Transcript

Canva’s $35B design biz is quietly taking over the workplace, with co-founder & COO Cliff Obrecht

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1:20 Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. The conversations I'm I'm having here go something like this. Hey CXO, uh, do you know much about Canva? And they're like, yeah, not a little bit, like my daughter uses it, et cetera, et cetera. And we're like, do you know you have 6,000 active users who have created over 500,000

1:51 designs this year alone and then they go What? They do what? And is that all on brand? Who's controlling that? Does our chief brand officer know about this, etc, etc. And the answer is like no no no and no, they're all going rogue. And then it's like holy s, we've gotta do something about this. That's Cliff Obrecht, co-founder and chief operating officer of Canva. As a fast-growing design platform valued at more than$35 billion, Canva is at the heart of a cultural and business battle about AI and the democratization of creativity. Talking with Cliff at the Can Lions Advertising Festival, he explains how he treads the line between support for individual creators and what amazing new tech makes possible. We also talk about how he and his wife, who is his co-founder and Canvas CEO, Melanie Perkins, how they navigate their personal and professional lives, plus why they're giving away$100 million of their own money in Malawi.

3:01 Cliff is a leader in his own mold, so let's get to it. I'm Bob Safian, and this Із рапи респонс. I'm Bob Safian, I'm here with Cliff Obrecht, the

3:18 co founder and uh chief operating officer for Canva. Cliff, uh great to great to have you here. Thank you, Bob. I'm uh excited to be here. Yeah, we are we are here in uh in Cannes, France. At the at the Can Lions Advertising Festival. Um You know, I I noticed that uh you once said that marketing was a a weak part at Camp.

3:40 One of your weakest parts. Okay, okay. Is that why you're here to sort of to to to get better or Is it a reflection that like you've you've figured out the marketing side of it? I think it's uh well what it is, it's a byproduct of we're a product first company and I feel that Good marketing? Can't

3:59 out compete a bad product. There were only professional design tools and on the other hand you had like Microsoft PowerPoint and Paint. So if you had an idea for something creative, you want to create it at ad, if you want to create any type of beautiful presentation, any type of marketing material for print or web. You you had very limited choice. With Canva, we bridged that gap and we allowed people to essentially get an idea and turn and turn it into a design, a beautiful design. People loved our product and people told others about that product.

4:28 And we grew really, really fast. And when you're growing really, really fast and your ninety five percent of your topper funnel is organic. You don't really have to work too hard on sales and marketing. And it was only about four years ago we're like, all right, we're kind of big enough now, but we should really like Double down on this marketing thing. Spend a percentage of our overall revenue and also like figure out this whole sales thing. So we've gone on a journey in the last four years. That's been an exciting one and it's it's really culminated at Ken. Yeah, I was there yesterday. It's really and very uh nicely designed. As one would expect. Thank you. It it's interesting.

5:05 you're saying it because uh you know Silicon Valley I I know you guys weren't born out of Silicon Valley, but uh the tech companies there are Like Even though they've made a lot of money off of marketing and advertising, they themselves haven't always been that uh forward about the way they promote their own brands. You know? Um, was that a model that you were looking at? Or not necessarily.

5:29 Well I think probably a lot of the tech companies they solved a real problem. So they had uh The same kinda high class problem that we had where Businesses wanted to advertise on the Google platform, the meta platform. And they they kinda like scaled naturally and then then they started investing a lot more in marketing. So I think everyone now sees its m importance.

5:50 Yeah. You um One of the other things I saw that you said that that Kant's philosophy is sort of start niche. And go why? And and and many successful startups have sort of uh tried to follow that route. You're now a lot bigger, right? I I have these numbers right. Two hundred and thirty million users, probably even bigger number than that by now. Ninety five percent of the fortune uh five hundred. You're doing

6:14 Three billion plus in annual revenue. At this scale. Is there more pressure to sort of Have everything be wide? To reach a lot more people? Is it harder to start

6:26 Nick. Um I think it actually is start harder to start niche, especially when you have great companies doing so many things and The benefit of a suite or a suite of tools Where you have a common interface, or you have a common login, you share data. It has a lot of advantages to it. And so I think.

