20VC Canva CoFounder, Cliff Obrecht on The Journey From 100 VC Rejections to a $40BN Company, Why Good Enough is Not Good Enough, The Secret to Hiring NonObvious Talent and Relationships to Money and Why They Are Giving Away Billions

In this episode, Cliff Obrecht, co-founder and COO of Canva, shares the story of how he and Melanie Perkins grew Canva from a small startup in Perth, Australia, to a $40 billion company. Despite facing over a hundred rejections from VCs in Silicon Valley, their persistence paid off as they secured funding and scaled the business to 60 million users and 2000 employees. Cliff discusses the early challenges, including accruing technical debt and the decision to halt new features to rebuild the platform. He emphasizes the importance of aligning goals, transparent communication, and the significance of perseverance, both in business and philanthropy. Cliff and Melanie's approach to wealth, opting to put 99% of their equity into philanthropic efforts, reflects their values and desire to contribute to solving global issues efficiently.

• Cliff Obrecht and his partner Melanie Perkins identified a gap in the design software market while she was teaching design at university.
• They observed the complexity of professional graphic design tools and contrasted it with the ease of use seen in social platforms like Myspace and Facebook.
• The initial idea for Canva came from Melanie's vision of future creation being online, collaborative, and easy.
• They started with a smaller scale project called Fusion Books, focusing on school yearbooks in Australia, which became the largest yearbook company in the country.
• They realized the potential for their software to be used for a variety of design purposes beyond yearbooks, which led to the scaling up of their idea into Canva.

"Oh, it probably goes back earlier than Canva. Mel was teaching design at university and realized that it sucked. It was really complex. It took about six months to learn the professional graphic design tools at the time, whilst at the same time people were using, I think it was Myspace at the time, Facebook, they were collaborating, they were sharing content and she gets all the credit. She was like, in the future, creation is going to be totally different. It's going to be online, it's going to be collaborative and it's going to be easy."

This quote explains the initial realization and inspiration behind Canva. Melanie Perkins, observing the difficulties her students faced with existing design tools, foresaw a future where design could be more accessible and collaborative, which eventually led to the creation of Canva.

• Cliff and Melanie decided to seek investment in Silicon Valley, known for its abundance of venture capital.
• They faced numerous rejections from venture capitalists (over 100 times) before securing investment.
• The process involved spending over a year in Silicon Valley, enduring rejections while still managing their existing business, Fusion Books.

"The thing with me is I just don't think too much and I don't think through how hard things are going to be. And that naivety probably plays well because I'm just like, oh, yeah, that sounds like a good idea. Let's go for it. What do we need to do? Let's unpack this problem we need to solve. Okay, we need some money. Where do we get money from? Silicon Valley's got heaps of money. Let's go to Silicon Valley."

Cliff Obrecht describes his approach to seeking investment as one characterized by naivety and a straightforward mindset. The quote reveals his decision-making process and the bold step of seeking investment in Silicon Valley, despite the challenges involved.

• Bill Tai, a venture capitalist and avid kite surfer, provided Cliff and Melanie an entry point into Silicon Valley.
• The couple capitalized on the opportunity to network at a kite surfing event in Maui, which led to valuable connections and eventual investment in Canva.
• The journey to securing investment included a critical moment of reflection after facing numerous rejections, followed by renewed determination.

"So that was our ticket into Silicon Valley and it was really fortuitous. Bill Tai is a venture capitalist in the Bay Area. You should have him on the show. He's an awesome guy, but a mad keen kite surfer."

This quote highlights the unconventional way in which networking and personal interests (kite surfing) played a pivotal role in Cliff and Melanie's journey to secure investment for Canva. It underscores the importance of leveraging unique opportunities and connections.

• Cliff Obrecht emphasizes the importance of persistence, integrity, and treating people well in business.
• He discusses the concept of business as a marathon, not a sprint, and the value of leaving a positive impression on people for potential future collaboration.
• Cliff also touches on his and Melanie's contrasting approaches to trust.

"Firstly, persistence pays off. You need to have some semblance of a good idea, but persistence really pays off."

This quote encapsulates Cliff's belief in the power of persistence in achieving success, suggesting that while having a good idea is necessary, the determination to see it through is equally important.

• Cliff's leadership style has evolved from leading by example to focusing on honesty, transparent feedback, and adapting communication to individual needs.
• He discusses the importance of self-care, learning, and adapting as one grows older and progresses in their career.
• Cliff also shares his philosophy on trust, contrasting his immediate trust approach with Melanie's more gradual one.

"I think it was very much used to be lead by example, work hard and accomplish things, and hopefully people would follow. I think now it's just like honesty."

