As design platform Canva hits $2.5bn in valuation, its founders say startup success is down to big goals and disciplined execution.
Set crazy big goals and make them happen has been a mantra for Canva since it was founded in 2012. Melanie Perkins and Cliff Obrecht started out selling stick-on tattoos at music festivals in their home town of Perth. While studying at the University of Western Australia, Perkins was teaching students design and saw them struggle with programs such as InDesign and Photoshop.
She imagined the future of design would be entirely different — people should be able to design and publish online. It would be collaborative and very simple.
In 2007, the pair developed Fusion Books — an online tool to create school yearbooks — in her mother’s lounge room. Today, it’s the largest school yearbook publisher in Australia and has expanded into France and New Zealand.
Canva now has 15 million monthly active users across 190 countries who have created more than one billion designs using the platform.
Perkins says the Fusion Books experience gave her enough confidence to know she understood her market better than anyone else and had thought about the future of the industry and where Canva would fit in it.
“We very atypically spent a year building our product before we launched, whereas most investors were like, ‘Can’t you just build it in a weekend and launch and see what happens?’” says Perkins.
She recalls being given advice totally at odds with her vision for the company. Equally, she was given advice that, while unpalatable at the time, proved invaluable in the long run.
Google Maps co-founder Lars Rasmussen was an early supporter, taken by Perkins’ idea when he met her in California on her first visit to pitch Canva. He liked it, but told her unequivocally to put everything on hold until she locked in a tech team of the calibre he demanded.
“Despite the fact that it was incredibly frustrating because I just wanted to get started, that advice became so important,” says Perkins. The long search ended with former Google designer Cameron Adams joining as co-founder and chief product officer. Adams says on meeting Perkins and Obrecht, it just clicked.
“We kind of formed the three legs of a stool. Design, product and business, and engineering, which is my remit, as well,” he says.
Canva’s thinking on governance is evolving as it grows beyond the founders. To date, Perkins and Obrecht have been its only directors, an approach that came about because of their experiences in early fundraising.
They later added two investors as board advisors and observers — Wesley Chan, managing director of Felicis Ventures, founder of Google Analytics and Google Voice, and Blackbird Ventures co-founder Rick Baker.
Board meetings have been run like normal board meetings, says Baker, with the benefits coming in between meetings through the relationship between advisors and founders, who regularly catch up to bounce ideas around.
Baker says Canva is building on the serendipity of the founders in the early days. “Mel has strong connections and insights into graphic design, Cliff is a machine of execution to get things done on the business side and, with Cam, Canva has one of the best engineering teams in the world,” he says. The mission is to build a really strong board over the next couple of years. We have to do the governance, but we want to make it simple, clear and easy to check on — and, of course, compliance.”
Canva P/L, which has a US parent, Canva Inc, made its first profit in the half-year to December 2017, its revenues tripling to $25m and total profits after tax of $1.8m.
In 2018, Canva launched in China, acquired Zeetings (meeting participation platform) and launched “right-to-left” languages so it could be used in Arabic, Urdu, Hebrew and Farsi. The company, notable for its focus on teamwork and culture, has 25,000 not-for-profits accessing a free service. It has been a Best Places to Work winner in 2017 and 2018.
Obrecht says all startup founders looking for venture capital investors should know the parable of the scorpion and the frog. “Make sure you understand their motives, because if you do, you can align in a mutual direction,” he says. “If you get the right advice early, you can circumvent a lot of bullshit.”
“Building a startup is a long, hard journey, but there a few things Canva has done that have got it to where it is,” says Perkins. “Number one — solve a problem that people really care about.”
See Melanie Perkins’ 10 Tips for Startups here.
5 Australian Startups
Afterpay
Board members Executive chair Anthony Eisen; executive director/group head David Hancock; executive director/CEO Nicholas Molnar; independent non-executive director Elana Rubin FAICD; director Dana Stalder; independent non-executive director Clifford Rosenberg
Founded 2014, Melbourne, Victoria
Based Melbourne (HQ), operating across Australia, New Zealand and the US
Employees 387
CEO Nick Molnar epitomises the millennial entrepreneur spirit: digitally savvy, debt averse and happy to disrupt established markets. He made his first millions before he turned 25, initially selling inventory from his family’s jewellery business on eBay, then establishing online jewellery megastore iceonline.com.au — all while sharpening his venture capital expertise at MH Carnegie. In 2014, he tackled a millennial financial bugbear: compounding credit debt. Molnar partnered with his neighbour, Anthony Eisen, previously chief investment officer at Guinness Peat Group, to establish a middle-ground payment option between debit cards and lay-by.
Afterpay allows approved customers to get the goods immediately and then pay off the full amount in four interest-free instalments, auto-debited from a nominated account. The company makes most of its profits charging retailers 4–6 per cent of every transaction and, in February 2019, Afterpay reported it had processed more than $2.2b worth of sales in the first half of FY19, of which approximately $260m transacted in the US.
