful increase in revenue? Is that just market share? Is that solidifying your presence and then growing further within the enterprise? How are you thinking about that expansion?

I think you’ve exactly nailed it. Canva is being used extensively across pretty much every organization at this point, but what we want to ensure is that it is not just 10,000 people using Canva but without a centralized account. Obviously, that’s bad for their company’s IP; that’s bad if someone leaves. There are so many different problems that presents for a company. We’ve invested really heavily for the last couple of years in building a way that an admin at a company can get a dashboard and report for how Canva is being used at their company. They can then actually consolidate all of their usage into one account, which means that they have visibility. If someone leaves, they can ensure that they aren’t just losing all their IP.

Pretty much every CIO or CEO we speak to is very concerned when they realize how much extensive usage there is and that they don’t currently have control of that. That was the message that we hope we landed, and it’s certainly been incredible to see how many people want to ensure that their IP is safe. Especially in this world of AI, IP is king or queen, so it’s really important to ensure that people have access to all of their content and can use it for their own purposes.

Do you think that kind of enterprise expansion will change the company? Consumer companies have one sort of cadence and attitude. It’s very competitive, especially in the space you’re in. It’s less so with enterprise companies. Enterprise software CEOs don’t often want to come on the show because I’m like, “Your product’s not good.” That is the reputation of most enterprise software. Do you think that will change Canva?

I don’t think so. What we’re excited to do, and you may have been able to tell by the rap, is bring a bit of fun and energy to enterprise software. Enterprise software doesn’t have to be dull and boring and second grade. It can be amazing and fast and be able to feel magical. We want to bring the fun to work, and we want to do that through our product in a way that hasn’t necessarily been a top priority from what you’re saying.

This puts you in more direct competition with some of the bigger players on that challenge-disruption curve. Adding a bunch of enterprise control features for CIOs moves you one step up. It’s not just what social media marketers are using in the corner on their personal MacBooks to get work done more efficiently because it’s good enough. It’s now what the organization is going to deploy on corporate MacBooks or laptops.

Now you’re talking about Figma. Now you’re talking about Adobe. You’re talking about maybe their contentious relationships and you can be a happier piece of software. Is that the opportunity — that you’re going to go and take from the more established enterprise players?

There are a couple of pyramids we’ve been working our way up to. Certainly we started off with consumers and then actually having deep penetration in businesses and working our way up to enterprise. Now, we’re seeing extremely large deployments across large enterprises today. So yeah, that is exactly the point. But again, to fill that gap in the market that we saw, there isn’t great software between productivity and creativity, and everyone wants to be productive and creative. We want to be able to bridge that gap and to have a design team to truly be able to supercharge their workflows and have deeper reach across the entire organization.

I’ll give a more practical example. A sales team is often deeply neglected by the design team, and that is because their work isn’t as important as, say, the executive presentations or a billboard. So the sales team just goes off on their own little tangent creating their own presentations, and then a designer would say, “But what is that? That is completely off-brand.” In this case, the designer can create a template the sales team can then use, so they can put their time into the high-value activities as they would normally but then also ensure there are templates for other things.

Another example is being able to create a template that local teams can go and use — the cupcake and icing. So they can create the template that local teams can use or marketing or sales teams or when you’re pitching clients. And we’re certainly seeing an extraordinary amount of that today.

You tried this once before in 2019. There was a bit of an enterprise offering. You scaled that back. Now you’re back at it. Why the step back and why the reapproach?

The first launch of Enterprise, we had some features, but we actually rolled that into our Teams product. We did that very intentionally because there were a lot of features that we thought every team should then use. The latest Enterprise product has really been built purely for the needs of admins and CIOs, which was a completely separate basket of things to what we rolled into our main Teams product the first time around.

So this is a shift in approach from “In the enterprise, you have large teams and they need to collaborate” to “Actually, what we needed was a dashboard so you could deploy the software.”

Exactly.

What brought you to this realization that you were making the wrong product?

Well, it wasn’t that it was the wrong product. It was that the product was probably better in the hands of everyone versus in the hands of the few. Whereas, with this second offering with enterprise today, it really has been built in conjunction with what we’ve been hearing from admins and CIOs as to what they actually need to be able to deploy Canva at scale.

In the years since, Canva has been on the education side, deployed across countries, across districts, and so we’ve had a lot more experience in deploying Canva on a very large scale. On the enterprise side, we’re seeing deployments of thousands upon thousands of people at companies now. They obviously have a lot more nuances to how they have their billing set up in huge multinational corporations, how they have admin access. There are so many things that are required to be able to deploy Canva at that scale, so really the Enterprise features needed to be ticking those boxes and ensuring that mass deployment.

