Building a Multibillion-Dollar Global Business by Disrupting the Design World
Founder and CEO of Canva Melanie Perkins felt she was onto a winner from the start. So much so that she called her idea for a free-to-use online design platform, "the future of publishing," and dropped out of university to follow her business dreams.
The journey involved more than 100 rejections from investors, learning to kitesurf to impress them and sleeping on her brother's floor for several months. Within a few years of its founding, Canva was a tech unicorn, and Melanie became one of the wealthiest women in Australia. The route to the top has not been a smooth, but it has been quick. Today, her company is valued at $6 billion, and she's only just getting started. This is the story so far…
In 2007, Melanie was studying digital media as part of her Communications Psychology degree at the University of Western Australia. Frustrated by how difficult it was to use mainstream design software, she envisioned a future where everything would be online, collaborative and straightforward. So she set out to create it.
Melanie had a grand vision of integrating the entire design ecosystem into a single platform that would be accessible to all. It would encompass everything anyone would need to design everything, from greetings cards and posters to websites and sleek company documents. She dreamed of a world-changing company that would revolutionize the design industry.
However, there was a snag. She had no business experience, no marketing experience and no product experience. Indeed no relevant experience whatsoever. Realizing her limitations and not wanting to run before she could walk, she set up a niche business with her boyfriend now fiancé. They created Fusion Books, a website that allows high schools to design their yearbooks online. Effectively it was a prototype of what Canva would become.
The couple took out a loan and worked out of her mum's living room, eventually taking over the house. The company grew organically, reinvested profits every year and took on more staff. Melanie was learning a lot about selling, recruiting and building a business. The workload was immense, and both quit college. Then a chance meeting at the 2010 Western Australia Inventor of the Year changed everything.
Also attending the conference was legendary Silicon Valley venture capitalist Bill Tai. Melanie chatted with him for five minutes, and he invited her to pitch to him back home in California. Six months later, Melanie jumped on a plane and flew to the US. At this time, Canva was just an idea about expanding beyond yearbooks, but she had prepared her pitch well.
Before the meeting in a café, Melanie had read somewhere that to impress someone; you should mimic their body language. She decided to put this theory to the test. But Bill didn't notice, in fact, according to Melanie, he didn't seem to notice much in the meeting as he was on his phone most of the time. She thought she had blown her big chance. Actually, Bill was impressed and was scrolling through his contacts, looking for people for her to connect with.
This included Google Maps co-founder Lars Rasmussen who she met the next day. They chatted for hours, and he said he would help her pick the tech team she needed. So, Melanie reached out to every single engineer she could by attending conferences and going through LinkedIn and other networks. Lars rejected them all, telling her she needed amazing people because she had a tough technical project.
What was initially meant to be a two-week trip turned into a three-month stay with Melanie camping out on her brother's living room floor. She had to return to Australia because her visa was expiring.
The search for a tech team continued. It took a year and was an incredibly frustrating time. The young entrepreneur was eager to get started on building her future of publishing but couldn't. Eventually, she found a tech co-founder in Cameron Adams and a tech developer in Dave Hearnden.
Navigating Choppy Waters
During his time, she was also pitching taking any meeting she could. The rejections were constant, and she heard about every type of dismissal under the sun: "It's too ambitious", "it's not ambitious enough", "it's too niche", "I don't understand your industry", "who cares?" and "this must have been done before".
But she would not be deterred or defeated. Perseverance is one of Melanie's defining traits.
"When you are faced with a wall of rejection, what do you do? You have two options," she told the Sunrise Conference in 2016. "You can stop, probably like most sane people, or you can persist over and over and over again until eventually, you land an investment. And that's what we did."
She found backers through an unusual route. Bill Tai is a keen kitesurfer and in 2012, invited Melanie and her boyfriend to network at MaiTai, his retreat for investors and kitesurfing enthusiasts. Melanie hadn't kitesurfed before so put herself through lessons. She decided to give it a go because it was a way to get her foot in the door and wedge it open little by little.
Her newfound skills on the water served her well, and the couple started winning over investors. But it had been a long hard slog that needed all her determination and resilience.
Meanwhile, the tech team was working hard to develop Canva. The basic product was coming together, but there were issues with other features, and Melanie didn't want to launch until she knew it would be an excellent experience for users.
She decided to do some user testing on usertesting.com to see how people used Canva. They struggled with a few things, and some wondered aimlessly around the site. Canva strives for click minimization, ensuring the least number of clicks to get users toward their goals as quickly as possible. To achieve this, engineers made numerous refinements to perfect the user experience.
In 2013, Canva was ready to be launched into the world backed by $3 million seed funding from US and Australian investors, including Bill Tai and Lars Rasmussen. The amount also included a matching grant from the Australian government.
However, what should have been a joyous moment was cut short by a journalist.
Launch and Stellar Growth
With big-name backers such as Lars Rasmussen, Bill Tai and prominent Australian investors, Canva was able to generate press interest. They put out a launch press release with an embargo, but a reporter broke it and wrote a critical article. Melanie was devastated. She hadn't worked so hard or persevered for so long to be met by such a scathing critique.
However, things picked up quickly. Other articles were very complimentary, and users wrote favorable reviews. Word spread quickly. Eight months after launch, more than 350,000 designs were being created on the site per month. Each month was growing faster than the previous one. Twenty months after launch there were 2.9 million designs per month. From there, the company kept growing and growing.
Melanie secured more funding, including from Hollywood stars Owen Wilson and Woody Harrelson, in 2015. In the financial year 2016-17, the company’s revenues went from $6.8 million to $23.5 million.
The most recently available accounts show it made a net profit of $1.86 million in the first half of 2017. While Canva is free for basic use, it makes its money from upselling to a premium version with flashier features and by selling high-quality stock photos.
Based on its success, Canva raised $40 million from investors in 2018 and was given a $1 billion valuation. The following year its customer base grew to more than 15 million users in 190 countries.
When the coronavirus pandemic hit, the company's print business suffered, seeing a 75% drop in revenue. However, Canva says the damage was limited and that it has seen core revenues grow higher than average. This is because more businesses have been forced to move their operations online and are creating attractive marketing material for social media.
In June 2020, Canva raised $60 million in new funding and was valued at $6 billion, almost double the valuation from the previous October. This makes it the largest privately-owned company in Australia, putting it in a strong position to take on such industry giants as Adobe and Microsoft.
Meanwhile, Melanie’s personal fortune has soared to $1.3 billion. At 32, she is the youngest billionaire in Australia.
Already super successful with more than 30 million monthly users and core revenues rising 30% on average, Melanie is nowhere near finished with Canva. She says she has only achieved 1% of what she wants.
The sky is the limit and then some, telling one BBC interviewer: "We've got millions of users today, but there's over three billion people on the internet, so we have a very long way to go yet."