This quote describes the shift in Cliff Obrecht's leadership style over time, moving from a model of hard work and example-setting to one grounded in honesty and transparent communication.

• Cliff Obrecht was a school teacher at an underprivileged school in Western Australia.
• His students included refugees from Africa, the Middle East, and parts of Asia, some of whom were ex child soldiers.
• These students faced significant disadvantages, often having spent years in refugee camps before moving to a new country where they did not speak the language.
• Cliff witnessed the transformation of these students as they educated themselves, learned a new language, and attained employment, which he considers a significant "distance traveled."

"But I used to be a school teacher, and I taught at one of the most underprivileged schools in Western Australia. A lot of the students there were refugees from Africa, Middle east, and parts of Asia. These people, ex child soldiers, they'd been to the most horrific things. They started life with a really big disadvantage."

This quote highlights the challenging backgrounds of Cliff's former students and the adversity they faced, setting the stage for his appreciation of their progress and achievements.

• Cliff Obrecht views many aspects of life, including business, as a game.
• In Australia, there is a social safety net that provides support for those without jobs, which Cliff commends.
• He approaches business as a serious game, aiming to win but not letting it define his identity.
• His competitive nature is balanced by a sense of contentment with simpler occupations, such as fishing or construction work.

"Most things are just a game, really. We're fortunate we live in Australia. We have a social safety net."

This quote explains Cliff's perspective on life and business as a game, and the security provided by social safety nets in Australia.

• Cliff Obrecht admits to feeling insecure and experiencing impostor syndrome when transitioning from teaching to the business world.
• He found social events with accomplished individuals intimidating and sometimes needed social lubrication to function.
• Over time, he realized that these individuals were not necessarily smarter; they were simply experienced in their specific fields.
• Cliff learned to back himself and trust his judgment, which improved hiring decisions at Canva.

"So, short answer. Yes, absolutely. And still have it very much to this day when we meet sort of fancy people."

This quote acknowledges Cliff's ongoing struggle with impostor syndrome, particularly when interacting with highly successful individuals.

• Cliff Obrecht values hiring internally and developing talent within Canva.
• He shares success stories of employees who advanced to senior positions without coming from "fancy tech companies."
• Canva complements homegrown talent with exceptional external hires, striking a balance between internal promotion and external recruitment.

"I love hiring internally. We love building talent."

This quote expresses Cliff's preference for nurturing and promoting talent from within the company.

• Cliff believes that a person's natural inclinations contribute to their strengths in deal making.
• He learned the art of getting a good deal from his mother, who haggled even in department stores.
• In business, Cliff emphasizes aligning goals between parties and being transparent from the outset to create mutually beneficial partnerships.

"You essentially just need to align the company you're acquiring or the person's goals with your goals."

This quote encapsulates Cliff's philosophy on deal making, highlighting the importance of aligning objectives for successful partnerships.

• Cliff focuses on understanding the motivations of the founders when considering acquisitions.
• He prefers to assess a company and its culture from an outside perspective before engaging with the founders.
• Trust is the most critical factor in investor relations, and Cliff values transparency and alignment of goals.

"The most important thing for me is trust."

This quote underscores the significance of trust in relationships with investors and in business dealings generally.

• Cliff humorously recounts the difficulty of assembling a Christmas tree as a recent challenge.
• He shares a serious business challenge when a software project outsourced to India failed to deliver, requiring manual recreation of yearbook pages.
• Another significant challenge was addressing the accrued technical debt in Canva's front end code, which necessitated a complete rewrite.

"The other hardest thing we ever done were about five years into canva. And we realized when you're a startup, right, you have to make tradeoffs."

This quote reflects on the tough decisions and challenges that startups face, such as managing technical debt while growing the business.

• Canva halted new feature development for two years during its growth phase.
• This period of not shipping new products was challenging for a company accustomed to constant innovation.
• Despite the difficulties, Canva remained focused on its long-term vision and eventually increased its product velocity.

"It was supposed to be one year, but it took two years in the middle of canva's growth journey. Call it from year four to six, we're at year ten now. And that was a death march."

The quote explains the unexpected extension of Canva's feature development halt and acknowledges the difficulty of this period.

• Canva faced competition from copycats during its growth.
• Mel, a co-founder, ignored competitors and focused on Canva's long-term vision.
• A competitor introduced video before Canva, which was part of Canva's plan, causing concern.

"We have had so many copycats over the years. Mel doesn't ever look at competition. She's like, fuck the competition. We've got this ten year vision."

This quote highlights Mel's disregard for competitors and her commitment to Canva's long-term goals.

• Being first to market is important, but acquiring users is equally critical.
• Canva focused on creating a great product and utilized it as the main marketing channel.
• The company chose social media marketers as their initial target audience due to their high need for visual content creation.