Are you building out Enterprise sales teams? This is another kind of culture you need to have, another approach to the market, another support layer that you need to build up. Is that pure investment or are you immediately seeing returns?

Both. We do have a large sales team based in Austin primarily and actually one in Europe as well. We see that as both an investment and just the way enterprises need to be able to have their hand held through the process of displaying Canva. They obviously have immense challenges and things to figure out to be able to ensure that it’s deployed successfully across their entire organization. Being able to work and partner with them on that is a really important part of our process.

Is that a growing sales team? As you head into enterprise, are you going to expand the scope of the sales team, or is it the same group?

It’s the same group, and we’ve been expanding that team.

Do you think you have to change the approach as you go to corporate customers, or is it going to be the same approach?

I’ll give you one thing that’s the same and then one thing that’s different. We have a program called “Closing the Loop,” which means that people complain about something or wish they had something or dream about something, and then we do that exact thing that they’ve asked for and send them back an email saying, “Hey, we’ve done this thing.” We’ve done this hundreds of times in our main product. So people are like, “I really wish I could have X, Y, Z,” and then we say, “Hey, we’ve done that.” People are like, “Oh my God, you actually listen to my feedback. How cool,” so that’s what we do on our consumer side.

But that same thing really applies on the enterprise side, too. People are like, “Hey, we really need this feature.” And then we go and build that feature and then they’re really happy that it has been built. I think that investment in making sure that we’re building things that people want on both sides of the fence is extraordinarily important, and it’s a culture that really runs through both sides.

The other thing you announced at Canva Create was a redesign of the product. You’ve refreshed the design, you’ve made it a little simpler, you’re expanding some of the things it can do. That’s tough. You mentioned you don’t have an antagonistic relationship with your user base. Redesigns are very often where the antagonistic relationship begins. Walk us through that redesign. What was the decision-making process there to say, “Okay, we actually need to make it look different”?

I mentioned Canva is a decade old, and Canva’s interface hadn’t changed much in that decade. As we look at the next decade, there were a lot of things that we wanted to do and introduce to enable people to take their workflows to the next level. We call the redesign a glow-up. With that glow-up, you can star your own content. Your team content can get starred, too. There are all sorts of beautiful touches that we put through the product. AI is infused across everything. We knew it was really important. As you mentioned, often, a redesign can go down poorly, and obviously that’s something that we didn’t want to happen. Firstly, we spent a lot of time working with our customers to ensure it was at the gold standard before we were getting it out the door.

And then secondly, at the event, we announced in a cryptic way that to get into the redesign, you had to click seven... Oh, actually, we didn’t say it explicitly, but I think it might be public knowledge. If you go on TikTok now, you click seven times on “For You,” and you go through this magical portal and get what number you are going through the portal. So it’s like, “You’re number 1 million through the portal.” We only opened it for the first million customers that went through it, and so there was 48 hours of frenzy to get in.

The great thing about it was that all of these social media influencers were showing Canva’s glow-up and training their community on how to use it, which I think was really helpful. People were seeing it and getting familiar with it beforehand, and we’re going to open the door up more soon. But it was very valuable to be able to build it firstly in conjunction with our community, get their feedback, and open the door just a little to let them in and get people excited about it and also to get them sharing it with their community in the early days.

You mentioned social media influencers and people training their communities. I think about that world, and I think almost entirely about how in mobile software, for whatever reason, you don’t see a lot of social media influencers in front of a 27-inch monitor doing stuff on desktop. Do you think of Canva as mobile software? Do you think of it as a web app? Where does it live primarily in your head?

As I mentioned, Canva is on every device. So it is actually about 50-50 between desktop and mobile. That particular campaign had more than 50 million views. I think it was 33 hours that the million people got into it, so we have an extraordinarily strong community.

What’s the split on the million between web and mobile?

Oh, that’s a really good question. I’m going to guess it was about 50-50, but I don’t know that I have that particular stat.

One of the things that really strikes me about this class of design software is that it is deployed on the web. Collaboration features are built in as first-class parts of the interface. Links are the new file. You can see it has enabled a lot of things to be a web app in this way, and you’re not shipping a bunch of native code on macOS or Windows.

You can’t do that on mobile. You have to participate in the App Store dynamics. You have to participate in whatever tax Apple wants you to pay and you run a subscription software product. Is there a tension there between deploying as a web app where you’re free to do all this stuff and take advantage of the web on desktop and then, over here, you have to participate in a much more closed ecosystem on the phone?

