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Now Figma can become the de-facto choice for its software category and a merger was proved to be ultimately unnecessary for its survival and was a clear attempt

Now Figma can become the de-facto choice for its software category and a merger was proved to be ultimately unnecessary for its survival and was a clear attempt at Adobe trying to buyout their competition because they can't seem to compete. I think overall this is a good thing. Adobe owning Figma isn't a great promise that it would be make Figma better, improve Figma in any way, nor keep Figma on the path of making healthy improvements. I can't blame anyone for seeing $20 Billion dollars upfront and taking the offer, but did Figma even need to sell in the first place? I don't know that I'll ever know the actual answer to this question, but this is a sign to me that no, it didn't, it is building a healthy business as a standalone product. Now Figma can take the $1 billion USD breakup fee and do some amazing work on solidifying their position. I do, as a sense of morbid curiosity, wonder if Adobe has had discussions in their boardroom about buying PenPot

s3r3nity 3y ago
> I can't blame anyone for seeing $20 Billion dollars upfront and taking the offer, but did Figma even need to sell in the first place? It's a great question from a P&L standpoint, but like you said: the board of the company represents the shareholders, and it's likely that $20 billion was a number _far_ above what they viewed the company's value - therefore accepting that type of deal would've made 100% sense to maximize return for those investors. Note that many employees are also shareholders, and therefore would've banked quite a bit of $ if this went through. I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? EDIT: after some quick searching, estimates place the value of Figma at $8-9 billion...making the offer of $20B virtually impossible to reject.
- deaddodo 3y ago
  > I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? Because Figma would have undoubtedly rejected at or near market rates. And regulators were already iffy. Being overly generous, if it still will pay off for you in the end, is a good way to grease a lot of wheels. The best analogy is the person who offers to pay 25k over asking (in a market where that is abnormal) on a house they definitely want to bypass the whole secondary negotiation process.
  - radley 3y ago
    Figma actually did reject many offers at market rates. $20B was too good to pass up, particularly with the $1B cancellation fee.
- no_wizard 3y ago
  IPO is another way to return to shareholders though, as is making a profit and paying a percentage of those profits via dividends to shareholders, which any private company can do, or using those profits to do share buybacks. There's any number of ways to benefit the shareholders. Its not anything you said per se, I'm simply annoyed at the legal maxim that we must maximize shareholder value whenever presented to do so, as long as its not an illegal activity.
  - clintonb 3y ago
    If you give me the option to more than double my money now versus get dividends over the next few years, I'm taking the money now. The goal of most businesses is to make money. Building with a focus on longevity is just one of many ways to achieve that goal.
    - kelnos 3y ago
      That sounds a little like the delayed-gratification experiments where they tell children they can have a single candy bar now, but if they wait a half hour, they can have two. In general I would take the dividend, if the expected value over that time was greater than the immediate lump sum, plus what I might get for investing that lump sum in something over those few years. And in reality it's usually not over just a few years; the dividend is long-term. I'd much rather build something valuable and get steady income from it than build something to flip. Now if the risk of no dividend payout is high enough, I'll take that lump sum. But I feel like those sorts of deals -- huge money now, or very risky, uncertain money over a number of years -- just aren't really a thing that often.
woleium 3y ago
Was this the plan all along? 1B for all that due diligence information seems cheap, i imagine there are a couple of teams rushing to implement at Adobe right now.
- sfilmeyer 3y ago
  This article is about Adobe getting out of this business. I'd think if they were "rushing to implement" they'd keep the existing product around and either integrate things into it or wait to kill it until they have a replacement. Also, while it's not perfect, there tends to be a fair amount of firewalling around that sort of due diligence to keep an acquirer from just ripping everything off with inside information gained in the process.
  - CharlesW 3y ago
    > This article is about Adobe getting out of this business. That's an enormous leap from, "We have no plans to further invest in it". It's more likely that they're going to create a new, Sensei-based solution in this category instead of creating yet another Figma-/Sketch-type solution.
    - tough 3y ago
      Yeah that's actually how I read it too, like they found out XD couldn't be savaged after peeking on Figma's internals, and is cheaper/better roi forthem to can that shit and just start from scratch for a collaborative real time environment like figma is build. expecting figma's adobe clone in anything like 6-24 months out
hipadev23 3y ago
> a clear attempt at Adobe trying to buyout their competition because they can't seem to compete. You paint this like it's a bad thing, that's why many acquisitions occur.
- karaterobot 3y ago
  It would have been a bad thing for consumers, which is why it's good that it was blocked by regulators. I don't believe it's always the case that an acquisition of a competitor by a large company is a bad thing, but it would have been in this one for sure. The only problem is that it ruined my optimism about Figma's leadership and direction without actually changing the status quo at all.