6:47 Having scale, being able to do a lot of things, sharing data across an entire platform is very beneficial. But also companies that do one thing incredibly well, there's always gonna be a space for those companies. And when but when you're looking at sort of new additions to make to the Canva platform. Are you looking again for like niches to build off of or is it like oh no we gotta That's not Worth it.

7:09 You know,'cause it doesn't reach enough people. Um well like yesterday we acquired a marketing analytics company that essentially understands what a good ad looks like um and the data behind those ads and then can help us and our customers create better ads. And I think like we're, for example, moving And evolving the business from not just like creating beautiful content.

7:31 But having a good understanding of beautiful content that performs and helping our customers create beautiful content that performs and helps them achieve their goals. And so We do pick off niches, but we also do pick off underlying themes that elevate Out whole sweet. I mean you you're here it can to elevate the Canva brand, but you also have a lot of customers in the advertising and marketing business, right? That's right. What is your goal when you're at an event like this? We're in, as you mentioned, ninety five percent of the Fortune five hundred. And so

8:04 Mm the conversations I'm I'm having here go Something like this. Hey CXO. Uh, do you know much about Canva? And they're like, Yeah, I know a little bit. Like my daughter uses it, et cetera, et cetera. Uh and we're like, do you know you have six thousand active users who have created over five hundred thousand designs this year alone?

8:24 And then they go. What? They do what? And is that all on brand? Who's controlling that? Does our chief brand officer know about this, et cetera, et cetera? And the answer is like no, no, no, and no. They're all going rogue. Uh and then it's like, holy sh, we've got to do something about this. Ah and so that conversation then starts turning into how we can actually be more efficient. And uh get control over a brand and create better content that's on brand at scale. So so your entree into a lot of these big things was like there's that phrase B Y O T, you bringing your own tech to work. That's basically what it was. Absolutely. Absolutely. I mean people say that about AI now too, that you're bringing your own AI to work. And I I wanted to ask you about AI. Everybody here is talking about it. Everybody everywhere is is talking about it.

9:10 Um, there's a there's this I don't wanna say conflict. But there are creatives who are like I wanna Create my stuff. Thank you very much. The algorithm cannot do what I do.

9:22 Right. And then there folks Canva among them is like no technology can democratize access to creativity. And some of the more Pure uh creators might push back on that. How do you think about that? That Issue.

9:38 I've got A couple strong thoughts and I've got a lot of the three. Yes, some some evolved thinking on that as well. So I can't when we launched A lot of designers said

9:49 Canva, we hate you. You're ruling our industry. You're like letting everyone design. And then we kinda said back, why why is a designer Why is that professional that that sort of skill set defined about being able to use a set of really, really difficult tools? And so Over time, it didn't take long. Within four years, designers didn't feel threatened by Canva. They saw it as actually a way to do the high value work.

10:14 And then essentially democratized their work throughout the rest of the organization so they weren't stuck. eighty percent of their time doing spell changes or like like changing the name on a business card or creating yet another social media post. They could do the high value brand campaign stuff. Where you really see AI as just another step in that evolution. I mean, it's here and it's here to stay. What I really believe though is that the creatives that the models have been trained on really need to be compensated and that model. is still being figured out. Like we have our creators program at Canva. where we pay out well over a hundred million a year in in revenue to our template creators, and that's evolving into sort of how we pay the creators that we train our models on.

10:53 Um, I think the industry at large is still figuring that out though, and I don't think the creatives have got the full value. of the the the the corpus of work that these models have been trained on But I do think creatives They need to embrace this new technology. Like not embracing AI as a creative is His old like

11:11 I mean you can see where it's going. I mean I I was talking with someone from uh from Google yesterday about their VO3 tool. Yeah, we integrated into Canva like two days ago. I mean it it's amazing though what it can do. Now it does make it feel like Oh, anybody can be an auteur, which of course is what we want, and maybe it opens the things up, but it could also You know, have people have people push back against it. Well, I think it's like With AI, there's gonna be a huge Proliferation of content.

