The Exchanges

Q Do you, do you have, like, Chinese walls, or, like, separation? And, like, when you go to, like, a family Sunday lunch, and it's like, fuck, we lost that fucking big enterprise deal. Cliff, damn. Are you like, ah, ah, ah, ah, not on Sunday? Like, do you have, like, the Chinese walls of separation?

A We endeavor to, we have like this thing where we're like, no work talk, and then, and then that just means we're not talking about work, like, can't be able to talk about work tonight, um, and so we often try and do that on weekends and stuff. Inevitably, it creeps in, um, and we used to do it a lot, like talk about work a lot, but now, I guess, we try, we try not to, um, but, and we do, and often it's fun, but sometimes you just need to not talk about work, like if you're on a date night, or if you're, Doing something fun. Um, you need, you need that division. Uh, and like we've said a few times, it's a marathon, not a sprint. And, and as you've been doing it for a long enough period of time, you actually need those recharge moments where it's not about work.

AI assessment note: “We endeavor to, we have like this thing where we're like, no work talk”

Q My question is, we mentioned the oversubscribed element there. Cliff, when you literally have a five X over subscription, I'm sorry if I'm being naive here, but in the same way that Dario did, how do you literally choose which dollars you take?

A It's very tough. And then for, for us, we priced our round before Figma went out, ah, and had all those conversations and relationships. And so the Figma IPO kind of throw a cat amongst the pigeons, um, in regards to proving that we will close the year very close, if not at four billion growing, ah, close to 40% growth rate and re-accelerating growth. So we are, ah, compounding growth at scale, which is, which is a good place to be. Um, When it comes to investors, we really need to think long term. We have a lot of long term partners, and you also, you want to pay a lot of loyalty to people that have supported you along the way, but also we're thinking through what an IPO looks like. Who are going to be the, the cornerstones of that IPO? How do we see this not as a point in time deal, but a relationship building exercise through the next 1824 month period with these really long holding investors? And how do we instill trust in them And, and for them to trust us as a leadership team that can take this through IPO and beyond and, and make good decisions. So we're not looking to ratchet up the price. We're not looking at kind of playing any silly games. We're really seeing this as like, how do we build these long-term relationships that are going to be with us while.

AI assessment note: “Who are going to be the, the cornerstones of that IPO?”

Q My question is, we mentioned the oversubscribed element there. Cliff, when you literally have a five X over subscription, I'm sorry if I'm being naive here, but in the same way that Dario did, how do you literally choose which dollars you take?

A It's very tough. And then for, for us, we priced our round before Figma went out, ah, and had all those conversations and relationships. And so the Figma IPO kind of throw a cat amongst the pigeons, um, in regards to proving that we will close the year very close, if not at four billion growing, ah, close to 40% growth rate and re-accelerating growth. So we are, ah, compounding growth at scale, which is, which is a good place to be. Um, When it comes to investors, we really need to think long term. We have a lot of long term partners, and you also, you want to pay a lot of loyalty to people that have supported you along the way, but also we're thinking through what an IPO looks like. Who are going to be the, the cornerstones of that IPO? How do we see this not as a point in time deal, but a relationship building exercise through the next 1824 month period with these really long holding investors? And how do we instill trust in them And, and for them to trust us as a leadership team that can take this through IPO and beyond and, and make good decisions. So we're not looking to ratchet up the price. We're not looking at kind of playing any silly games. We're really seeing this as like, how do we build these long-term relationships that are going to be with us while.

AI assessment note: “loyalty to people that have supported you along the way, but also we're thinking”

Q Can I ask you, you said that before we started recording, what do you mean when you say it's a game?

A Um, Most things are just a game, really. Like, we're, we're fortunate. We live in Australia. We have a social safety net, so if you have no job, you can go on the dole and get enough money to live and eat and have a roof over your head, um, which is a great system, by the way, um, that many other countries should follow that can. And so, with business, we've just always treated it like a game, and it's a serious game. Like, I'm very, very competitive, so when I play a game, I play to win. I absolutely play to win. But at the end of the day, the business doesn't define me. I know I would be just as happy if I was a fisherman. Um, I actually think I'd love how it'd be my dream job is going out fishing every day. Um, or like I was in the construction industry before I started teaching and, and like, uh, I think I'd be happy out on site digging holes every day. Often I long to dig a hole and not have to think about things and manage people.