"First to market is important, but user acquisition is just as important."

This quote emphasizes the dual importance of being first to market and mastering user acquisition strategies.

• Canva spent a year building the product before launching.
• Investors pressured for a quick launch, but the founders resisted in favor of a polished freemium product.
• Social media marketer Guy Kawasaki was an early supporter of Canva.

"We are going to launch the most delightful product to our users and offer it for free, which is the freemium model."

The quote illustrates Canva's strategy to build a high-quality product and offer it for free to attract users.

• VCs were skeptical about Canva's potential due to non-technical founders and a perceived narrow initial market.
• Canva's strategy was to start with a niche market and expand to adjacent markets.

"You don't want to boil the ocean. You want to solve a problem for someone that has that problem, solve that problem really well."

This quote explains the strategy of focusing on a specific problem for a niche market before expanding to broader markets.

• Having a technical co-founder is considered important for the technical foundation of a business.
• Canva was lucky to bring on a third co-founder, Cam, who had a technical background.
• Technical expertise helped gain investor confidence and build a solid technical foundation for Canva.

"We were incredibly lucky to bring on a third co-founder, Cam, and he was at Google, he wasn't quite technical, but we palmed him off as the technical co-founder because he could write JavaScript."

The quote discusses the importance of having a technical co-founder and how Cam's skills contributed to Canva's development.

• Canva prioritizes features that benefit the greatest number of users.
• The company looks ahead to future trends and industries to make strategic long-term bets.
• They focus on integrating AI tools into workflows to assist users in accomplishing their tasks.

"People don't know what they don't know. It's the whole Henry Ford. If you ask them people what they wanted, they would have said a faster horse."

This quote reflects on the idea that consumers may not always know what advancements are possible, likening it to Henry Ford's philosophy.

• Canva aims for excellence in its key product areas and rejects the notion of "good enough."
• The unified platform approach allows for interoperability and ease of use across different types of content creation.
• Canva's pricing model is aligned with customer value, charging based on active users.

"We hate good enough. Good enough is not good enough. We aspire and are world class across our key product areas."

The quote conveys Canva's commitment to delivering high-quality, world-class products and not settling for mediocrity.

• Cliff Obrecht has always felt rich due to his modest desires and ability to travel.
• Despite Canva's valuation growth, Cliff and Mel have not cashed out significantly; they are focused on the company's long-term success.
• They committed the majority of their Canva ownership to philanthropy, focusing on impactful projects.

"We have more than enough with what we have. So Mel and I, we own 31% of canva, and we put 30% so, like, 99% of what we own into a charity."

This quote highlights Cliff and Mel's decision to dedicate the majority of their Canva shares to charitable causes.

• Cliff Obrecht chooses not to actively angel invest, preferring to back ideas that he believes the world needs.
• He discusses the discomfort with being labeled as billionaires and the decision to focus on philanthropy.

"I actively don't angel invest. I do do some just because it's like a great person."

The quote reveals Cliff's personal stance on angel investing and his criteria for backing projects.

• Cliff Obrecht expresses a frugal approach to personal spending, preferring to save rather than spend on luxury items like private jets.
• He values experiences over material possessions.
• Cliff is keen to be invited onto someone else's private jet but has never flown on one himself.

"I've never flown on a private jet before, but I'm very keen to be invited on someone else's."

Cliff is interested in the experience of flying on a private jet but prefers not to spend his own money on such luxuries.

• Speaker B emphasizes the importance of spending money on things that can improve oneself, like a personal trainer.
• Cliff agrees and mentions that investing in experiences and personal trainers can enhance one's life and work performance.

"An example of that is I spend on a personal trainer because it makes me fitter and healthier and I could never afford to before."

Speaker B's quote highlights the value of investing in personal health and fitness, which can also lead to improved performance in business.

• Cliff and his partner invest in experiences, such as adventurous holidays, which bring them joy.
• They have engaged in activities like motorbike riding in Bhutan and ziplining in Laos.

"We just have experiential holidays, and that means a lot to us, and that's where we get the most of our joy."

Cliff's quote underlines the significance of investing in experiences that bring joy and create lasting memories.

• Cliff discusses the challenges and benefits of being in a relationship with a business co-founder.
• He believes there is no secret to a successful marriage; it's a work in progress.
• He values his relationship with Melanie, who is his best friend.

"Melanie. I have only been married two years, but we were dating 16 years before that, so we've been together for 18 years."

This quote reflects on the long-term relationship between Cliff and Melanie, emphasizing the importance of friendship in their marriage.

