Pricing Page unPacked - CANVA: Why AI allowances replaced a credit model

Rob Litterst (0:18)

Welcome to Pricing Page unPacked. I'm Rob Litterst. I'm joined by Ulrik Lehrskov-Schmidt, pricing expert and CEO at Willingness To Pay. Each week we take a real company's pricing page and break it down. The decisions behind it, the trade-offs, and what it tells us about how the company actually wants to grow. No slides, no scripts, just a real conversation between two friends who live and breathe pricing. Let's dive in. How are you doing today, Ulrik? Awesome. Canva. Big one. A big one indeed.

Fan favorite. Near and dear to my heart. I feel like I live in Canva sometimes. I use it quite a bit as a very nascent designer. It's a very easy tool to use. I'm a big fan.

Ulrik Lehrskov-Schmidt (0:56)

It's one of the few design tools that haven't scared me away. Like it's one of those like you open the design tool and then you like well, all the good and like the right intentions, and then you just like you run dry somehow and then you leave it again. It can mess out of like it's just easy enough for even idiots like me to use it.

Rob Litterst (1:14)

So exactly how I feel. I would lump myself into the idiot bucket as well. It is very helpful. I think the question on everybody's mind is will Canva ever IPO? And I think they've kind of been on the cusp of IPOing for the last five years. And who knows? It's a weird era for SaaS right now.

Ulrik Lehrskov-Schmidt (1:33)

Yeah, we just have Claude Design coming out last week. And so yeah, we it's gonna be interesting to sort of see what the positioning is and sort of the real value and sort of yeah, but so big discussion today, I think.

Rob Litterst (1:47)

Yes, and we have very like we have very specific takeaways from that over on the PricingSaaS side because we put out these quarterly trend reports, and traditionally we have done that with Canva, and we actually did the most recent one in Claude Design. So I have a lot of thoughts on this. So I'm excited to talk about it.

Background: who is Canva?

Rob Litterst

A little bit of background on Canva for those that might not be as acquainted as we are. Canva is a visual design and content creation platform. And their core product is really design platform. It's a drag and drop tool. Really, as we said, kind of so that anybody can be a designer, anybody can design something. It's extremely easy to use. And I think they really pride themselves on being the easiest-to-use design tool. They have since gone into a bunch of different kinds of adjacent categories.

They have Canva Docs, they have Canva whiteboards, they have Canva video, Canva websites, they have a Magic Studio now where you can use generative AI tools. They have, this is just mind-blowing to me. They have 220 million global users. They're used by individuals, SMBs, and large enterprises. Over 95% of the Fortune 500 companies use Canva. Notably, their estimated revenue is $2 billion annually. They have a lot of free users. And they have a pretty, they've historically had a pretty generous free offering.

They're a private company, 5,500 employees. They have kind of classic subscription plans, which we'll get into, Canva Pro, Canva Teams or Business, and then Canva Enterprise. When you talk about PLG SaaS companies, I think that it's very hard to find an example that is a better profile of PLG SaaS than Canva. It's Canva, it's Dropbox, it's companies like that that, you know, have this massive user base, but a lot of free users. Canva has been making a lot of changes lately to try to monetize better, I think.

And so I'm excited to kind of talk about their current pricing.

When freemium has finished its job

Ulrik Lehrskov-Schmidt (3:36)

As you say, like it's an amazing user-based growth. So one of the interesting things is going to be sort of at 220 million users, you kind of have all users. Like whatever your freemium was supposed to do in terms of like getting the product into the hands of the potential customer, that is now in the past. Like that has been achieved. So now you kind of have to sort of figure out, okay, so are we then converting them into paid? At what rate, like how would that work, and so on, right?

So it's very rarely that that you can say that a freemium is like you have exhausted the limits of it. But I think Canva is sort of one of the ones where you might have that argument. It's like, hey, like that no more people exist that haven't tried it.

Rob Litterst (4:24)

Where they've kind of tried to go. Like I think a lot of companies have tried to do this too. You've kind of got like the classic Microsoft suite, you've got like the Google workspace, you've got Notion kind of trying to take over both of them. You've got Canva kind of trying to back in from the design side with docs and all these other things. It's not like Canva is offering like email or calendars or anything like that yet, but it does seem like they're kind of trying to position themselves as an all-in-one platform.