- phmqk76 3y ago
  Well it is obviously a bad thing, and goes to the heart of antitrust. US regulators understood this clearly all the way up until Reagan, and his DOJ instituted a paradigm shift that let companies get away with obliterating their competition through acquisitions - instead of assessing whether companies could compete in a healthy market, the focus became solely the impact on consumers. That’s why, under this new-ish paradigm, Amazon is fine, because prices are kept low through monopolistic and monopsonistic effects. The EU has a better enforcement paradigm that says a healthy economy can only exist where new market entrants can also earn a living, even if it means consumer prices aren’t the lowest they could possibly be.
- wisemang 3y ago
  Just because it’s relatively common doesn’t mean it’s good..
- ceejayoz 3y ago
  > You paint this like it's a bad thing, that's why many acquisitions occur. You paint that like it's a good thing.
  - foooorsyth 3y ago
    A lot of founders see it as a good thing -- not everyone wants to stay in the game. Some want a big liquidity event after 10 years of grind and a sale to a large competing company typically yields the biggest windfall.
whywhywhywhy 3y ago
> but did Figma even need to sell in the first place? It’s pretty clear Figma in 5-10 years could make photo and video editing products that outperform Adobe and Adobe can’t even make one web product as good as Fireworks was that they killed so yeah no Figma has no need for Adobe. Figma has an outstanding engineering team you can tell just by using the app, Adobes dev team it’s questionable how much of Photoshop and AE they even understand how it works as they so rarely try and fix any of it and when they do they tend to break something. Kinda feel the Photoshop and AE codebases are probably like an ancient untranslated artifact to their current dev team.
- PaulHoule 3y ago
  I still use Photoshop because I know how to do a lot of things with it but I'd really like to have a similar app which is designed entirely around linear light. (It's not like the 1990s when I was always editing indexed color images) They are still keeping it relevant because of the generative AI features which I often use to touch up photos (remove a spot of grout from a brick wall, then add a row of bricks to center the pictures) I still use Photoshop to print things like https://mastodon.social/@UP8/110607460518784045 https://mastodon.social/@UP8/110607460518784045 (where I touched up the bricks) and have 99% control of printing photographic and non-photographic images (more than I can say for Lightroom) although I recently improved my workflow and now I have 100% control (specifically of margins) of printing the back side of my cards https://mastodon.social/@UP8/110662093661611559 https://mastodon.social/@UP8/110662093661611559 using a Python script and Epson's printing software. I used to think the neural noise reduction in Lightroom was pretty hot but when I was having trouble w/ shooting indoors Volleyball other photogs told me to try DxO and it was like getting a whole new camera. I like Premier and hypothetically I might want to make and edit a video but it never happens, so I suspect one of these days I am going to give up on Creative Cloud.
  - jcheng 3y ago
    > designed entirely around linear light Can you say more about that? What is “linear light”?
ivanmontillam 3y ago
I can also say Figma avoided Adobe going into "destroy mode" with a similar product. We recognize Adobe XD as incapable, but with Adobe's resources, they'd have thrown enough money until they achieved it. Of course there are exceptions: same cannot be said of Google Video and YouTube.
- drcongo 3y ago
  Adobe could have thrown $40B at it and never made a product to rival Figma because it would have been riddled with Adobe Updater, Adobe Service Manager, Adobe SwitchBoard, AdobeARMservice and all the other crap they force on their users, and nobody would bother. They get away with this kind of user hostility for software they're entrenched in, they'd never get away with it if they were trying to challenge something that's better and doesn't hate its users as much.
  - HlessClaudesman 3y ago
    Yeah I hear what you are saying about services bloat, but the timing of today's XD discontinuance leaves me scratching my head. If this providing a web design / prototyping service was so valuable to Adobe subscribers that Adobe were willing to pay 20 billion for it, surely it must still be worth something to Adobe to prevent subscriber churn today. I don't get why Adobe would abandon a foothold in this corner of design, offering a good enough service is still compelling when bundled when all their other products. Three explanations I can come up with are: 1. Maybe XD was a huge cash hole / or massively underperformed in some other metrics, 2. If Adobe cant dominate a market they take their ball and go home, or 3. Maybe more charitably, Adobe bigwigs still like Figma and have some sort of personal incentives to walk off the pitch and offer their competitor a massive open goal. Is this how corporations are supposed to act?
    - toyg 3y ago
      You just have cause and effect the wrong way around, IMHO. Adobe might have tried to buy Figma precisely because they already knew XD was a dead duck. Announcing it before acquisition talks, however, would have strengthened Figma's hand; so they waited and pulled the plug only after that situation was resolved.
lrivers 3y ago
Adobe has a record of acquiring products and then killing them. Fireworks & Freehand for example.
- smilespray 3y ago
  They also kill good internal products because of infighting. ImageReady was nixed by the Photoshop guys.
  - DaiPlusPlus 3y ago
    ImageReady’s tooling (slicing, 2-Up/4-Up Save-for-Web, GIF frame editing, etc) was incorporated directly into Photoshop. It wasn’t “nixed”.
