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Regarding the justifications for Figma's price: > most startups cut their valuation by a lot in 2022 Most startups are not used by every single other startup,

Regarding the justifications for Figma's price: > most startups cut their valuation by a lot in 2022 Most startups are not used by every single other startup, whereas I would be very surprised if any startup doesn't use Figma for UI design. I've never used Canva and never heard a company using it. The only time I heard of Canva is to create a nice looking CV. Comparing outliers to the average/most isn't very helpful. > Another way to peek at a startup’s valuation is by revenue and growth multiplier. That is clearly not the only factor in valuation. It also depends on Figma's cash, founders desperation (very low, especially to sell out to Adobe), acquirers desperation (very high), how unique is Figma (Sketch, Adobe XD and Canva are way worse), and loads more factors. I would guess the real reason the Adobe price tanked was because it was a huge admission of defeat. Previously, you can't see how bad Adobe XD has performed, and now you know it's so low it doesn't matter. They can't build something people want. Nobody wants to use Adobe XD, even when IIRC, it was free at one point.

YetAnotherNick 4y ago
If every startup uses something, it's not a positive thing as then they are near peak revenue. Their revenue is $400m, and 50x multiplier in late stage is exceptional. For canva and other small companies, I would give higher valuation to revenue multiplier.
- pavlov 4y ago
  If every startup uses something today, it often means that it's just starting to be noticed by large enterprises, and in five years will have spread there too. There's probably a big untapped market for Figma in boring enterprise software and internal design needs for marketing, etc. I'd bet that Microsoft was bidding for Figma too. In that light, Adobe's $20B price is a sign of strength because they were able to afford to outbid Microsoft for an extremely strategic acquisition. Adobe isn't taking enormous amounts of expensive new debt to fund this. The stock market's opinion of the deal doesn't affect Adobe's finances directly.
- cyanydeez 4y ago
  Not every startup is eating adobes lunch
raverbashing 4y ago
Yeah it's hard to not say yes to 20Bi. Take the money and do whatever you like.
rippercushions 4y ago
Canva is huge among casual users, eg. school-age children.
- lucideer 4y ago
  True, but I think that's the point. It's not really competing as directly in the Adobe/Figma market. Figma has massive corporate use & Canva's casual users would've been much less likely to have shelled out for a CS/CC licence anyway.
- nisegami 4y ago
  That market, while large, is difficult to monetize effectively.
lucideer 4y ago
> founders desperation (very low, especially to sell out to Adobe) What makes you say this metric is "very low"? Evan seemed (to my eyes) to be the technical drive behind Figma as a product, and left in 2021 (shifting focus to esbuild) Dylan has come out criticising Adobe (in what mainly seemed like good marketing) in the past, but other than that, his focus has been investment, and - more recently - NFTs, crypto & web3. An exit seems very natural.
bryanrasmussen 4y ago
>whereas I would be very surprised if any startup doesn't use Figma for UI design. have startups stopped using Invision? >acquirers desperation (very high), I would think acquirers desperation (very high) would be another word for 'dump this stock' which to me is what the article seems really about. People dumped adobe, why because Figma not worth that unless acquirers desperation (very high). uh oh, who wants to hold a desperate company?
- cercatrova 4y ago
  InVision is not a design tool, it is a prototyping tool.
- mrjh 4y ago
  "have startups stopped using Invision?" Speaking as a designer, Invision has never felt like a serious design tool and they've had a constant struggle to find their place in the market. Invision started life as a prototyping tool, and they dabbled with Studio sometime around 2019, but recently they've morphed into more of a collaboration/whiteboarding tool. They're probably more akin to Miro or Jamboard than Figma these days.
  - bryanrasmussen 4y ago
    Ok I thought that might be the case, although not sure why. As a developer I found less irritating than I am currently finding Figma, although that might just have been the project.
achow 4y ago
Think about it this way.. - "Every startup" does not mean big number. Startup are handful if compared against all kind of business that exist (from car dealers to big retailers to IT behemoths...) - In typical tech company only handful of people use Figma (Design, PMs, Front end engg) Whereas Canva's addressable market is anyone and everyone who has need to produce documents that are not wall of text (all young, old - resumes, birthday party invitation,...), all companies (newsletters, flyers for their events,...)
Existenceblinks 4y ago
Implication in another axis: proprietary is underrated and overbashed. I'd love Adobe to prove me wrong by making Figma file format opened.

YetAnotherNick 4y ago

If every startup uses something, it's not a positive thing as then they are near peak revenue. Their revenue is $400m, and 50x multiplier in late stage is exceptional. For canva and other small companies, I would give higher valuation to revenue multiplier.

pavlov 4y ago
If every startup uses something today, it often means that it's just starting to be noticed by large enterprises, and in five years will have spread there too. There's probably a big untapped market for Figma in boring enterprise software and internal design needs for marketing, etc. I'd bet that Microsoft was bidding for Figma too. In that light, Adobe's $20B price is a sign of strength because they were able to afford to outbid Microsoft for an extremely strategic acquisition. Adobe isn't taking enormous amounts of expensive new debt to fund this. The stock market's opinion of the deal doesn't affect Adobe's finances directly.
cyanydeez 4y ago
Not every startup is eating adobes lunch

raverbashing 4y ago

Yeah it's hard to not say yes to 20Bi. Take the money and do whatever you like.

rippercushions 4y ago

Canva is huge among casual users, eg. school-age children.

lucideer 4y ago
True, but I think that's the point. It's not really competing as directly in the Adobe/Figma market. Figma has massive corporate use & Canva's casual users would've been much less likely to have shelled out for a CS/CC licence anyway.
nisegami 4y ago
That market, while large, is difficult to monetize effectively.

lucideer 4y ago

> founders desperation (very low, especially to sell out to Adobe) What makes you say this metric is "very low"? Evan seemed (to my eyes) to be the technical drive behind Figma as a product, and left in 2021 (shifting focus to esbuild) Dylan has come out criticising Adobe (in what mainly seemed like good marketing) in the past, but other than that, his focus has been investment, and - more recently - NFTs, crypto & web3. An exit seems very natural.

bryanrasmussen 4y ago

>whereas I would be very surprised if any startup doesn't use Figma for UI design. have startups stopped using Invision? >acquirers desperation (very high), I would think acquirers desperation (very high) would be another word for 'dump this stock' which to me is what the article seems really about. People dumped adobe, why because Figma not worth that unless acquirers desperation (very high). uh oh, who wants to hold a desperate company?

cercatrova 4y ago
InVision is not a design tool, it is a prototyping tool.
mrjh 4y ago
"have startups stopped using Invision?" Speaking as a designer, Invision has never felt like a serious design tool and they've had a constant struggle to find their place in the market. Invision started life as a prototyping tool, and they dabbled with Studio sometime around 2019, but recently they've morphed into more of a collaboration/whiteboarding tool. They're probably more akin to Miro or Jamboard than Figma these days.
- bryanrasmussen 4y ago
  Ok I thought that might be the case, although not sure why. As a developer I found less irritating than I am currently finding Figma, although that might just have been the project.

achow 4y ago

Think about it this way.. - "Every startup" does not mean big number. Startup are handful if compared against all kind of business that exist (from car dealers to big retailers to IT behemoths...) - In typical tech company only handful of people use Figma (Design, PMs, Front end engg) Whereas Canva's addressable market is anyone and everyone who has need to produce documents that are not wall of text (all young, old - resumes, birthday party invitation,...), all companies (newsletters, flyers for their events,...)

Existenceblinks 4y ago

Implication in another axis: proprietary is underrated and overbashed. I'd love Adobe to prove me wrong by making Figma file format opened.