Similar to like Zoom has tried to do that recently as well. We'll see how successful that is. I think objectively, as a design tool, they have reached a massive part of the market. So very, very interesting.

Rapid pricing experiments at Canva's scale

Rob Litterst

I wanted to pull up really quickly just their profile in PricingSaaS Pulse. You can see they've been busy. They've made a lot of changes like quarter over quarter since 2024. Even this year alone in 2026, we have about six different changes here. We have an active experiment where they've been going back and forth on the annual prices for the pro plan. We tracked an A-B test here. So they're very, very actively working on pricing and packaging. And I think a lot of people talk about like pricing page experiments.

And I often think that those are kind of overrated. Like I think people just put too much stock into that sort of thing. But for a company like Canva, where they're getting the amount of traffic to their website and their pricing page, I actually think rapid experimenting makes a lot of sense because of how kind of like classically PLG they are.

Ulrik Lehrskov-Schmidt (5:48)

I think in a lot of the projects we do, people have this idea that, oh, we'll run some sort of data-driven process. And then if you have to do any kind of like meaningful like A-B split test, you kind of say, okay, so how many sort of customers you use it do we get sort of through the flow that we can then split test? And then when are we going to reach some sort of statistical significance? And then what you end up is with often is that you need a tremendous amount of volume to actually get to significance, especially if you're testing like your A B are not that far apart.

Like if you're doing like, oh, what about 100 versus $500, then you don't need as many in your sample size in order for you to get some sort of signal of which one is sort of going to perform better. But if you're slicing within a few percentage points of price, then suddenly you actually need like quite high volumes, where even if you have hundreds of thousands of users, you'll actually often end up with the timeline for an experiment to run into the months.

Often people are actually surprised about this. So it's an extraordinary power to have millions of users run by because that actually allows you to run these kinds of optimization exercises with way more speed. And so they run sort of six this year, maybe. The flip side of that is that you can also, as a company like Canva, then start to consider that to be the game. Yeah. Okay, so the way that we do pricing is that we split test the heck out of like a lot of different scenarios and that we try to sort of optimize the current structure that we have as opposed to deciding if we're at the right structure, right?

So often it's because it is a playable game for them, that can become the game that they're trying to win instead of like taking a step back and seeing if they're even playing the right game, right?

Rob Litterst (7:43)

And assuming they're playing the right game, that yeah, that the that rapid experimentation can be really helpful. Whether or not they're playing the right game is an open question that we can get into.

Price localization

Ulrik Lehrskov-Schmidt (7:52)

I pulled it up here and I'm in Europe, and then so the first thing to notice is just that they have actually the localization of their pricing down. Like it's gonna show in whatever currency location you're at, and with some nice editing of the numbers where you can see like the business account, it always comes up to a nice even number. I'm in a local like Scandinavian currency here, and the business account is an even 1600. Your Canadian dollars is like 260 Canadian, whatever the dollar price was, yeah, was a little bit different.

So price localization is one of these things that I normally advise people to not care about until they're a certain size. But if you're Canva's size, it's definitely something you want to care about. And I think one of the earlier studies I saw on this is that just showing a price in people's local currency can have like a 4% impact on conversion rate. And then you actually have different sort of price levels adjust from there. And I think actually the different prices that I've seen dollars, Canadian dollars, and my currency over here, if you do the conversion, it's actually the same price, like with minor adjustments.

So they're not trying to price higher or lower, they're just doing sort of like the currency conversion and then sort of slight localization without trying to arbitrage between the locations too much.

The plans and the product-led upgrade motion

Rob Litterst (9:16)

Looking at their pricing, we already talked about how they really index as kind of like the simple design solution. And I think because of that, they have historically tried to keep their pricing really simple. So they have this free plan, they have a pro plan for individuals, they have a business plan for individuals and teams, and they do gate it with like different kinds of thresholds for different kinds of like usage metrics. So they have design types, they have templates, they have photos, they have brand kits.