The firm listed on the ASX in April 2016 at a market capitalisation of $123m, which has grown to $3b.
Hyper Anna
Board members Stephen Yue Ji (Sequoia Capital China)
Founded 2015, Sydney, NSW
Based Sydney (HQ), operating in Melbourne, Singapore, Hong Kong
Employees 47
CEO Natalie Nguyen was six years out of university when she co-founded AI data science firm Hyper Anna with head of technical operations Kent Tian and Sam Zheng (now CEO of AI startup CuriousThing).
She knew her data science skills were in high demand, helping businesses extract growth and efficiency insights from their rapidly growing data sets. Nguyen and her team created “Anna”, an AI data scientist who can develop code, analyse data and present the findings to human co-workers. Anna communicates in natural language, similar to Apple’s Siri, to give financial sector workers insights into everything from customer behaviour and revenue trends to HR and supply chain.
Hyper Anna raised $16m in Series A funding in August 2017, led by Sequoia China, along with Airtree Ventures and the venture capital arms of early customers Westpac and IAG.
Expert 360
Board members Director/investor Dmitry Alimov (Frontier); co-founder/CFO/non-executive director Emily Yue; CEO/co-founder Bridget Loudon; director Sean Hogan (Treadstone); advisor Matt Cooper; advisor Gary Swart
Founded 2013, Sydney, NSW
Based Sydney (HQ), Melbourne and San Francisco
Employees 90+
CEO Bridget Loudon and Emily Yue MAICD (now also executive manager strategy/operations at Quantium) launched business consultant marketplace Expert360 after working together at management consultancy Bain & Co.
Although there were several online freelance platforms already, their experience in a corporate context showed a gap in the market: matching subject experts, boutique firms and teams of consultants with businesses that needed them for short-term projects. They’d also observed highly qualified people choosing to freelance because they wanted more flexibility and choice in how they worked.
So Expert360 built in the verification, matching and management tools needed for both sides of every consultancy relationship, including options for payment through the platform. In February 2019, Expert360 partnered with IAG to offer professional indemnity and public and product liability insurance to its 25,000 member experts.
Expert360’s growth was started by $1m from private investors in 2013, followed by two venture capital rounds: $4.1m in 2015, led by Russian investment fund Frontier Ventures; and $13m in 2017 from AirTree Ventures. Its Clients include PwC and Telstra.
Deputy
Board members CEO/co-founder Ashik Ahmed; co-founder Steve Shelley; Karen Appleton Page; Eric Liaw (IVP); Daniel Demmer (OpenView); Ricky Pelletier (OpenView); Howard Leibman
Founded 2008, Sydney, NSW
Based Sydney (Australian HQ) and Atlanta (US HQ), operating across Asia Pacific, US and UK
Employees 300+
CEO Ashik Ahmed co-founded Deputy in 2008 with his previous boss, Steve Shelley, expanding the workforce management platform he’d developed in 2003 in a fast-growing, people-intensive maintenance business.
Ahmed automated time-consuming activities such as staff scheduling and set up reporting tools so Shelley could track maintenance tasks assigned to each team, as well as their cost-per-hours-worked for each shift.
When the pair launched Deputy in 2008, they knew hosting the platform in the cloud would make it more accessible to businesses of all sizes via mobile apps. Growth has been particularly strong in sectors relying on highly mobile and paid-hourly workers on shifts, including retail, hospitality, construction and manufacturing.
Around 90,000 businesses now use Deputy to manage shifts and analyse performance through integrations with business software platforms such as payroll and point-of-sale.
International growth has been supported by two venture capital rounds: $25m in 2017, led by OpenView; and $111m in 2018 led by IVP, supported by Square Peg Capital and EVP. Its customers include Amazon and Qantas.
Indigital
Board members n/a
Founded 2015, Jabiru, NT
Based Jabiru and Canberra
Employees Three, plus project-based teams in the Philippines
Mikaela Jade’s connection to country was there long before she traced her heritage to the Cabrogal clan of Cabramatta in Sydney. She’s worked as an environmental biologist, park ranger and conservation manager, plus management stints with PwC and Microsoft. Jade is now a member of Microsoft’s Reconciliation Action Plan advisory board and a United Nations Permanent Forum on Indigenous Issues delegate.
Her love for story sharing motivated her to use innovative media tools such as drones and image-recognition software, working with Aboriginal elders to record and translate ancient knowledge. The multi-award-winning Indigital Storytelling augmented-reality app for smartphones and Microsoft’s HoloLens merges images from the physical world in front of the viewer — such as sacred sites — with virtual reality animations, bringing Indigenous stories and cultural law to life in context. Indigenous-owned and operated, Indigital sells augmented-reality cards and T-shirts, returning half of its profits to country.
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