11:44 And I think To cut through that noise, you're gonna have to create something unique and different. And I think that's what creatives bring to the table. That's what designers bring to the table. That ability to to stand above the pack. If everyone can create this then a good creative can create something elevated. And I think it's it's gonna lift the baseline, absolutely. But I think the best creatives are gonna be elevated beyond that. And And celebrate it even more. I as we're talking reminded I had a conversation

12:13 This is several years back with Ben Afflak. And I was asking him, you know, listen, so many people are watching The movies that you make on their phones, do you start to think about like creating them differently as because so many people are looking out on a smaller screen. And he was almost insulted at the idea. You know, that like no no no, it's gotta be for the big screen. It's gotta be for the big screen. But but now I wonder whether like you could s

12:37 You know, like AI can do some of those things that make the big screen distinctive without having to have the same sort of budget, right? Around it. It's gonna be incredible. And uh like w we're we're about to start running competitions for student creatives. Like what can you create as a ten year old or a fifteen year old and like create a a your five minute masterpiece, I think It's gonna really evolve to I have a daughter, so how can we create her a beautiful custom story that features her doing all the things she loves. Like it's gonna it's gonna be creative and and movie qual what we what's currently movie quality creative.

13:16 Down to the individual. Which is really just gonna see so much more creative. And and I think it's a great thing'cause I think Also like Like I'm dyslexic, so I can read, but like I I don't read like well. I read fast but like i I blur things up.

13:31 So I I hate being a A rote learner when it comes to like reading text. I'm a very visual learner and a a learner that does like wants to learn but doing. I think what AI is doing is really It it's allowing, particularly when it comes to education, bifurcating the way people learn and giving them the the method that they they resonate with most. So for example, You can create a document in Canva, but you can say create this as a presentation, or you can say create this as a movie, or create this as a podcast.

14:00 And then people can learn and people can consume the way they want to consume. Yeah, I I I sometimes I think too we we um we pigeonhole people you're either a creative or you're not. And some people are like, Oh, I'm not creative, but we all are creative if we are given the tools that work for us. That's such a good comment because When we launched Canva, the f the comment we would hear time and time again is I don't have a creative bone in my body. That's because the tools were so difficult to use. That's why we worked so hard and so long on the product.

14:31 Because it couldn't be daunting. It had to be simple. And we had to make it a game. So our first onboarding We had a monkey in the the the canvas. And the first command in onboarding was put a hat on the monkey, so you had to search for a hat. and put it on the monkey. And then you had to like add some text. And all of a sudden you'd just done something that you never thought you'd be able to do, but you had fun doing it. And that just unlocks a whole new mental paradigm. And I think.

14:55 Yeah, I AI is gonna do e that at on steroids. Yeah, but it but it needs that interface to be able to do it. And that's why like Canva Code, for example, like people people are scared by the even these AR coding tools that make creating a website so easy. But people find the Canva interface very approachable. So like we launched Canva Code because it's it's really hitting that sort of not the not the first movers. But the the masses that are already using Canva and can we can take them on that journey and unlock a whole new level of sort of opportunity for them. As Cliff talks about Canva Code, the company's generative AI platform, it illustrates how quickly AI is penetrating design and creativity. But who actually owns all this stuff that AI tools are creating? We'll talk about that and more after the break. Stay with us.

15:49 Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's gonna be two types of companies.

16:31 Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives.

17:04 Find pioneers of AI wherever you tune in. Before the break, Canvas Cliff Obrecht explained how Canva has infiltrated the biggest corporations by appealing to individual users. Now we dig into who owns what AI creates. Plus how Cliff and his wife, Canvas CEO and co-founder Melanie Perkins, balance their business and personal lives, what they're doing with their newly earned billions, and why being blunt is ultimately good business strategy. Let's get back to it. When we're talking about AI

17:39 There's a question that I sometimes wonder about, which is if someone uses AI To create something. Who owns it? Like it you know, like is is is it me? Is it the AI? Is it the person who created the source material? Do you have a a philosophy about that, a position? Uh I think uh terms and conditions so if you created in Canva and are assisted by AI, you weren't

18:05 And that's the way you feel like it should be for everyone. I think we've probably followed a lot of industry best practices there. There's a lot of people that were kinda Cutting down the jungle, forging uh forward before us. And we've kind of largely gone with industry best practices. Uh, I think that's probably. The right approach. Um And and you're not you're not necessarily like uh Jack Dorsey and Elon Musk saying there shouldn't be intellectual property uh protections at all.