I was talking about the ladder up to every device before. Originally, we had separate apps; Android, iPhone, iPad were completely different front-end teams. We spent a number of years investing really heavily. The problem at that point was that we had different feature sets available on each of the devices, and it was really hard to keep it in sync. We then spent a number of years investing really heavily on ensuring that the same code is deployed across all devices so we have feature parity across everything. It was a very hard investment that took a number of years, but now, the same feature sets are available on all devices. People have the same experience, but again with the cupcake and icing metaphor, it’s the same product with little nuances and differences depending on the device.

But do you see the pressure the app store model places on smartphone applications being different from what you’re able to do on the web? I talk to other companies and they’re like, “Of course the application model on desktop is the web. We can distribute immediately to the entire customer base without anyone getting in the way. No one has to download anything, and we can just take the full amount of the subscription price without paying a tax, and I can’t do that on a phone. And so, of course, our effort is over here on the web.” Do you feel that same tension?

No. We really just want to be where our customers are. Some people use Canva entirely on their phone. Some people use it entirely on the web, on the desktop, and then some people use it as a hybrid. We actually split our efforts very universally, and we’re fortunate to have great relationships with the app stores, which do a lot of promotion of Canva, too. It’s certainly been a net positive for us.

I feel like I’m going to ask you, do you think you don’t have a tense relationship with Apple because you’re in Australia? You’re one of the few CEOs who’s ever been like, “Yeah, it’s fine.” Do you think there’s a reason it’s not quite as tense for you?

I don’t know that I have a particular reason, but they’ve been great partners for us.

The App Store tax is just not on your mind?

A certain number of people use Canva exclusively on their iPhone, and that’s sort of the price through the gate, the price at the door.

I want to wrap up by talking about AI and then a little bit about competition. As I said at the start of the show, it is an angsty time in the design world. You’ve mentioned AI a couple of times. It’s come up. All the new features, I think you said, are infused with AI, and then you mentioned a bunch of people wanting to protect their intellectual property. Those ideas are in massive tension. I think your AI features, you’re partnered with OpenAI, I believe. They have their own troubles with the creative community. Just from the basics, how are you thinking about the tension between creatives who basically hate it and then the people who are actually using it at super high rates in the actual tools?

If we wind all the way back to 2017, obviously search and recommendations are all powered by AI. The first big AI feature that we put into Canva was background remover. And I’ll dive into that one for a second because I think it’s quite illustrative of the way we think about it. So people would typically go and spend a long time deep etching an image in something like Photoshop, and we found this amazing company, Kaleido, that enabled that to happen with one click.

It meant that something that would take a long time to do and could only be done by a very small number of people could all of a sudden be done by everyone with a click. We baked that into Canva and it was extraordinarily popular. We then acquired that company back in 2021, and it really was a first foray into this, but it wasn’t really different from the whole intention of Canva, which was to take people’s ideas and turn them into designs and have as little friction as possible between those two points.

With every single AI feature that we introduced into Canva, we really think it’s helping to cut down that time between A and B of getting the idea into an actual product. As we’ve introduced things like Magic Write and Magic Media, where you can create photos and illustrations and vectors and videos, all of these things just enable people to take their idea and turn that into a design and reduce the friction. I don’t think people wake up in the morning thinking, “Oh, I want to use AI.” They wake up in the morning with a job to do and they want to create that presentation or they want to brainstorm something on a whiteboard. All of those AI features are really based on trying to help create shortcuts in that process.

I feel like the deep etching example, the background remover, is a really great example, because we were talking about the tools and creativity before. Is it creative being able to go and deep etch the image and have all of that nuance and spend an hour doing that? Or is the creative process actually wanting to take that image and use that in a really cool way? I think the latter. With all of these things, the more that we can enable people to take their idea and turn that into a design, whether you’re a professional designer or you’re someone just getting started, we think that gap is worth bridging.

But candidly, this is the same example that everyone gives me. Then the Decoder audience listens to that example and they say, “Sure, but you’re going to take our jobs away. We don’t want this to happen because it’s not just removing the backgrounds. It’s showing up and saying, ‘Produce an AI-generated influencer ad campaign and spam social media with it,’ and that is actually the problem.” Or it’s “train on our images and ask whatever AI tool to produce something in the style of me, and it will just do it and then my work will be devalued.” And that’s actually the tension. It’s not, “We’ll do some horrible, boring thing for you.”