• Cliff and Melanie strive for work-life balance by setting boundaries around work discussions during personal time.
• They recognize the need for "recharge moments" and try to avoid work talk during weekends and date nights.

"We endeavor to. We have this thing where we're like, no work talk, and then we're not talking about work."

The quote illustrates their attempt to separate work from personal life to maintain balance and the importance of doing so for long-term sustainability.

• Cliff sees the mutual understanding of work demands as a benefit of co-founding with a romantic partner.
• The downside mentioned is their extensive work hours.

"Oh, I think if either of us were dating anyone else, we would both be dumped, because we're both kind of neglectful partners at times."

The quote highlights the mutual understanding and support that comes with co-founding a company with one's partner.

• Cliff shares his views on fatherhood, emphasizing the importance of instilling values in children and allowing them independence.
• He admits that the lack of sleep is the hardest part of being a new father.
• Cliff and Melanie practice tag-teaming in parenting due to their busy schedules.

"I think you need to give that space to kids to find their own path and cut their own course."

The quote reflects Cliff's belief in nurturing independence and values in children, allowing them to grow into self-reliant individuals.

• Cliff discusses the challenges of establishing routines for children and the effectiveness of getting professional help.
• He and Melanie attempted to hire a night nanny but found that establishing a routine was more impactful.

"We ended up getting a lady in for a few hours for about a week, and she really just whipped us into gear."

This quote reveals the benefits of professional guidance in parenting, particularly in establishing routines for children.

• Cliff enjoys reading for leisure and prefers "trash" like Jack Reacher over business books at night.
• He mentions "Working Backwards" about Amazon as a current business book he enjoys.

"I've read a lot of business books over the years, but now when I'm going to bed, at night, I want some trash."

Cliff's quote indicates his preference for light, entertaining reading material to unwind at the end of the day.

• Cliff aims to bridge the gap between the world's goodwill and the problems that need solving.
• He believes there are enough good intentions and capital to address global issues but sees a need for more efficient systems.

"I think the world has enough good intentions and capital to solve the world's problem."

The quote captures Cliff's perspective on philanthropy and the necessity of creating systems that effectively channel resources to address problems.

• Cliff is uncertain about starting another company due to the challenges involved.
• He is open to running philanthropic projects with a startup mindset.

"I don't think so. It's hard. Tell me, although Glenn is a punishment, likely we'll probably do."

The quote expresses Cliff's hesitance to embark on another startup due to the difficulties experienced, yet he remains open to project-based endeavors.

• Cliff has recently changed his mind about the difficulty of parenting.
• He acknowledges underestimating the challenges of having a child.

"How hard having a kid is. I used to tell Mel when she was pregnant, which she used to hate."

This quote reveals Cliff's newfound understanding and respect for the complexities of parenthood.

• Cliff hopes his child will adopt traits such as perseverance, kindness, curiosity, and a sense of adventure.

"Perseverance, kindness, being curious. And a sense of adventure."

The quote lists the qualities Cliff values and wishes to see in his child, highlighting his aspirations for her character development.

• Cliff would choose Bob Iger for his values-first approach to business.
• He admires Iger's focus on customer and employee well-being and the creation of value.

"Bob has a very values first approach to business. It really resonates what's best for the customer, what's best for the employees."

Cliff's quote emphasizes the importance of a values-driven approach in business leadership, as exemplified by Bob Iger.

• Cliff reflects on the lessons learned from Canva, wishing he had known more about people management earlier.
• He values transparency and aligning goals within a team.

"I guess a lot of the people management stuff, I've really evolved how to get the best out of people."

The quote underscores Cliff's personal growth in managing people and the importance of clear communication and shared objectives.

• Cliff is pleased with the shift away from the idea that startups must be based in the Bay Area.
• He encourages a global approach to investing and values diverse perspectives.

"The amount of investors that rejected us because they said, I like to ride my bike to my startups, I'm like, fuck off."

The quote critiques the previously narrow view of some investors and celebrates the changing attitudes towards startups outside traditional hubs.

• Cliff looks forward to Canva's continued growth and believes it will play a significant role in the increasingly visual digital world.
• He is excited about the potential paths Canva can take.

"We really believe as the web and the world become increasingly visual places, canva is in prime position to really help through that transition."

The quote conveys Cliff's optimism for Canva's future impact on visual communication and its alignment with the web's evolution.

• Speaker B closes the conversation by praising Cliff's humility and authenticity as a leader.
• Cliff's approach to leadership and business is characterized by a focus on creating value and maintaining a work-life balance.

"Cliff is just such a wonderful, awesome leader. Such humility, such authenticity."

The final quote from Speaker B summarizes Cliff's leadership qualities, highlighting his humility and authenticity.