13 ms·

I think the Figma IPO proves Khan was right. $60B market cap today vs the $20B Adobe offered in 2023. There was some criticism about regulatory overreach when t

• ichik 1y ago
  > design tools market stays competitive Adobe killed their Figma competitor (XD), so the reality of the UI design tools niche in the design tools market is that Figma actually has a near monopoly. Sketch still chugs along, but its market share is negligible. Penpot is a neat idealistic community effort that is lightyears behind. This is one of the reasons why Figma continues to tighten the screws on their userbase, who doesn't like it one bit, but continues to pay. Now, this is all not to say, that it would've been any better with Adobe's involvement, more like lamenting the fact that Figma lived long enough to become a villain.
  • shortrounddev2 1y ago
    Adobe is in maintenance mode. They aren't willing to compete with figma because they have basically never had to compete with anyone since the 90s. They forgot how
  • madeofpalk 1y ago
    Figma has a near monopoly because it built the better product. This is the preferred outcome compared to Adobe broadening their monopoly not by building a better product, but just by acquiring/squashing their competition. Monopolies aren't illegal. Preventing competition is the thing we want to stop. As far as I can see, Figma doesn't do anything to give themselves an unfair advantage or prevent other players from entering the market.
    • MrGilbert 1y ago
      Figma had 8 funding rounds in 10 years, according to crunchbase. That is an advantage compared to other players on the market that do not receive VC. If it's fair or not, that’s up to everyones own standards.
      • skrebbel 1y ago
        You do not "receive" VC, you sell shares (and control). You write as if it's some sort of grant that Figma uniquely got access to.
        • deleted 1y ago
          [deleted]
        • MrGilbert 1y ago
          I think the more common term is to "raise money". But at the end, you receive money that you should spend. With strings attached, of course. That’s the nature of VC.
          • skrebbel 1y ago
            Yes but that's pretty common and in no way an unfair advantage.
      • theptip 1y ago
        It’s fair, because they earned it by building the best offering on the market. Fairness doesn’t mean everyone gets funded regardless of their quality.
      • ashwindharne 1y ago
        Should the other players not have also raised VC money if it was such a differentiating advantage? Perhaps they should have sold even more equity than Figma did and raised more money if that would have been the difference maker.
      • madeofpalk 1y ago
  • dkarl 1y ago
    Adobe would have killed one product regardless. If they had been allowed to acquire Figma, they might have killed the better one.
• yard2010 1y ago
  PSA that no regulator simply means the sharkest shark regulates. There is no such thing as no regulator. People will regulate. The question is who and how
  • bko 1y ago
    What does this mean? If there is no regulator, someone else will use force to prevent voluntary mutually beneficial deals from taking place?
    • sprinkly-dust 1y ago
      That is one of the possible outcomes right? Producers have an incentive to collude and not compete with one another. They could create a consortium to fix prices, and use tactics such as acquisitions or _dissuasion_ to prevent new, more efficient competitors from undercutting their prices, thus distorting a free market equilibrium. The consortium creates an oligopoly which prevents mutually beneficial deals that would have otherwise taken place in a regulated competitive free market between consumers and producers.
    • passwordoops 1y ago
      I think that's what the comment meant. Take it metaphorically
    • lucianbr 1y ago
      If there is no regulator, the company with the most money will use its money to prevent any deals that are inconvenient for it from taking place. Often those would be beneficial to the other parties or to the consumers. Maybe it's not a great choice of words to say here "the large company regulates the space" but it's definitely a problem worth pointing out.
    • benreesman 1y ago
      It means that markets organize somehow. Even black markets in prison have rules (and for all I know, sensible ones under the circumstances). The drug trade has rules and norms. Cartels form and collude, the JP Morgans or Goulds of the world see excessive competition next to their neat steel or railroad trusts and decide to organize it. And sometimes this can even be an improvement (those old telephone poles with like 90 separate junctions just got too tall to be safe!) But on average, the public would like (or should want) a say in how markets are organized, because it is both possible and lucrative to induce market failure. Big Tech is especially good at this (its arguably far more their speciality than technology is). Markets are inevitable (try to stop them forming if you don't believe me), but market failures are generally not inevitable, they are generally the result of poorly refereed markets.
• benreesman 1y ago
  It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right. The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and made everyone rich is twilight zone shit. It makes no sense according to the stated values in the fucking masthead.
  • DonHopkins 1y ago
    But what if you care about Adobe? Booooo Hooooo!!! ;( /s
  • holmesworcester 1y ago
    One way to settle the question of whether Khan is right would be for the government to simply make competing offers in these situations, buy the companies, and shepherd them to IPO, or a buyer with fewer antitrust issues if that's not possible. If the government is net ahead after a decade or so, then we'd know. This approach to antitrust wouldn't work in cases like the Apple case, where the power is worth it to the company only because they can misuse it, but it would be a very fair and accounting-transparent remedy for the "startup gets bought by competitor" case.
