Entrepreneurs Cyan and Collis Ta’eed built digital marketplace Envato into a multinational business generating more than US$1b for its creative community. As they consider their next venture, they share their insights on succession planning.
Some people, like Cyan Ta’eed, are comfortable being entrepreneurs. They love the challenges of building something from scratch, of trying new, hopefully better, ways of doing business and scaling an idea to profitability. Just a year out of university, she started a business with her husband Collis and their friend Jun Rung in her parents’ Bondi garage to help designers and coders like themselves buy and sell creative assets.
That business grew into Envato — a hugely popular marketplace for stock images, templates, code and tutorials with more than two million customers, 600-plus employees and US$1b in earnings reported among its member community. It landed the Ta’eeds on The Australian Financial Review Magazine Young Rich List — a phenomenal achievement for a bootstrapped, founder-owned business that hadn’t courted venture capital.
“I like that startups are scrappy,” says Cyan. “There’s a sense of autonomy in being able to see the big picture and working with small groups of people to make it happen. You really get to see how your decisions make a difference.”
About three years ago Cyan realised she preferred the startup phase of a business with all its experimentation and challenge-solving. So she stepped back from day-to-day operations at Envato to launch three new startups — ethical chocolate brand Hey Tiger, a donation platform for women in crisis accommodation called New Day Box, and Instagram website-builder Milkshake.
In an open letter on Hey Tiger’s website, she paraphrased a favourite quote from American author John Augustus Shedd, summarising her feelings about business risks: “A ship in harbour is safe, but that’s not what ships are built for” and adding her own thoughts: “It’s vital that entrepreneurs and dreamers everywhere take risks, go big and try.”
Collis Ta’eed praises Cyan for nurturing Envato’s entrepreneurial culture while he was busy inventing things in the early days. “For a super-long time, I ignored the signs that my focus needed to be more on running the business than making things,” he says. “It’s one of the hard lessons of building a business — you’re constantly replacing yourself in roles. You change from being a person who makes things to talking with people who make things. Often I wished I could get in there and do it myself.”
Indeed, Ta’eed’s short biography on thought- leadership platform Medium reveals a lot of his character in 22 words: “Hi, I’m Collis. I’m the co- founder and CEO of Envato. I love to design, write and make stuff. I’m also a Baha’i.”
When you know there’s something bigger than you as an individual, then your core motivations are bigger.
Faith in humanity
Ta’eed’s declaration of his faith is gently expressed: he believes in the oneness of humanity, the value of education, equality for all people and social justice. “When you know there’s something bigger than you as an individual, then your core motivations are bigger,” he explains. “It’s a focus on growth for society. Those ideas of justice, fairness, being truthful and treating people kindly that we try to put into practice are not unique ideas, but they play an important role.”
Pressed to talk about how some corporations seem to operate in ways contrary to the professed beliefs of their leaders, the Ta’eeds take a forgiving view. “If the systems are flawed, then people might find themselves in situations where it’s difficult to make different decisions, but most people want to do good,” says Cyan.
“Maybe the corporate system behaves in a particular way,” adds Collis, “But if you pluck out almost any individual, you’ll find they’re totally for fairness. Humans are fundamentally noble. The way to change the system is one person at time — it’s just a matter of education.”
This faith in humanity inspires Envato’s company mission, stated as a commitment to having a lasting positive impact by blending profit and purpose, embracing diversity and inclusiveness, placing high value on integrity and openness. And at the heart of their business philosophy from day one is a desire to support people to succeed.
Flash in the pan
The Ta’eeds started working in the mid-2000s as multimedia designers just a few years after the dot-com bubble burst. Although they’d both completed dotcom-ready degrees, by the time they graduated, opportunities for young creatives seemed scarce. Like the best and brightest of their generation, they set up their own business — Good Creative. Pairing Cyan’s gifts in graphic design with Collis’ talents in web design, it attracted clients ranging from local government agencies to music labels. A year later, with Jun Rung, they channelled some of their earnings into funding their first online business idea — a marketplace for interactive assets.
“We’d been discussing how there were all sorts of things that could be useful to designers like us, but they didn’t exist,” says Cyan. “And if we made something, there was no platform that supported designers to sell and distribute product. My father worked as a photographer and we were conscious that stock libraries were often not set up in the best interest of the creator. So, we started a little side business, originally called FlashDen, and launched in 2006.”