As a user, you might know how much storage you need and you might know how many brand kits you need. But the other ones, I think it's really interesting. Like they are truly product led. Going into Canva, like you have no idea if you need more than 1.6 million templates or 4.7 million photos. But what happens is when you're using Canva's product, you'll want to use one of those photos or one of those templates as you're building and you'll see that it's gated.

And so they really have like a product-led upgrade motion where people will have to upgrade to get access to certain things within the product. And I think they do that better than a lot of SaaS companies. And I think a lot of people look at PLG almost exclusively as kind of like an acquisition strategy, where a lot of the time it's honestly like such a big expansion opportunity. And I think HubSpot kind of classically has these arrows on all of their features where you need to upgrade and that can drive people insane.

But I think HubSpot and Canva are two of the companies that do a pretty good job of driving expansionary revenue by showing within the product you know, what you need to upgrade to get.

Ulrik Lehrskov-Schmidt (10:43)

For sure. That's also sort of one of the things that I remember from the few times I've used that. It's like, oh, I need to whatever, remove a background, like do something. It's like, hey, it's easy to find an interface and it's like properly paywall. So like, okay, so fair enough.

AI allowances and the AI Pass: clearer than credits?

Rob Litterst (11:02)

Next thing that I wanted to jump into is kind of what they're doing with AI. Because I think it's really interesting, and I think that's kind of like the biggest question on everybody's minds right now. So I first want to show what they currently introduced, and then I'll show what they used to do because this is a recent change. So they now have this concept of AI allowances, which gives you a certain amount of uses. And then they also have this thing called AI Pass, which allows you to boost your AI usage even more.

So I just want to show what they did before this because this is a diff that we saw recently in PricingSaaS. So we can see out over here on the left is their previous pricing page before this. And you'll see they just had that like a very kind of vague description of AI usage and access. So in free, you had limited AI access. In pro, you had high AI access. In business, you had higher AI access. So they had just kind of like this very vague level of AI, and then they had like a few AI features down below.

And you can see they made this change to AI allowances and the AI pass add-on. And for those that are just listening, I'm going back to the Canva pricing page right now. You can find this live on their site. You'll see under each plan they have these AI allowances, and then you'll see if you scroll down a little bit further, they have the AI Pass. They also just recently added this button for Canva AI 2.0, where it looks like you can generate on-brand designs and visuals through a single prompt.

Honestly, this is something that I've been waiting for in Canva for a long time. It goes back to the kind of Claude Design conversation that we were having. One thing that I would love to get your take on, Ulrik. So this AI allowances thing that they do, I actually think like my hypothesis is that they did this because they wanted to avoid a credit model explicitly. Like they wanted to make their AI pricing seem simpler to their customer base and kind of like the SMB, like individual creator, designer, agency, owner, whatever it might be.

And so instead of doing credits, they have this AI allowance and then they have different levels of AI usage or like different kinds of AI usage. They have standard AI, premium AI usage, and ultra AI usage. This to me is more confusing than credits. Like, I honestly think they should just have a credit system where different actions take up different amounts of credits rather than this. I still just think this is like kind of a vague way to do it. Like you have this AI allowance, then you have these three different levels of AI, and then you can buy the AI pass and it gives you 40x.

Like, at no point can you really clearly see like how many credits you have left or like how much usage you get. It's all just through these vague kind of multipliers. I'm curious to get your take on this because I honestly think a credit model would be clearer than what they're doing.

Ulrik Lehrskov-Schmidt (13:41)

Do you see this sort of play out in a lot of different sort of design tools right now? Is that there's an internal debate in them in that are you going to lean in very heavily and try to sell the new fanciest models and just directly in your interface? So you're gonna have someone like Freepik saying, Hey, you can use Nano Banana whatever seven or whatever the new model is, like straight in our tool. And then you're gonna have others like Shutterstock or someone like these that just say, Hey, we're gonna have AI generation.

So it's like one of these, like, and they probably use like similar LLM. So it's just like, are you marketing the actual like model that you use, or are you sort of saying, hey, we're gonna drive traffic because we know we have there's part of the market that searched for that model and being able to generate with it? Or are they just saying, we think the designers they just want to design and be creative and they don't care about like which LLM is driving what in the background?

