Canva's CEO on its big pivot to AI enterprise software

20:47And it kind of blew my mind that, like, I was like, this is the only place that actually has this information about me. And so being able to have that full visual suite from docs to sheets, you know, whiteboards, presentations, all of that context. And then I guess the other thing is that when you think about it, Most things kind of end up in a design format of some description at the end of the process. And so being able to have all of that context right there beside the AI tools, we think is pretty powerful.

21:20Nilay Patel:Yeah, I think the thing I'm curious about is where the primary interface for that lives. And you're obviously making the case that it should be Canva. It clearly is for the CEO of Canva, inside of Canva. But I could bring the CEO of Slack on here and they would happily tell you that that is Slack. Or, I don't know, Microsoft will tell you that they're going to force feed Copilot to you wherever you are using a Microsoft product, and that's where that should be. There's a lot of ideas about this. And one of the things that makes that messy in my mind is all of these products can now talk to each other in very specific ways.

21:55Nilay Patel:So Canva itself is a plug-in for the other chatbots, and it seems like the usage of that plug-in is very high. How do you think about who owns the interface in a world where the core tool set might be usable somewhere else entirely that also has access to all that data and all that information that the company might have generated? The key focus for us is always like how do we empower our community the most? How do we help them to achieve their goals? So we're already embedded in organizations and businesses all around the world. And when they're creating a design today in Canva, it's like quite a manual process.

22:30You have to go to all these different fragmented tools, collect all the information. And so being able to have that just inside the design tools, we think will make a great deal of sense because it means that you're not, it's just like cutting down manual and busy work, which is kind of always a thing that we're doing for our customers. Like when we launched some years ago, like 2019, we launched Background Remover. And the whole point of that was you click the Background Remove button and then the background was removed and like that reduced a lot of manual work and then again like with this release it's kind of the same sort of thing it's like there's a lot of manual work to go and collect all the information collect all the contexts all in different places and so having that just there where you're designing we think makes a lot of sense where you've already got like huge repositories of your images across your company where you've already got all your brand templates where you're already doing the collaboration we think that makes a lot of sense But really, we just want to be putting the tools that help to reduce busy work in the hands of our community and helping them to achieve their goals with less clicks.

23:31Nilay Patel:A few weeks ago, we had the CEO of Okta on the show, Todd McKinnon, and he was like, the future of Okta is managing agent permissions because this is a security nightmare. And I will sell kill switches to every enterprise that has agents running rampant over its networks and databases. And so I hear what you're saying. It's like, okay, Slack is going to have a bunch of agents that can go talk to Canva's database of images. Canva will have a bunch of agents that can go talk to Slack's database of conversations. Something else is going to happen over here. Does that seem like a workable picture of a company of the future where all of these tools are sort of accessing one another independently?

24:09Or do you think it will naturally land on just one? I think there will be, I think the cool thing is for consumers, there's going to be choice about how they want to have their work stack set up. I think it's a really exciting time in technology because there's just so many new possibilities for the way work gets done to reduce fragmentation. You know, we've got a quarter of a billion people using Canva today, so we think there's a huge opportunity to make AI simple and accessible, just like we did with design. But very importantly, helping to empower people to achieve their goals and to communicate their ideas.

24:43So we think we're pretty excited about what we're going to be able to bring out into the world.

24:47Nilay Patel:Yeah. How does it work for you? What's the dynamic inside of Canva? You're obviously on the bleeding edge of this technology, and you obviously have your own tool. How does it work for you? In what sense? Sorry. Do all of your tools have AI access to all the other tools, or do you work only in Canva and let Canva AI go talk to all the other tools? What's your setup? Oh, yeah. Since getting connectors, obviously, Canva has always had all my designs and my presentations and my documents. But being able to get connectors and being able to pull information has been pretty astonishing. So, for example, being able to say, hey, create me a plan for my next week and how I can optimize my time.

25:27And being able to go and read my calendar and then create me a document about my upcoming week. It was like, there's a lot going on. And it told me I had a massage book and I was really surprised about that because I didn't actually know it until I read that in my Canva doc. And then I was like, oh, I think there's like a bug here. And then I realized that my partner has sat.

25:44Nilay Patel:The bug is it's booking self-care for you whenever it wants. And so I think it's really cool because there's a lot of things that would be like very, very manual, like going and doing a calendar audit. And that all of a sudden can actually happen inside the one thing and it can actually create the presentation or can create the document and then you can have people collaborating on that. People talk about AI slop and I think the AI slop is often it's like one-shot generation you kind of just take that and you put it somewhere else. I think that what Canva has a really it's really exciting about with Canva is that that is really just the draft that's the starting point and then you can use it to iterate you can use that you know through manual editing or you can use that through being able to iteratively edit through Canva AI inside the editor itself and like to refine it to really be able to clearly articulate your idea.

