Canva is a graphic designplatform renown for its simplicity and the fact that it is freely accessible to users. The platform follows a freemium model, where users are prompted to subscribe (Canva Pro) to get more features at $12.99/month. Other plans comprise Canva Enterprise ($30/month). Other services are Canva Print (allowing consumers to print a chosen design on physical material) and the Marketplace, where designs are sold at one-time, and Canva takes a cut of the sales.
Business Model Element
Analysis
Implications
Examples
Value Proposition
Canva’s value proposition revolves around democratizing design by offering a user-friendly and accessible platform for graphic design. It provides a wide range of design tools, templates, and assets that empower users to create professional-quality visual content without the need for extensive design skills or software expertise. Canva simplifies the design process, making it efficient and enjoyable. Its collaborative features enable teams to work together on design projects seamlessly. Canva also offers a free plan with premium features available through a subscription, making design accessible to individuals and businesses of all sizes.
Democratizes design by offering a user-friendly and accessible platform. Provides a wide range of design tools, templates, and assets. Empowers users to create professional-quality visual content without extensive design skills. Simplifies the design process, making it efficient and enjoyable. Enables collaborative design work for teams. Offers a free plan with premium features through subscription. Appeals to individuals and businesses of all sizes seeking design solutions.
– Canva’s value proposition aligns with the increasing demand for visual content across various industries. – The platform’s user-friendly approach reduces the barrier to entry for design. – A combination of free and premium offerings caters to a broad user base. – Collaborative features promote teamwork and efficiency in design projects.
Customer Segments
Canva targets a diverse range of customer segments, including individuals, small businesses, marketing professionals, educators, non-profits, and larger enterprises. Individuals and small businesses use Canva for personal and marketing materials. Marketing professionals rely on Canva for campaign assets. Educators use it for educational materials, while non-profits leverage Canva for fundraising and awareness campaigns. Larger enterprises often adopt Canva for consistent branding across teams. The platform caters to both free and paid users, providing accessibility and scalability.
Targets individuals, small businesses, marketing professionals, educators, non-profits, and larger enterprises. Appeals to individuals for personal and marketing materials. Serves small businesses with marketing and promotional materials. Caters to marketing professionals for campaign assets. Supports educators with educational materials. Empowers non-profits for fundraising and awareness campaigns. Attracts larger enterprises for consistent branding across teams. Provides accessibility and scalability through free and paid plans.
– Addressing a wide range of customer segments ensures a diverse user base. – Offering both free and paid plans allows users to choose the level of service that suits their needs. – Canva’s user-friendly interface caters to individuals with varying levels of design expertise.
Distribution Strategy
Canva’s distribution strategy is primarily digital and focuses on its website and mobile app. Users can access Canva through their web browsers or by downloading the mobile app for iOS and Android devices. The platform offers cloud-based design, allowing users to work on their projects from any device with an internet connection. Canva also provides a web-based platform for team collaboration, making it easy for users to work together on design projects in real-time. Additionally, Canva offers integrations with popular social media and content management platforms to streamline the design and publishing process.
Relies on a digital distribution strategy through its website and mobile app. Offers cloud-based design accessible from web browsers and mobile devices. Provides web-based team collaboration for real-time project work. Offers integrations with popular social media and content management platforms. Ensures accessibility and convenience for users, supporting design on various devices and workflows.
– Digital distribution simplifies access to Canva’s platform and eliminates the need for physical distribution channels. – Cloud-based design enables users to work on projects from different devices, enhancing flexibility. – Collaborative features support teamwork and productivity in design projects. – Integrations streamline the design and publishing process for users.
Revenue Streams
Canva generates revenue through a subscription-based model, with additional revenue sources from print products and partnerships. Canva Pro and Canva for Enterprise are subscription plans that offer premium features, including advanced design tools, brand management, and team collaboration. Canva also offers print products, such as business cards and posters, which users can order through the platform. Partnerships with stock photo providers and other services contribute to revenue through affiliate programs and licensing agreements.
Relies on revenue from: 1. Subscription plans (Canva Pro and Canva for Enterprise) with premium features. 2. Print products, such as business cards and posters. 3. Partnerships with stock photo providers and other services through affiliate programs and licensing agreements. Ensures income through subscription fees for premium features. Diversifies revenue sources through print product sales and partnerships. Enhances value with advanced design tools and collaborative features in subscription plans.
– Subscription plans provide a recurring source of revenue and incentives for users to upgrade. – Print products offer a supplementary revenue stream and enhance the user experience. – Partnerships expand Canva’s offerings and generate income through affiliate programs and licensing.