    - smilespray 3y ago
      Of course it was. ImageReady was lean, fast and web-focused. When they killed it you had to buy a PS license and deal with the monolith PS was becoming. If you're making web pages, you don't need CMYK workflows.
      - DaiPlusPlus 3y ago
        > ImageReady was lean, fast and web-focused. When they killed it you had to buy a PS license and deal with the monolith PS was becoming. To my knowledge, ImageReady 1.0 was the only version sold standalone - and that was back in 1998; the very next version (in 1999) was sold in-box with Photoshop 5.5 - but the separate ImageReady.exe program was around until 2005 - whereas the way your post is worded implies Adobe were being more customer-hostile than they usually are (hah). I see your point about not needing the weight of Photoshop's print-and-photo tools when web-design folks back then were just wanting a flexible raster image editor - but my recollection of the web-design scene back then was that most web-designers tended to already have a background in print design work (e.g. think about all the print-shops who expanded into website-design in the late-1990s) - so it makes a lot of sense for Adobe to extend their tooling to support the web and "new media" as we called it - rather than create a new tool which would operate on a completely different, "web-first", domain-model (of course, that's exactly what Macromedia did, and they rightfully have their fans for that).
duxup 3y ago
>but did Figma even need to sell in the first place? I've worked a company that was profitable, operated well, growing ... but were sold and the CEO said (I'll get the words not quite right): "I fought for keeping independent and not selling, that's how I've kept that company and I wanted it to stay that way. But the offer was increased into the range where I didn't feel like I could survive a legal challenge (if it came to that) as far as my requirement to do what is best for the shareholders." In the case of that CEO, I believed him (i'm not usually inclined to do so). I could be wrong, of course he made a lot of money, but this guy really did seem like he really did like building companies so to speak and that was more a motivation than anything else. But in his case I think he was right, he couldn't seriously argue that he could likely provide a return to investors even for a decade or more than they could get taking the offer right then and there. It is a problem I always worry about, good businesses are there to return value to the stockholders, it makes sense. But in the face of gobs of cash they must fold.... and so often poorly managed after that and some things are lost. It's a black hole in the free market.
- Mistletoe 3y ago
  *good public businesses Private businesses don’t have to do anything and is where you get some of the best companies that exist and care about their customers like Patagonia. https://www.outsideonline.com/outdoor-gear/gear-news/patagonia-axios-harris-poll-2023/ https://www.outsideonline.com/outdoor-gear/gear-news/patagon... Maybe it’s the only way out of the enshittification death spiral because there are no shareholders to destroy the company to “create value” for.
  - dyno12345 3y ago
    There is still a fiduciary duty even for private companies
    - bombcar 3y ago
      Private companies often have so few shareholders that you can simply talk to all of them, together.
runako 3y ago
For a company like Figma, the shareholders often include many/all of the employees. Choosing not to take a deal that could net staff retirement money (or realistically in SF: "homeownership money") can also be a bad choice for morale. Consider that many of the employees will have joined the risky startup instead of taking a larger cash compensation at a company like Adobe; helping them get liquid is part of the bargain. This all assumes the company won't go public, the traditional path for companies to generate liquidity and raise capital while remaining independent. For whatever reason, companies like Figma are waiting much longer than historically to go public. HubSpot serves a similar market and went public in 2014 with a valuation near $1B, in a normal IPO with top-tier bankers. It's not a prerequisite for companies to wait until they are $10B-$100B to go public.
burningChrome 3y ago
> but did Figma even need to sell in the first place? My two cents would be no considering they already surpassed and put both Sketch and InVision out of business. They were predictably emboldened to think if they were able to beat out two other competitors, and more and more enterprise companies are moving to their product, taking on Adobe or even sharing the lions share of the market with them wouldn't be that bad. The fact the only remaining real competitor went all in and attempted to buy them was a clear signal Adobe saw them as a threat and were willing to clear out their bank vault to acquire them. Figma rightly played their hand perfectly and not only shut down the offer, but now have a clear path to being the sole software provider in a rapidly dwindling market. My anecdotal evidence would be if you go on LinkedIn or any other job board and start looking at the job descriptions for UI/UX designers, none of them list Sketch, InVision or Adobe XD. Its 100% Figma now. At my current company, everything has been moved to Figma and we've even had several enterprise tools that we're using that integrate with Figma.
paulddraper 3y ago
> did Figma even need to sell in the first place? In order to not bankrupt? No. In order to maximize discounted cash flow? Maybe. Define your objective, get your answer.
- no_wizard 3y ago
  You’re saying the same thing in a different way. Any reason for selling would be a reason. I suspect there is no strongly compelling reason for it other than it was a big offer they couldn’t refuse
lofaszvanitt 3y ago
5 years and Figma is oob.