18:32 No, I I definitely believe in intellectual property protection. If you've created a character, you own the rights to that character. If you've created a A piece of work, you own the rights to that work. And if people are training on that work, for example, then you should be compensated. Yeah. I very much believe in Value for value. Yeah. I I will say that uh for those of us who are in the news business, there are certainly a lot of uh anxiety about how You know, our content is being used to train models and our business is going away. And will those models be able to continue to persist when they don't have the raw material?

19:04 Well I think regulation is often slow to catch up with technology and I think You've seen uh like Like music, for example, it's evolving again with AI, but historically Like There was a period of time where there was napster and like

19:20 All the musicians were up in arms thinking they're getting absolutely disrupted. But that sort of figured itself out to to to evolve into Spotify and Apple Music and whoever else is doing this. And I don't know if Net Net that's actually be more beneficial for for musicians, but at least there's a compensation cycle that seems to fairly attribute people listening to that music to the artists creating that music and and the and the money of the from the people listening to the artists doing the creation. And that feels like we'll get to that model eventually. Like I think it's happening in fits and starts. You can start messy right now. It's messy right now, but in five years' time, I think.

19:56 Well does anyone want a world with no original content being created from humans? I don't think so. Like does anyone want a newsroom that can't survive? No, like the the this ecosystem needs to exist. Um and I think the economics will figure itself out. But it's always a rough time when you're figuring out new technology. It's true. It's true. And it does make people anxious. Well, I mean the uh the the candle makers when the light bulb came about were were We're worried for a while, but um yeah.

20:23 But then they started switching on their lights and they realized it wasn't so bad. And they went and did something else. Um You co-founded Canva with your wife, with Melanie Perkins, uh, who is now the CEO. It's not uh not usual for a for a couple to be at the top of a a big corporate uh organization like like Canva. I did uh uh an article several years back with Mark Zuckerberg and uh Priscilla Chan about how they operated the Chan Zuckerberg initiative together and how, you know, they would schedule meetings, but also try to sort of schedule when they were and weren't talking about work. Like how do you and Mel sort of

21:03 Balance. Co workers, colleagues may technically work for her, right? And and also being uh, you know, life partners. Yeah, I mean, it's definitely something that's constantly evolving and we're figuring out but like At the end of the day, and and I don't know if I'm speaking to all the married men out there, like

21:23 You gotta know who's boss. Like you then there's there's parts you can find and then there's things you just gotta concede on for like the goodness of everything. Um And and she is ultimately the boss. And so on things like product, she gets the final say. And you just gotta understand where those boundaries lie. We're very collaborative, like we never like she never really pulls rank on me, so to speak. Um except for at home when it comes to parenting. I get rank pulled on me all the time. Um but Uh yeah, let me figure it out. And like On weekends, we've been doing this long enough now. We had so talking about going and going what, we had a school yearbook company, essentially it was Canva for school yearbooks before we had Canva. Um so we've been on business together for probably

22:03 eighteen years and we're we've been in a relationship for twenty years. We have to say on weekends like come on, we're gonna take a minute off. Like you can't sprint a marathon and and there's some walks we go on where we're like this is a no w work talk. Like we just need we need a minute to just talk about. Do you sometimes like one of you will bring something up and the other one will be like Not now. All the time. All the time. Which must frustrate both of you. It does it does it does right. Because like you you don't realise it can even be a very positive thing'cause like Running a business, you're constantly solving problems. And so you can be on a uh like we go on lots of walks, right?