26:32So we're pretty excited about the possibilities that it unlocks.

26:37Nilay Patel:We have to pause here for a quick break. We'll be right back.

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31:37Welcome back.

31:38Nilay Patel:I'm talking with Canvas CEO Melanie Perkins. And I had to know, has Canvas Big AI Push changed how she makes decisions? I feel like it's time for the decoder questions because you've talked about how much you use Canva internally. The last time I asked you how you make decisions, you said you had a process called decision decks where you literally made Canva documents, all the pros and cons, and you mocked up the products. Is that still the process? That is still the process. Prototyping has become a very key part of it. So often now there's like a workable prototype before anything gets launched.

32:08I think the really fun thing about, I don't know if I talked to you about the complex decision-making framework. No, this is new.

32:14Nilay Patel:This is definitely new. Okay. For anyone that needs to make complex decisions, I find this extremely helpful. It's like splitting it out into like what are the goals, then what are the options, what are the pros and cons for each of the options. But it's really fun because now we have a template inside Canva, which is the complex decision-making framework doc, and you can literally just dictate using dictation through Canva AI, and it will actually go and fill out this template. So there's a lot of really exciting ways of like how you can take your ideas and like the thoughts in your head and then have that distilled in a way that other people can see and understand, which I guess is the essence of design.

32:47Like if you think about design in the sense of it previously, design can sometimes be thought of as like making things look pretty. But really design is about expressing ideas and being able to communicate that effectively and being able to turn something from an idea into reality. And so we think all these new tools really help to facilitate that. I use Canva code all the time. I used to do a lot of mock-ups and now I use Canva code to create prototypes all the time for every idea that I have, which is pretty powerful because it takes the idea far further than it could before.

33:18Nilay Patel:The last time I asked you about structure, I asked the other Dakota question is how the companies are structured. Last time you were about 4 ,500 people and you described your structure as a very centralized product team and then lots and lots of local teams. And the metaphor you used was a cupcake. And you said, we work on the cupcake and we make the cupcake bigger and all the local teams work on the icing. is that still a metaphor? Yeah, that's a fair metaphor. That one's been around. The cupcake and the icing is actually so applicable in so many different ways. The small empowered teams is really at the essence of how we get things done.

33:55We're very much a goal-oriented structure. So for example, with Canva AI 2.0, we really brought everyone together across the company to achieve that goal and bring Canva AI 2.0 out into the world. And we do show and tells every week so everyone can share and get deep context on what's happening. I think that goals has really been at the essence of how we've achieved anything over the last decade is being able to rally around goals and have different team formations in order to achieve that.

34:21Nilay Patel:How many people has Canva now? Oh, latest start, about 5 ,000. Okay, so you've been growing. I'm really curious about, just in that context, decisions and structure, how you made the decision to say, okay, we're going to do Canva 2.0 and we're going to lean heavily into AI the way that we're going to lean into AI. That's a lot of people. It's a big decision. I imagine that there was a decision-making slide or a deck. And then this feels like it sort of inherently is a top-down decision. Like, we're all doing this. Like, Melanie says we're all doing this. We're all doing this. Walk me through that decision and walk me through any structure changes you had to make in order to accomplish it.

34:59Yeah, absolutely. So I'm going to take us back to 2011 and to a deck that we had, which was called Kansas Chef before Canva was even called Canva. And the first slide when you go into it, it's like, what do you want to chef up today? And then you could type into a search box and the idea was that you could type whatever you wanted and then you'd pop into the editor and you could collaborate and you could have the editing tools. If we share it with you after this, you'll see it's like bizarrely similar to what we're launching today. So I guess this has been the dream for a really long time, but the technical ability to do this has been hard.

35:43I'd say in 2017, we had this document, we called it Getting Smart, and we're like, in the future, future, future, there's going to be search-driven design. Rather than going to the buffet and getting something, it will be able to happen on the fly, like a chef cooking something up from the raw ingredients. And now it feels like we can actually do that. Back in October, we'd been researching into this space for some years. The foundational model, that was a huge step. The design foundational model, that was a huge key piece. But then in October, there was a significant breakthrough in the company that meant that we could actually do it.

36:18So as soon as we saw that, we were all like, oh my goodness, this is really exciting and groundbreaking for what Canva can unlock. And so that was when we really started to go all in and realized that that technology needed to be pushed as far as it could go, which is what we're launching today.