s3r3nity 3y ago

> I can't blame anyone for seeing $20 Billion dollars upfront and taking the offer, but did Figma even need to sell in the first place? It's a great question from a P&L standpoint, but like you said: the board of the company represents the shareholders, and it's likely that $20 billion was a number _far_ above what they viewed the company's value - therefore accepting that type of deal would've made 100% sense to maximize return for those investors. Note that many employees are also shareholders, and therefore would've banked quite a bit of $ if this went through. I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? EDIT: after some quick searching, estimates place the value of Figma at $8-9 billion...making the offer of $20B virtually impossible to reject.

deaddodo 3y ago
> I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? Because Figma would have undoubtedly rejected at or near market rates. And regulators were already iffy. Being overly generous, if it still will pay off for you in the end, is a good way to grease a lot of wheels. The best analogy is the person who offers to pay 25k over asking (in a market where that is abnormal) on a house they definitely want to bypass the whole secondary negotiation process.
- radley 3y ago
  Figma actually did reject many offers at market rates. $20B was too good to pass up, particularly with the $1B cancellation fee.
no_wizard 3y ago
IPO is another way to return to shareholders though, as is making a profit and paying a percentage of those profits via dividends to shareholders, which any private company can do, or using those profits to do share buybacks. There's any number of ways to benefit the shareholders. Its not anything you said per se, I'm simply annoyed at the legal maxim that we must maximize shareholder value whenever presented to do so, as long as its not an illegal activity.
- clintonb 3y ago
  If you give me the option to more than double my money now versus get dividends over the next few years, I'm taking the money now. The goal of most businesses is to make money. Building with a focus on longevity is just one of many ways to achieve that goal.
  - kelnos 3y ago
    That sounds a little like the delayed-gratification experiments where they tell children they can have a single candy bar now, but if they wait a half hour, they can have two. In general I would take the dividend, if the expected value over that time was greater than the immediate lump sum, plus what I might get for investing that lump sum in something over those few years. And in reality it's usually not over just a few years; the dividend is long-term. I'd much rather build something valuable and get steady income from it than build something to flip. Now if the risk of no dividend payout is high enough, I'll take that lump sum. But I feel like those sorts of deals -- huge money now, or very risky, uncertain money over a number of years -- just aren't really a thing that often.