AI assessment note: “with business, we've just always treated it like a game, and it's a serious game.”

Q really hard. Um, like, and you said about aligning goals there, people will sometimes say goals that may not be true to get acquisitions done. How do you ensure that the goals they say are the truth? And, you know, you're a very trusting guy, but you also have to be savvy enough to know when someone wants to get a deal done and say what you want to hear.

A I think I'm a decent judge of character. And I like to get to know the human behind the business. Um, and that's probably the most important thing because the business speaks for itself. Like you can look at similar web and you can look at their traffic, you can look at their metrics, you can outside in how a company is going. You can then understand how their culture is outside in as well. You look at their attrition through LinkedIn, who's jumping jobs, et cetera, et cetera. So there's a lot of knowledge you can kind of assess just from sort of outside in analysis. And then it's really around like, what are the motivations of the founder? What are they like as people? I mean, it was hard through COVID cause you couldn't go out and spend some time with them and really get to get the cut of their jib. But, um, We find we have a real philosophical alignment with the founders we've, uh, acquired their companies of, um, and, um, and we've, we've acquired some amazing founders. Rob is our head of product. Um, the Flourish team are heading all our data viz. It's like, yeah, so, so we've, uh, maybe we've just been really lucky, I think. Um, but, but we've, we've had a lot of luck in that regard.

AI assessment note: “I think I'm a decent judge of character. And I like to get to know the human”

Q Do you, do you have, like, Chinese walls, or, like, separation? And, like, when you go to, like, a family Sunday lunch, and it's like, fuck, we lost that fucking big enterprise deal. Cliff, damn. Are you like, ah, ah, ah, ah, not on Sunday? Like, do you have, like, the Chinese walls of separation?

A We endeavor to, we have like this thing where we're like, no work talk, and then, and then that just means we're not talking about work, like, can't be able to talk about work tonight, um, and so we often try and do that on weekends and stuff. Inevitably, it creeps in, um, and we used to do it a lot, like talk about work a lot, but now, I guess, we try, we try not to, um, but, and we do, and often it's fun, but sometimes you just need to not talk about work, like if you're on a date night, or if you're, Doing something fun. Um, you need, you need that division. Uh, and like we've said a few times, it's a marathon, not a sprint. And, and as you've been doing it for a long enough period of time, you actually need those recharge moments where it's not about work.

AI assessment note: “We endeavor to, we have like this thing where we're like, no work talk”

Q Cliff, how important is First to Market, and how do you advise founders on how to think about competition?

A First to market's important, but, um, user acquisition is just as important. So you can have a great product, but if you haven't cracked the user acquisition channels, then you've got nothing, right? Um, because customers need to be able to find your product and, and use your product and love your product. And we grew Canva through a couple of different ways. Primarily our product was our biggest marketing channel. So we built Canva over the course of a year before we launched and launched anything. And at the time the lean startup was really in vogue. Um, and so our investors are all going, what are you doing? Launch, iterate, do all the lean startup stuff, hack your way to success. And Mel was like, absolutely not. We are going to launch the most delightful product to our users and offer it for free, which is the freemium model. And our users are going to be our biggest marketing channel. And that's what we did, uh, despite all that pressure from investors, and we picked a really good target audience when we were starting as well. We're like, who has the biggest need for visual content creation? Social media marketers, because social media is a visual content beast, and you need to keep feeding the beast. So we approached social media marketers, and one of the person, people I called outreach to was Guy Kawasaki, and, uh, he responded like nothing at the time.

AI assessment note: “First to market's important, but, um, user acquisition is just as important.”

Q Um, when you look back, were there commonalities in why VCs said no?

A Oh, there were so many reasons why VC said no. Two non-technical founders from Perth, uh, a couple, um, like there was, we got every reason under the sun why, why there was a no. But yeah, uh, but we have a philosophy around that. It's start, niche, and go wide. Like, you don't want to boil the ocean. You want to, you want to solve a problem for someone that has that problem. Solve that problem really, really well. Um, and then once you've solved it for them, what are the adjacent Industries, people, professions that have that same problem and let's go pick those off. And that's sort of what we've done with Canva. Um, and, and, and the other sort of user acquisition channel we cracked in the early days was, um, SEO as well. We're a content company and we figured out a way how to propagate that content onto the internet. So people searching it can find it, uh, and then drive people to the product like that.

AI assessment note: “we have a philosophy around that. It's start, niche, and go wide.”