36:33Nilay Patel:Did you send out an email? Did you send out like a Canva deck being like, we're doing this now, decision made. How did that work? That is a great question. How did we? So there was a team working on it already and then we really bolstered up that team. So then we were like, okay, we need to get every single person that can possibly help bring this to life onto the project. And we started the weekly show and tells and we turned it into a more of a centralized AI team with then hundreds of people. It went from a smaller team to then many hundreds of people to bring it to life, everyone working on the different parts that needed to become part of this orchestra.

37:14Nilay Patel:Yeah, I'm curious. Like that part, that structure part seems really interesting to me, right? We have a software tool, you know, standard sort of deterministic software tool with a select box and a text arrow, all that stuff, and we're going to build an AI that can use that tool. Now we've got to take all the engineers we had and point them at that problem. Did you have to rethink your product team or did you just make it bigger, the team that was working on that part? I think a little bit of both. Once the team had this big breakthrough and we all saw it in action, we were like, my goodness, this is the coolest thing ever.

37:50And then we had to figure out who could actually help from across the company. And I think that's the goal-oriented structure I was meaning. before is that I was mentioning before is that when there's a goal then you need to figure out like who are the people that can help bring this to life and then everyone that's where then we were doing the weekly show and tell so everyone can get a really clear understanding of like where everything is at all the pieces that needed to be orchestrated to come together I think Canva already being interoperable meant that there was a lot of these things that had already been built and that then could just be come together you know in an exciting way we we do something called the camera jigsaw.

38:27We've been doing different variations of the camera jigsaw since the earliest days, which is like, it's often a goal. And then all the pieces that need to be worked on independently to be able to bring that to life. And that was exactly what we had at the center of this project again.

38:42Nilay Patel:You're fundamentally the software CEO. I think that's a fair description. I think you make software. The nature of software development itself seems to be going under some kind of existential crisis. One of our designers here at Divergent Box Media described all software development now is calibrating yourself to a database and just like talking and seeing what happens and maybe that'll turn your brain to mush. Are you using as much cloud code or codex to make Canva as it seems like every other company is racing to do? Yeah, so I use Canva code really extensively from the perspective of like...

39:17Nilay Patel:When you say Canva code, that's your own coding product. Like you're not using cloud code or... Because it's so cool. So what you can do now, I used to create mock-ups all the time. Anytime I had an idea, I'd create a mock-up. And now anytime I have an idea, I can use Canva code. But with this latest release, you can actually go in and edit the text. So you can actually create something. You can edit the text. You can drag and drop. You can move things around. We've been really investing heavily on the AI front and upskilling our team. So can you make Canva with Canva code? Yeah, we do make Canva with Canva code.

39:51Not deployed. We have many incredible engineers that actually make it sound to go out to hundreds of millions of people. But we use it for prototyping all the time.

40:04Nilay Patel:Yeah, I think that's the question I'm asking is more about those folks and how you think about the costs associated with those folks. Like the nature of software engineering is changing in some big, meaningful way due to the, in particular, the coding tools that are available. Are you rethinking how that works inside of Canva as you ship new versions of Canva? Because every other software CEO I talk to is, their minds are exploding. They don't quite know how it's going to go, but they know it's definitely going to change forever. I think, you know, one of the things that we've invested really heavily in is continuously upskilling our team and systems.

40:36So we've taken a very intentional approach to give all of our team access to all of the latest and greatest tools. So we actually have not selected a winner. We have just like given them everything. And it's been very intentional because we want everyone to be playing with the latest and greatest and to be upskilling all the time. We need to be upskilling every one of our systems. we need to be upskilling because like the way we build product is completely different today the way we do QA is completely different today the way we you know do actually every system and process inside the companies had to have like an AI native transformation and so there's in every specialty inside the company has had to have an AI native transformation what a designer does today what an engineer does today across every single part of the company so it's been a huge area of investment on the tooling, on giving our team time, on the specialties.

41:26We've had this focus on AI everywhere and then AI impact and now AI native because we really want to be rethinking everything in this AI era.

41:35Nilay Patel:There's some sort of rebalancing of power between product managers, designers, and engineers because AI lets them all do each other's jobs. Where have you landed on that inside of Canva? I think we're all here to build the best experience we can. and you know I think having really solid expertise is it's never been the best way to build product in fact great PMs often think about the design perspective great engineers often think about things from a design perspective so really it's about the team that are like there to like just create the best thing possible and you know having people in their separate siloed isolated lanes and saying like that's my territory was never a great way to build product and so I think that with AI it's really leaning further into that.

42:16It's like everyone thinking about what is the best product experience that we can build. And everyone will bring different skills to the floor. So a designer will obviously have a certain expertise. A PM will have a certain expertise. An engineer will have certain expertise. But we've always thought of it as a bit of a team sport where the best idea should be winning and everyone should be collaborating to create the best outcome that they possibly can for our community.

