Atlassian, Canva, Now Index: A Startup Secondary Success Story

Hosted by Jason Atkins
President & Co-founder, Cake Equity

Episode notes

Join Jason Atkins and Christian Iacullo, co-founder of Index and ex-engineer at Canva, discuss product market fit and Canva’s recent secondaries. Christian also shares his experience as an engineer at Canva and how he witnessed its growth and made use of his equity. Here are things you wouldn’t want to miss:

  • Christian tells his experience with the Canva secondary transactions, emphasizing the financial opportunities and challenges that come with startup equity. The jump in Canva’s valuation to $26 billion just talks big on insights on startup equity.
  • Jason and Christian also talked about product market fit and the importance of understanding customer needs, iterating on product features, and finding your own spot in the market regardless of the competitors you have in any category.
  • Christian also shared his way of maintaining a healthy lifestyle to balance the demands of a startup career.

Tune in to the latest episode of Startup Equity Matters to gain insights into the world of startup equity and entrepreneurship. Listen now on your favorite podcast platform!


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Transcription to follow!

Jason Atkins: Hi, everyone, and welcome to today's Startup Equity Matters podcast. As you know, this podcast is about startup equity. We try and unpack cool stories and insights from real startup people who are getting it done to make life easier for you because sometimes it's a bit hard to work out what's going on out there with startup equity. I'm particularly excited for today's episode. There's so much startup stuff in this one. We're going to talk about one of the hottest secondary transactions getting around, which is Canva, which is one of the world's most successful Startups, super excited to chat a bit about that. We're going to talk a bit about product market fit, which is super interesting. A bunch of just equity goodness. We're such a great guy. Christian is a long-time supporter and friend of Cake’s. He's got an incredible startup journey. He's done stuff already. He's been involved in the recent Canva secondary, and yeah, just has done so much stuff and really had equity throughout his journey. So welcome very much, Christian.

Christian Iacullo: Happy to be here. Thank you, Jason.

Jason Atkins: Cool. So the topic today we're going to cover, we're going to talk about startup equity success. We've got the Canva story. Definitely, there's been two secondaries at Canva in the last few years, so we're going to learn a little bit more about that. It's pretty cool. We love unpacking equity success stories and talking about not just the financial side, but what opportunity that creates for these people. Then hopefully, that inspires you and helps you on your journey. Also, Christian was at Atlassian too, so he really knows how to pick a startup, but we'll be covering much more, including his ongoing success with his new startup and we'll be digging into something that Christian and I are both very passionate about, which is zero to one product market fit, including how Christian helped Cake along the way as well as a mentor. So, to kick things off, I better shut up now. Now, can you tell us a bit about the hot topic in startup land globally, but very much so in Australia, possibly the biggest financial event in Australian secondaries history. Yeah. Canva. Big news.

Christian Iacullo: For sure. It's a very exciting time. I think anyone who's worked at Canva over the last few years has, I think, been holding out for this secondary. We had a bit of a break between the last one, which occurred in 21, basically at the height of the market, $40 billion valuation. Interestingly, prior to that, it was happening yearly from what I hear. I was actually only eligible to participate in a secondary for the first time in that 2021 secondary. Part of the equity contracts mean that there's a three-year lockup before you can sell. So I joined in January 2018. And so, yeah, that 2021 boom, I mean, what a secondary to be able to participate in. I think with the benefit of hindsight, I maybe would have sold a little bit more at the top but I was obviously a very big believer in Canva's mission and I still think there's this huge upside in the company and in the stock price. Very widely known at this stage that there was a revaluation to $26 billion in terms of the company valuation, so a bit of a markdown just as the public tech companies were struggling with that kind of post-COVID boom crash and multiples readjusting. So I don't think you'll find too many other companies that have ARR growing from a billion to two billion and then have their valuations slashed at the same time. But yeah, I guess it's an interesting case study in the disconnect between market prices and intrinsic value.

Jason Atkins: I don't think you'll find many companies going from 1 billion to 2 billion ever anyway, so that's a hell of an achievement in the first place. Exactly. How we price these things is a bit of a mystery and a bit of a lottery. There's also many factors at play there. But yeah, incredible company, one of the greatest ever private companies. I think when it was valued at 40 billion, it was up there in the top handful of private companies globally with the likes of Stripe. So, it was an incredible achievement, one of the greatest success stories of Australian business. And from an equity perspective, we just love seeing the opportunities that it creates for everyone, for investors, and for the team. I think today, we're going to focus on the team. What can you tell us a little bit more about it? Maybe we'll do it in order. You were able to participate in 2021. Obviously don't share too much info, but I'm sure people would like to understand if you can share what type of equity it is.

