How Canva Grows

The Deep Dive

Sure, you’ve heard the story of Canva.

CEO Melanie Perkins and her boyfriend Cliff Obrecht started a yearbooks company.

Then they expanded into the overall design market, perfected PLG, and have grown the company to $1B ARR growing >100% YOY. Today, the tool has over 125 million MAU.

But it’s about 25% more interesting because we don’t get a chance to peak under the hood.

Canva is still private. Some prominent pieces out there peg its valuation at $55B. Insiders within the VC industry tell me that it’s more like $40B. Whatever the case - it’s still a huge number.

So, as I previewed the last couple of issues, we’re going to break down all the details of Canva’s motion.

I’ve been using the product a ton, and I talked to a Canva PM & a Canva designer (both who prefer to remain anonymous). So in today’s piece, we’ll use those insights to tear down Canva’s overall model, and the most important elements to its PLG strategy.

Outline

1. Enduring Vision, Strategy, and Problem

2. World-Class Onboarding

3. Freemium Experience

4. Feature Gates

5. Free Trial

6. Virality

If I do say so myself, this is my best company deep dive yet. I have never gotten quite as specific, breaking down each and every screen, and creating custom graphics. At over 5,000 words and 35 images, it’s a beast.

If you enjoy reading it one quarter as much as I did writing, it should be good fun 🚀

1. Enduring Vision, Strategy, and Problem

One of the keys to Canva’s success has been a a consistent, simple vision and strategy over time:

• Vision: Canva will create a world where people with an eye for design can express their vision in their professional and personal lives

• Strategy: Build web-first world-class design for non-designers

It’s very hard for companies to nail the vision and strategy like Canva has. In an interview with ‘How I Built This,’ Melanie stated that she has had this vision from the start. It’s incredibly rare to get the initial, timeless vision so right.

That’s clearly one of the keys to Canva’s success. They have been able to stick to a single vision, strategy - and, most importantly, problem.

Melanie herself had deep intuition about this problem. She was teaching people how to use Photoshop for very basic tasks - and it was simply too hard to use. It would take folks 45 minutes to make a basic design, and 45 days to have any level of mastery.

Even crazier, nothing existed on the market that was browser-based. This allowed Melanie to narrow in a central problem to build the company around:

• Problem: I need easy and modern tooling to create beautiful designs.

This problem has endured.

When Melanie was a mere 19 year old teaching Photoshop, this problem took the shape of: As a non-designer, existing tooling is hard to use and not browser based, which I need to create beautiful designs. It was a consumer product for non-designers.

Canva’s Seed Deck focused primarily on these non-designer personas:

Then, in 2015, Canva released Canva Pro. As a result, the problem took the shape of something more generic that can encompass both personas: Existing tooling for beautiful design is hard to use and not built for internet-native collaboration.

Most recently, Canva has made the move up to the tip-top of Enterprise. Their VP of North America Sales summarized the positioning as:

Canva began as this really great design tool for consumers and we then introduced our Pro offering which was aimed more at small and medium-sized businesses. What we found, though, is that the Pro offering was being adopted by a lot of people at large companies.

So, now, Canva’s problem is: Existing tooling is hard to ramp up on and does not allow me to quickly make beautiful designs powered by AI.

All three evolutions of Canva’s problem fit within the original problem statement.

This consistency - in vision, strategy, and core problem - has allowed Canva to build a flywheel to spin faster and faster:

Its remarkable how singular focus creates reinforcing loops. Canva follows the two-wheel model:

• On one side of this flywheel is the design experience. As Canva improves its design tools and features, this drives more templates, which drives more user engagement & community building.

• On the other side is content sharing & collaboration. The increased platform stickiness Canva gets from its design flywheel drives more shared designs & content, which in turn drives more user engagement & community building.

At the core of it all is user engagement & community building.

Fun Fact: Canva did not spend a dollar on marketing until 2016. This highlights the importance of product in every element of this motion. The entire user engagement & community building flywheel is enabled by a first-class commitment to Product-Led Growth (PLG). Canva doesn’t just have free trial or freemium, it has freemium and free trial.

Let’s break down the facets of that PLG motion: onboarding, freemium, feature gates, and virality 👇