42:38Nilay Patel:So I understand that this sort of positive case for AI, why you made the decision. I understand that the product promise of just tell this box what to make and it will make you a first draft and you can go on from there based on the data you have. There's a pretty significant downside to AI, particularly as it relates to brand. There's polling here in the United States, at least, that basically is just bad vibes around AI. Like the last NBC News poll that we are constantly citing is AI is polling under ice in terms of favorability and just above the war in Iran. That's not a great place for AI to be as a concept that has favorables, aren't favorables.

43:12Nilay Patel:People are voting against data centers in their communities. AI is widely associated with job loss. And maybe now you're going to cause some enterprise job loss because social media teams don't need to be as big as they need it to be anymore. There's a lot of layouts that are being blamed on AI across the board. You're leaning into AI with Canva, right? They're like you're rebranding the whole product as having AI in it. How do you think about that downside risk that people don't like it? The more they're exposed to it, the more they're saying, wait, stop, I don't want this around me. I think it's kind of like any tool.

43:45It will be whatever you want it to be. And so if you want it to help empower people, if you want it to help deliver better experiences for your customers, if you want it to uplift students and to give them great quality education materials, it can do that. And I think that's...

44:03Nilay Patel:Wait, can it do that? I'm actually not so certain about the student thing. We launched something called Learn Grid. And Learn Grid enables across many countries to be able to have the curriculum aligned content created. And that can be worksheets, that can be immediate feedback, and it's free. So we're really excited about being able to put these tools in teachers and students' hands around the world. We've got 100 million teachers and students using Canva today. But the access to great tools is like very divergent depending on the wealth of a school, for example. And so we're really excited about being able to bring that accessibility to students around the world.

44:36Nilay Patel:Right. But I think my question there is it's more of the slop question, right? Like people are experiencing the tools that exist today, and maybe mostly they're experiencing the free version of ChatGPT or whatever AI overview Google puts in front of them running on the cheapest possible model at the biggest possible scale. And they are having these experiences. And I know that the industry likes to say most people have never used AI and certainly no one's paying for it. But like a billion people have used ChatGPT and then the polling is the polling. I'm just sort of wondering how you're thinking about communicating this is an AI product.

45:10Nilay Patel:Because it, to me, feels like that comes with all kinds of baggage. And I'm watching OpenAI by TVPN because they think they have a marketing problem. I'm watching all the venture capitalists be like, the media is lying about AI and it's going to change everything for the better. and then you're like racing into being like, Canva's AI now. And I think you know that a bunch of designers are going to be very unhappy about this, right? There's some people who are going to just say, this is bad, they're ruining the product. And I'm just wondering how you are thinking about navigating that balance. I think, you know, there's going to be a plethora of opinions on any topic.

45:48What we always do is just like put what our community want to need at the center of it. So we've had a lot of people asking, even yourself quite specifically. You're like, I've got this goal. Why can't Cam AI just know everything about it and be able to help me with that first draft? And so helping people to achieve their goals is always going to be at the center of what we do. And that's exactly what drives these sorts of decisions is like being able to like take out a lot of the manual work from being able to, you know, create, lay things out. So really believe that AI should accelerate your vision and creativity, not override it.

46:22And I think that's really important that like AI is just like another tool in our toolkit and it will help achieve our goals if we choose to use it. And so we've been really intentional about the product design like Canva AI is a new tab. So if you just come in and you love templates, you can use that. If you come in and you just love the elements and just like creating things from scratch, that's totally fine. That's totally cool. If you want to be able to express an idea just like by through dictation or through typing, you can do that too. So I think it's really important that we understand that every one of our community members is at different stages and different scales of comfort with AI.

47:01And so we want to be making sure that we're helping to facilitate that. So I think this is the full spectrum. And it's really important that Canva isn't turning into a chatbot by any stretch of the imagination. But if you do want to be able to just chat to something and have it help you out, you can do that too. So, you know, really enabling all of that. I think, you know, I can't speak for other companies out there in the world, but, you know, Canva has benefited greatly from an incredible community. We've got, you know, a quarter billion people that use Canva each month. There's a lot of love for our product.

47:35And I think that that love really comes from being able to have Canva be the thing that helps people to express their ideas and turn that into reality. And we take that extremely seriously. So with all of these product developments, we are continuing to keep that at our core. And empowerment is like such a critical principle for us that is very much through everything that you'll hopefully be seeing and touching very soon.

48:02Nilay Patel:We've got to take another short break. We'll be back in just a minute.