Christian Iacullo: Yeah, sure. I'll try to steer away from specific numbers, but can definitely give you a sense. Yeah, it's super interesting. When I joined Canva, I tell people it was like my third time lucky because I started as a grad at Atlassian and there was an ESOP there. There were RSUs actually. Then eventually, two years into my full-time working career, I joined this startup and was really going for the home run with that startup, like getting in from a really early stage.

Jason Atkins: How many people were there at Canva when you joined?

Christian Iacullo: Do you remember? I think there were around 150 total, maybe about 100 engineers.

Jason Atkins: Wow. It's still a pretty decent-sized company then.

Christian Iacullo: Yeah. And the other funny part of it was that the 1B round was just closed but not yet announced, so I was actually deciding between Canva and some other offers that I had at the time and was fortunate enough to get on the phone to Cliff, and Cliff basically gave me the news about the one bil round. So certainly, from my perspective in terms of value counts of the equity, I assumed that a lot of the upside was already priced in. So I think, yeah, funnily enough, I got a minor.

Jason Atkins: That's a fair assumption. It's like you guys are really worth the bil.

Christian Iacullo: The previous valuation was around the 300 mil mark, right? So it was accelerating at a dramatic pace. And I thought, best case scenario, I'll be there for four years. I want to stick it out this time, invest my equity at a company that's doing well. I kind of missed the boat a little bit on that one, leaving maybe too early from Atlassian, at least from a financial perspective. I think for career reasons, it was definitely the right choice. Yeah, I think behind my models, I had the best case scenario 4B after four
years. So to have an outcome that was like 10X, that was seriously mind-blowing.

Jason Atkins: And even 4X is fine, right? You might be getting 20, 30, 50K worth of equity, I don't know, depending on what your offer is, and you get that over four years, and then that 4X is, I mean, that's still a cool outcome. One little insight I'm picking up here that people could learn from is, You know, you've come into a later stage company and it's already got the billion dollar vowel. But it's probably a lot closer to having liquidity at that point than if you choose the really early-stage option, they could be six, eight, 10 years away from having any sort of material liquidity event, so that's an interesting insight.

Christian Iacullo: Totally. I think it was a sweet spot for me in my career as well. At Atlassian, for comparison, it was about 600 devs over a thousand staff when I joined. When I left, it was over a thousand devs, many thousands of staff globally. Going from that environment to startup, it was like me and a few other people in a room that was kind of like two polar ends of the spectrum. Then I think Canva was that sweet spot where it very much was de-risked. They had an amazing growth trajectory, really smart people that I could learn from, and just a great culture as well, like excellent job by Canva's, they call it the vibe team or experience team at creating a really fun atmosphere around the company office and culture and things like season openers. But yeah, back to your question. Atlassian was the RSUs, Canva was options actually. A little different, but still ESOP options. The market rates at that time–I don't think it's too different now, so I'm happy to share a ballpark there, but if you actually did the math on what the shares are worth at the bill valuation, it was kind of in the order of a couple hundred thousand dollars over the four-year period. So it seemed reasonable at that time, kind of compared to other offers, I thought, okay, great. Yeah, maybe there's a bit more risk with this company being at an earlier stage than say like an Atlassian, which at that point was already public. So you would receive your equity grants and could sell them immediately. I knew with Canva, there was this an illiquidity factor, but then hopefully more growth to make up for it. So, I took the deal and started working and then continued to work on the business and then kind of saw the magic unfold, I guess, over the years to come.

Jason Atkins: Amazing. So many people would be in a similar boat right now, and it's very exciting to hear of the success. I'm really happy for you, man. So cool. Then there was a secondary in 2021, and so has it been happening yearly? Or is there a little gap just because of the things that are hard to price for a few years or, maybe there's not enough liquidity in the market or what's going on?