22:38 And and w we can buy hey, there's a no work talk. Um about Someone will bring up something that's really good and you're like, Oh, that's good. We can talk about that, because that went really well. It always quickly devolves into like, Oh, there's a problem in your area, like are you gonna fix this? Or da da da. And it can blow up a good walk. So like even a good thing, we're like Yeah, that's leaves out the light up. But sometimes too, you're you're just having I mean, I know this for me, I could be at my kids' soccer game and I'm cheering and I'm into it, and then sometimes something will strike me. And like, do you then say like, hey, I just had this idea, or you have to be like Oh no, no, I better not bring it. No, we're both pretty useless. Like if it's something burning, we're both pretty bad at holding our tongue. Um we often go like purely w work walks as well.

23:23 I'm curious on whether it's on those walks or otherwise. One one of the um challenges for business leaders right now is deciding. Which sort of societal issues To uh You know, speak out on or not. There's a lot of wariness about repercussions for things. The marketplace has become divisive about it. Do do how much do you ML talk about that? How how do you think about that?

23:48 I mean, we're a bit insulated from crazy US politics and how sort of partisan and how everyone's just always screaming at each other all the time. Um And when it comes to like societal issues, our our philosophies haven't changed and then they're not influenced by the latest uh comings and goings of politics. Like We've always had a two-step plan to create one of the most valuable companies in the world and do the most good we can do, and we've pledged to give away pretty much all of our money. Um, and we already are in the process of doing that at a smaller scale, um, through Give Directly, and and I think we're just announcing a a hundred million over the next Three years to go to communities in Malawi.

24:24 Um I Cash transfers, right? And we're really big believers in giving sort of the poorest people in the world choices in what they want to do. So we're big believers in cash. and education. Um and so just like a startup starting niche and going wide.

24:39 That's kind of um Yeah, our approach to that. I mean Uh not Everyone who has been as successful as you guys have. are willing to embrace giving that much of it away. I mean, a lot of people feel like that gives them power. You know, they can impact elections, impact other things.

24:58 You think they're not necessarily doing what's best for the world when they do that? I think everyone makes their own personal choices around what they think's best for the world and I don't think like the way we view the world is is maybe what's best. Like so I'm not saying I'm right. I just saying it's like What's right for us, what's right for our family and It feels good. Like I actually think giving like but buying more shit does not make me feel good.

25:21 Like giving away money selfishly. That makes me crazy. And you know that about it. Yeah, and so so c so I could be selfish. Like I I'm acting in my own self interest'cause that's what that's what I I find value in. And people might find value in other things, and that's totally cool. I don't judge them on that. I didn't grow up with much money. I didn't grow up super poor. Mum was a teacher, dad was like a welder, then worked for the government. Mel's mum was a teacher, like We we didn't grow up with money and we don't think that like

25:45 Money gives you more happiness. Like I mean those super yats out there look pretty damn cool. But um No, I I I'd rather just raise normal kids and I don't like To make my kid rich. And like not appreciate things, and I'd never want to rob the right from my daughter to And her own way in life. Like so she needs to like buy her own house. She needs to ensure like you like you help out in little ways. Like maybe make sure she gets a safer card chip a little bit extra in.

26:12 But like you do you don't rob kids of their right to feel that self worth,'cause I don't know if you know many rich people that have been given everything, like they're kinda like I don't know, they're not generally the types of people I want to hang out with. If I'm remembering this right last fall, you raised prices a lot and there was kind of a blowback and you had to walk it away. Yeah, like so it wasn't. It was like We had grandfathered some customers at like three dollars and so

26:39 For most people, we didn't increase prices that much, but there was like a we it was an oversight, right? Like we we we should always respect the customer. So We never want to put Canva and our revenue and our quarters or whatever ahead of that customer relationship. Cause if you do the right thing long term by a customer. They will they they will advocate for you, right? But you ra you raised prices to a certain level and there were folks who had been much lower. And so for them it was a big thing. like our oldest users who like you can argue loved us the most because they're grandfathered at this cheap price.