And I think a lot of these tools are sort of trying to sort of figure out, okay, so what do customers care about? So the problem then is that depending on what kind of AI generation you have, so are you doing like an expensive model or cheap model? Are you doing it on a picture or are you doing it on a video, or is there a sound on that? And then are you saying, hey, give me like a five-minute video for like full feature length movie type thing of a Star Wars scene with these things, or you just want to like give you my like essentially like a simple stock photo or a time frame?

Like from an like a prompt basis, like the user is like putting in a prompt, but one has like a tremendously higher AI cost than another one, right? You're essentially trying. So what you're seeing here with what Canva is doing is like, hey, we're saying standard premium ultra AI. They probably have like this grid in the background where they're saying, depending on what kind of medium we're doing, like video, photo, sound, and what kind of LLM we're doing, we're going to categorize these and then have like a standardized unit of cost.

And then we're going to use this to since we're saying, hey, if we have these many uses, which essentially is like a form of credits just in different things, then we know that we're going to be not losing money inside of this kind of product, right? So they're using it essentially as a form to sort of try and give like a certain volume of AI usage to customers without being unprofitable. I don't have access to Canva's data, but from other similar tools that we have worked with, we actually also can see that like interestingly, around half of users, if not more, actually don't use the AI features yet.

Like this is sort of early 2026. That might change. So the AI tools are sort of stuck in this situation where we have a design tool, AI can do a lot of design, obviously. We want to make it available to a user base, they do, and then they see half the users don't use this, and then you have like a sort of it's a long tail, and then you have a spike of users that that have a tremendously high usage of the AI, and they need to be cost controlled.

When heavy AI users cost more than they're worth

Ulrik Lehrskov-Schmidt

I think what a lot of these companies are trying to deal with is that a designer can probably spend more money on gen AI than they're willing to pay. That's this is my take. So my take is that there is an asymmetry between the potential cost and the potential revenue with the extreme uses. I think if you have designers that just hammer like the Nano Banana like latest model or whatever the most expensive model is right now to the max, they can burn through literally tens of thousands of dollars of cost in a month, which they're very unlikely to be willing to pay for a design tool that just like wraps around this, right?

Right. So I think whenever we deal with like AI pricing, we often look, I call this sort of the doppy stick. We say, okay, so you have uneven distribution of value in the product, and you also have this uneven distribution of AI cost. And so what you might see sometimes is that, well, the value actually corresponds really well to the cost. So that means that customers are willing to pay for the value, but sometimes it doesn't. So we actually see that sometimes you have a product where you have a little bit of spikiness in cost, but the value to the user is tremendously high and they're willing to pay a lot of money for it.

And sometimes you have the inverse, where actually you have a tremendously high spike in cost, but customers actually not willing to pay that much more for that cost. And those are the products that really have to watch out. And I think most design tools actually fall in that category where their most heavy users can actually drive at an extremely high cost component without having a similarly high willingness to pay for that cost, which means that they need to gate it in a lot of different ways, whether it's fair usage or like chunking in these sort of different sort of like AI credits or like type of credits that they're doing here, in this sense to like get the most of the customers to use AI and pay for it in some way, but without then creating these extreme scenarios where a small subset, like less than 1% of users, suddenly like eat away all of their AI budget.

Your remark was, isn't this just more confusing than credits? It is, but the good thing is that credits somehow imply that I can buy more of them, right? Right, right. And also I have a currency, and I think from it from a designer's point of view, there is this idea that am I in flow and designing something and like constantly paying for it? And maybe those two things are like opposed. Right. Like the frame of mind that I'm in when I want to decide, I just want to design.

I don't want to constantly feel that whenever I click something, I I'm paying.

Rob Litterst (19:32)

Yeah.

Ulrik Lehrskov-Schmidt (19:32)

And I think that's what they're trying to get away from. So it might actually be more complicated and less transparent, but it might to an extent kind of solve this problem. Yeah. At least I think that's what they're trying to do here.