Marketing Strategy
Canva’s marketing strategy encompasses content marketing, social media engagement, partnerships, word-of-mouth, and community building. The platform creates educational content, tutorials, and design guides to demonstrate its capabilities and help users improve their design skills. Active engagement on social media platforms fosters a community of users and promotes user-generated content sharing. Canva forms partnerships with organizations, educational institutions, and businesses to provide design solutions and access to Canva for Education. Word-of-mouth referrals play a significant role in attracting new users as satisfied customers recommend the platform to others.
Utilizes content marketing, social media engagement, partnerships, word-of-mouth, and community building for marketing. Produces educational content, tutorials, and design guides to showcase capabilities and help users improve their design skills. Actively engages with users on social media platforms, fostering a community of design enthusiasts. Forms partnerships with organizations, educational institutions, and businesses to provide design solutions. Benefits from word-of-mouth referrals as satisfied users recommend the platform to others. Focuses on building awareness, educating users, and fostering a sense of belonging within the Canva community.
– Educational content establishes Canva as a valuable resource and attracts new users seeking design guidance. – Social media engagement builds a community of design enthusiasts and encourages content sharing. – Partnerships extend Canva’s reach and address specific customer segments. – Word-of-mouth recommendations contribute to organic growth and user acquisition.
Organization Structure
Canva operates with a structure that includes teams responsible for product development, design, content creation, marketing, partnerships, customer support, and business operations. Product development teams focus on improving design tools and features. Design teams work on creating templates and assets. Content creation teams produce educational content and resources. Marketing teams handle promotional efforts and user acquisition. Partnerships teams collaborate with organizations and educational institutions. Customer support teams assist users with inquiries and issues. Business operations teams manage financial and administrative aspects.
Employs a structure with specialized teams for product development, design, content creation, marketing, partnerships, customer support, and business operations. Ensures continuous enhancement of design tools and features. Focuses on creating templates and assets for user convenience. Manages promotional efforts and user acquisition through marketing teams. Collaborates with organizations and educational institutions through partnerships teams. Assists users with inquiries and issues through dedicated customer support teams. Manages financial and administrative aspects through business operations teams.
– Specialized teams contribute to ongoing platform improvement, user satisfaction, and safety. – A wide range of templates and assets enhances user convenience and creativity. – Marketing and user acquisition efforts play a crucial role in platform growth and revenue generation. – Partnerships with organizations and educational institutions expand the platform’s offerings and address specific customer segments.
Competitive Advantage
Canva’s competitive advantage stems from its user-friendly platform, vast template library, collaborative features, global community, and accessibility. Its user-friendly interface simplifies the design process, appealing to users with varying levels of design expertise. Canva’s extensive library of templates and assets provides a wide variety of design options for different purposes. Collaborative features enable teams to work together seamlessly. The global community offers support, resources, and a sense of belonging. Accessibility through both free and paid plans ensures inclusivity and scalability.
Derives a competitive advantage from: – User-friendly platform that simplifies the design process. – Vast template library offering design options for different purposes. – Collaborative features supporting teamwork. – Global community providing support, resources, and a sense of belonging. – Accessibility through both free and paid plans for inclusivity and scalability. – A strong presence in the graphic design industry, influencing best practices and standards.
– Canva’s user-friendly approach reduces the barrier to entry for design. – A diverse range of templates caters to different design needs and preferences. – Collaborative features enhance teamwork and productivity in design projects. – The global community fosters collaboration and provides valuable resources. – Accessibility through free and paid plans ensures inclusivity and widespread adoption.
Table of Contents
Origin story
Canva is a graphic design service allowing users to create presentations, posters, logos, business cards, e-books, documents, and social media graphics.
The company was founded in Sydney, Australia, by Melanie Perkins, Cliff Obrecht, and Cameron Adams in 2012.
It was Perkins in particular who provided the impetus for the formation of Canva.
While studying at university, she noted that existing design platforms offered by Microsoft and Adobe were extremely difficult to use and also expensive.
As a result, she set out to make design accessible to everyone – regardless of their skill, ability, or means.
To test the viability of her idea, she and Obrecht created an online school yearbook design company called Fusion Books.
The service was an immediate success and exists to this day, but Perkins was intent on expanding the concept.
In 2010, she was invited to pitch her idea to Silicon Valley investor Bill Tai.
Two years after her initial pitch, Canva secured the backing of major investors and a team of tech engineers to build the platform out.
