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

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1:26like 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 designs this year alone? And then they go, damn, 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, no. They're all going rogue. And then it's like, holy shit, we're going to do something about this.

2:01That'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 CanLions Advertising Festival, he explains how he treads the line between support for individual creatives 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.

2:45Cliff is a leader in his own mold, so let's get to it. I'm Bob Safian, and this is Rapid Response.

2:58I'm Bob Safian. I'm here with Cliff Obrecht, co-founder and chief operating officer for Canva. Cliff, great to have you here. Thank you, Bob. I'm excited to be here. Yeah, we are here in Cannes, France at the Cannes Lions Advertising Festival. You know, I noticed that you once said that marketing was a weak part at Canva, one of your weakest parts. Okay, okay. Is that why you're here to sort of to get better? Or is it a reflection that like you've figured out the marketing side of it? I think it's, well, what it is, it's a byproduct of, we're product first company. And I feel that good marketing can't outcompete a bad product.

3:45Before Canva, 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 an ad, if you want to create any type of beautiful presentation, any type of marketing material for print or web, you had very limited choice. With Canva, we bridged that gap and we allowed people to essentially get an idea and turn it into a design, a beautiful design. People loved our product and people told others about that product and we grew really, really fast. And when you're growing really, really fast and you're 95 % of your top of funnel is organic, you don't really have to work too hard on sales and marketing.

4:22And it was only about four years ago, we were 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 really culminated at Cannes where we have a beach here. Yeah, I was there yesterday. It's really nice. And very nicely designed, as one would expect. Thank you. Thank you. As one would expect. It's interesting as you're saying it because, you know, Silicon Valley, I know you guys weren't born out of Silicon Valley, but 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 forward about the way they promote their own brands.

5:07You know, was that a model that you were looking at or not necessarily? Well, I think probably a lot of the tech companies, they solved a real problem. So they had the same kind of high-class problem that we had where businesses wanted to advertise on the Google platform, the Meta platform, and they kind of like scaled naturally. And then they started investing a lot more in marketing. So I think everyone now sees its importance. Yeah. One of the other things I saw that you said that Canvas philosophy is sort of start niche and go wide. And many successful startups have sort of tried to follow that route.

5:46You're now a lot bigger, right? I have these numbers, right? 230 million users, probably even bigger number than that by now. 95 % of the Fortune 500, you're doing 3 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 niche? I think it actually is 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 having scale, being able to do a lot of things, sharing data across an entire platform is very beneficial.

6:35But also companies that do one thing incredibly well, there's always going to be a space for those companies. 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, that's not worth it, you know, because it doesn't reach enough people? Well, like yesterday, we acquired a marketing analytics company that essentially understands what a good ad looks like 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, 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.

7:23And so we do pick off niches, but we also do pick off underlying themes that elevate our whole suite. I mean, you're here at Cannes 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, 95 % of the Fortune 500. And so the conversations I'm having here go something like this. Hey, CXO, do you know much about Canva? And they're like, yeah, I know a little bit. 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 designs this year alone?

8:07And 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, no. They're all going rogue. And then it's like, holy shit, we've got to do something about this. And so that conversation then starts turning into how we can actually be more efficient and get control over our brand and create better content that's on brand at scale. So your entree into a lot of these big things was like, there's that phrase BYOT, you bringing your own tech to work. That's basically what it was.

8:42Absolutely. Yeah. I mean, people say that about AI now too, that you're bringing your own AI to work. And I wanted to ask you about AI. Everybody here is talking about it. everybody everywhere is talking about it. There's this, I don't want to say conflict, but there are creatives who are like, I want to create my stuff. Thank you very much. The algorithm cannot do what I do, right? And then there are folks, Canva among them, that's like, no, technology can democratize access to creativity. And some of the more pure creators might push back on that. How do you think about that issue? I've got a couple of strong thoughts and I've got, yes, some evolved thinking on that as well.

9:28So at Canva, when we launched, a lot of designers said, Canva, we hate you. You're ruining our industry. You're like letting everyone design. And then we kind of said back, why is a designer, why is that professional, that sort of skill set defined by 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 and then essentially democratize their work throughout the rest of the organization so they weren't stuck 80 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 we really see ai is just another step in that evolution.

10:17I 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 billion a year in revenue to our template creators. And that's evolving into sort of how we pay the creators that we train our models on. 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 corpus of work that these models have been trained on.