Do people top up design tools like they top up Lovable?

Rob Litterst (19:44)

So I have another, I have like a another analogy to that, something that's analogous to this that I'd love to get your take on. So I was talking to Zona from Clay a couple of weeks ago, and we were talking about how there's this discrepancy right now where SaaS buyers are looking at their looking at what they're paying for their SaaS tools with like hawk eyes, right? They're like scrutinizing every expense across their SaaS budget, except for the tools that are like indispensable for building things.

So like we're seeing this live with John at PricingSaaS and what we're building. So like any SaaS tool that we're using, we're looking at it pretty closely. Like, do we still need this? But then for something like Lovable or Claude, we just keep paying, right? So, like to your point, like if John is building something or like prototyping part of our website or something like that and Lovable and we run out of credits, he's obviously going to do a top-up. Like there's just a 0% chance that he's not going to do it.

I'm curious, like, how close do you think design is to that kind of Lovable use case? Or do you think there is like a really clear demarcation between those two where with something like Lovable or Claude Design, people are just way more willing to upgrade in the moment than with a more traditional SaaS design tool? Because that's a powerful dynamic. Like that's what we're seeing. Like it, like with Claude, it's like if we're in the middle of some big thing, like we're launching a report or something and we we're time crunched, we're just gonna pay whatever we have to pay to get it done, you know?

Ulrik Lehrskov-Schmidt (21:13)

I think there's a real discrepancy between user and buyer here, right? So I think the user, like the actual designer doing it, yeah, might just like hit the button and try to move forward and pay what it costs. And then I think when that then trickles up to the CFO or whoever is gonna approve the budget, there might come like a hard stop back to say, hey, like whatever you're doing with design is not worth this. So stop, right? Yeah. So I think the mandate to keep on buying is gonna you know get killed faster for designers than it is for developers, right?

So I think it was whatever last week or the week before where like it circled through the news cycle that Uber had blown through its Anthropic budget like in the first three months of the year. Like for whatever they had budgeted for in like all of 2026, like they'd spent by the end of March. The CFO was like, oh, back to the drawing board. It wasn't like, okay, we're now going to stop using Anthropic. Like this, so like the whole sort of sentiment behind the news piece was we miscalculated and we're now going to have to find money and maybe make some adjustments, but it isn't like stopping to buy this.

Like that was like not the question, right? I can't imagine the same for like Canva. Like if Uber have suddenly like blown their budget on Canva by the end of March, it probably would have, well, you know, whatever you like the way you used it last year, go back to that, right? 100%.

Rob Litterst (22:41)

So I think it's it, I think it is different in that way.

Claude Design vs. Canva vs. Figma

Rob Litterst

And I think like that's a really good transition into the conversation around Claude Design versus Canva versus Figma. And just to like put some personal perspective on it. So John and I at the PricingSaaS team, we put out these quarterly trend reports. Typically, what our workflow is we have an MCP for PricingSaaS data. We basically query the MCP to figure out like what the meaningful changes are over like the last quarter or whatever the period is that we're doing for the report.

We get that initial data set. We like lock in whatever big changes we want to include in the report. We put some kind of like guardrails around the report and kind of like make it clean and pretty and make it make sense. And then we send it to the these kind of outsource designers that we work with, this outsource design firm that will help us make it look a lot better. Right. And so we do the initial kind of like slides for the report after we take a look at the MCP and get those changes.

We have them piped into Canva and then we do some light fixes on our own and then we send them over to our designers. That has historically been our workflow. With this last report, basically, John plugged the MCP directly into Claude Design. And Claude Design spun up a first draft of the report that looked really, really good. Like looked better than the designs that we were getting from our designers, looked better than everything that we've done before. And we were super impressed.

That in itself is something that we could dig into with like Canva being a tool that you use, right, to get to an outcome versus Claude Design being this tool that just does an outcome for you. Like I think that's kind of like the classic like input versus outcome spectrum that we've been talking about forever. The other part of it though is like the original report that we got in Claude Design needed a lot of editing and a lot of iteration.