woleium 3y ago

Was this the plan all along? 1B for all that due diligence information seems cheap, i imagine there are a couple of teams rushing to implement at Adobe right now.

sfilmeyer 3y ago
This article is about Adobe getting out of this business. I'd think if they were "rushing to implement" they'd keep the existing product around and either integrate things into it or wait to kill it until they have a replacement. Also, while it's not perfect, there tends to be a fair amount of firewalling around that sort of due diligence to keep an acquirer from just ripping everything off with inside information gained in the process.
- CharlesW 3y ago
  > This article is about Adobe getting out of this business. That's an enormous leap from, "We have no plans to further invest in it". It's more likely that they're going to create a new, Sensei-based solution in this category instead of creating yet another Figma-/Sketch-type solution.
  - tough 3y ago
    Yeah that's actually how I read it too, like they found out XD couldn't be savaged after peeking on Figma's internals, and is cheaper/better roi forthem to can that shit and just start from scratch for a collaborative real time environment like figma is build. expecting figma's adobe clone in anything like 6-24 months out

hipadev23 3y ago

> a clear attempt at Adobe trying to buyout their competition because they can't seem to compete. You paint this like it's a bad thing, that's why many acquisitions occur.

karaterobot 3y ago
It would have been a bad thing for consumers, which is why it's good that it was blocked by regulators. I don't believe it's always the case that an acquisition of a competitor by a large company is a bad thing, but it would have been in this one for sure. The only problem is that it ruined my optimism about Figma's leadership and direction without actually changing the status quo at all.
phmqk76 3y ago
Well it is obviously a bad thing, and goes to the heart of antitrust. US regulators understood this clearly all the way up until Reagan, and his DOJ instituted a paradigm shift that let companies get away with obliterating their competition through acquisitions - instead of assessing whether companies could compete in a healthy market, the focus became solely the impact on consumers. That’s why, under this new-ish paradigm, Amazon is fine, because prices are kept low through monopolistic and monopsonistic effects. The EU has a better enforcement paradigm that says a healthy economy can only exist where new market entrants can also earn a living, even if it means consumer prices aren’t the lowest they could possibly be.
wisemang 3y ago
Just because it’s relatively common doesn’t mean it’s good..
ceejayoz 3y ago
> You paint this like it's a bad thing, that's why many acquisitions occur. You paint that like it's a good thing.
- foooorsyth 3y ago
  A lot of founders see it as a good thing -- not everyone wants to stay in the game. Some want a big liquidity event after 10 years of grind and a sale to a large competing company typically yields the biggest windfall.

whywhywhywhy 3y ago

> but did Figma even need to sell in the first place? It’s pretty clear Figma in 5-10 years could make photo and video editing products that outperform Adobe and Adobe can’t even make one web product as good as Fireworks was that they killed so yeah no Figma has no need for Adobe. Figma has an outstanding engineering team you can tell just by using the app, Adobes dev team it’s questionable how much of Photoshop and AE they even understand how it works as they so rarely try and fix any of it and when they do they tend to break something. Kinda feel the Photoshop and AE codebases are probably like an ancient untranslated artifact to their current dev team.

