What do all great founders have in common? According to Wesley Chan, a 100 year plan
What makes the global startup superstar say yes? Founders such as Canva’s Melanie Perkins who won’t take no for an answer.
Get a glimpse into the future with The List: 100 Innovators 2022, a celebration of Australia’s boundary pushers and innovators. Find it in The Australian on Friday, July 15 in print and online.
It is the 100-year plan Melanie Perkins rolls out at every Canva board meeting, but with a pirate-themed twist.
Perkins, the founder of the online graphics startup phenomenon, likes to keep the Canva directors entertained and guessing as to how the plan will look each time the board gathers.
Wesley Chan, an early Google employee who has gone on to become one of America’s most savvy startup investors and one of the first to write a cheque to invest in Canva, chuckles when describing Perkins’s plan.
“She brings it up at every board meeting, and it is in a different form every single time. It has been a hybrid treasure map even. It’s her baby, so why not have fun?”
Perkins does, after all, have the necessary skills to make decent graphics. And literally built the company, with husband and co-founder Cliff Obrecht, to make it as easy as possible for millions around the world to make snazzy designs.
Behind the fun is a more serious question: who comes up with 100-year plans for their company anyway?
Turns out, very few company founders think that way, according to Chan. There has been only a handful of people he has come across in almost three decades at the cutting edge of the tech sector like this, and it puts the Canva co-founders in some impressive company.
“They remind me of Larry and Sergey. They had a 100-year plan. I mean, who has a 100-year plan? Turns out Cliff and Mel do,” says Chan.
We are sitting in a coffee shop in New York’s upmarket Chelsea district on a late spring afternoon as Chan cites the legendary Google co-founders (and his former employers) Larry Page and Sergey Brin. Chan joined Google in 2002 as Brin’s chief of staff and went on to build Google Voice and Google Analytics – he has 17 patents of his own – before leaving in 2013 to become an angel and early-stage investor.
If Chan was a sports scout, he would be considered one of the best spotters of talent in the business.
He was part of the Series A round for Australian unicorn Culture Amp, whose founder, Didier Elzinga, advised him to meet with a fledgling firm called Canva. Chan would go on to lead a $15 million Series A funding round in 2015. Canva’s most recent raising last year valued it at $US40 billion ($55 billion).
Chan’s other hits include early-stage investments in US unicorns such as online stock trading app Robinhood, software firm Carta, finance company Credit Karma, drone delivery startup Zipline and cloud communications startup Dialpad, to name just a few.
While he is loath to discuss exact details, it is likely Chan’s portfolio is worth 40 to 50 times his initial investments, even if tech valuations have started to decline this year for both public and private firms.
One of his best picks has been Canva, and Chan says the Australian company’s co-founders exhibit the precise traits he looks for when writing cheques to join early funding rounds.
“The simple thing is I look for mission-driven founders who see the world differently,” Chan explains.
The founders should have energy and excitement about their company, he says, and usually will do just about anything to make their dreams come true.
“I remember Larry and Sergey being told there were already 20 search engines out there, and that they should stop wasting their time. And guess who else was told to stop wasting their time? Cliff and Mel,” Chan says of the Canva couple.
“They got told things like ‘There’s already Photoshop’ and ‘Adobe’s well funded’. So to stop wasting their time. But really, they understood design better than anyone else. Because they had been thinking about it their entire lives. That’s why I said yes.”
Chan says the Google co-founders confounded their critics by designing a simple page that allowed search-engine users to be off the site in two clicks – “before then it was all about keeping you on your site for as long as possible” – that ultimately showed they were looking at an existing thing in a completely different, and ultimately successful, way.
It was, he says, the same way of thinking that Perkins and Obrecht had with Canva.
Chan explains that previous ways of designing something for a presentation, for example, was “text first and design second”. What worked on PowerPoint may not work with a Word document and vice versa.
A firm would even hire a designer to undertake the complex work instead.
Along comes Canva with simple-to-use design-element templates that can be merged easily into video and other presentations or web elements.
“So it was about the design first and then the document second,” says Chan. “A different way of thinking. By the way, everyone under 30 thinks like this because they’re trained on Instagram and social media. So all you had to do is listen to (Perkins and Obrecht) talking about that mentality and how the Instagram and Snapchats of the world were coming and how people were thinking about things differently, and say ‘What if they are right?’
“But nobody else did that. I just can’t believe that.”
Chan goes back to talking about founders with mission-driven values. What they do, he says, is set a course for the company. Take Canva’s values of “be a force for good” and “make complex things simple”. They might sound easy to say, but saying and then sticking to something like “think of the user”, is a simple way to reinforce it to everyone in the company
Those are the values, Chan says, that Perkins uses to attract good talent to her company. As well as some dogged enthusiasm.
“Mel is one of the best storytellers out there. They can tell a story that makes people leave, say, their top-paying jobs at KPMG. Mel convinces them. They’re like missionaries in that regard. … I only work with missionaries. It’s missionary versus mercenary.”
Chan remembers the founders of the now disgraced blood technology firm Theranos pitching to him in its early days. “I thought ‘No, they’re mercenary’. They cared about how much they paid themselves, how they looked, the magazine articles.
“The ones I like are saying ‘I’m busy building my company. The success will speak for itself’.”
But Chan also admits to looking back to his time at Google with some regrets. The company has grown to be a juggernaut and controls big parts of the advertising market as a result of his technology. It has also run into issues with regulators about the dissemination of false information via its search engine or videos that users post on YouTube.
“It goes both ways. It has helped a lot of people find better information, but at the same time you have all this election interference, all this YouTube crap. It’s a double-edged sword. I guess that’s why I’m an interesting investor, right? I have seen the negative consequences of having lived through it.”
The comments are intriguing, given Chan’s next move has a more altruistic bent. He and former Morgan Stanley tech banker Pegah Ebrahimi are going to launch a new venture capital firm to invest in early- stage companies. According to documents lodged with the US regulator, the pair have raised $US367 million ($523 million) from investors.
Chan says he cannot discuss the new fund, but sources confirm that investors include founders of companies Chan has previously put money into, including Elzinga, Perkins and Obrecht.
The fund, the sources say, aims to make money for endowment funds and charities, rather than making money only for investors.
What Chan will discuss, in a way, is valuations in the tech sector plunging this year.
“I don’t care,” he says. “I know it sounds flippant to say that. But I don’t control it.”
Chan says valuations in the public market got ahead of fundamentals and he isn’t surprised there has been a fall. And he insists he will keep investing in the sector.
Which brings us back to the 100-year plan at Canva, and what he likes about it.
There are no thoughts of the founders cashing out and counting their riches, Chan says.
“People aren’t going to stop using Canva”.
