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Adobe loses the game with their skill and use money to win it. Figma won the game with their skill but lose the money game.

by isnhp 4y ago

pcurve 4y ago
Yep. Everybody has a price. It's not that Figma was worth $20 billion. It's that Adobe was likely seeing subscription revenue take hit from customers that realized there's no need for creative cloud subscription.
- unstrategic 4y ago
  > It's that Adobe was likely seeing subscription revenue take hit from customers While being pummeled by public markets, and being forced to make a move that might keep shareholders from calling for blood. This is certainly not the first time that Adobe has presented a number to Figma's board — but it has to be the biggest number yet, by far. From Figma's position: take your chances on an IPO while the Fed is cracking skulls around inflation — or flip the bit on that liability, and cash out to a desperate Adobe?
  - majani 4y ago
    Another interesting layer to this is that Adobe only has $5b in cash according to their balance sheet, so the overwhelming majority of this deal is probably in Adobe stock with a long vesting period. Also the deal being done in a downturn means that the difference between this and an IPO is academic in my view
    - unstrategic 4y ago
      > the difference between this and an IPO is academic in my view More theatrical than academic — if both options have a risky short-term outlook, optimize for the story. Sold for $20B? Or lackluster IPO? As GP of a VC fund, which story is going to better-enable you to raise your next several funds?
    - wikfwikf 4y ago
      Why do you think there will be a long vesting period? Vesting periods are quite common in employee incentives but not at all common in mergers and acquisitions.
      - majani 4y ago
        Because it's just common sense to not want close to $20 billion of stock flooding the market in a short period of time
adventured 4y ago
Adobe got the money in the first place via skill. Photoshop has been the leading photo editing software for a generation. Hundreds of companies over decades, some with deep pockets, have tried to knock them off and have failed. Figma didn't lose the money game, they sold out specifically to reap the money. The owners of Figma - where the profits tend to go in a business - are extracting at an epic scale. They sold out at a valuation far beyond anything sane. They won the money game big time.
- HellDunkel 4y ago
  They have not failed because they couldn’t get a great product out. They have failed because so many people are trained on Adobe products an just use those.
  - clcaev 4y ago
    Yes. At an individual level, they ask the question: "Delay my deliverables a week or two in frustration as I retrain; or, pay $300". User by user, the decision is obvious: pay the ransom and move on with your life.
    - HellDunkel 4y ago
      I did not mean it this way. The user will always ask the question: „Can i use another software for less money/more value“. Those who can will turn their back on adobe as the company is greedy and lazy. Problem is: if your company/client is a large cooperation you dont have any choice. Never underestimate professional users.
- unstrategic 4y ago
  Arguably, the money game is exactly what Figma was playing all along. Dylan's good at this game, as are the VCs he partnered with. Figma's flagship product was private equity. The design tool was secondary.
  - NavinF 4y ago
deleted 4y ago
[deleted]
brokencode 4y ago
It’s hard to say they lost the money game when they ended up with $20B.
- HelloNurse 4y ago
  They can definitely fund the development of a new good product with that kind of money.

Adobe loses the game with their skill and use money to win it. Figma won the game with their skill but lose the money game.

by isnhp 4y ago

Adobe loses the game with their skill and use money to win it. Figma won the game with their skill but lose the money game.

pcurve 4y ago

Yep. Everybody has a price. It's not that Figma was worth $20 billion. It's that Adobe was likely seeing subscription revenue take hit from customers that realized there's no need for creative cloud subscription.

unstrategic 4y ago
> It's that Adobe was likely seeing subscription revenue take hit from customers While being pummeled by public markets, and being forced to make a move that might keep shareholders from calling for blood. This is certainly not the first time that Adobe has presented a number to Figma's board — but it has to be the biggest number yet, by far. From Figma's position: take your chances on an IPO while the Fed is cracking skulls around inflation — or flip the bit on that liability, and cash out to a desperate Adobe?
- majani 4y ago
  Another interesting layer to this is that Adobe only has $5b in cash according to their balance sheet, so the overwhelming majority of this deal is probably in Adobe stock with a long vesting period. Also the deal being done in a downturn means that the difference between this and an IPO is academic in my view
  - unstrategic 4y ago
    > the difference between this and an IPO is academic in my view More theatrical than academic — if both options have a risky short-term outlook, optimize for the story. Sold for $20B? Or lackluster IPO? As GP of a VC fund, which story is going to better-enable you to raise your next several funds?
  - wikfwikf 4y ago
    Why do you think there will be a long vesting period? Vesting periods are quite common in employee incentives but not at all common in mergers and acquisitions.
    - majani 4y ago
      Because it's just common sense to not want close to $20 billion of stock flooding the market in a short period of time

adventured 4y ago

Adobe got the money in the first place via skill. Photoshop has been the leading photo editing software for a generation. Hundreds of companies over decades, some with deep pockets, have tried to knock them off and have failed. Figma didn't lose the money game, they sold out specifically to reap the money. The owners of Figma - where the profits tend to go in a business - are extracting at an epic scale. They sold out at a valuation far beyond anything sane. They won the money game big time.

HellDunkel 4y ago
They have not failed because they couldn’t get a great product out. They have failed because so many people are trained on Adobe products an just use those.
- clcaev 4y ago
  Yes. At an individual level, they ask the question: "Delay my deliverables a week or two in frustration as I retrain; or, pay $300". User by user, the decision is obvious: pay the ransom and move on with your life.
  - HellDunkel 4y ago
    I did not mean it this way. The user will always ask the question: „Can i use another software for less money/more value“. Those who can will turn their back on adobe as the company is greedy and lazy. Problem is: if your company/client is a large cooperation you dont have any choice. Never underestimate professional users.
unstrategic 4y ago
Arguably, the money game is exactly what Figma was playing all along. Dylan's good at this game, as are the VCs he partnered with. Figma's flagship product was private equity. The design tool was secondary.
- NavinF 4y ago

deleted 4y ago

[deleted]

brokencode 4y ago

It’s hard to say they lost the money game when they ended up with $20B.

HelloNurse 4y ago
They can definitely fund the development of a new good product with that kind of money.