Pet peeve of mine, but Canva doesn't hike its prices by 300%; it hikes them by 200%.
I'm not a native English speaker, but I assume "to hike prices by x" means the new price = the old price + x, right? If not, ignore my comment.
In the example used in the article (team of 3 users), the old price = 12 * $39.99 = $479.88, and the new price is $1458. Let's see what a price hike of 300% looks like: 300% of the old price = 300% * $479.88 = $1439.64. New price = old price + that 300% = $479.88 + $1439.64 = $1919.52 which is nowhere close to the actual new price of $1458. When I do the same calculation with 200% instead of 300%, the answer is pretty close.
What they're _trying to say_ is that the new price is 300% of the old price, but what they're _actually saying_ is that the price is increased by 300%. That's _not_ the same thing. You could say that the price is increased by 200%, or that the new prices is 300% of the old one (or that it is 3 times the old one). You have to pick one of those, not mix them.
Yes, it is ambiguous and I frequently encounter such ambiguous language in Apple's marketing copy, as a prominent example. Here I would rather they made a substitution of preposition from "by", to "to".
Haha I’ve had this argument with friends, you have to start them out with 2x is “100% more” the way percentages are used far and wide, and then they get it.
Its common to dis-stinguish between different types of percentage metrics like percent, percetage point and basis point as symbols for them are not commonly used. Specifically that its easier to say, a decrease from 50% to 40% would be a decrease of 10 pp, but a decrease of 20pc (%) for example.
Obviously Australians are somewhat more influenced by British usage than say Americans are, although not always (e.g. we say “truck” not “lorry”-although we define the word “truck” more narrowly than Americans do)
Finally, a company that adds AI to their product and then IPOs - I can't wait to see what groundbreaking stickers the AI will come up with, so I can really level up my birthday cards.
To be fair, Canva's product is uniquely a good fit for Gen AI. Casuals who just want the end result without trying to learn all the complicated photo/video editing techniques.
The Gen AI company they just acquired seems to be making their own model that, amongst other things, can generate coherent and heavily stylized text. For a platform that makes logos, branding, marketing material etc that seems like a natural fit.
Creating elements like that even with Canva's existing tools would generally require a graphic designer or someone with that skillset, or even worse - an agency. All of those options can be prohibitively expensive relative to the benefit they provide.
Yep I use it quite a bit as well as Buffer's AI assistant to help me rewrite texts, or at least give me interesting synonyms. It's probably the only venue where I can say "maybe AI will help people instead of ruining their jobs"
Interestingly enough, Canva has a mechanism where artists sell their templates on other sites like Etsy then grant access to customers... which Canva is getting none of the pie.
Capture customers and unreasonably hike the prices is a business plan as popular as subscription services. I hope consumers and businesses will notice how unreliable this is and start choosing more user friendly products more often.
What should they choose? Today's more user friendly products are just tomorrow's unreasonable price-hikers that haven't captured enough customers to start enshittifying yet. Meanwhile, even without network effects, migrating to a new product is usually a hassle; the frog has to be quite thoroughly boiled before it's worth it.
Products which aren’t subscriptions to begin with, so the company can’t hike the price from under them with little notice and leave them in a position where they’re forced to pay and bleed money every day they fail to find an alternative.
I did that with Affinity software which was purchased by Canva. Currently they don't have a subscription but I give it a year or two and they'll either have subscriptions or it gets folded into the Canva subscription.
Even if they do that (they explicitly said they won’t), that doesn’t stop us (I also have Affinity apps) from indefinitely continuing to use the versions we already have. So buying non-subscription software was provably the better choice.
Software does not exist in isolation. I am acquainted with a number of people and organisations who deliberately keep otherwise obsolete equipment running obsolete operating systems in order to indefinitely continue using old software instead of paying for new versions and/or switching to a subscription model.
While it is certainly a choice, and one people demonstrably make, it comes with downsides and tradeoffs - it is not unambiguously better.
I don’t think you did it on purpose, but that’s a straw man. Most software that works on one version of an operating system doesn’t break on the next, and they’re not released that often anyway.
And if you really need it, you’d be fine not upgrading until you find an alternative. Which with non-subscription software you can do at your own leisure. That’s my point.
This is just capitalism though. Like, what else are you suggesting? Opt for companies whose products are more expensive in the hope that they are less likely to hike prices later on? The real issue is when these companies become monopolies and then can raise prices without paying a competitive cost for doing so. But that's not Canva.
Maybe this is a really crazy idea, but businesses could compete on the free market, winning customers with superior products and services? And use revenue to grow?
The initial investment to start a company, especially a tech company, isn't all that big anymore.
Is that not what Canva is doing? They’re raising prices because they think their product is superior. If they’re wrong, their customers will just switch to another product!
I'm referring to the 'capture customers and unreasonably hike the prices' business model, which intends to make profit of exactly the cases where a customer is NOT a rational agent, just like scams do. I'm not saying that's all there is to Canva, just making a general remark about these kinds of business models.
Because yes, in theory a customer can 'just' switch to another product. In reality though, there are various reasons why it isn't so easy. Customers get invested with their time, build skills, have projects, or just plain inertia. It takes some mental load to compare alternative products and make the switch. People are busy.
We don't think of bait-and-switch business models as scams, but once you see them as basically scams-light it becomes clear it is at least an open-question if their existence furthers the glory of the free market, or hinders it. We don't have a problem seeing scams or criminality as basically obstructing a free-market.
Eventually Canva will perish if they make the deal bad enough, unless they somehow achieve a monopoly or sales stranglehold (my term), but not before they squeeze a good few bucks out of frustrated users. If they are successful enough at it, it hollows out the market.
I don’t think the point of this price hike is to profit off of non-rational customers. I think it’s likelier that they expect and maybe even hope that they’ll lose customers.