48:13Nilay Patel:Support for this show comes from Rippling. Too often, apps that call themselves all-in-one are far from it. Rippling is here to make things a whole lot simpler. It's the unified platform for global HR, payroll, IT, and finance. With Rippling, workflows that normally bounce between a handful of tools and departments actually do just happen in one place automatically. Here's an example. You have an employee getting promoted. Rippling can update their payroll taxes, manage any new app permissions, ship them any new device, issue a new corporate card, and assign trainings all in one platform. No jumping between apps.

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50:23Nilay Patel:Acrobat lets you generate an audio overview of your project in just one click. Learn more at adobe.com slash do that with Acrobat. Support for today's show comes from CNN. Do you want to live forever? Influential journalist Kara Swisher is taking a hard look at the longevity industry to separate the influencer hype from evidence-backed science. In her new CNN original series, Kara's talking to Silicon Valley power players and trying out the latest in anti-aging technology to see what works and what's a waste. Kara Swisher wants to live forever. New episodes streaming Sundays with a CNN subscription.

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51:19Your plans, your specs, and then invite the crew to build what's next. They talk off the team words. You can update it, render. They think that this design could be a contender. But when somebody wonders, what's the next steps?

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51:48Welcome back.

51:49Nilay Patel:I'm talking with Canvas CEO Melanie Perkins about how weird it is to do automated marketing with AI right now. Let me ask you about the competition because you're describing goals and when I talk to executives and I describe goals and what people really want, you often realize you're talking about business software, right? And your enterprise is growing for you. And this very much feels like an enterprise offering to me. Like you're going to connect to all these other systems and you're going to get some work done and you're going to do work. That's what this feels like to me. And I know Canva has a big consumer base and a lot of people have fun with it.

52:20Nilay Patel:This feels like a work product. Is AI fundamentally enterprise software? To me, like, I don't think that people yearn for automation in their personal lives. Like, I think you want to get rid of busy work at work so you can do something more important and a lot of work is inherently repetitive. And AI just makes a lot of sense in this zone. Do you think AI is fundamentally enterprise software? I think you're right. Canva AI will totally be the system at the center of how work gets done. But that doesn't mean that if you're creating those wanted posters for your daughter's party, you can't be like, pull the invite list from the party coming up.

52:54And just wanting that to kind of connect to that.

52:57Nilay Patel:This implies that I have a good access to the database of the eight-year-old girls coming to my house next weekend. But yeah, it often will be about work. And, you know, work means many different things to many different people. So work can mean a teacher in a classroom. Work can mean at a large company. Work can mean a small business trying to just get their marketing collateral created. I think we've gone from broadcast communication where everything is like one to many to being able to have like a hairdresser being able to send out a campaign on someone's birthday to say here's a special voucher for your birthday, that particular thing that you like.

53:34Being able to have that much more personal communication, I think, is another aspect.

53:40Nilay Patel:It does feel to me like the cutting edge of, in particular, social media marketing is automation in this way. And I've probably watched more TikToks and Instagram reels of social media managers explaining how they have built incredible dashboards using AI tools, automated entire workflows, built content pipelines. You can see it. There's something very important happening there. Presumably Canva will participate in that and they will build those tools inside of Canva. Right next to that is Meta itself and TikTok itself and YouTube itself, who are all working on tools exactly like this. Mark Zuckerberg in 2025, I'm just going to read you this quote.

54:16Nilay Patel:He said this to Ben Thompson. In general, we're going to get to a point where if you're a business, you come to us, you tell us what your objective is, you connect to your bank account. You don't need any creative. You don't need any targeting. You don't need any measurement. You tell us the results you want and we will give them to you, except to be able to read the results that we spit out. That's a redefinition of advertising. They're describing, to some extent, your product, right? You tell it what you want to achieve, and AI is going to make a bunch of creative and schedule it across their platform.

54:46Nilay Patel:I know TikTok is working on this. I know YouTube is working on this. They all see this thing that they can sell to their biggest clients, their advertisers. How do you think about competing with the platform's own native capabilities that look a lot like what Canva is trying to make for marketers in particular? It's actually funny. It sounds like, you know, back in 2012, we had this pitch and we called it, we had the design engine. And we said, like, all these other platforms are going to, like, have tools. And they did, like, lots of companies have lots of different tools for, like, a specific platform.

55:20But it's kind of annoying because as a company, you probably want to be advertising in lots of different places. You probably want to be having your pitch decks and your docs and all the different things. and you don't want to have that fragmented across lots of different tools and systems. And so Canva, it's kind of everything in one place rather than having to go and have your knowledge in lots of different places. So that's, I guess, one of the key things that we've been leaning into for the last decade is that Canva can be that thing that is at the center of your work.