Christian Iacullo: Although I wasn't able to participate, I think it was happening yearly prior to 2021. I don't know how early that started, but speaking with some of my former colleagues, I believe it was happening at least yearly, sometimes even more. At the time, there's a transition probably happening at the moment because of the recent fallout, but at the time, this was all facilitated through the Carta platform. So Carta actually had a secondaries workflow in their product, and the way that it would work is you get this email saying, hey, there's a tender offer that's now in progress. And usually, they give you about a month to put in your request, I don't know whether it's called allocation or submission for how much you'd like to sell. Then once the month is over and it's usually a large institution on the other side that's already committed to buy, you know, usually hundreds of millions or even billions worth of stock. Then the process closes after that month. That's the last chance you get to put in your submission, and then the orders get filled. So for the first, as I said, the first chance I had to participate was 2021, and for me, it was basically the biggest outcome of my career financially. I think this would be the case for most Canva people. I think I'd had a bit of a small win from the Atlassian equity, but I was much more junior in my career. The company was later stage, and so the equity was just much smaller in comparison. So, yeah, pretty crazy timing as well with COVID and the acceleration that had up to that 2021, 40B raise with Canva with the whole work from home setup, learn from home, and all the eyeballs that were being driven to the likes of Zoom, but also Canva, things like learn from home. I was working on the education team at the time. So, couldn't have been a better timing for like that kind of top in terms of market aspects definitely playing a part. But then yeah, after the 2021 secondaries, kind of the heart of the market, there was that big correction. So I believe it started with Blackbird in conjunction with some of the super funds of Australia, which are direct investors in Canva, wanting to come up with a fairer value for the company, knowing that that 40B was probably a bit aspirational at the time of that 2021. It was both a raise and then a secondary transaction afterwards in 2021. So in 2022, there was a pause, no secondary activity, no fundraise, just as those prices readjusted, but an independent valuer came up with that 26B number for Canva down from the 40. Then, I guess everyone was kind of hanging out through 2022, then 2023. And even last year, things were a little bit scary with the Silicon Valley Bank collapse, crypto winter, tech stocks taking a pummeling. But I think, at least from my perspective, from a macro perspective, I think things really started to improve towards the end of last year and some certainty around interest rates as well, kind of hitting their peak. Then you start to see public tech companies and their valuations improve. I think that combined with Canva's continuing phenomenal growth, it's widely known now that they're on track for the two billion ARR, which has created this opportunity, and I think it's a pretty great opportunity in terms of price for the institutionals who are buying now at essentially a 25x multiple on a company with a huge growth rate, over 50% year on year ARR growth and at the scale they're at with the billions of revenue. Here we are. That's basically happened now over the last month, and I believe people were paid or the orders filled about two weeks ago.

Jason Atkins: Yeah, amazing. I'll just dive into a couple of things there. Just to reiterate a couple of those key points that we're very passionate about as well, which is I guess the financial power of equity. Canva is an exceptional case, but even if you're at one or two or three billion, if you've started out in seed stage or series A stage, the ability to create wealth for your team and within these teams is incredible. You know, it's hard to save money from a salary. Everyone knows that cost of living pressures are intense and wages don't keep pace with all this cost of living pressure and house price growth. So it's getting harder and harder. But to be able to work in a startup and get equity in good startups that have good culture around their equity and the teams participate and there are regular opportunities to create liquidity. Our teams can create real life-changing wealth, and in this case, we're talking about the home run outcome. But there's lots of great outcomes that can be achieved by startups all the way through–the different stages of success, and I'm just super excited to be able to highlight that today with you. So thanks so much for sharing that. And the annual piece of it, I think is worth digging into as well, because you know, as startup leaders, and when we're building our culture, once we get to a certain point in the journey and you can't go too early these days, you do need to have, say, let's call it Series B level maturity in your company. Perhaps, you can squeeze it out a little bit earlier. We would like to think so at Cake, but not really that cool yet. But once you get around that sort of late Series A, Series B maturity, you can definitely start creating liquidity and setting prices and having annual opportunities for people to sell down portions of their equity. I don't think it's normal to sell all your equity or anything like that, but I think companies would normally set a limit, say 10-20% each time. Then, you can sell that over time and utilize those things for really important life expenses like homes and school fees, and perhaps even holidays or whateveris important to you.It's really, really valuable in the real world, and it's not just on paper. We're so passionate about that at Cake. So again, thanks for sharing and giving us an opportunity to talk through a real life example of how that happens. The last thing I want to touch on is culture. You talked about Canva having a great culture. I've certainly heard that many times. The vibe team sounds cool. We do have more or less a vibe team at Cake too, so that's nice to hear. But yeah, how is the Canva culture? Can you share a little bit about that and maybe particularly around equity culture, if that's something we could touch on?

Christian Iacullo: Yeah, for sure. I might just start with the culture more broadly and then kind of drill into the way the equity side was managed. Canva is a pretty special place. I think, firstly, it’s very unique that it's run by Melanie Perkins. You have a woman CEO running this multi-billion dollar company, and especially, in the tech and software space, it just wasn't an archetype that we were used to seeing, especially from my perspective, having worked for Mike and Scott at Atlassian. And so I kind of had this perception of a typical tech CEO-founder being this nerdy computer science graduate, like Bill Gates and Mark Zuckerbergs of the world. So to see that mold broken and a totally different type of person with a different background running a company was I think probably one of the most interesting aspects and that had a very natural effect on the culture. Obviously, things like all the perks and great office space that you come to expect from a lot of tech companies. I think Canva was somewhat unique in Sydney in that maybe similar to Google, they had in-house catering. So I remember the first time I ever visited the office for a recruiter chat, I think it was, maybe it was my interview, but you know, I sat down with a bunch of the Canva team folks and just grabbed lunch, went and did the whole self-serve, and I was like, “Wow, this is different.” You know, this is definitely different to what I'm used to.

