When Simplification Wins

Canva’s growth story is monumental, which shows how much of an untapped market existed for them to capitalise on.

Canva was founded in 2012 by Melanie Perkins, Cliff Obrecht and Cameron Adams in New South Wales, Australia. The idea came from Perkins’ previous role as a design software teacher at a university, where she realized her students were having difficulty learning the incumbent design software, such as Adobe Photoshop.

Melanie identified a number of issues here, including:

1. User interface and overall user experience were not catered towards the user, but more towards what the software company felt was right for the user and themselves.

2. Accessibility - These tools were catered towards already experienced professionals, which meant there was a learning curve just to produce something basic.

3. Pricing - Products like Adobe Photoshop required expensive licenses for individuals and teams, which priced out anyone just trying to get something mildly creative done.

As the world was becoming more heavily reliant on design and creativity, there was a clear gap for something different, with a lower barrier to entry, and a short time to value.

Templates were not as readily available, and the pricing structure to obtain them was not simple either. So what did Canva do?

• Interface - Canva focussed heavily on user experience, creating functionality such as drag-and-drop to make it easy for anyone to create designs.

• Templates - Offering many thousands of pre-made templates enabled users to develop high quality designs much more quickly than more traditional design software.

• Collaboration - Canva thought about team collaboration, making it easy for teams to work together on a project, which also enhanced the workflow and enabled users to create something that everyone can contribute to and agree on quickly.

• Cloud - Taking a cloud-based approach allowed Canva to update features and add new features much more easily than a desktop based app. This allowed more releases, which continually surprised users with a continual flow of regular enhancements.

• Free to start - Taking a freemium model allowed anyone to use Canva without a paywall, enabling people to see for themselves how useful and valuable the product was. Approaches like this require faith in your product being so superior that you know customers will eventually pay for it, whilst also accepting there will always be a percentage that may never go paid.

There’s a reason 400,000 professionals read this daily.

Join The AI Report, trusted by 400,000+ professionals at Google, Microsoft, and OpenAI. Get daily insights, tools, and strategies to master practical AI skills that drive results.

Sign up now for free and work smarter, not harder.

Canva is currently used by 85% of Fortune 500 companies, launching a wide breadth of product streams including Pro (premium subscription), Enterprise (tailored to larger organizations), Print (for print-on demand services) and Marketplace (selling design elements).

Canva’s growth has come about through high conviction in an underserved market of design enthusiasts and creatives, and people who just need something creative done quickly and easily. They continually tested the market, learned and released with continual iterations, to find the right balance of features and functionality. Here are some of the approaches Canva took:

Key Highlights on the road to Canva’s outsized success:

• 2014: Achieved 1 million users, after just 1 year of operation.

• 2018: Achieved unicorn status, exceeding $1 billion valuation.

• 2021: Reached $40 billion valuation.

• 2023: Over 55 million users with $650 million annual revenue.

How they Executed

Staging feature rollouts:

Rather than a big bang approach, new features can be released gradually to users. An example is the new editing feature, which was only made available to the first 1 million users via a secret portal in the home page. Once established, this feature was rolled out to all users in 2024.

A benefit of this approach was to be seen by users as creative, which is important for a company selling software to creative people. The approach also allowed Canva to test and see that the new feature was working as anticipated, before making it ready for prime time.

Leveraging events:

Canva hosts multiple events including “Canva Create“, used to release major updates and new features, as well as share some of the pipeline of new features to come. This keeps a buzz about them and increases awareness of their innovation.

It can also help as a temperature check to receive anecdotal or social media feedback, which may prompt Canva to prioritize or change certain features proactively before they release.

Continuous updates:

Canva regularly updates the platform with new features and enhancements, such as AI tools for image and audio, enhanced music integration and mockup features, all in 2024 alone.

Whilst many software companies do the same, the transparency and usefulness shows that they listen to their audience and respond with features they actually want and are likely to use.

Simplified releases to users:

Public apps using Canva SDK can be released by developers on-demand following an app-review process. In addition, Canva uses press releases to communicate new features and changes so they are visible to users.

Such is the impact that Canva is having, that other competitors have emerged, perhaps the most notable being Adobe aiming to protect their market share by launching Adobe Express in 2015, originally under the name of Adobe Post.

Other competitors seeking to capitalize on the market shift include Stencil, Easil, Pixlr, Snappa and Visme.

Reading about Canva’s journey was a masterclass in how a team can follow their conviction in an underserved market and give customers what they need, rather than what you think you can offer for the highest price. Here’s what else I noticed:

Winners Get Complacent

Bigger competitors such as Adobe or Microsoft have achieved success by meeting users needs and scaling with a compelling business model, however when they have achieved scale, they can become complacent and only provide incremental value until someone rethinks the status quo. This is exactly what Canva did, however they could not have been successful without the ability to scale fast before the incumbents compete.

This taught me that even the very large organizations can get it wrong and will only innovate as much as they need to, unless someone else comes along and forces them to think differently. In this case, size doesn’t matter, innovation and new ideas of how to tackle an existing problem matters more.

Give First, Take Later

Canva created a highly compelling product, and that had to be true otherwise they would never succeed. It had to be even better than what was already out there and much more accessible.

Building a product that is so good that you can give it away for free so that users will want to pay for the full version is no mean feat, but that’s what Canva did, and that’s the level of quality that project teams and leaders must aspire to if they want their products to succeed.

UX is King

I’ve been on so many teams where customer experience and design is the first requirement to be reduced when teams need to cut costs. Canva’s example shows that the reverse is true. More investment in user experience is needed with every product.

Canva has many competitors that offer a more comprehensive and even more professional product, however Canva does what most people need most of the time, and is very easy to use and adopt. This makes it a more compelling offering to the target audience than something feature-rich but hard to navigate.

Less is More

Larger teams don’t always translate to more value delivered.

For example, a research experiment showed that two-person teams completed a Lego structure 36% faster than a four-person team, despite having double the resource available.

When instagram was sold to Facebook (now Meta), it reached 30 million users yet only had 13 employees.

When Elon Musk took over Twitter (now X), there were roughly 7,500 employees. He famously released approximately 6,000 employees, roughly 80%, yet the service still functioned and even started to release more features with a smaller team.

References

Design Made Effortless: Exploring Canva’s Latest Updates!

About Canva

CLP Articles

Leaner Budgets, Higher Returns

Why Upstart Beehiiv is Winning

The Sky is the Limit for AirBnB