The Profile Dossier: Melanie Perkins, the Billionaire Founder of the World's Most Valuable Software Startup
“If you get your foot in the door just a tiny bit, you have to kind of wedge it all the way in.”
While no one was looking, Melanie Perkins built Canva, an online graphic design business valued at $40 billion. Canva's latest funding round made it one of the world's most valuable private software companies, and the most valuable female-founded and female-led company.
It’s one of these rare Silicon Valley stories that you don’t hear too often because well, the company is not in Silicon Valley.
Based in Australia, Canva CEO Perkins and her co-founder (and now-husband) Cliff Obrecht recently raised a whopping $200 million in venture funding from investors including T. Rowe Price with Franklin Templeton, Sequoia Capital Global Equities, Bessemer Venture Partners, Greenoaks Capital, Dragoneer, Blackbird, Felicis, and AirTree.
“It’s a huge vote of confidence in what we’re doing and where we’re going,” Perkins told Forbes. “I always like to have enough money in the bank that if the lights turned off tomorrow and everything disappeared, we’ve got enough capital to keep us together for a long time.”
With more than 2,000 employees, it's hard to believe that Canva started as a very, very small high school yearbook business.
When she was 19, Perkins and Obrecht were college students in Perth, Australia. They were making a little income on the side by helping teach other students how to navigate complicated design programs offered by tech giants such as Microsoft and Adobe.
"People would have to spend an entire semester learning where the buttons were, and that seemed completely ridiculous,” Perkins said. “I thought that in the future it was all going to be online and collaborative and much, much simpler than these really hard tools.”
Perkins and Obrecht, who were dating at the time, decided to start small and test their idea. They created an online school yearbook design business that would offer yearbook templates full of layouts, fonts, and elements available for free. The pair would then print the yearbooks and sell them to schools all over Australia.
"Over five years, Cliff and I grew Fusion Books into the largest yearbook company in Australia, and expanded into France and New Zealand," she says. "But we knew all along that the technology we had built could be applied much more broadly, which is when Canva was born."
The business was a success, but Perkins saw a bigger, more immediate need to create a one-stop-shop for people who needed design services but didn't have design skills.
She began pitching small investors, and the idea for Canva became a reality in 2012 when the duo added a tech co-founder named Cameron Adams and a tech developer named Dave Hearnden. Canva raised $1.5 million for its initial funding round to build a simple design tool that would help users create social media graphics, presentations, posters, documents, and other visual content.
Today, the company offers more than 800,000 templates and 100 million photos, illustrations, and fonts. It attracts more than 60 million monthly active users from 190 different countries. It makes money via a freemium model that allows enterprises to pay for more designs and capabilities. As a result, more than 500,000 paying teams now use Canva, including companies like American Airlines, CBRE, Intel, Kimberly-Clark, and Zoom.
Another factor that separates Canva from its venture-backed peers is that the company has been long profitable and cash-flow positive. According to a report in Forbes, the business continues to more than double in sales, which put it on pace to reach a $1 billion annualized revenue run-rate by December 2021.
From her humble beginnings to her billionaire status, Perkins already has a plan for what to do with her wealth. She has long talked about her "two-step plan for maximum impact," which involves “become one of the most valuable companies in the world, and do the most good we can do.”
She and Obrecht don't believe in "hoarding money," so the duo has already launched a foundation where they have pledged to give away 30% of Canva, which accounts for the “vast majority” of their stakes in the company. Their equity, which is roughly valued at $12 billion, would put the young co-founders on track to create Australia's largest charitable foundation.
"It has felt strange when people refer to us as 'billionaires' as it has never felt like our money, we’ve always felt that we’re purely custodians of it," Perkins, who is only 34, wrote in a September blog post. "We have this wildly optimistic belief that there is enough money, goodwill, and good intentions in the world to solve most of the world’s problems, and we want to spend our lifetime working towards that."
Here's what we can learn about innovation, leadership, and philanthropy from Perkins, one of the most underrated founders and operators in the technology space today.
On building a design empire: How on earth did Perkins build a profitable business in Perth, a city built on mining and petrochemicals? When she pitched Silicon Valley investors, they saw two big red flags: The company was based in Australia and its co-founders were romantically involved. This 2019 profile details how Perkins and Obrecht cobbled together their initial funding to launch what would become one of the most successful software companies in the world.
On the power of the entrepreneurial mindset: Perkins started her very first business when she was 14 years old selling handmade scarves. As she got older, she understood that the people who change the world often start small. "A key moment for me was when I first met with Lars Rasmussen, a co-founder of Google Maps," she says. "Until then, I hadn't considered that people who start huge, world-changing companies could just be normal, lovely people. It radically changed my perspective and the scale of my vision for Canva."
