Startups don't get daunted by failure: Guy Kawasaki

Canva pushed until it got funding, says CEO Melanie Perkins

It takes some irrationality to be an entrepreneur, according to Guy Kawasaki, an Apple veteran who is now chief evangelist of graphic design startup Canva.

“It is not rational to be an entrepreneur – a lot of work, not a guaranteed success – and if those kind of things scare you, you should become a scumbag investment banker,” he said this morning at a breakfast hosted by Canva.

“If you’re thinking about being an entrepreneur and you looked at the statistics and you decided not to, then you weren’t an entrepreneur ever.”

Despite high failure rates of startups – there are estimates that nine out of ten startups implode – Kawasaki said it is easier than ever to get a tech business going.

“Things are getting more democratised. Frankly, everything a startup needs today is much cheaper if not free.”

For example, the Internet has made it possible to have staff in different parts of the world and that makes hiring easier and means startups require less real estate, he said.

The availability of cloud services from companies like Amazon and Rackspace has meant that startups don’t need to have rooms full of servers and IT staff in multiple locations. At the same time, the rise of social media has significantly reduced the cost of marketing, he said.

“The good news is there’s a lot less barriers. The bad news is there’s a lot more competition.”

That doesn’t mean the market is saturated, said Kawasaki. “I think by definition, entrepreneurs could never be saturated. I believe in the theory of infinite monkeys. If you have infinite monkeys writing software, you’re bound to come up with something good.”

The funding challenge

Finding early funding for a startup remains difficult, and this was the case even for an Australian tech company that now counts a respected tech veteran like Kawasaki as its chief evangelist.

The Sydney-based Canva launched 10 months ago with a service meant to simplify graphic design and now has 580,000 users globally. It has investors in Australia and the United States, and in April, the startup scored a major coup by signing Kawasaki to the same role he once held at Apple.

Next, the startup plans to announce several partnerships that will see the functionality of Canva integrated into other websites that host user-created content, according to CEO Melanie Perkins.

Visibly enthusiastic about the startup, Kawasaki said he believes Canva will democratise graphic design in the same way that Apple did for computing and Google did for information.

Things weren’t always so easy.

“Rather than just pitching the investor and all of a sudden having a cheque written, it was years of trying to find investors, trying to get people to understand our vision and the enormity of the problem,” Perkins said.

Perkins said a trip to San Francisco in 2009 played a key role in Canva securing its first $3 million of funding.

Even there, it was difficult at first to find investment. The fact that Canva was Australian turned off some potential investors because off the geographic distance, said Canva co-founder Cliff Obrecht.

The company kept pushing and through networking secured the investment it needed to launch. Now that the company has had global success, Canva regularly receives emails from American VCs trying to get in on the action, Obrecht said.

Perkins said that executing on the business was critical.

“With investment it’s very difficult to get the ball rolling to start with but once investors see your company doing great things and growing really quickly and attracting incredible people, it makes it a lot easier.”

While Canva has many customers and investors in the US and plans to open a marketing office there in the next year, the startup wants to keep its core engineering and operations staff in Sydney, said Obrecht.

“We’re happy to be an Aussie company,” he said. “There’s a lot of talented engineers here.”

The smaller scale of the Australian startup scene as compared to Silicon Valley can be an advantage, he added.

“It’s quite nice not to have that competitive landscape where everyone’s just poaching each other’s employees and other things of that nature. It’s a nice thing to be a big fish in a small pond.”

Adam Bender covers startup and business tech issues for Techworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Techworld Australia on Twitter: @Techworld_AU

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