10:47But I do think creatives, they need to embrace this new technology. Like not embracing AI as a creative is, you can see where it's going. It seems folly. You have to. I mean, I was talking with someone from Google yesterday about their VO3 tool. Yeah, we integrated into Canva like two days ago. I mean, it's amazing though what it can do. Now it does make it feel like, 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 push back against it. Well, I think it's like with AI, there's going to be a huge proliferation of content.

11:27And I think to cut through that noise, you're going to 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 stand above the pack. If everyone can create this, then a good creative can create something elevated. And I think it's going to lift the baseline, absolutely. But I think the best creatives are going to be elevated beyond that and celebrated even more. As we're talking, I'm reminded I had a conversation, this is several years back, with Ben Affleck. And I was asking him, listen, so many people are watching the movies that you make on their phones?

12:05Do you start to think about like creating them differently as because so many people are looking on a smaller screen? And he was almost insulted at the idea, you know, that like, no, no, no, it's got to be for the big screen. It's got to be for the big screen. But now I wonder whether like you could, you know, like AI can do some of those things that make the big screen distinctive without having to have the same sort of budgets right around it. It's going to be incredible. And we're about to start running competitions for student creatives. What can you create as a 10-year-old or a 15-year-old and create your five-minute masterpiece?

12:44I think it's going to 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 going to be creative and what's currently movie quality creative down to the individual, which is really just going to see so much more creative. And I think it's a great thing because I think also like I'm dyslexic. So I can read, but like I don't read like well. I read fast, but like I blur things up. So I hate being a rote learner when it comes to like reading text. I'm a very visual learner and a learner that wants to learn by doing.

13:23I think what AI is doing is really it's allowing, particularly when it comes to education, bifurcating the way people learn and giving them the method that they resonate with most. And 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. And then people can learn and people can consume the way they want to consume. Yeah. Sometimes I think too, 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.

14:00right that's such a good comment because when we launched canva the 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 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 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 yeah ai is going to do that on steroids yeah but but it needs that interface to be able to and that's why like canva code for example like people people are scared by the even these ai coding tools that make creating a website so easy But people find the Canva interface very approachable.

14:57So like we launched Canva Code because it's really hitting that sort of not the first movers, but the masses that are already using Canva. And 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.

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17:07So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. 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 were talking about AI, there's a question that I sometimes wonder about, which is if someone uses AI to create something, who owns it?

17:57Like, you know, I get confused. That's the$20 billion question. Right? Like, is it me? Is it the AI? Is it the person who created the source material? Do you have a philosophy about that? A position? I think our terms and conditions say if you created in Canva and are assisted by AI, you own it. 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 kind of cutting down the jungle, forging forward before us. And we've kind of largely gone with industry best practices. I think that's probably the right approach.

18:34And you're not necessarily like Jack Dorsey and Elon Musk saying there shouldn't be intellectual property protections at all. No, 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 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 will say that for those of us who are in the news business, there are certainly a lot of anxiety about how our content is being used to train models and our business is going away.

19:10And will those models be able to continue to persist when they don't have the raw material? I think regulation is often slow to catch up with technology. And I think you've seen 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 all the musicians were up in arms thinking they're getting absolutely disrupted. But that sort of figured itself out to evolve into Spotify and Apple Music and whoever else is doing this. and I don't know if net net that's actually more beneficial 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 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 see it's just messy right now it's messy right now but in five years time I I think, well, does anyone want a world with no original content being created from humans?

20:10I don't think so. Like, does anyone want a newsroom that can't survive? No. Like, this ecosystem needs to exist. And I think the economics will figure itself out. But it's always a rough time when you're figuring out new technologies. It's true. It's true. And it does make people anxious. Well, I mean, the candle makers when the light bulb came about were worried for a while. But then they started switching on their lights. and they realized it wasn't so bad. Yeah, yeah. And they went and did something else. You co-founded Canva with your wife, with Melanie Perkins, who is now the CEO. It's not usual for a couple to be at the top of a big corporate organization like Canva.

20:54I did an article several years back with Mark Zuckerberg and 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 balance being co-workers, colleagues, I mean, technically you work for her, right? Right, she's my boss. And also being, you know, wife 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 I don't know if I'm speaking to all the married men out there, like you got to know who's boss like you and there's there's fights you can fight and then there's things you just got to concede on for like the goodness of everything um and then she is ultimately the boss and so on things like product she gets the final say and you just got to 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.

21:58But yeah, let me figure it out. And like on weekends, we've been doing this long enough now. We had, talking about going niche and going wide, we had a school yearbook company. Essentially it was Canva for school yearbooks before we had Canva. So we've been doing business together for probably 18 years and we've been in a relationship for 20 years. We have to say on weekends, like, come on, we're going to take a minute off. Like you can't sprint to marathon and there's some walks we go on where we're like, this is a no work talk. We just need a minute to just talk about it. Do you sometimes, one of you will bring something up and the other one will be like, not now.