27:14 It it like it went three hundred percent up or something like that. And then we we like we didn't really think about that that cohort. We just thought about hey, this is the new price, we're gonna move everyone to the new price. Those people were obviously angry, and we said, and you're fair enough. We're gonna keep you at that price. Thank you for supporting us. And that was not a a tough decision. You ha you you have this uh this reputation for being very transparent, a kind of no BS style. Um is that the way

27:41 You always were. Do you feel like that um That helps you as a leader in the in the organization, or and then sometimes is when is it like a a a hindrance? I never had really had a professional job, but I used to Work on like construction sides while I was at university and then

27:59 I was a school teacher as well, following my mom's footsteps. Um And I guess when we first started business I tried to be like more professional. Yeah. And then I just realised like being yourself is actually Like I don't know, it it works for me. I think people don't hate me.

28:15 Uh and so I like and and so I think it just like being transparent Uh You can get stuff done faster. It doesn't work with low performers. Like working with low performers, you're you're not doing a very good job. Like my expectations are here and you're down here. you need to bridge that or you like your or this place probably isn't right for you, right? If it's not working, it's not working. And like when it comes to managing people or even making a deal or anything, it's like

28:42 What are your goals? What are my goals? Let's find a mutual like uh something that's mutually beneficial together. Because when you can find that, that's where the magic happens. And if one person's trying to push an agenda that's that That's not good for the other person. That's a bad deal for everyone and it always ends in disaster because Mean people are smart.

29:00 So why are you doing this today? During this interview? Yeah. Oh, a PR team asked me to do it. I'm not big on doing um podcasts and like building a personal brand actually, so I actually generally refuse to do all this stuff, but And I love your podcast. I really do. Well too. Yeah, yeah, yeah, yeah, yeah. Um you have done a great job. Um

29:21 And yeah, provide really valuable information for people, hopefully. I said one thing that's someone can take it. No, no, this is this has been fun. So what's at what's at stake right now for for you at NCAM? I think Right now is a time where if you're not disrupting yourself. you're getting disrupted. And so we're aggressively disrupting ourselves, like how we are all parts of the company leveraging AI from our product to our teams to our leadership to our hiring.

29:47 We need to be an AI company. Okay. That's what we need to be in order to succeed in this new world. And to to drive that change, you kinda need like you've got peacetime leaders and wartime leaders. And and this is a time where you need wartime leaders that can get shit done. Come up with good ideas.

30:04 Build good teams and execute very, very fast against them. It's not a time to have a six month roadmap and incrementally kind of chip away. It's time to like it's a let's go time. And you need the let's go team in order to sort of like compete in this market. So are y are you looking at the teams, the leaders that you have at Canva through a different lens then because of this. I mean, maybe not today. I'm definitely holding them to a uh a high standard. Yeah.'Cause like in the in the the happy growth times it was like Hey, we could we could just go on holiday and and the numbers would keep growing. The numbers will still keep growing if we do nothing for a while, but then it will start dropping. So it's like how do we get that next like hit a lick on that next stage of growth? And that's gonna come from AI, it's gonna come from disruption, and it's gonna only come from being the very best product to solve Companies and individuals visual communication means.

30:53 Well Thank you. Uh thank you again for doing. Pleasure. Thanks so much. The phrase that sticks in my head from Cliff, if you're not disrupting yourself, then you're getting disrupted. That's arguably always been the case, the basis for Clay Christensen's seminal book, The Innovator's Dilemma. Yet, in an AI world, the stakes feel higher and more urgent. As much as Canva is racing forward as a business, it's also straddling the transition that we as humans are facing, helping us all be more creative while raising questions about what actually defines creativity.

31:30 Perhaps it helps that Cliff and his wife, Canvas CEO, aren't personally motivated by building generational wealth. Maybe that allows them to take a beat every now and then to examine if what's best for growing the business is necessarily best for the world. Then again, they have thousands of employees, they have investors, they're part of the global marketplace. We'll see how those pressures manifest themselves over time. I'm Bob Safien.

31:54 Thanks for listening. Rapid response is a wait what original. I'm Bob Safian. Our executive producer is Eve Tro. Our producer is Alex Morris. Associate producer is Mashumaku Tonina. Mixing and Mastering by Aaron Bastanelli and Brian Pugh. Our theme music is by Ryan Holiday.

32:21 Our head of podcasts is Lital Malad. For more, visit rapidresponse show.com.