Jason Atkins: Really personal, eh? Not cold and stale. Eating was like having a meal with someone is a really kind of great way to connect.

Christian Iacullo: Exactly. The kinds of conversations like hallway conversations or lunch conversations and the people that you meet that aren't from your immediate team. I think the opportunities that it creates for those serendipitous conversations is definitely a part of the culture. I think the other thing worth highlighting was the big difference from Atlassian to Canva was that Atlassian was very engineering-centric and that was reflected in their quarterly cadence or what they called shippets. So every quarter, they would do this shippet, which was essentially a hackathon that everyone participated in, but it was really the engineers who were able to produce something kind of new and cool that were generally glorified and rewarded and won the competition because it was a competition at the end of the day. Whereas I think with Canva, it was really different. They had this concept of season openers–season closes if you want, because in between one season to the next, and I think it may have changed now, but we initially operated on the Australian season, the spring, summer, autumn, winter. And so as the season changed, they'd throw a huge party, we'd celebrate the wins that had been achieved over the last quarter, and then also paint a picture of what the vision looked like for the upcoming quarter. And so that was the moment where you were held accountable for your goals, but then also got to set new goals for the future. So it was a really interesting and fun cadence around like the way the company operated and you could kind of notice the stress levels rising as people wanted to get things in for the season opener. It was usually this big presentation where certain teams would share and some of them, a few of them, but some of them were actually opened up to the public. At one point, we had this season opener that was at Luna Park and all the press were invited. We are kind of starting to see the real beginnings of a roadshow or a kind of event–Atlassian has things like Summit and Atlas Camp, Apple with WWDC, Amazon, of course, has all their events. Canva initially started to dip their toes in with the season openers, making the quarterly company cadence around goal setting something that they could share, but they've actually gone even deeper into the events now with the Canva Create events. I think last year was the first official one. Then there's one coming up in a couple of months as well. So, there was a really big contrast there, just the engineering-centric culture with hackathons and shippets at Atlassian. We did have some hackathons at Canva, but the primary quarterly cadence was, I would say, very preso-driven, like giving a presentation and offering, often painting a picture of the future. So, yeah, designers were often very busy making slides and making mocks and designs for slides, like, around that season opener period.

Jason Atkins: Wow, that's super interesting. Yeah. You can see like a very creative way to sort of develop those skills the company needs. It was like practicality and creativity and fun coming together. Really interesting insights there. Look, I could talk about this stuff all day. It's one of the most interesting companies of our generation, but it's really important. We've got some cool stuff to do next. You've got one of the best new startups going around. There's YC, there's an incredible round. I don't know what you can share about your round, but you've got some great investors backing you. So congrats on the new venture. To keep the equity story, okay, so had a really successful career, learned some great stuff from the best companies, and created a little bit of financial freedom for yourself. Congratulations, let's not talk numbers, but obviously created some space, right? And now you're doing something super exciting. Yeah, tell us about the new mission.

Christian Iacullo: Yeah, for sure. So yeah, I spent almost five years at Canva, so towards the end of that period, late 2022, a good friend of mine, Simon, now my co-founder, had this product idea that he had. And at the time–probably from early, maybe even late 2019 to through to 2022, I was involved with Startmate as well, so working with startups and giving advice–that's how we both met. The Startmate program was something that I do regularly, so I didn't really think too much of it other than the fact that this was someone that I knew very well. Obviously, I wanted to help my friend out, so I think we tried to get you on Cake.

Jason Atkins: I think everyone you've mentored tried to get you on board, so there must have been something special about this project.