22:31All the time. It's not the time. All the time. They're like, yeah. Which must frustrate both of you in those situations, right? Because you don't realize it can even be a very positive thing. Because running a business, you're constantly solving problems. And so you can be on a, like we go on lots of walks, right? and we could go, hey, there's a no work talk, but 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 going to fix this?

23:01And it can blow up a good walk. So like even a good thing, we're like, let's leave that for later. But sometimes too, you're just having, I mean, I know this for me, I could be at my kid's 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 this up now. No, we're both pretty useless. If it's something burning, we're both pretty bad at holding our tongue. So yeah, and we often do like purely work walks as well. I'm curious on whether it's on those walks or otherwise.

23:36One of the challenges for business leaders right now is deciding which sort of societal issues to speak out on or not. There's a lot of weariness about repercussions for things. The marketplace has become divisive about it. How much do you and Mel talk about that? How do you think about that? 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. And when it comes to societal issues, our philosophies haven't changed and they're not influenced by the latest comings and goings of politics. 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.

24:20And we've pledged to give away pretty much all of our money. And we already are in the process of doing that at a smaller scale through GiveDirectly. And I think we're just announcing$100 million over the next three years to go to communities in Malawi, 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. And so just like a startup, starting niche and going wide, that's kind of, yeah, our approach to that. I mean, not everyone who has been as successful as you guys have are willing to embrace giving that much of it away.

25:00I mean, a lot of people feel like that gives them power. You know, they can impact elections, impact other things. do 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'm 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 like buying more shit does not make me feel good like giving away money selfishly that makes me and you know that about yeah and so it's like so i could be selfish like i'm acting in my own self-interest because that's what that's what i find value in and people might find value in other things and that's totally cool i don't judge them on it i didn't grow up with much money i didn't grow up super poor mom was a teacher dad was like a welder then worked for the government mel's mom was a teacher like we we didn't grow up with money and we don't think that like money gives you more happiness like i mean those super yachts out there look pretty damn cool but um no i'd rather just raise normal kids and i don't want like to make my kid rich and like not appreciate things and i'd never want to rob the right from my daughter to earn her own way in life like so she needs to like buy her own house she needs to land sure like you like you'll help out in little ways like maybe make sure she gets a safer car chip a little bit extra in but like you don't want to rob kids of their right to feel that self-worth because i know if you know many rich people that have been given everything like they're kind of 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 it like yeah like so it wasn't it was like we had grandfathered some customers at like three dollars and so for most people we didn't increase prices that much but there was like it was an oversight right like 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 because if you do the right thing long term by a customer they will they will advocate for you right but you raised prices to a certain level and there were folks who had been much more and so for them it was a big for them for a small cohort of our longest like our oldest users who like you can argue loved us the most because they were grandfathered at this cheap price.

27:24It went 300 % up or something like that. And then we didn't really think about that cohort. We just thought about, hey, this is the new price. We're going to move everyone to the new price. Those people were obviously angry. And we said, you're fair enough. We're going to keep you at that price. Thank you for supporting us. And that was not a tough decision? It was not a tough decision at all. You have this reputation for being very transparent, a kind of no BS style. is that the way you always were do you feel like that that helps you as a leader in the organization or and then sometimes is when is it like a hindrance I never really had a professional job but I used to work on like construction sites while I was at university and then I was a school teacher as well following my mom's footsteps and I guess when we first started business I tried to be like more professional and then I just realized like being yourself is actually like I don't know it works for me I think people don't hate me 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 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 what are your goals what are my goals let's find a mutual like 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 i mean people are smart so why are you doing this today doing 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 and i love your podcast i really do well yeah yeah yeah yeah and you have done a great job um and you provide really valuable information well hopefully i said one thing that's someone can take no no this is this has been fun so what's it what's at stake right now for you at NCANVA?

29:41I 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. We need to be an AI company. That's what we need to be in order to succeed in this new world. And to drive that change, you kind of need like, you've got peacetime leaders and wartime leaders. and this is a time where you need wartime leaders that can get shit done come up with good ideas 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 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 higher standard.

30:37Yeah. Because like in the happy growth times, it was like, hey, we could just go on holiday 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 going to come from AI. It's going to come from disruption. And it's going to only come from being the very best product to solve companies and individuals' visual communication needs. Well, thank you. Thank you again for doing this. Pleasure. Thanks so much.