People use background remover. The CEO of Adobe, Shantanu Narayen, was on the show, and he told me people use background remover and generative fill at the same level as layers. It’s not that people aren’t using the tools for that. It’s that the second- and third-order effect of the tool devalues the work over time. Canva, and this is where we started the conversation, has long been on the democratized access part of the spectrum. More people are going to make more creative work, and now the knob has turned all the way to 11. How are you thinking about that, the second- and third-order effects, where designers are saying, “Look, this isn’t just reducing tedium for us. This is reducing the overall value of creativity”?

Let me start very macro. A decade ago, the number of people creating designs or the number of designs in total being created, let’s say, was 100. I’m just going to make up some stats, but a very minuscule amount compared to the amount of designs created today. A professional designer would be creating, say, just a couple of graphics a decade ago. Now, every single touchpoint is expected to be visual. There’s truly a boom in visual communication that has happened and played out over the last decade. I don’t think, actually, from what we’ve been seeing, that there’s any shortage of the need for design at all. In fact, we’ve been seeing the exact inverse: it’s across every single vantage point that every single exec now realizes the power and importance of visual communication.

We’ve been seeing those two trends. The access to it certainly has been increasing, but at the same time, the importance of it has also been dramatically increasing. I don’t feel like it has devalued the importance of it. In fact, over the last decade, it would be fair to say that it has been absolutely exploding both in popularity and in importance, and video communication is certainly at the center of every organization now. We’ve run surveys and studies before and found that two-thirds of business leaders now expect their staff to be able to have visual communication knowledge and actually want to be doing training with their own staff. We’ve certainly seen that change dramatically over the last decade, and those two things actually went hand in hand versus as inverse to each other.

So that’s the macro. What about the micro of angry designers today? How are you thinking about that?

Canva has always been the tool that does the layout design. You can take your beautiful professionally designed assets, your logos and whatnot, and then you can lay them out beautifully in Canva as a template. We actually acquired an incredible company recently called Affinity. Affinity is about creating all of those assets for professional designers. We think that it has such a beloved community that really loves Affinity — the product and their approach — and it’s something that we’re investing really heavily in to ensure we protect. That incredible community can take their assets if they want, and they can use it on Canva, but those things we think work beautifully hand in hand.

Part of the AI work you’re doing is trust and safety — something called Canva Shield. There is stuff now that you won’t let people make with Canva. Where’s the line for you? Is it “there’s stuff we won’t let our AI generate”? Is it “there’s stuff we don’t want you to make at all”? How do you think about that difference?

We’ve invested really heavily in our trust and safety team, and there are all sorts of different things that we’ve been having to think through in a great amount of detail. For example, our AI doesn’t do medical or political terms, and there are a whole bunch of things that we just don’t think it’s appropriate for our AI to be generating. Canva has been designed to be a platform where you can come in and take your idea and turn it into a design, but there are certain things we shouldn’t be generating.

I’ll pick the United States. It’s an election year in the United States. I’m assuming both parties in our country are using Canva. It just seems like a thing that is happening given the scale of the assets they need to make. You’re not saying, “Well, you can’t use it because we don’t want you to use it.” But when it comes to your AI, you’re saying, “We won’t let our AI generate political messaging for you.”

That’s exactly right.

Walk me through that. How did you decide that that would be the defining line?

I think with things like deepfakes, creating images — all of those many, many problematic areas, we decided that wasn’t where we thought our AI should be playing. If you want to create a poster to promote your favorite candidate, that’s your prerogative.

If I’m a low-level city admin for the Biden or Trump campaigns, I’m like, “Here’s our candidate’s talking points. Make me some social assets.” I’m assuming Canva’s AI won’t do that. It’s going to recognize that this is political messaging, and it’s not going to do it. But if they wanted to do it on their own in Canva, that would be fine. So the line is like, “We won’t make political messages for you with our AI tools.” That is a decision. Tell me about that.

Particularly on Magic Media, if someone were to say, “Hey, I want to create an image of my favorite candidate,” or “my not favorite candidate,” which is probably even more problematic, it just says, “You can’t do that.” The importance of that, it seemed, was pretty clear. We didn’t want to be creating imagery that may be harmful or inappropriate. So we’ve had a pretty firm line there.