Christian Iacullo: Yeah, definitely. It was super interesting in terms of the product for me, but also the opportunity to build something from scratch when it was just an idea. And to be able to get that off the ground, I think, was appealing. I think, yeah, where YC came into it was because my co-founder Simon, well, was a friend at the time, thought that the best path forward for us was to apply to YC, so I didn't really think much of it, honestly. I knew of YC from the early days when I was in university and seeing the likes of Dropbox, Airbnb come out of YC. But I knew that the accelerator was kind of into the more mature phase of its life cycle, like larger batches, and I knew that they were always inundated with applications, so I thought that the probability of success through applying was going to be very low, but worth a shot anyway, as kind of a catalyst to get this possible venture started. And so I recorded a quick 10-minute video and sent that off. A month went by, I didn't hear from YC. And so I was very happy in my role at Canva. I'd worked in a bunch of different teams and I was actually–I joined this new team, the collaboration team that was working a lot on the commenting, real-time cursors, experience, the way that users interact with each other within the product, and so it was loving the work, loving the team, but then always had this like startup itch that I wanted to scratch because I'd never gone out and started something of my own and kind of approaching you know 10 years in the industry I was like well it's kind of that point of like now or never like I think if I don't do it now, I could certainly see myself maybe settling down. Eventually, I will have kids. I have a long-term partner. And so yes, definitely saw it as my opportunity, especially with that financial security goal achieved, the financial independence. I was like, “Okay, now could be the time to start thinking about this.” But yeah, after that month went by, I got an email to me somewhat out of the blue from YC and they wanted to jump on a call. It was a very quick call. I think it's 10 minute interviews as well for YC. The batch sizes are quite large, like 200 plus companies, and so we've got a lot to get through and yeah, we had the chat. And before we knew it, pretty much 24 hours later, they're like, yep, you're in. So that basically secures you $500k US in investment. Wow. That's a quick $500k in 10 minutes. Yeah, exactly. I think it was like maybe half an hour for us to prepare and record the initial video and then 10 minutes, so it was probably the most efficient fundraise. I've heard of it in terms of like, yeah, accelerator applications and it was still an idea. Like we were still at our jobs at that time, which was the other really surprising thing. I didn't know how much they were going to discount our application because of that.

Jason Atkins: I think my JCal pitch off the back of Startmate was in the same ballpark. When he led our round, I was like, what happened? That was insane.

Christian Iacullo: US accelerators and VCs, they're efficient. They don't need a lot of time.

Jason Atkins: It's like they're looking for something. And when they see it, they're like, “Get in”.

Christian Iacullo: That's it. And so, yeah, when I had that opportunity presented to me, and it was like, okay, 500k opportunity to start a business versus I'll hang around at Canva and, you know, go for the next promo, probably become an engineering manager and be managing a bunch of team leads. I knew which one I would kick myself more about if I didn't take the opportunity. I think, yeah, even the natural competitive aspects of it, you know, with my co-founder and friend Simon. And I thought, the fear in the back of my mind was like, I would be so upset with myself if in two or three years time he goes up and starts this and I never joined and it completely exploded and blew up. I think I definitely started to believe that there was something in the original idea and what a unique solution that we'd be able to bring to the space with the experience that we had. He was at Atlassian for about four years prior to the YC application and I was at Canva.

Jason Atkins: And then tell us what's the Index mission and what's happening in 2024?

Christian Iacullo: Totally. So yeah, really broadly, it's a collaboration tool for software companies to make them more efficient. Then more specifically, and this actually relates to some of the stuff I was saying around the Canva season opener process, but Canva and basically all software companies have this process of goal setting, and it's usually on a quarterly basis. Some people call it OKRs, OKRs is kind of, you know, a lot of people are OKR-allergic. They don't really like frameworks around these things. I think I would consider Canva in that category where Canva just called them goals. So when I started at Canva, it was a very simple system where there were few enough of us that the product team could get together in person in the office and everyone would write down their set of goals on these A4 sheets, one sheet per goal, and then we'd stick them on the wall, and Mel would walk around with each of the teams, see the goals, and then maybe give some feedback. We'd always pick a goal celebration as well. So if we achieve this goal, we'll celebrate in so and so way. So that worked well up to maybe a few hundred people in the company. I think certainly when it started to near the 500-employee mark, like the whole posters on the wall thing didn't really scale, so Canva adopted a spreadsheet. They just had this one big G sheet for all the company goals and so

Jason Atkins: Sometimes sheets are hard to beat.

Christian Iacullo: Yeah, exactly. So yeah, GSheet was like, you know, a great first digital solution, better than the posters on the wall, but that was kind of my vantage point. And then Simon at Atlassian, a much more mature company, was also seeing how Atlassian was doing goal setting and the fact that they struggled to use a lot of their own products to do it, so they had to create these internal tools or try and integrate a bunch of systems or even create new systems, new products to try and solve this problem. We definitely saw the delivery side of software development and project management as a pretty well-solved problem. So, you got the likes of Jira, Asana, Monday, and more recently, Linear. But this whole planning side, things like prioritization, roadmapping, collecting feedback, and using that as evidence to prioritize certain projects over others. How do you figure out the stack rank of the most important projects? That seemed like a whole bunch of white space, a huge area that there were some product solutions in, but none that we saw that were really compelling to the teams or the companies that we were working at. So that was our opportunity. We've been working on Index for the last year. We're in private beta at the moment, but yeah, watch this space. Definitely moving towards a more public launch in the coming weeks, in the coming months. Pretty soon. What's the website? Yep, so is the site. Check it out, everyone.

