Generosity as a Moat

You've probably heard me quote Tim O'Reilly's principle to "create more value than you capture."

Canva is a compelling example I've been studying recently. They embody this principle through their two-step plan: 

• Step One: Build one of the world's most valuable companies. 

• Step Two: Do the most good we can.

In the early years, Canva started with the Pledge 1% program, giving 1% of time, money, equity, and profitability.

Now as a company, they give away $1.5 billion worth of product annually to educators and others.

Melanie and her co-founder Cliff Obrecht have together pledged 80% of their stake to the Canva Foundation for charitable causes. That equity is worth billions.

"It has never felt like our money," CEO & Co-founder Melanie Perkins explains. "We've always felt that we're purely custodians of it."

This generosity became a competitive moat.

Customers started to realize their subscriptions fund both innovation and social good.

They became evangelists. Not because of a referral program, but because choosing Canva meant they were part of something bigger. They trusted and believed in what the Canva team wanted to create in the world.

When you sign up for Canva, you’re included in their mission right away. You’ll receive an email titled “You’re a force for good” that invites you to learn about Step Two: Do the most good we can.

Today Canva is valued at over $40 billion. They’ve proved that creating more value than you capture isn't just good ethics. It's good business.

The research I’ve been working on

Canva is just one of the stories I’ve discovered while working on this newsletter and The Eric Ries Show podcast – part of an inspiring mix of academic research and the history of remarkable businesses with longevity and outsized returns. 

Perhaps the most surprising thing about what I’ve discovered is that all of this positive data and success isn’t talked about in the business world, and isn’t widely taught. 

I want to start changing that. And I want to start now by sharing some of it with you.

In case you missed my invitation last week…

If you're interested in early access to the ideas born of all this work, I'll include you in a dedicated email series over the next few weeks to bring you into the loop. 

Choose an option below if you haven’t weighed in yet. ⬇️

Thanks,

Eric

P.S. If you choose yes, check your inbox for the first email.