Between 1995–2010, Flash was the dominant app platform for interactive online content. The Adobe Flash Player was installed on more computers worldwide than any other web media tool, powering everything from animations to online games and video embedded in websites.
And Adobe was sensitive to any perceived threat to its IP. At the peak of FlashDen’s sales in 2009, Adobe forced the Ta’eeds to change the name of their marketplace to ActiveDen.
Collis says it was an important lesson in not naming your product with someone else’s trademark, but also that memorable names don’t have to mean much. By the time ActiveDen closed in 2015, it had generated more than US$11.5m for its creator community, propelling the Ta’eeds’ business to nine-figure earnings.
“There was so much unmet need on the internet for Flash templates and tutorials because everything was so new,” says Collis. “Fifteen years later, a lot of businesses answer questions like ‘How do I do that?’ Or ‘Where can I trade this?’. Back then, everything was waiting to be done. I have a lot of admiration for entrepreneurs today because you have to do a lot more to find an opportunity that hasn’t been jumped on by a thousand people.”
Maybe it sounds idealistic, but we’ve always assumed if we do the right thing by others, it’ll work out well for everybody.
What’s in a name?
Having proved the market desire for a digital marketplace with FlashDen/ActiveDen, the Ta’eeds and Rung created two more in 2008 — ThemeForest (selling webpage design themes), and AudioJungle (royalty-free stock music and sound effects).
They thought of bringing all three marketplaces together under an umbrella name, but their favourite choice — Eden — was incredibly difficult to trademark and almost impossible to build any search momentum for.
“Trying to trademark Eden was a horror learning experience,” says Collis. “We liked the leaf design we’d come up with, so decided to find a new word to go with it. We found ‘Envato’ on [brand website] Brand Bucket and it sounded nice — plus it was trademarkable.”
As an umbrella brand, Envato gave the business plenty of stickiness among creatives worldwide, which made each brand extension easier to promote — from tutorials on digital tools like Photoshop to marketplaces for code, images and design templates.
“Often, there would be a symbiotic relationship between things like our tutorials on Photoshop and a place to buy Photoshop assets,” says Collis. “It’s a bit of a cliché to say ‘technology moves fast’, but our early experience with FlashDen taught us we had to get good at riding the waves of new digital technologies very quickly.”
By August 2015, reported earnings across the Envato community exceeded $300m, with one web theme author ThemeFusion reporting they’d made $10m in sales.
The following year when earnings in the Envato community hit the $400m mark the business founders made a strategic decision to ride a new wave in the digital sector. “We saw a shift from people buying individual products to wanting subscriptions, like on Spotify,” says Collis. “So we started investing heavily in subscription products with Envato Elements and it’s become quite a large part of the business, reaching $100m in sales.”
The Envato philosophy of sharing the rewards of growth is exemplified by the Ta’eeds’ decision, in 2016, to launch a profit-sharing scheme for their employees to celebrate the 10th anniversary of their business. In October 2020, when Collis stepped down as CEO, 20 per cent of profits were given to Envato’s 600-plus employees in Melbourne, Los Angeles and Guadalajara, Mexico. That 20 per cent profit share, totalling $3.75m, also saw an increase in the profit contribution to charitable causes to up to two per cent annually, according to Envato.
At the time, Collis said that profit share had become an integral part of Envato and “helps connect the team with a share of the success they create through their efforts”.
“We knew we were fortunate to be in the 0.001 per cent of people who get to run a highly profitable business like this,” says Cyan,” And we had this freedom to do what’s right.”
In June 2020, Envato became a Certified B Corporation, joining 3000 businesses worldwide “that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose”.
And for the seventh year in a row, Envato was recognised as one of the best places to work by global employee-sentiment body Great Place to Work. “We’ve always wanted a win-win for everyone in the business,” says Collis. “Winning at someone else’s expense is not really winning. So, we’ve always been interested in finding ways for creatives, employees and the business to succeed together. Maybe it sounds idealistic, but we’ve always assumed if we do the right thing by others, it’ll work out well for everybody.”
We knew we were fortunate to be in the 0.001 per cent of people who get to run a highly profitable business like this. And we had this freedom to do what’s right.