Jason Atkins: Then on the equity side of things, I know really early days, have you got like an ESOP set up yet? Or is it just founders?

Christian Iacullo: Yeah, it's really simple. So we had to set up a USC corp as the parent entity, and that's where we received the YC funds. Simon and I split 50-50 for our founder's share, YC, and then again, watch this space on fundraise. I'll be able to reveal a little bit more about that in the coming months.

Jason Atkins: I'm glad I didn't say anything. There's some cool people back in this company, so definitely keep an eye on it.

Christian Iacullo: Yeah, investors have their share. Then at the moment, there's an amount that's reserved for employees. So yeah, we have set up the foundations of the ESOP.

Jason Atkins: And you've got incredible lessons from your experience to be able to bring through. So, if I could editorialize a tad, you had a big choice to make, right? Do you stay and manage the team and continue to build your career that way? And if you hadn't had equity in these companies and you hadn't had an exit, I would suggest you'd be more inclined to go that path because you're really still trying to set yourself up more financially. But because of the prior successes, it gives you more freedom, being able to take more risks and doing something that you're much more passionate about, I think, and is more exciting to you. So love seeing that, love seeing the opportunity to create new innovation and bring all that IP into new things. Something that we're so grateful to see happening in the ecosystem. Even though Cake has not been directly responsible for any of these things, there are other good ways to do it out there. I don't know what they are.

Christian Iacullo: You're facilitating it for thousands of other companies.

Jason Atkins: We're doing our bit. But look, it's just cool to see it all happening and that's really exciting, so congrats on all that. One thing we wanted to touch on also is 0 to 1 product market fit. You're sort of doing it now. You helped us do it at Cake. When we first met, we were in Startmate, which is Australia's YC, I suppose. It's our top accelerated down here, backed by a wonderful VC and Blackbird and network of mentors, a lot of the best people in the Australian ecosystem are in there. Christian was there when we were there and we were doing, I don't know, 10, 20k in MRR at the time, very early days, trying to work out how to scale and you were super instrumental in helping us. The big win we had together that I remember is helping us understand how to tackle the global market because we were finding a little bit of product market fit in Australia, but it was such a small market in our niche and we had to expand the market size, and your experience was very helpful in helping us understand how we could open up the globe and tackle a much bigger market and try and find product market fit in a way that allowed us to get funding. Because if you're going to try and raise like two or three million bucks, you have to be able to show that your market size is pretty serious. So thanks for your help in doing that.

Christian Iacullo: I really enjoyed working together, actually, and big kudos to you guys for the progress as well. I think of my angel investment portfolio, let's say 10 or 20 companies… I think Cake could have to be up there in terms of performance and valuation growth and kind of what I'm expecting in terms of return.

Jason Atkins: Hopefully one day we can rival your Canva outcome for you, mate. That's what we're trying to do.

Christian Iacullo: That would be epic. Yeah. Here's to that. It's been incredible to see and certainly very inspirational for me doing the zero to one thing because I think one of the most challenging parts about starting a company is you're entering the competitive landscape, and I think especially in the 2020s, 2024 and beyond, no matter what you're doing, there are going to be other players out there, especially if you're in a large market. So I think it was really educational for me to see Cake enter the space as a relatively new kid on the block and then over time become a very established player and pretty much become the go-to equity platform, like certainly here in Australia. I think that's becoming the case globally as well. So we, as founders, love to use a lot of these examples, like looking at other case studies of companies which have done a similar thing. I was on the Confluence team, so when I first saw Notion, I thought, this is a Confluence clone. What's so special about this tool? But then seeing the growth of that over time and the adoption across startups and similar for Linear with the whole journey in Jira being this juggernaut ticketing system that's used probably across the board, like considered best of breed ticketing, especially in established enterprises. But then you have this new entrant of Linear with their ticketing system. And at least for our YC batch, like almost every company we spoke to was using Linear rather than Jira, so it's super interesting how generations of products evolve over time. Then the reasons for why certain products establish a foothold in a category and then can move towards category leadership. So, yeah, something we think a lot about with Index and the category that we're entering.