I think that’s just so interesting because once you move software to the cloud, and then once the software starts taking action on your behalf, the lines about what software companies allow people to do become vastly more important versus running Photoshop locally on your computer where you can do whatever you want. Have you had broader conversations about where those lines should be with governments and policymakers? This seems ridiculous to ask about Canva, but it seems like where it will be expressed the most often given how many more people use it. Is this something you’re thinking about at a policy level? Is it just “we’re protecting our brand”? Is it “our values don’t align with this”? Where is this coming from?

All of the above. We’re working in consultation with governments all around the world. Every government has a different tolerance of what they want, what comfort level they have. It’s really important.

This is the worst icing, it seems like.

[Laughs] Yeah, there are many variants in the icing. So yes, all of the above.

Alright. Let’s finish by talking about Affinity. You acquired Affinity. People love Affinity. It is a competitor to Photoshop, and there’s long been this idea that you could assemble an indie bundle of things that could take on Creative Cloud and that would be some way to break whatever you perceive Creative Cloud to be. Is that the goal? Is the goal to go get those users and say, “We represent a full alternative to Adobe”?

There’s a whole host of things. As I was saying before, we’re working our way up the pyramid, and professional designers were sort of the last step. Even though we’ve been working with them on the layout design of the fence, on the actual asset creation, it wasn’t an area that we have dived into. When we met Affinity, and we’ve been hearing and admiring their work from afar, we knew that they were creating a faster, better alternative. We think that alternatives in the market are a really good thing for consumers, and they’ve got such a passionate community. What we wanted to do was to work with Affinity to ensure that we are able to create an incredibly powerful offering that is truly living up to what Affinity uses and the community wants, expects, and deserves.

Do you think that that’s going to lead you into more direct competition with Adobe?

It is important for us to always play nicely with all of the different products on the market. So you can bring in your Photoshop files into Canva, you can—

But, again, you’re trying to expand the market. You want to get 1 out of 5 in every country in the world. That’s a lot of people. A lot of those people are using the Adobe Suite right now.

Are they? Are they?

And as you mentioned, some have a very antagonistic relationship with that company. Wait, actually that’s interesting. Do you think you’re going to get non-Adobe customers?

Oh, I mean, Canva certainly has many non-Adobe customers.

Is that where the growth is, or is the growth taking share?

I always like to think about it more as creating market and solving a problem. If we’re not solving a problem, then why would we exist? If there was no problem to be solved, literally, why would you be a company? For us, we’re always looking at what the problems are to solve, right from our earliest days to today.

Even our Enterprise product, it’s always problem-based. How can we create a more effective solution to a problem that people have? Those problems can take place in many different shapes and forms. When I was at university in Australia, Adobe cost $1,200, and I was like, “That is crazy expensive. In developing markets, how can people ever afford that? As a student, how can you afford it?” I think that any problem is actually a great market opportunity, and it works better for the consumer to have their problem solved.

You acquire Affinity; that’s growing. You have more competitive surface area against Adobe, however you want to slice it. Adobe tried to buy Figma. It saw the same kind of threat from a very similarly situated company: a web collaboration-first company that was competing in a space it wasn’t strong in. Adobe went to try to buy them, and basically the governments around the world were like, “No, you’re not going to do that. You need to have competition.”

Do you feel that same pressure when you think about, “Okay, we bought Affinity. There’s maybe something else we could buy, maybe there’s another kind of deal we can do”? Is that something that’s limiting you right now, or is that actually providing you opportunity because Adobe can’t just buy its way out of competition?

In the design market, there hasn’t been a strong challenger for a long time. It has been a little bit of a one-horse race, and I don’t think that works out well for anyone or certainly not well for the consumers or the designers specifically. I think that being able to have another alternative in the market for professional designers benefits everyone.

Alright, you’ve given us so much time. I want to wrap this up with a very challenging question. I want you to confirm lastly for the record, one final time, that that was not you rapping in the video.

It was not me rapping. I can promise you, you will never hear me rapping because that, unfortunately, is not a skill I possess.

Just wait until the AI gets ahold of you. We’ll have you deepfake rapping so fast. What’s next for Canva?

Our first decade was about empowering every person. We’re extraordinarily excited about being able to empower every organization over this decade to continue to make strides toward our mission of empowering the world to design. We want to enable you to take your idea and turn it into a design and have no friction between those two things.

Unfortunately, my idea is that you are going to start rapping. Melanie, thank you so much. This was great. I appreciate it.

[Laughs] Oh dear.

Very good. This was great. Thank you so much.

Thank you so much. Really appreciate it.


Source: https://www.theverge.com/24191080/canva-ceo-melanie-perkins-design-ai-adobe-competition-decoder-podcast-interview