PaulHoule 3y ago
I still use Photoshop because I know how to do a lot of things with it but I'd really like to have a similar app which is designed entirely around linear light. (It's not like the 1990s when I was always editing indexed color images) They are still keeping it relevant because of the generative AI features which I often use to touch up photos (remove a spot of grout from a brick wall, then add a row of bricks to center the pictures) I still use Photoshop to print things like https://mastodon.social/@UP8/110607460518784045 https://mastodon.social/@UP8/110607460518784045 (where I touched up the bricks) and have 99% control of printing photographic and non-photographic images (more than I can say for Lightroom) although I recently improved my workflow and now I have 100% control (specifically of margins) of printing the back side of my cards https://mastodon.social/@UP8/110662093661611559 https://mastodon.social/@UP8/110662093661611559 using a Python script and Epson's printing software. I used to think the neural noise reduction in Lightroom was pretty hot but when I was having trouble w/ shooting indoors Volleyball other photogs told me to try DxO and it was like getting a whole new camera. I like Premier and hypothetically I might want to make and edit a video but it never happens, so I suspect one of these days I am going to give up on Creative Cloud.
- jcheng 3y ago
  > designed entirely around linear light Can you say more about that? What is “linear light”?

ivanmontillam 3y ago

I can also say Figma avoided Adobe going into "destroy mode" with a similar product. We recognize Adobe XD as incapable, but with Adobe's resources, they'd have thrown enough money until they achieved it. Of course there are exceptions: same cannot be said of Google Video and YouTube.

drcongo 3y ago
Adobe could have thrown $40B at it and never made a product to rival Figma because it would have been riddled with Adobe Updater, Adobe Service Manager, Adobe SwitchBoard, AdobeARMservice and all the other crap they force on their users, and nobody would bother. They get away with this kind of user hostility for software they're entrenched in, they'd never get away with it if they were trying to challenge something that's better and doesn't hate its users as much.
- HlessClaudesman 3y ago
  Yeah I hear what you are saying about services bloat, but the timing of today's XD discontinuance leaves me scratching my head. If this providing a web design / prototyping service was so valuable to Adobe subscribers that Adobe were willing to pay 20 billion for it, surely it must still be worth something to Adobe to prevent subscriber churn today. I don't get why Adobe would abandon a foothold in this corner of design, offering a good enough service is still compelling when bundled when all their other products. Three explanations I can come up with are: 1. Maybe XD was a huge cash hole / or massively underperformed in some other metrics, 2. If Adobe cant dominate a market they take their ball and go home, or 3. Maybe more charitably, Adobe bigwigs still like Figma and have some sort of personal incentives to walk off the pitch and offer their competitor a massive open goal. Is this how corporations are supposed to act?
  - toyg 3y ago
    You just have cause and effect the wrong way around, IMHO. Adobe might have tried to buy Figma precisely because they already knew XD was a dead duck. Announcing it before acquisition talks, however, would have strengthened Figma's hand; so they waited and pulled the plug only after that situation was resolved.

lrivers 3y ago

Adobe has a record of acquiring products and then killing them. Fireworks & Freehand for example.

smilespray 3y ago
They also kill good internal products because of infighting. ImageReady was nixed by the Photoshop guys.
- DaiPlusPlus 3y ago
  ImageReady’s tooling (slicing, 2-Up/4-Up Save-for-Web, GIF frame editing, etc) was incorporated directly into Photoshop. It wasn’t “nixed”.
  - smilespray 3y ago
    Of course it was. ImageReady was lean, fast and web-focused. When they killed it you had to buy a PS license and deal with the monolith PS was becoming. If you're making web pages, you don't need CMYK workflows.
    - DaiPlusPlus 3y ago
      > ImageReady was lean, fast and web-focused. When they killed it you had to buy a PS license and deal with the monolith PS was becoming. To my knowledge, ImageReady 1.0 was the only version sold standalone - and that was back in 1998; the very next version (in 1999) was sold in-box with Photoshop 5.5 - but the separate ImageReady.exe program was around until 2005 - whereas the way your post is worded implies Adobe were being more customer-hostile than they usually are (hah). I see your point about not needing the weight of Photoshop's print-and-photo tools when web-design folks back then were just wanting a flexible raster image editor - but my recollection of the web-design scene back then was that most web-designers tended to already have a background in print design work (e.g. think about all the print-shops who expanded into website-design in the late-1990s) - so it makes a lot of sense for Adobe to extend their tooling to support the web and "new media" as we called it - rather than create a new tool which would operate on a completely different, "web-first", domain-model (of course, that's exactly what Macromedia did, and they rightfully have their fans for that).