Q You said there about the importance of the human. I think one thing that I heard a lot from your investor base was exactly that. When you think about, like, investor relations, what have been some of your biggest lessons as you reflect on the investors that you have on your cap table now, and the great relationship you have with them?

A You're probably spotting a theme here. Like, the most important thing for me is trust. Um, you can garner any knowledge that And skills you like, um, through commercial means. I've, I've actually, having listened to your podcast for a long time, heard a lot of really smart people and just reached out to them and say, hey, can you be an advisor to the company or can I pick your brain on this thing? And so, um, you can get a lot of great advice around domain, certain domains from just reaching out to people. And obviously as you'll You get more leverage with your company that, that becomes easier and easier. But even in the earliest days, we used to pay people with generous equity grants, and we still do to this day to get them on as an advisor. So Canva, to give you an example, Canva until three years ago, we were like a big bodybuilder that had not done a single leg day in their life. So we had a huge upper body, and that was our user acquisition, that was our product, and that was our, uh, our organic growth. But our two weak little legs were marketing and sales. Um, and so it was like Zach, me and Zach were like, hey, let's figure this out together. Who are the best people? Who does marketing better than anyone else? Let's go speak to as many of them as that, that will speak to us. Um, and so we started by building our own knowledge and then we hired a few people and we made …

AI assessment note: “the most important thing for me is trust. Um, you can garner any knowledge”

Q What do you think of founders who are actively angel investing? You see a lot today with funds. I have very strong views on those with funds who take external money. What do you think about founders who are actively angel investing with or without funds?

A I actively don't angel invest. I do do some just because it's like a great person, um, that I know, or it's like, I really like, I, I don't do anything to, to make money. I, I do, I back ideas that I think the world needs to see. Um, but yeah, in regards to, to the, the money stuff, it started to become really uncomfortable for us, um, when Canva started really growing in valuation, um, and the papers started writing about us as like billionaires, Um, and we were like, that, that, that feels horrible. We, we don't really want to be billionaires. Um, we have more than enough, um, with, with what we have. So, so Mel and I, we, we own 31% of Canva, and we put 30%, so like 99% of what we own, um, in, into a, a charity that we can't spend on our own stuff, because we, and selfish in a way, because we get the most Joy, I guess, or, or we get, yeah, most fulfillment from helping others rather than sort of buying a PJ or, or that fancy car or, um, anything like that.

AI assessment note: “I actively don't angel invest. I do do some just because it's like a great person”

Q Um, when you look back, were there commonalities in why VCs said no?

A Oh, there were so many reasons why VC said no. Two non-technical founders from Perth, uh, a couple, um, like there was, we got every reason under the sun why, why there was a no. But yeah, uh, but we have a philosophy around that. It's start, niche, and go wide. Like, you don't want to boil the ocean. You want to, you want to solve a problem for someone that has that problem. Solve that problem really, really well. Um, and then once you've solved it for them, what are the adjacent Industries, people, professions that have that same problem and let's go pick those off. And that's sort of what we've done with Canva. Um, and, and, and the other sort of user acquisition channel we cracked in the early days was, um, SEO as well. We're a content company and we figured out a way how to propagate that content onto the internet. So people searching it can find it, uh, and then drive people to the product like that.

AI assessment note: “Two non-technical founders from Perth... but we have a philosophy around that.”

Q What do you think of founders who are actively angel investing? You see a lot today with funds. I have very strong views on those with funds who take external money. What do you think about founders who are actively angel investing with or without funds?

A I actively don't angel invest. I do do some just because it's like a great person, um, that I know, or it's like, I really like, I, I don't do anything to, to make money. I, I do, I back ideas that I think the world needs to see. Um, but yeah, in regards to, to the, the money stuff, it started to become really uncomfortable for us, um, when Canva started really growing in valuation, um, and the papers started writing about us as like billionaires, Um, and we were like, that, that, that feels horrible. We, we don't really want to be billionaires. Um, we have more than enough, um, with, with what we have. So, so Mel and I, we, we own 31% of Canva, and we put 30%, so like 99% of what we own, um, in, into a, a charity that we can't spend on our own stuff, because we, and selfish in a way, because we get the most Joy, I guess, or, or we get, yeah, most fulfillment from helping others rather than sort of buying a PJ or, or that fancy car or, um, anything like that.

AI assessment note: “in regards to, to the, the money stuff, it started to become really uncomfortable”