Canva revenue generation
Canva is free to use, but the company has added several income streams over the years.
Here is a look at each.
Canva Pro
Canva Pro is a premium subscription plan packed with additional features for $12.99/month.
The plan is aimed at graphic design professionals who need access to premium animations, fonts, and priority support.
Canva Enterprise
Canva charges $30/month for their Canva Enterprise plan.
As the name suggests, this plan is perfect for large businesses who need to manage design teams, assign roles, create shared folders, and grant various access rights.
Educational institutions receive a discount on the plan, while non-profit organizations can access Enterprise features for free.
Canva Print
Canva Print allows consumers to print a chosen design on physical material. This may include business cards, postcards, flyers, invitations, or t-shirts.
Canva charges for this service according to the type of physical product, order volume, and country of residence.
In some cases, customization requests will also attract an additional charge.
Marketplace
For those with no desire to sign up for the Enterprise or Pro plan, Canva charges a one-time fee for single usage of a premium design.
For every sale, Canva takes 35% and gives the remainder to the design creator.
For content sold in the Pro subscription, creators receive 50% of the net revenue earned less taxes and payment processing fees.
Design school
Canva also offers a range of online and in-person classes relating to design, branding, and social media.
Each is run and hosted by Canva employees with relevant expertise.
Online classes are offered for free, while those conducted in person start from $5.
Canva becomes a platform business model
Canva has been a product for years. Yet, by 2022, the company transitioned into a platform business model.
What’s the difference?
When you shift the core paradigm of the company from developing all the features needed to enhance the product, when enabling others to, quickly, expand the use cases, features, and applications of the product.
That is when a shift from the product to the platform business model happens!
Indeed, on Canva, you can now find many applications which enhance the capability of the platform.
From graphic applications to AI applications.
As Canva launched its API, it started to enable developers to build on top of it.
A Canva app is a JavaScript file that runs inside an iframe. This file can render a user interface within Canva and then access a number of APIs for interacting with the users’ design. With those interactions you have the ability to create powerful new features for Canva’s 100+ million users
This is a historical transition for the company, since its inception, and it marks up an important change toward becoming a platform and business ecosystem, rather than just a product!
Canva transition toward becoming an AI platform
Another critical turning point for Canva was the experimentation with new AI tools to enable creators to build graphics much faster.
This comprises text-to-video generation, which lets users quickly turn their prompts into graphics that can be customized.
This is part of the core trend of the coming decade, where we’ll see most software companies turning into AI companies.
Canva is a graphic designplatform that aims to level the playing field in design. It was created by Australian university students who recognized that existing design software was expensive and had a prohibitively steep learning curve.
Canva makes money through two subscription plans. Canva Pro is ideal for single users while Canva Enterprise is best suited to businesses that need to manage design teams.
Canva also drives revenue through a marketplace service, allowing users to purchase content as and when they require it. The company also makes money by printing designs onto physical items such as t-shirts, postcards, and business cards.
Key Highlights
Freemium Model: Canva offers a basic version of its platform for free, allowing users to create various types of designs, including presentations, logos, social media graphics, and more.
Subscription Plans:
Canva Pro: Canva’s premium subscription plan, priced at $12.99/month, provides users with advanced features such as premium animations, fonts, and priority support. Aimed at graphic design professionals and users seeking enhanced capabilities.
Canva Enterprise: Priced at $30/month, this plan is designed for large businesses and includes features for managing design teams, assigning roles, creating shared folders, and granting access rights. Non-profit organizations and educational institutions may receive discounts or free access to Enterprise features.
Canva Print: Canva offers a service known as Canva Print, allowing users to print their designs on physical materials like business cards, postcards, flyers, and more. Pricing varies based on the type of product, order volume, and location.
Marketplace: Canva’s marketplace allows users to purchase premium design templates for one-time use. Canva charges a fee for each sale, taking a percentage (35% or 50% depending on the context) and distributing the remainder to the design creator.
Design School: Canva offers both online and in-person design-related classes, catering to users interested in improving their design, branding, and social media skills. Online classes are often free, while in-person classes may have a fee starting from $5.
Platform Transition: Canva has evolved from a product into a platform business model. This transition involves enabling third-party developers to build applications and features on top of Canva’s platform using its APIs. This shift allows for expanded use cases and applications beyond Canva’s core offering.
AI Integration: Canva has incorporated AI tools to accelerate design creation. For instance, it offers text-to-video generation, where users can turn prompts into customizable graphics.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