55:49Nilay Patel:So the back and forth there is these platforms either have bad analytics or are not very generous in sharing their analytics or make you pay extra to access their analytics. Meta obviously has its own models. Google obviously has its own models. They might say, look, if you want to run this creative, you got to make it in our tools, right? If you want to use this stuff, we will throttle you if you come to us with creative made elsewhere. We're going to push you towards our tool. So you use our models and we get two bites of the apple on token pricing. I've heard this from a bunch of AICO's that database access in general is going to become a new pricing vector, right?

56:28Nilay Patel:We're going to charge tolls. You want to connect to our system, the customer will have to pay some higher access fee. Have you seen any glimmers of this yet, or is it too early to say? I'd say, A, it's too early, but B, I think that hopefully the customer wins out of all this. Hopefully the customer is able to achieve their goals. and use the tools that they want to use. And I guess at the end of the day, all of this is hopefully about why I've been so infatuated with design is like design is imagining the future and then willing it into existence. And design really radically helps that process.

57:09And so I guess you mentioned optimism. I think that's why I love design so much is because you kind of, you do have to imagine the future that you want and then you can work to bring it into reality. Yeah.

57:23Nilay Patel:I just, I, the reality is Mark Zuckerberg exists and he's very, very, very competitive, right? Like there's also that piece of it. And I think they also like, I think from our experience, they love to have creative because creative is the blocker. Did you say they love money? I heard you. I mean, look, it is like, I know a lot of social media people who take it as an article. Hang on, let me give a little extra clarity on that. They like to be able, like they're not going to stop advertisement. Like their company is built on advertising. So they're going to want to take creative from wherever to have it on their platform.

58:01In fact, you know, the lack of companies being able to create great advertising materials has been a huge blocker from people being able to advertise on their platform. And so I don't think they're going to be sad about creating it in Canva.

58:14Nilay Patel:Okay, I'm curious how this one plays out. Because the other thing that I see at Meta doing is investing heavily in AI. Like themselves, and they are – every week, you know, Zuck has spent another$200 trillion hiring three AI researchers who are going to build in the best model. And like who knows how that will pay off the same way who knows how any of this will pay off. But one way it could pay off is for him to say, if you want to buy advertising on our platform, you're going to generate it with our AI models. and because we own the model, we can charge you less than Melanie who has to go buy tokens from someone else and pay their margin and pay her margin.

58:49Nilay Patel:And you can just see how that would, like I know a lot of social media managers who are fully convinced that they need to make their videos in Instagram's edits app because Instagram will promote it more heavily, even if they're not actually making videos, even if they're just feeding it through to get whatever little metadata that says edits. And like, maybe that's true, maybe it's not. But the perception of Meta as a platform, the perception of YouTube as a platform is that they will self-preference in this way. So if they're also the model providers and they can have lower pricing and the perception of self-preferencing, how do you expect to come up against that?

59:29Let's check back in a few years.

59:31Nilay Patel:Okay. I kind of thought that's what you would say, but it's just, I see it coming, right? Especially for Meta, which has to find some way to make money with the model that they're building. And as of yet, I don't know what it is, except for maybe they're doing reels targeting on GPUs. Yeah, I can't speak for them and their business model, but I can certainly say, you know, from a customer's perspective, being able to create all of the content that you want in one place, having little friction between that, being able to deploy into lots of places. It's, you know, what we've been specializing in, I'd say, for the last decade.

1:00:02And certainly being able to take that to other platforms. has been great for our customers, but then also great for the other platforms because then they are able to have all these people that can do their marketing on those platforms.

1:00:15Nilay Patel:The last time we talked to your model provider was OpenAI, I believe. Is that still the primary partner? We partner with OpenAI and Anthropic and then, of course, our own internal models. We love to collaborate with everyone. Yeah. Are their models interchangeable or do you use them for specific tasks inside of Canva AI? We always take the best model for the best task continuously. So it's been great to have so many great partners in the space, from Google to Anthropik and OpenAI. My sense of the situation is that every token costs the big companies money, that they're all subsidizing token use.

1:00:53Nilay Patel:At some point, that's going to turn, right? They're going to want to make a penny a profit on every token. What does that do to your pricing when that happens? So investing in our own models has been a really core part of our strategy and we were able to bring the cost down, the latency down. And the price is being driven down radically. If you look at the price of LLM queries, it's grown down 50 times in the last three years. So it's pretty exciting from that standpoint of having so many big companies racing to provide the cheapest models. When you say your own models, are you in the fight for GPUs?