Jason Atkins: Yeah, it's super insightful. Obviously, in the beginning of Cake, when we were raising capital, everyone's like, well, there's Carta. So why do you need to exist? And we were like, hang on a sec. It's a big market. It's a big world. They might be worth $10 billion, but just look at the size of all the private companies in the world and all the different types of companies. There's regional niches. There's customer niches. There's customer size niches. There's verticals. There's so many different ways that you can enter a space, there's different channels you can use, and these are all opportunities for you to build a company and get a product market fit. And you don't want to be too focused on the competition. You want to be really focused on the customer. If you do that, it's quite possible that you can create yourself a bit of space that's bigger than you think, and you can build a really great company. Then if you've got a great company and a great culture and great momentum, you can see how far these companies can go these days. It's not like, “oh, we can only have this one product in this one market over 10 years.” It's like, “no, we can have 10 products in three or four markets over time because we're a bloody great company.” So I think there's a lot of energy in that. Another thing I heard along the way was one time I was talking to–I think it was Fidelity, which is one of the biggest fund managers in the world. I said, “oh, the big dog in our market is Carta.” And the guy straight out laughed. He laughed. He's like, we're the big dog. They had a little dog. And I was thinking, “oh, what does he think of us then?”

Christian Iacullo: Yeah, I don't know who owns Solium, but like Atlassian was on Solium and that was like a legacy platform, been around for a while before Carta as well so, I think I love these music analogies for this as well. It's like artists and genres. I see startups in a very similar way. It's like you look at any genre there's going to be a whole bunch of really successful artists in that genre but then the emerging artists as well and it's like that transition from like the old god to the new god that is super interesting. My daughter put on Katy Perry the other day and I was like “oh she's like the poor–”

Jason Atkins: Like Taylor Swift now, but she's huge. So successful. She must be having like a few dramas this year while Taylor's like on to God level. But it's an interesting insight, isn't it? I mean, there's so many ways to succeed. So, yeah, just got to get your head down, bum up, get that zero to one product market fit done. Then once you do that, you can sort of find your product market fit. I think it is a bit of a misunderstood term as well. It's not like, hey, people will buy my product. It's like, hey, people are buying my product at pace and I know how to sell it at a reasonable price, like, my unit economics are reasonably tight and I'm not going to grow and go broke. So you've got to have like quite a bit going on there to have product market fit so you can really scale your company.

Christian Iacullo: Totally. I think the whole product craftsmanship side is something that we've been really leaning into too, and seeing that from the likes of products like Notion, Linear, and so on, where they're winning on that product experience, even the Canvas of the world relative to likes of the Adobe suite, they'll always squarely focused on competing with the Adobe suite over time. Maybe not initially because they were going for non-professional designers, but with the recent acquisition of Affinity, that's one of the competitors to the Adobe Creative Cloud suite. They're much more squarely going head on against Adobe now. So you're always going to have competition, and I think it's about finding those competitive edges that you can have. That might be product craftsmanship, might be user experience, it might be distribution, or brand. But yeah, I think for us, that whole product craftsmanship side has been something that's been very inspirational, looking at a lot of the new tools that have emerged over the last few years.

Jason Atkins: So what's the big product market fit work you're doing at the moment that you can share? What are your sort of Q2, Q3? What are the big tests or goals or theories or processes that you're going through to try and make progress?

Christian Iacullo: Yeah, totally. So for us, there's been a lot of foundational work on the core table stakes experience. We've started with a very spreadsheet-like interface. So something that a lot of users would be familiar with if they've used things like GSheets, of course, Airtable, Notion data tables. That's cool.

Jason Atkins: It's probably lower cost as well and easier to iterate without heaps of funky UI on top.

Christian Iacullo: Yeah, we just found that people kept going back to spreadsheets and that whole G-sheet example with the Canva goals, like they've essentially moved off it now, but it took some time for them to move away.

Jason Atkins: And so we thought… So flexible, so powerful. There's so many ways you can edit it and move it with planning. It's like so much information, visually available with that formatting.