Cyan says she and Collis started talking about him exiting the business soon after she launched Hey Tiger in 2018. “One of Collis’ many wonderful qualities is he moves methodically,” she says. “He was always clear there was no way he was going to finish up as CEO if the business wasn’t in the best shape of its life.”
In early 2020, just before COVID-19 triggered lockdowns, the Ta’eeds met with Dr Kirstin Ferguson FAICD, former deputy chair of the ABC and currently a non-executive director of SCA Property Group, EML Payments and PEXA.
Ferguson became the first external director of Envato in June, joining the Ta’eeds, Collis’ father, Fuad and his brother, Vahid. “It really reflects on Collis that he took the time to make the transition,” says Ferguson. “He’s very thoughtful in how he does anything, and wanted to find the ideal successor before he stepped back.”
Cyan acknowledges concern Collis might have some sort of existential crisis when he wasn’t at Envato every day, so she’s glad he took three years to transition. She also feels very positive about how he’s set up the business for its new CEO, Hichame Assi, previously head of HotelsCombined. “Collis has been the equivalent of someone doing a perfect clean of their entire house before your cleaner arrives,” she says. “He’s been very thorough.”
Ferguson agrees, adding the Ta’eeds imparted a clear vision for the business to her and Assi. “The more people who understand how incredibly successful Envato is, the better,” she says. “They’ve built it without needing to raise capital and enshrined a very strong sense of purpose in every decision we make. In Hichame, we’ve found someone who has that international vision and experience, who fits incredibly well with Envato’s strategy. Collis has been very good at allowing Hichame space to find his own way.”
Collis says he was encouraged by the fresh energy Assi brought to Envato and also realised over time that as a board member he doesn’t need to be across all the detail every day.
“We’ve talked a lot about making sure we slow down and let ourselves rethink before we start another project and make new commitments,” says Cyan. “We want to make sure we have time to really focus on our kids and just quietly let ourselves follow our own interests for a while.”
Taking time to learn
Cyan and Collis Ta’eed chose Darwin for their family’s next chapter because it offers a nice balance of the tropical beauty Collis remembers fondly from his PNG childhood and a culturally diverse community.
“There’s a lot of interesting people up here marching to the beat of their drum and also some challenges to living up here,” says Cyan. “We hope we can become useful members of the community, so we’re exploring the best ways we can contribute.”
Both parents believe if they’d chosen an easy option for their sea change, their kids wouldn’t be exposed to the real Australia and the family couldn’t make a meaningful contribution to community life. “I was born in the US and one of the things my father’s often spoken about is that the American Dream is an incredibly powerful thing, but a major flaw is that it doesn’t take privilege into account,” says Cyan. “There are thousands of reasons I’m where I am today, and a lot of them are outside of my control — the family I was born into and the access I had to education, healthcare and money. I didn’t deserve it, I’m just fortunate.”
Envato director Dr Kirstin Ferguson FAICD has a similar view about the obligation to give back. One of her commitments is answering phones for Lifeline. ”I’ve previously sat on charitable boards, and I’ve spoken on other boards about mental health. But there’s nothing like the coalface of helping people who need it,” she says. “Being on the phones for Lifeline reminds me of the pain points for people in society and why we need to give back, so people don’t fall between the cracks. It’s all about using your position to try to influence outcomes.”
“We built our whole business and our whole lives in Australia on First Nations land,” says Cyan. “Darwin is a great place to learn from First Nations people about the land and its cultures. When we understand more, we’d like to support community projects through our charitable trust.”
Always have a succession plan
“Obviously there’s the ‘hit by a bus’ scenario, but that’s easy because you will have someone fill the role for the short term until you can appoint the successor. A thorough plan for the long term involves either developing people within the business to take over or having that radar of who is out there in your industry — and that process can take years.” Kristin Ferguson FAICD
No backseat driving
“One of the best lessons from Kirstin [Ferguson] was if you’ve been the chair and CEO, you sometimes forget which hat you’re wearing. She’s super candid with her feedback after each meeting and helps me focus on the role of the chair now, without backseat driving.” Collis Ta’eed
There are no sacred cows
“Try to overcome any insecurity that having a conversation about succession somehow means you’re on the way out. One of the key tasks of any leader is making sure that when they leave the role, they’re replaced with someone as good, if not better. So be upfront about timings for refreshing the leadership or the board and have transparent, respectful conversations about succession.” Kristin Ferguson FAICD
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