On the nuts and bolts of building a business: In this podcast, Perkins discusses the long, winding road of pitching investors to secure funding for her fledgling startup. She details how she navigated her first investor meeting, her first pitch, and her first hire. It's a classic entrepreneur story, full of ups and downs and failure after failure — until she and her team finally hit it big. This is a must-listen.
On growing Canva into a global unicorn: Perkins has grown Canva from a two-person company into a multi-billion-dollar software startup. Along the way, her team has encountered plenty of opportunities to pivot in various directions, but the company's greatest strength has been staying disciplined and strategic. "I don't really like distractions," Perkins says. "I like getting to build a company."
On ditching the 'overnight success' myth: There is no such thing as an overnight success. In this talk, Perkins explains all the ingredients required to build a successful company — none of which have to do with a totally random lucky break. She emphasizes that you can create your own luck by relentlessly talking about your outlandish dream with anyone who will listen. "It's the only way it will turn into a reality," she says.
On leading during a crisis: In 2020, Canva responded to stay-at-home orders with preventative measures, from implementing remote work early to flexible schedules for working parents. Here's how Perkins helped her employees stay safe and productive at home.
Test early and often: Even though Perkins had an audacious goal to take on software industry titans like Adobe and Microsoft, she knew she had to take the first step. What was something small that could serve as proof of concept of her idea? High school yearbooks. By creating a software tool that required no prior design experience, she made the entire process more seamless and fun. Thanks to the success of that tiny venture, she was able to gain momentum and prove there was a market need for her much-bigger business idea. Test your work, seek feedback, and iterate before you launch. Big things always start small.
Aim to be memorable: When you search the words "bizarre pitch deck," Perkins's Canva recruitment pitch deck appears as a first result. Here's why: As Perkins was building up Canva's technical team, she wanted to recruit Dave Hearnden, a senior engineer at Google. He was having second thoughts, so Perkins hatched a plan to convince him to take a chance on Canva. She sent him a 16-slide pitch deck, which details the story of a man named Dave, who longed for adventure but was torn by his loyalty for Google. In the pitch deck, as in real life, Dave eventually joined Canva. Sometimes, the bold, memorable moves prove to be fruitful. (Check out the pitch deck here.)
Know that rejection is simply part of the game: Perkins received more than 100 "no's" from investors before raising her first funding round for Canva. "It was really hard for her to raise," says angel investor Bill Tai. "You've got a young girl in her 20s from Australia who had never worked at a company, with her live-in boyfriend as COO. People would say to me, What if they break up? I didn't have a good answer." But every time Perkins got a hard question from an investor or a reason on why they declined to invest, Perkins says she stayed focused on what she could change. "I revised our pitch deck after every meeting, more than a hundred times in a year, to answer the questions or fix the reason for rejection from the last time," she says. "The normal thing to do after your 100th ‘no’ would be to stop, but you just have to persevere." Remember, rejection is just a form of feedback.
Create internal systems to streamline communication: When it was just Perkins and her co-founder Obrecht, communication was easy. "At the start, there were just a few of us sitting around one table and everyone always knew what everyone else was working on," Perkins says. But now, Canva's employee base has ballooned to more than 2,000, making that same task impossible. So Perkins and her leadership team devised a system-based plan to make sure communication was seamless across teams. Throughout the week, each team catches up on the daily progress of benchmarks they want to hit. On Fridays, each team at Canva convenes for a company-wide standup meeting to share progress, lessons, and takeaways. "Our structure of small, empowered teams enables everyone to be nimble and move quickly," she says. This is how Canva has retained the flexibility of a startup even though it's grown into the size of a mature corporation.
Build a company to solve your own problems: Perkins says she lives by this quote from legendary investor Paul Graham: "The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing." She says she came up with the idea for Canva from her own observations where she watched students struggling to learn complex design programs. "I don't believe you can ask your users or customers what you should create," she says. "If I had asked the students what they wanted, they would have asked for incremental improvements to the design software they were using." In other words, trust your own expertise. What annoys you probably annoys other people too, and the solution may allow you to come up with your next business idea.
QUOTES TO REMEMBER.
"Plant lots and lots of seeds and hopefully one will grow."
“If you get your foot in the door just a tiny bit, you have to kind of wedge it all the way in.”
"If you believe one person who says you can’t, you have to believe one person who says you can."
"The rejection is often not because of the reasons you think they are rejecting you.”
"Know that determination wins."