1:01:32Nilay Patel:Are you training them on someone else's cloud? How's that working? Yeah, it's been a really important area of investment, which is why we've got our own research team of 100 people that are investing in the areas that we need to. So, for example, I was mentioning the design side, like Magic Layers was from our own research org. It's been really exciting to invest in the areas that other companies aren't. We don't need to go and compete in areas that there are billions of dollars of investment already happening, but in the areas that we know we can give great advantage to our customers, we certainly do that.

1:02:05So Magic Layers was, you now take any image from wherever you might generate it into Canva, and then it will actually split it out into layers. So you can just edit it like a Canva template.

1:02:15Nilay Patel:Does Magic Layers happen on your models, or are you going out? Yeah, no, that's certainly our models. That's really cool. When you've made the decisions to invest in your own models versus going out to other providers, is there a cost performance ratio? Like, how do you make that decision? Because investing in your own models is expensive. It is expensive, but like, for example, MagicLayers has had 8 million uses in the four weeks since launching. And it just really hit a pain point that people had, which was that you generate something and you have to go and reprompt the LLM over and over again to be able to do it.

1:02:50So being able to like just go in and make that tiny little text tweak or, you know, to be able to collaborate or whatever it might be has been really important. So I guess, you know, every time we're choosing a model, it's like what is the best in the world? We want to have price brackets for each of the different areas of our company. So, you know, we've got different models. You can choose your premium models or you can choose standard models. So we are domain experts in design and visual AI, and so that's been really the focus of our research and development.

1:03:19Nilay Patel:You said you don't want to talk about your competitors, but I want to wrap up by talking about your biggest competitor. We spent some time on it the last time you were on TV. I'm actually curious. I don't even know who you're going to name. Who's our biggest competitor? I think it's Adobe. I think it's Adobe. I think in the world of creative software for professionals, it's obviously Adobe. And maybe Canvas is more consumer than that. Who do you think your biggest competitor is? I shouldn't have opened that question up, should I? I should have let you just go. You walked right into this. I know, I know.

1:03:47When we set out years ago, we were like, there's this huge gap in the market. There wasn't tools that enabled easy design that was rapid and enabled creative freedom. And I think that that's exactly, you know, with Canva AI 2.0, bring creativity and productivity together, having, being this place where you can get all of your work done in one place. They're really, I don't really think of it as competitors. There are a community of a quarter billion people that we need to satisfy and help them achieve their goals. We really focus on running our own race and filling the gap in the market. No, but you have to answer.

1:04:21Nilay Patel:Who's your biggest competitor? Who's our biggest competitor? You can't say no one. You can't be a$4 billion company with no competitors. That's not a choice. I don't think that they're... I think the way we think about it, it would be actually a bad business decision to be like, you know what I'm going to do? I'm going to go and create this product that another company has created. And that wouldn't make any sense. We literally go in and we say, like, where is the gap in the market? I like what you're doing and I appreciate it and it's very good. But it has to be someone. Who do you want to take market share from and who might take market share from you?

1:05:03I don't know that I have a great answer for you. I think there's a lot of fragmented tools right now. And having that in one place, I think, is going to be the gap in the market that we fill.

1:05:16Nilay Patel:Were you born this way? You're like such a pro. It's very good. It's incredible. I've never – I'm impressed. The reason I'm asking about Adobe specifically – You can name. Who do you think? I'll let you say whoever you think. I do think it's Adobe. And specifically, you know, when I think about the Canva community, it's a lot of people who need to make something as consumers or as a one-off at their company, and they kind of graduate to the full suite. Right. And I think we have talked about that journey for a lot of folks. And, you know, when I was young, getting my first legal Photoshop license was a marker.

1:05:54Nilay Patel:And like, I think that is still a marker for a lot of people. I think Premiere is a marker for a lot of creators, right? Being able to afford that software. and I think Adobe is a different kind of company and maybe you don't think they're a competitor but they occupy the same space for a lot of creatives in a lot of ways and their products line up right with yours, right? You can prompt Photoshop in exactly the way that you were talking about prompting Canva and Adobe will tell you that it's PDF business that is the best business database that has ever existed in the history of the world and they're gonna line it all up.

1:06:27Nilay Patel:I know what they're gonna do. One of the things that I think is the most interesting when I line up these two companies is in general, people love Canva. And I think that on balance is true. I'm very curious to see how that goes once you put AI in front of everybody. Like I'm saying, I think that there's some risk there. And in general, people are really mad at Adobe all the time. Right, that is just the nature of those two companies, the way they're situated right now. So I got to ask you, Shantan and Ryan is leaving Adobe. He announced he's going. We don't know who the new CEO is going to be.