And that process was pretty cumbersome, pretty annoying, and we ran out of credits multiple times and it made it very difficult. And so now we're going back to the drawing board on like, how do we make this process better next time? Where, you know, we do the kind of like original strategic vetting beforehand and like make sure that we have the report in like basically a very tight outline for the report, and then get it over to Claude Design and then just kind of like put some guardrails around the copy and the takeaways so that the LLMs don't hallucinate.

And we think if we can do that well, then this process will be extremely easy and painless. But just wanted to share that because it's kind of like, you know, a first hand journey and account of like what the difference is between these two products. We have the same.

Ulrik Lehrskov-Schmidt (25:23)

So my head of marketing the other day, who's not a designer. We had a report and he like he just played around with Claude Design, put in our brand guide, said he said like it took him an hour and a half, and then he essentially like spun up just a work document that we had and like turned it into a really nice looking report. That would have taken like someone on the marketing team like longer and it would have been less good.

I think you you're gonna be able to sort of after some iteration be able to sort of use it to just generate more stuff faster. So I'm seeing it where it's a little bit like the reference, like it makes like are you just gonna get the outcome or are you just gonna give enable someone to do the work? It's a little bit what I think Intuit discovered with TurboTax at one point was like the first iteration of the product was hey, we're gonna make it really easy for people to do their taxes.

And they had like a lot of like multiple choice, and people could fill in information. And then at one point they had sort of a like a jobs to be done discussion where like, hey, the outcome is just people just want their taxes to be done. They don't want to do their taxes. Yeah. So that was sort of the birth of TurboTax, which is like, hey, okay, if we just press a button and taxes are done, wouldn't that be awesome? And they just try to like get that, right?

Yeah. And I think that's a little bit what we're doing here, where I'm seeing that a lot of the like more casual sort of design cases or use cases that sort of we would do because we're not like a design heavy company, we just like have the need for design on an occasional basis, we would just have Claude Design do it for us. Yeah. And then we might pay whatever it takes to get that done, which is probably better than having to go through a process.

But if I'm a let's say professional designer and I need more control, so my wife has a company where they're quite design heavy for various reasons, and she has a designer that is a real professional, and she might still need a tool other than Claude Design because of the interface and the way that she needs to sort of edit the output in certain like nuanced ways that that can be good. I think some of these like Claude, like it's unlikely that they're going to spend as much time as Canva is doing in creating like a really good interface for designers.

Yeah. And so I think that's really going to be the edge that that Canva has is like, are you really going to deeply care about that avatar and that persona enough to build an entire company around it, right? Maybe they take a big chunk out of Canva, but Canva's only 2 billion of revenue. Like, so how much is Claude really gonna care about like getting all of that revenue? So they can maybe spin out design, they will take maybe half of Canva's revenue, but even if they were to take all of it isn't that big of an opportunity.

So I think actually Claude doesn't have this incentive to really, really try to go after all of the revenue, right? Yeah. So it's more like we're gonna push something out, it's gonna be good enough, and then we're gonna move on to the next thing, right? Yeah. If I was Canva, I would like take a little bit of confidence in that it's not worth it for Claude to really try and get sort of deep into the vertical that I'm currently owning.

Rob Litterst (28:51)

It's an interesting dynamic in a lot of ways. Because I also think like I'd be more worried for Canva with this than Figma, probably, because I think like hardcore designers still want to have a lot of control over everything. And I think Canva appeals more to people that aren't really designers and they just want to get the job done. And I think that's where Claude Design can just be a total game changer. So yeah, I'm curious to see how it all plays out.

I mean, we mentioned it earlier in this episode, but Canva is also announcing a few things that I think will bring its tools into Claude. So they have a connector coming up, they have Canva AI 2.0 where you can generate on-brand designs and visuals through a single prompt. I've literally tried to do this in Canva and it has not worked. But now they have that feature actually coming out. So I'm excited to see how it does work. But yeah, I think like grappling with AI and trying to figure out where they can live in this new reality is gonna be really interesting for Canva.

Will Canva have to track underlying LLM costs?