    • theptip 1y ago
      This is a terrible idea. The government should not be in the business of buying large pre-IPO companies. There is no need to bikeshed a new solution here. Antitrust law solves this just fine, as exemplified by this case.
    • benreesman 1y ago
      We've got an awful lot of history on the periods in which serious regulators without perverse incentives attached to revolving door industry jobs competently and diligently refereed markets, and when big business has been successful in achieving what I downthread called "Goldilocks" regulation: just enough friction to new entrants, plenty of pliant former and future employees doing regulation in the interests of the established players. We've got a lot of history on what happens when technology is acknowledged as a natural monopoly and guided through it's development, evolution, and dissemination through society for the global welfare: that's the entire 20th century friend: the transistor, the Internet, the laser, fucking Velcro. We're living through a time when that treasure trove of public wealth (paid for by taxpayers) is getting captured up by a caricature of gilded age kleptocracy at the front row of the fucking Inaugeration. We know what the outcomes are. I don't know why people who hang out on Hacker News are fighting the data on this tooth and nail. Maybe it's because Trump threw her out, maybe it's because they own a bunch of NVIDIA stock and like the status quo, I don't know. The outcomes are not in fucking dispute in this case or the macro situation.
• holmesworcester 1y ago
  I'm sympathetic to a prohibition on big companies buying their competitors, but a 3x difference over two years seems too low to suggest that antitrust creates more pure business value. First this is all hindsight now. We don't know the probabilities of this outcome vs. others. Figma's shareholders didn't at the time, which is why they chose to sell. Khan didn't either. Second, 3x over two years isn't that much. There must be many opportunities in SV for all of Figma's employees and investors that could have given them a much higher return than that with much less risk. I don't have this data, but one could look at secondary sales in the past two years as a measure of the increased risk and opportunity cost, right? Any delay of people getting liquid impacts the creation of other startups, both by the Figma people who can now leave and do their own thing and for the companies Figma stakeholders would have invested in . This is super hard to measure but it is the kind of thing markets are good at measuring when they ask shareholders "sell now to Adobe or wait to IPO?" This seems really good for Figma users, most of all. Most of the value destroyed by the acquisition would have been in the distortion and likely ultimate destruction of a company culture that made an insanely good product. But those people are capable of going and making new products, and maybe Figma at its current phase is now too boring a thing for their talents, and should be managed by a more boring organization staffed by people who are slightly less able to make another Figma. Who knows, but I doubt Khan (or any one individual or organization) is in a better position to assess the optimal delivery of what people want than the incentivized distributed intelligence of all the stakeholders and the people and markets around them. Again, there are other reasons to do this that markets wouldn't quantify.
  • benreesman 1y ago
    The lengths people will go to to avoid the facts on this are fucking remarkable. I'll let Opus explain: "The Bottom Line A 73% annualized return would: Easily rank in the top 10-20 best-documented investment returns of all time if sustained for multiple years Significantly outperform virtually all professional fund managers and legendary investors Be 7x higher than the long-term stock market average Turn $10,000 into $30,000 in just 2 years (your 3x example) Such returns are typically only achieved during: Early-stage growth of revolutionary companies (like early Apple, Amazon, or Netflix) Cryptocurrency bull runs Highly leveraged trades Exceptional market timing during recovery periods Small/micro-cap stocks experiencing explosive growth While spectacular, returns of this magnitude are extremely difficult to sustain and often involve significant risk."
• amelius 1y ago
  > This is exactly why we need regulators willing to tell Big Tech "no" sometimes. At some point, "Big Tech" is really "Big Finance" in disguise.
• aianus 1y ago
  If I suggest putting your net worth on black at roulette and it lands on black, does that make my advice right? Khan forced the employees and investors to continue working and gambling on a company they might not have wanted to continue working for or gambling on. It doesn't really matter that the gamble succeeded in this case.
  • rhet0rica 1y ago
    I'm pretty sure no employee wants to work for Adobe.
• usaar333 1y ago
  I don't see why the market cap proves whether she is correct or not. You'd have to compare it to the counter-factual of what the value of a Figma subsidiary would be under Adobe today. This is not obvious at all to me. Instagram (bought for $1B) is probably worth ~700 B of Meta's market cap.
• dzonga 1y ago
  the only thing I will refute is the $60Bn market cap is due to IPO. Once they start reporting earnings, in a year or two once the hype dies down we will find the true value. a lot of tech darlings have been decimated by the stock market. & Adobe can still buy them once they're public, maybe even cheaper than $20bn.
• AraceliHarker 1y ago
  As is the case with many startups, especially those with a limited product portfolio, it's rare for them to exceed their IPO valuation in the future. So, I think we'll have to wait and see if Figma can continue its growth.
• smoser 1y ago
  On the flip side Khan was wrong about iRobot. The results were layoffs at iRobot and now Roombas are made by a Chinese ODM.
• SergeAx 1y ago
  It's 43 already. Let's look at their first quarterly call.