The Product Strategy that Fueled Canva's Success

Ever wondered what it takes to design a product so good it grows into a $6 billion business? No? Is it just me? Is that weird? What's up? It's Jamal from HubSpot. We're going to take a deep dive into Canva's product strategy and see how the Australian unicorn is disrupting the $128 billion design services market. If you like this story, you know what to do with the like button and subscribe to the HubSpot YouTube channel. Now we've all googled a question. Uber to a party Venmo to maybe a little too much for those nachos Having your product name become a verb that people use in everyday conversation is the holy grail for any brand, especially in tech. It means that your product has become ingrained in people's lives. Now, Canva isn't a verb just yet, but with 40 million monthly users in 190 countries, it's well on its way to becoming the next TiVo or Skype to make the linguistic leap in our consciousness. The idea for canva began in 2007 when CEO Melanie Perkins grew frustrated teaching students complex design tools like Photoshop. Hey, Photoshop. That's another verb. Nice. Perkins and co founder Cliff Overich had a vision for an online tool that would give the whole world access to high quality design capabilities without having to master complicated design software. With the addition of technical co founder and Chief Product Officer Cameron Adams, the first version of canva launched in 2013 with a team of eight and Adams doing the product design and much of the coding. The product designed by Adams and the Canva team set it apart from the competition and set the stage for massive growth. What can we learn from Canva's $6 billion innovation? Let's find out by looking at the four major pill of the product. The first is Canva's ease of use. According to Canva, it only takes 23 seconds to learn graphic design using its browser and app based design tools. This might be a slight exaggeration, but the product really is incredibly simple, even for users who have never touched a design tool. Looking at Canva 1.0, you can already see the clean and intuitive editor tool that is still the core of the product. Neat. Adams has described the central product philosophy as just simple enough, a premise in keeping with Canva's mission to make design more accessible. Canva's ease of use starts with onboarding. The moment you hit the site, users aren't required to sign up or log in, just one click to start designing. Boop. There you go, you did it. Once you're working in the Canva editor, everything is drag and drop. The app proportionally resizes images and prevents users from accidentally stretching images out of proportion. Text dynamically resizes as you type, and grid lines appear as you move things around. These are pretty familiar functions now, but they were extraordinary when Canva debuted. Adams describes these types of design guardrails as having great defaults. In Canva's case, that means enabling new users to produce great design right out of the box, while still allowing experienced users to go deeper with the tools as abilities increase. Your business probably has different defaults, but it's all about optimizing for the solution that works best for the most users. The idea of defaults in Canvas design system drives the product's second major component templates. Canva offers over 250,000 free templates that users can customize and publish. That number almost doubles for pro subscribers. Templates play a crucial role in Canva's product. With so many templates available, Canva also has to put lots of effort in helping users find the templates that are right for them to just like Netflix for video and Spotify for music, Canva uses machine learning to optimize its template recommendations, creating personalized suggestions that users might not even be aware of but that make the entire Canva experience more satisfying. And I've been saying this for a while now, but the minute that machines start learning, that's the future, baby. Templates also provide a cornerstone for Canva's site architecture and SEO strategy. The website features dozens of template landing pages and hundreds of subpages that act as lead magnets when new assets become popular, like TikTok templates or Zoom backgrounds, and they create a new landing page and watch the traffic pour in. Responding quickly to consumer trends is critical for any business. It's one of the ways that Canva has stayed on top. We have a whole video about Canva's digital marketing that you can check out when this one's over, look for the link in the description. Templates have always been a part of Canva, but their fundamental importance wasn't there from the beginning. Their current importance is a result of data that shows users are much more likely to publish a design if they use a template, as opposed to starting a design from scratch. Data driven decision making is critical for any tech company, and it's the third ingredient to Canva's success. That's why Canva partners parses every imaginable web and digital analytic and is constantly testing iterations to make improvements. In Canvas case, this can mean testing a new team invite dialog and discovering that improved conversion by 88% or increasing activations by 10% by testing a welcome pop up that asks users what kind of poster they want to design when arriving through that channel. For your business, making data driven improvements can mean anything from optimizing your high performing blog posts to increase conversion or testing different app store descriptions to improve visibility. Start with any data you have easy access to and run a pilot program to test and iterate. You'll be amazed how quickly those sort of methodical improvements can turn into positive change. Feeling out of your depth or want a refresher on some of these concepts? We've got you covered with literal days of content with HubSpot Academy, all geared towards helping you and your business skill up. Check it out in the description below. Now, when it comes to data, you can only get insights on the things that you're doing. You can't measure what you aren't doing or what you could be doing. That's why Canva focuses on qualitative data as much as quantitative Data. In a 2020 interview, Canva's head of product growth and monetization Dave Burson said it's important to balance talking to your happy customers as much as your unhappy custom. Yet he admits that most companies don't do enough of this research because it can be more cumbersome than analytics. It was from talking to customers that Canva learned users didn't understand the phrase magic resize in marketing for Canva Pro. But by changing it to magically resize your design in just a few clicks, the signups magically increased. I wonder if they can do that with food. Just make like a really big chicken wing. I'll email them. The real mystical thing about Magic Resize, though, is that it's one of the few features on Canva that is limited to pro users. Almost all of the product's functionality is available available in the free tier, keeping with the company's mission to democratize design for the whole world. In an interview with NPR's How I Built this, Perkins describes this philosophy as providing as much value as you possibly can. So how does this business model work? That's the fourth pillar of Canva's product upgrades. Users are encouraged to upgrade their service in order to access tools that add convenience like Match Resize, as well as expanded content like premium templates and images. This is done with a light touch compared to many other freemium services, a pricing page that dynamically changes with the size of your team, a prompt to get a subscription before buying, a premium template or image, or a Canva Pro button in the bottom navigator bar of the Canva mobile app. Despite the soft sell, Canva has acquired over one and a half million paying customers who account for an estimated $230 million in annual revenue. It's a lot of money. The company doesn't release its balance sheet, but it claims increasing profitability every year since 2017, something that no doubt helped it obtain that multi billion dollar unicorn valuation. But the real value investors see is in the ability of canvas product to revolutionize how we do graphic design. No matter if you're a Fortune 500 company or a crappy startup, or just someone who's doing design for work or pleasure, every successful product out there is a result of thousands of small decisions. Get enough of those decisions right and you have a good chance of success. Canva is a product that got a lot of decisions right, from its ease of use and template first design system to its data driven decision making and freemium upgrade business models. Keep watching this channel for more lessons that will help you make the right decisions for your business. And let us know what companies you'd like to see us cover in future episodes by telling us in the comments. If you'll excuse me, I'm going to get back on the grind now for Jamba, which is my 12 billion dollar company. You'll hear about it. I'll see you next time. The idea for canva began in 20062000 hey, 2000 words.