Let’s say a full 50% of Canva’s customers eventually churn because of this. They’re raising prices 3x, so they’d still make 1.5x their previous revenue. And they’d make even more profit, because their customer support costs have been cut roughly in half.
Meanwhile, the 50% of customers who dropped are now on the market for a new design tool — and a big hole has just opened in the low end of the market. So it’s good for competition, too!
Of course, if 80% of Canva’s customers leave, that’s bad for them. It’s a gamble! But in general, increasing prices by Nx in hopes that you’ll retain at least (1/N)x customers is a totally reasonable strategy.
How much are you lowering the satisfaction of those users though? Sure you may end up with more cashflow, but a much smaller, less eager group of users to be promoters.
The point of this is imho likely to boost the numbers as much as possible prior to IPO at the expense of the UX, brand, and by extension product
Sure, that’s part of the gamble. But for what it’s worth, I‘m pretty skeptical that raising the price like this will lower the satisfaction of existing users, especially if the remaining ones are mostly businesses.
I always find it weird when someone's economic model of the world is basically "I hope corporations aren't greedy and don't raise prices too much" Surely there must be something else going on, no?
I'm no tech exec, but this seems fine to me. If your government increases the money supply, ceteris paribus the demand curve (for every product) will shift right. At that point the tech exec can raise their price along with their competitors for an easy win. They're not forced to, but it's monetary policy that made it possible.
You're right of course. I guess I was trying to steelman the hypothetical exec's position as not totally unfounded or unreasonable, not give the final verdict.
A loose monetary policy does contribute to inflation. It's not the sole contributor, but when a lot of money is injected into the system, and the # of goods & services stay the same, inflation occurs.
Increasing production takes time. There's not a magical machine that can double it's production overnight: New machines & factories & supply chains need to be built out, and those can take months at best.
Terms like loose are relative so it’s often associated with unhealthy extremes. But in a growing economy you need to increase the money supply to avoid long term deflation. Further, the economy naturally expands and contracts over time so timing things correctly and a loose money supply doesn’t necessarily mean short or long term inflation.
Of course everyone is operating with in perfect information so it’s impossible to achieve a completely stable currency.
We didn’t get 300% inflation. So clearly the value of all dollars isn’t simply a direct percentage of the size of the US economy or all wealth in the US etc.
I think we have very different definitions of moderate inflation.
Note: I don't consider CPI a good measure of inflation experienced by the average consumer. Unfortunately the measure is heavily politicized and thus highly distorted from real-world experience.
Nonetheless, using CPI as a benchmark:
- Average CPI exploded 382% between 2020 and 2021 (from 1.23% to 4.7%)
- Grew another 170% from 2021 to 2022 or 650% increase from 2020 to 2022 (2022 CPI was 8.0%)
- It subsided somewhat in 2023 and 2024 (to 4% then 3%) but remains significantly higher than historical norms.
Notably, CPI is now expected to remain at or above 3% for the foreseeable future, which is a sustained 50% increase over the previous target of 2%
The Fed is now working to normalize this new normal as there is basically no chance of us ever returning to the prior target of 2% CPI anytime soon.
Also note that the largest spikes in inflation align closely with the Feds massive money printing in 2021 and 2022.
1.23% is below the FED’s target, they would want it to rise to maintain healthy economic growth. 4.7% is also slightly outside the desired range but they don’t consider it a major issue during an economic crisis.
> authoritative source the World Bank says moderate inflation is 15-30%
I'm not sure if you are being serious or not. Think it through, are you telling me you believe that 29% year over year inflation for years on end with prices doubling every 3 years -- is moderate inflation? And do you really believe after making such a ludicrous statement that the world bank is a credible authoritative source on anything?
Do you also still believe that inflation from 2021-2024 was primarily due to COVID, the war in Ukraine and supply chain issues? Do you choose to ignore, like the government and the FED that printing 80% of all the dollars ever created between 2021-2022 was not an important or more likely the primary factor driving inflation?
To quantify “loose monetary policy,” between 2021 and 2022 the US Fed increased the money supply by 4x. Put another way 80% of all US dollars that have ever existed were created between Jan 2021 and November 2022.[1]
Prior to this event, inflation was tame. After this event inflation exploded. Coincidence? I think not.
Notably, the government then blamed COVID, supply chain issues, and the Ukraine war as the reasons for inflation, but neglected to mention money printing.
So why didnt price go up prior to covid, if the CEO can manage to set prices?
Or is it that they have always set their price to the maximum that their customers will bear, and it's just that now, their customers were willing to bear a bit higher (due to some external cause)?
I doubt they're going to work on the Affinity suite much more, it was probably more of an acquihire, where they'll get the engineers to work on the main Canva product.
I've used Affinity for years, it was pretty much in a feature freeze state before V2 (which didn't really add anything major). I'm fine with that, it's more capable and user friendly than GIMP and Inkscape so I was happy to pay for it.
I'm not a native English speaker, but I assume "to hike prices by x" means the new price = the old price + x, right? If not, ignore my comment.
In the example used in the article (team of 3 users), the old price = 12 * $39.99 = $479.88, and the new price is $1458. Let's see what a price hike of 300% looks like: 300% of the old price = 300% * $479.88 = $1439.64. New price = old price + that 300% = $479.88 + $1439.64 = $1919.52 which is nowhere close to the actual new price of $1458. When I do the same calculation with 200% instead of 300%, the answer is pretty close.
What they're _trying to say_ is that the new price is 300% of the old price, but what they're _actually saying_ is that the price is increased by 300%. That's _not_ the same thing. You could say that the price is increased by 200%, or that the new prices is 300% of the old one (or that it is 3 times the old one). You have to pick one of those, not mix them.