Christian Iacullo: Exactly. So we wanted to start with that familiar interface. We, of course, have other features as well now, other views for that data, such as the roadmap view, our board style views, but really the last 12 months for us has been working closely with our early customers. So we were lucky enough to land a number of customers within our last 12 months of essentially being in private beta and then working very closely with them. You could call them design partners, if you will, where they're constantly providing us feedback on the core value proposition and a lot of the table stakes features that just need to be there. But for us, really, it's about also looking at those key differentiators. So I did mention the whole feedback side is really interesting to us. We haven't seen too many tools that do a great job at tying customer feedback to roadmap items, and especially doing it in a way that doesn't require a lot of work on the PM teams, user researchers, designers, and so on. But yes, there's so many things that we're dreaming about building into the product in terms of those massive time savers for both small teams, one to five person teams, even a single product manager using this planning product with their team, right up to massive enterprises, canvas scale and beyond, where they're planning large work streams that will be contributed to by hundreds of engineers. So, yeah, approaching launch, I think we now have a really solid foundation, a lot of those table stakes in, and that's what takes the initial year or so of build to really make happen and why we've stayed in private beta so we can really refine that. But very excited to go out publicly and then finally open the top of the funnel a little bit more, be having a lot more eyeballs on the product and that's going to mean more feedback for us and then clear a direction on our roadmap and the areas we need to focus on.

Jason Atkins: Very cool. Look, as with every topic we've talked about today, I could talk much more about that, but we're really out of our time and I really want to respect your calendar today. But hit Cake up when you launch or before you launch. You know, we're going to be happy to help. Of course, I see this problem inside Cake. We're a really, really well-running team. Getting all this information in the right place to be able to prioritize is at minimum time-consuming, at maximum ineffective. So definitely hit us up. We'd love to check it out. Yeah, appreciate that. We always finish with our creative, healthy lifestyle questions. Everybody knows at Cake, we see health–looking after your health and getting in nature and being centered as a real asset to being creative and bringing positive energy and building a workspace where everybody's vibes high, as we said earlier. How do you see that? Have you got any insights from your career or how you're looking to build this into Index?

Christian Iacullo: Yeah, it's a great question. I think from the health and fitness side, I'll start with that. I think just the basics, the fundamentals, like eating well is really big for us. Like currently looking at our office here and like one of the high priorities for us was like having a great kitchen that we could use regularly for ourselves. I think that's something that just started out of starting the company from SF while we're going through YC and living out of this apartment in SF with just Simon and I and like cooking most of our meals because you know takeout food is pretty pricey in SF like it's an expensive place and so I think that's one of the core pillars. The other side is obviously training. Uh, look, you go through ebbs and flows with this, especially because oftentimes it's tough as a time commitment, but it's something that I've been prioritizing a lot more recently. For me, that's weight training four or five times a week, a bit of cardio in there as well. I think the other big pillars of this just for me personally is just like a sense of fun that's challenging outside of work. So something that I can fully focus on and I usually spend Sundays doing these kinds of activities. As of earlier this year, I've actually become certified as a recreational pilot. And so I've been in flight training from when I started at Canva, so it's been a while now, about six years. I've been doing it on the weekends, but I find that that's an activity where you kind of just lock in I'm fully focused on that activity at the time, and it brings me a lot of fulfillment and  satisfaction in overcoming the challenge of learning the various controls, performing the necessary maneuvers, passing the test. But yeah, I think I love anything basically with an engine. I have always done so, big F1 fan. I kind of grew up watching that and more recently have been doing a little bit of off-roading as well for the first time. So I got a little Suzuki Jimny and just been taking that out on the weekends with my partner or crew, some of my mates. I think work is the all-consuming, big part of my life, and I'm spending most of my week doing that. But I do think it's pretty important for me to have that reset time. And whether it's me going flying or heading out into the Blue Mountains area with the Jimny, just having that time away is key.

Jason Atkins: Wait, you sound super fun. That's a great answer. I'm intrigued about the flying thing. I might hit you up. My grandfather and my auntie were pilots and I spent a bit of time flying when I was young off the back of that, so I'm intrigued, too because I'm going to be considering adding that in to my next little phase to see if I get the same sort of enjoyment out of that as they did and you do. We can maybe chat about that another time.

Christian Iacullo: But yeah, for sure. Next time you're in Sydney, Jason, hit me up. We'll head over to Bankstown.

Jason Atkins: No way. I'd love that. That'd be so fun. Cool, man. Look, I was excited. I thought this would be a killer ep, and it definitely was. Every single thing we talked about, I could have talked about for more. I'm sorry if I missed things for listeners, but hit me up if you want to dig into any of those things in more detail. And yeah, I'd love to find an opportunity to have you on again later in the year, maybe. See how you're going. But look, thanks a lot. I know you're a very busy guy. You've been very generous to Cake over the years, and we're very grateful. Hopefully, we can make you a bit of cash on the angel investment side of things.

Christian Iacullo: No doubt.

Jason Atkins: Congrats. Thanks for sharing. Very hot topic. And congratulations, and excited to see how you go with Index, and I'm sure we'll be catching up soon. So see you, everyone. Thanks for listening. Thank you, Jase. Appreciate it. See you.

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