How Canva Empowered Creators and Exploded in Growth

Good morning. Whenever I do one of these dives into WHY a company succeeded in whatever it does, one theme emerges everywhere: They focus on user experience and simple design.

Is anyone still surprised by that? Is that still a surprising, informative fact? It’s been discussed and confirmed. I feel like nobody wants to read about this. I want to take that as a given for a company that can succeed.

I am instead looking for the pieces that stand out for that specific company. What’s their sauce? What smart plays are they running that we can learn from.

A lot has been written about Canva's success. I will focus this post on their product and pricing strategy.

In the meantime, I will keep looking for a company that succeeded because they focused on bad user experience and complicated, unintuitive design. That would be one for the books.

5-minute-read

Everyone can be a designer

Canva launched in 2013 to enable everyone to create visually stunning content. The vision resonated with users and investors, but the path to success was challenging.

The Australian founders, Melanie Perkins and Cliff Obrecht, started with a very niche problem to solve before they started Canva. As a teacher, she felt it was such a pain point to create good-looking yearbooks that she and her now-husband started a yearbook publishing business, Fusion Books. The business quickly became Australia’s largest yearbook publisher and is still running.

As a stepping stone, this business gave them a bigger vision.

Today, Canva is one of the biggest forces in making design accessible to anyone. It transformed workflows and has had a noticeable impact on the creative industry.

After steady growth to 10 million users in the first five years, the business expanded and pulled the right levers to boost growth to 130+ million in the following 6 years.

👥130+million Monthly Active Users

🕺Valued at $26 billion

💰Annual recurring revenue of about $2.3 billion

📈The 11-year-old company almost doubled its user base in the last 20 months

The boost in growth started to come once Canva expanded its positioning from a tool for graphic designers to a broader audience, including non-designers, as well as a team-friendly tool that would enable teams to collaborate closer. This is a similar growth lever that gave Figma its growth.

2023 was all about driving growth through the generative AI design tool “Magic Studio AI,” which gained a lot of viral attention as a design tool for non-designers to bring design via generative AI to the masses.

We’ll start by looking at their product and pricing strategy. But Canva strategically focused on another driving force; stay with us, as we’ll discuss below.

Non-Designers Needed Convincing

I always sit as close to the designers I work with. I call myself a “wannabe designer.” I admire them for finding the perfect layout, typography styles, and colors. Whatever I made never looked as good after the designers took over.

I could blame the tools, but that wouldn’t be fair. I had full access to the same tools, and I took the time to learn Photoshop, Sketch, and Figma.

The tools that non-designers have at their disposal are too terrible to use. You will agree if you have ever tried making a PowerPoint slide look good. But most don’t take the time to learn advanced tools. It’s a huge barrier.

And that’s okay. However, if the barrier of entry were so low, non-designers could bring their vision to paper without having to explain it to anyone else. And Canva knows this.

But how can Canva convince non-designers that it has the right tools for them?

Giving a design tool to a non-designer who has tried other tools doesn’t immediately make them believe a new tool would make their designs look better. They will have to try it to believe it.

.4 Key Moves in their Product & Pricing Strategy + Genious Bonus Move

Key move 1 - Lowest possible barrier to entry

Canva provided non-designers with a low barrier of entry by giving them ample features to play with entirely for free. These features made their designs look great, resulting in happy and satisfied users. Canva convinced these users that Canva’s design tools make design work accessible to them. And deliver great results.

Once they are in, how can they get hooked?

Key move 2 - Overdeliver on value for the free tier

Canva presented them with many templates to quickly create a professional-looking, on-brand design with minimal effort. However, it still involved a creative element: picking the right template that expresses how you want it to look. This is similar to how Instagram added filters to give users a greater sense of creative expression, which drove user engagement—Canva Free users can access 2.1 million free templates.