Ulrik Lehrskov-Schmidt (29:47)

So one more thing that's sort of a little bit back to this sort of like how many standard premium ultra AI uses do you get? Let's say let's sort of break it back down. So Canva essentially like we make design easy, and suddenly Claude comes out and they make design, right? And then they have like this AI power on it. And then so to defend against that, Canva then essentially like incorporates, like they like retroactively become a wrapper around an LLM.

So it's like, hey, we have a tool and suddenly the LLM comes up, and we need to sort of wrap around it so that we sort of integrate all of that AI power into our tool so that we don't get outcompeted by it, right? So that's sort of roughly sort of the mechanism. But then also from a pricing perspective, they kind of need to also sort of wrap around the pricing model, right? So if Claude Design costs X in a certain way, then suddenly Canva gets this translation problem between, okay, so they need to pay for the Claude Design infrastructure to run their own product for their users if they just want to wrap around.

And then either they have to now own the exchange rate between whatever Claude Design costs and how they price, or they just have to like carry it over completely to say, hey, we're just gonna mark up on these particular things where whatever Claude Design costs, you're gonna pay that plus whatever 20% or just that. And then that's how we're gonna price it in Canva. So I think the interesting thing for someone like Canva is are they going to be able to stick with this like simplistic AI use case model, or are they going to be forced to actually more closely mimic and track the underlying infrastructure cost as it comes through from Claude Design?

This is sort of this is a big unknown, and it's going to be really interesting to see how this sort of plays out in the next couple of years.

The verdict: buy, hold or sell?

Rob Litterst (31:39)

All right, Ulrik. So at the end of every episode, we give kind of our analysts' view on the pricing for each of these companies. So if you are looking at Canva's pricing, are you buying? Are you holding, or are you selling?

Ulrik Lehrskov-Schmidt (31:53)

I think I'm just if it was a stock, I would be selling. So the same as everyone else, right? So from a pricing perspective, I think they're doing what they can, but it's but they're just in a really tough spot. And so I would say that I would have to see something like extraordinarily clever for this to be even a hold, let alone a buy. I think they're just stuck between a rock and a hard place. Like I think they're going to be really heavily hit by Claude Design and some of these others.

And I think a lot of this in this category, in a sense, already are. I think it's a sell for me. They might turn it around. So you never know. But I think really what they would have to do is to lean heavily into more closely mimic the underlying LLM cost, regardless of the complexity towards the end user. I think that's the way to go. They have an opportunity to do that for a lot of their free users already. To say, hey, if free users come in and you know get access to a credit card, and then you essentially like you run over because you start to use some of the AI functionality in there, and that could become a new lever for growth for like the PLG motion for them.

Just letting the AI like drive adoption and sort of playfulness around like designing things. I think that's where I would probably focus. Yeah to sort of ride that wave right now. But I think apart from that, I think they're in a tough spot, and I don't see a lot of other like real avenues for growing this.

Rob Litterst (33:37)

The one thing that I always think about with user bases this big and like with Dropbox that they would be in the same boat. As like a media person, like I always go back to ads. Like, is there a world where like Canva could have an advertising revenue stream, where Dropbox could have an advertising revenue stream where they have, you know, like a slate of partners that they give exposure to kind of various parts of the product when people are in there and they charge for that.

I think that's the one thing that these kind of like freemium first products could probably find a way to execute. They could kind of protect their revenue growth. But again, that's a completely different business model, very different from what they've been doing.

Ulrik Lehrskov-Schmidt (34:19)

You never know. Like, so the good thing about crises is that sometimes it like this is where you can see some real creativity sort of jump out. Maybe we're not the ones to help Canva because it does sound like we have a lot of great ideas here. Yeah. But who knows? Like so we're just gonna like hope that these guys have it under control and I think we're just gonna have to check in later to see if they went and surprised us.

So that's where we are.

Rob Litterst (34:49)

That is it for this episode of Pricing Page unPacked. If it was useful, subscribe to the podcast on your podcast provider of choice or find us on LinkedIn, the PricingSaaS community, or on YouTube. And remember, your pricing page is not just a page, it is a strategy statement.

Ulrik Lehrskov-Schmidt (35:05)

See you on the next Pricing Page unPacked.