1:06:55Nilay Patel:Who do you think the next CEO of Adobe should be? I definitely can't comment on that. Should it be you? No, definitely not. Maybe you can, but then we will. No, nobody wants me to be in charge of PDFs in the world. You don't want that at all. But I'm asking, if you're looking at this, there's a leadership change coming. Do you see that as an opportunity? Do you see that as your, I will say your competitor, retrenching? I'm curious how you are perceiving that change over there. Honestly, like we really have been pretty busy just focusing on our quarter billion users to try to make sure that we're putting great products into their hands.

1:07:35I just genuinely haven't given that like any consideration.

1:07:39Nilay Patel:Really? No one sent you a text like he's leaving? I was aware of it, but it's like it's not where my mind is focused. Here, I'll give you the way I think about the world. It's like I always think it's like internal locus of control and external locus of control. Things that you can control that actually have an impact and then things that are completely outside your control. I really focus on the things that are within our control and that's delivering a great product to our customers. That is helping to close our community's wishes. And then the things that are outside of our control, I literally just don't focus my time and energy on because there's quite a bit inside the internal locus of control.

1:08:19Nilay Patel:One of the reasons that I think designers are always mad at Adobe is their pricing goes up, they change the plans, they charge for more, features go away. You're at a scale with Canva now where you have what I would call like the Microsoft Word problem, where like the toolbar has to have every button in it because you're so big that even if it's like 1 % of users use the button, it's like millions of people use the button and you can't have millions of people mad at you because you remove the button. Like it feels like Canva is at this scale, which is why AI is in a tab, right? You can't change it too much.

1:08:52Nilay Patel:How do you think about making sure your Canva customers, who all use the product every day, seem to be very happy with you, stay happy with you, even as you roll out these products that might fundamentally threaten their jobs or how they work? I think all of those considerations you said is absolutely very much on top, very much something we focus greatly on. So, for example, when we launched Canva AI, what we're really excited about is there's like so much breadth and depth in Canva's product now that like a casual user might not be aware of all of the different things and capabilities that Canva can do.

1:09:29Many users are very deeply aware of every single button in Canva but Canva AI really brings that all together so you can just say whatever it is that you want and you might not know the specific tools you need to be able to use to bring that to life but it can do it for you. So we're really excited about how that will be able to you know make complex things simple even from the perspective of like being able to create your first design in Canva. We also do an extraordinary amount of user testing and we do that with existing Canva community members with new users and that really helps to refine the products before we're getting them out the door and into our community's hands.

1:10:06And then we get more than 1 million wishes a year from our community and so we're actually we just granted 40 of them at Canva Create and so all of these things that we're doing are very much in partnership with our community. And I think that's a really key part for us is that we want to be building Canva in partnership with our community, getting their feedback, helping to learn from what they want, what they need to do to achieve their goals. And that's very much at the center of how we think about it.

1:10:34Nilay Patel:All right. I need to ask you one very important question right at the end. Sure. Do you promise to keep affinity free? Yes, absolutely. We've made that an absolutely key commitment. I feel like every time I talk to you, someone's like, make sure you ask her if Affinity is going to stay free. I can very much say Affinity is going to be staying free. It's a critical thing. We knew that that was a really critical part of why Affinity was created in the first place, is being able to make it more accessible. And then a key part of Canva has always been having our free product. We've got hundreds of millions of people using our free product.

1:11:10Affinity itself has had more than 5 million downloads since we announced it. So, yeah, it's a really key part. Affinity is free and will be.

1:11:20Nilay Patel:That's great. Canva 2.0 is basically in beta, right? You've announced it, but it's in a small beta. Yeah, research preview. When does it go big? At Canva Create, we gave 1 million people access to Canva AI 2.0. And so we're really excited to be watching how everyone is using it and how it's helping them to achieve their goals. Great. Well, I look forward to getting secret access to it so I can make even more silly posters for birthday parties. Melanie, it's always so much fun talking to you. Thank you so much for being on Decoder. Thank you so much for having me. Thanks for your great questions.

1:11:52Nilay Patel:I'd like to thank Melanie Perkins for taking the time to join Decoder. And thank you for listening. I hope you enjoyed it. Just let us know what you thought about this episode or really anything else at all. Drop us a line. You can email us at decoderoftheverge.com. You really do read all the emails. Or you can hit me up directly on Threads or Blue Sky. We're also on YouTube. You can watch full episodes at DecoderPod. We also have an Instagram and a TikTok. They're also at DecoderPod, and they're a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts.

1:12:16Nilay Patel:Decoder is production of The Verge and part of the Box Media Podcast Network. The show is produced by Kate Cox and Nick Stat. This episode was edited by Xander Adams. Our editorial director is Kevin McShane. The Decoder music is by Breakmaster Cylinder. We'll see you next time.