In 2023, they even included their Magic tools (generative AI) in the freemium package. Canva was one of the first tools where users could try the graphic capabilities of generative AI for free. Many new users came in from viral videos about how Canva made entire investor pitch decks based on a short product description. Users flocked in to try it themselves but became loyal and engaged as they discovered what else Canva had to offer. And some ultimately converted to paying customers.

Key move 3 - Make it easy for teams to collaborate

For Canva, this was a key enabler for growth. If you work in a team, imagine how painful it is to export a design, send it via Slack or email, wait for feedback, and update your designs to repeat the cycle. Especially in a remote world, this is not a desirable user flow, and users will look for easier solutions.

In addition, getting it right for teams over individuals is almost more important. Why? One user onboards and starts experimenting. They like the features, create something, and want to share it with their team. If that’s easy enough, it immediately multiplies one user to 4 or more referrals.

Even better, as they might operate in a business setting, this team could become an advocate within their company, and Canva could grow organically into the rest of the business.

Canva launched “Canva for Work” in 2018 and later rebranded to Canva Pro. Once the pandemic hit, growth started to skyrocket.

But a company needs to make money. So, how did Canva convert all these free users?

Key move 4 - Seamless Upgrade Path to Paid Plans

Canvas figured out what it would take to lead freemium users to paid tiers naturally. User analytics can tell them much about WHY users upgrade based on their past behavior.

Once users become regular and engaged, they discover the specific value in Cavna for them. Canva focussed on the right quality of life improvements that these users would seek, as well as increased usage for AI and larger storage capacity for power users. This is the value power users would likely pay for. After confirming that hypothesis, they rolled it out.

Note: The free tier includes almost all team collaboration features. However, it does not include enterprise-grade team management features like roles, admin controls, restricted sharing controls, etc.

Once Canva is deeply established in teams across the company, the chance to convert an enterprise package is very high. This brings big contracts and steady revenue. And it all started with a single user that wanted to try the Magic AI tool for free…

However, a drastic recent price increase of 300% !! and might have priced many small/medium companies out of their teams plan.

Bonus Move - Double down on Content Creators

Now, Canva has all the features that encourage users to engage, invite other users, and even upgrade to paid plans.

I would assume this, but I couldn’t find confirmation that they did cohort analysis of their users to understand which industry was the fastest growing, highest revenue, fastest churning, etc., to understand their key business metrics across different audiences.

Once you do that, you will know how to tailor your product marketing and maybe even future roadmaps toward your most desired audience.

So, Canva focused on social media content creators.

Here is how they won them over:

1. New templates tailored for Social Media Platforms

2. Added video creation and editing to become a one-stop shop for creators

3. Social media scheduler to extend the value offering beyond design and remove another reason to export anything

In addition, Canva ran content creation challenges and partnered with influencers and social media platforms.

Working with content creators is a win-win as it boosts word-of-mouth in the area with much reach.

Conclusion and Key Takeaways

What kind of blueprint can we take away from it?

• Provide an attractive free service where users understand the value you have to offer. Canva’s templates and powerful AI tools let users do what they could never do before.

• Make it easy for small collaborating teams to collaborate and share access to their work.

• Show active users shiny new features and templates that are worth paying for.

• Build a tiered pricing structure that adds quality-of-life features and capabilities that power users and later enterprise customers would ask for.

The kicker:

Once all that is in place, and you see that users stick, look at the most attractive industry to double down on. For Canva, content creation was on the rise. Canva lets content creators produce polished, on-brand content faster and cheaper.

A growing industry is establishing new workflows. Canva would fit right in as a tool in between - shitty amateur visuals and hiring a pro designer.

Based on partnering with Social Media platforms, Canva can now run analytics on user content and its performance. They can immediately turn these insights into new templates that they know work well.

The work of a whole agency with hundreds of people done in a single web-based application… 🤯🤯

I’ll take a content break now, and I hope you have a great rest of your week.

Best,

P.S. Please don’t hesitate to send this to a friend if you think they would be interested.