duxup 3y ago

>but did Figma even need to sell in the first place? I've worked a company that was profitable, operated well, growing ... but were sold and the CEO said (I'll get the words not quite right): "I fought for keeping independent and not selling, that's how I've kept that company and I wanted it to stay that way. But the offer was increased into the range where I didn't feel like I could survive a legal challenge (if it came to that) as far as my requirement to do what is best for the shareholders." In the case of that CEO, I believed him (i'm not usually inclined to do so). I could be wrong, of course he made a lot of money, but this guy really did seem like he really did like building companies so to speak and that was more a motivation than anything else. But in his case I think he was right, he couldn't seriously argue that he could likely provide a return to investors even for a decade or more than they could get taking the offer right then and there. It is a problem I always worry about, good businesses are there to return value to the stockholders, it makes sense. But in the face of gobs of cash they must fold.... and so often poorly managed after that and some things are lost. It's a black hole in the free market.

Mistletoe 3y ago
*good public businesses Private businesses don’t have to do anything and is where you get some of the best companies that exist and care about their customers like Patagonia. https://www.outsideonline.com/outdoor-gear/gear-news/patagonia-axios-harris-poll-2023/ https://www.outsideonline.com/outdoor-gear/gear-news/patagon... Maybe it’s the only way out of the enshittification death spiral because there are no shareholders to destroy the company to “create value” for.
- dyno12345 3y ago
  There is still a fiduciary duty even for private companies
  - bombcar 3y ago
    Private companies often have so few shareholders that you can simply talk to all of them, together.

runako 3y ago

For a company like Figma, the shareholders often include many/all of the employees. Choosing not to take a deal that could net staff retirement money (or realistically in SF: "homeownership money") can also be a bad choice for morale. Consider that many of the employees will have joined the risky startup instead of taking a larger cash compensation at a company like Adobe; helping them get liquid is part of the bargain. This all assumes the company won't go public, the traditional path for companies to generate liquidity and raise capital while remaining independent. For whatever reason, companies like Figma are waiting much longer than historically to go public. HubSpot serves a similar market and went public in 2014 with a valuation near $1B, in a normal IPO with top-tier bankers. It's not a prerequisite for companies to wait until they are $10B-$100B to go public.

burningChrome 3y ago

> but did Figma even need to sell in the first place? My two cents would be no considering they already surpassed and put both Sketch and InVision out of business. They were predictably emboldened to think if they were able to beat out two other competitors, and more and more enterprise companies are moving to their product, taking on Adobe or even sharing the lions share of the market with them wouldn't be that bad. The fact the only remaining real competitor went all in and attempted to buy them was a clear signal Adobe saw them as a threat and were willing to clear out their bank vault to acquire them. Figma rightly played their hand perfectly and not only shut down the offer, but now have a clear path to being the sole software provider in a rapidly dwindling market. My anecdotal evidence would be if you go on LinkedIn or any other job board and start looking at the job descriptions for UI/UX designers, none of them list Sketch, InVision or Adobe XD. Its 100% Figma now. At my current company, everything has been moved to Figma and we've even had several enterprise tools that we're using that integrate with Figma.

paulddraper 3y ago

> did Figma even need to sell in the first place? In order to not bankrupt? No. In order to maximize discounted cash flow? Maybe. Define your objective, get your answer.

no_wizard 3y ago
You’re saying the same thing in a different way. Any reason for selling would be a reason. I suspect there is no strongly compelling reason for it other than it was a big offer they couldn’t refuse

lofaszvanitt 3y ago

5 years and Figma is oob.