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So smart for both Adobe and Figma. Figma posed a serious threat to Adobe and it makes sense for them to do it. The losers are all of us poor sods who were happy Figma customers.

Just goes to show that if you want an outsized exit multiple the best way is to put a gun to a $100B company's head.

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> So smart for both Adobe and Figma. Figma posed a serious threat to Adobe and it makes sense for them to do it. The losers are all of us poor sods who were happy Figma customers.

It's utterly fucked up that "so smart for the companies: the losers are the customers" is baked into the system we use to transact culture.

Somehow, the dynamic where a company is an organization of humans to be used to further some human cause was reversed, so now humans are elements of a corporation to be used to further the cause of the corporation. We've gone from running companies in service of humans to running humans in service of companies.

Except that all the engineers working at Figma and getting paid huge salaries, and many of whom will now get a huge exit pay day if they want it, may not have had this opportunity without the company existing. It's well and good to trash talk the idea of companies raking in huge profits, but we as a software industry and incredibly privileged to be making the salaries we do, and this would not be possible without the existence of these companies, and the constant cycle of start-ups and buyouts.

> we as a software industry and incredibly privileged to be making the salaries we do, and this would not be possible without the existence of these companies, and the constant cycle of start-ups and buyouts

Unless you have seen another economy with functional alternatives, this is only ever a statement of faith.

We have found one local maximum. That’s it.

It makes sense if you replace “corporation” with “feudal lords” in your sentence.

Something is broken if a company like Adobe can hold its customers hostage by subscription.

A competitive product in an established, profitable market space? It's not a revelation but you're not wrong.

Can someone plz enlighten me how Figma competes with Adobe? AFAIK Web/app designers use either Sketch or Figma, publishers use Illustrator and photographers use Photoshop/Lightroom. At least that's how it's been back in the day. Is that no longer the case?

People are moving away from designing in photoshop to figma in large numbers hence the 20bn.

But Photoshop is not a vector design tool? I thought this move happened in the 90s

The agencies I've worked at only started dumping Photoshop around 2015-ish, going for Sketch and XD.

I sometimes consult with internal design teams and a lot of them just never switched away from photoshop

you seem to think that vector vs. bitmap is a design concern. it isn't. designers care about their form and their function. a better tool means an easier path in the design process, it doesn't matter the tool, vector or bitmap.

Adobe has XD, which is a direct competitor to Figma as a vector based design tool that includes prototyping functionality.

Thanks, I've never actually seen anyone use it in practice but turns out that Figma has a 31.73% market share in the Collaborative Design And Prototyping category, while Adobe XD has a 15.14% market share in the same space

Where are these stats from?

https://www.slintel.com/tech/collaborative-design-and-protot...

There is absolutely no way those statistics are even remotely accurate

There are use cases where Figma and Adobe already directly compete:

- Product wireframes/mockups

- Memes/social media posts

- Simple vector creation/editing

And that list is only expanding.

That whole market was Photoshop and Illustrator for a long time. That changed because of better and cheaper alternatives (like Sketch).

They have tried and failed to get it back and now seem to have given up on competing and just bought the competition instead.

It's also not just UI. Figma is a very capable vector and general purpose graphic tool. Figma made a lot of common things much easier than they are in Illustrator and Photoshop. While being online and fully collaborative. It's really an amazing tool and imo Adobe was rightfully threatened by it as I don't believe they could deliver anything close. It would just continue taking over more use cases.

While Figma is a great vector tool it doesn't hold a candle to Photoshop when it comes to image editing. There's a reason photographers use Photoshop for retouching photos.

Yeah but adobe's other 'star' product is illustrator a vector tool.

I see people using Figma a lot for UX design and storyboards. Illustrator seems to be used more by graphic designers.

If true, that would make them complementary products not competing products in the same market.

it's a bit counterintuitive that something can be good for a company (or companies) AND bad for the customers of said company...

shouldn't something that is bad for a customer of a company be bad for the company too?

It's good for adobe and figma employees/shareholders, but bad for figma as a product / new sub-business

Only if there is active competition between similarly sized companies with the customers able to move unhindered between them.

Antitrust regulators have long since been forbidden to use their diminishing powers to make that a reality.

Generally, companies obtaining a monopoly position is bad for consumers.

No, the interests of companies and customers are usually at odds with big mergers.

Competition is good for customers, it means different things get tried so there’s more diversity in products and pressure to compete on lower prices.

Figma is not selling to gain any efficiency or benefit from being included in Adobe, people are just looking for a pay day.

These kind of just payday mergers along with private equity profit by destruction mergers need a lot of regulatory backpressure because they simply aren’t in the interests of anybody but the people profiting from them.

Depends on the customer. The equity has customers too.

Companies aren’t your friends. They exist to maximize what customers will pay in exchange for the minimum effort on their part.

This is super true. Also, the reverse relationship exists with the company and the workers, but we workers often imagine it's different.

what's truly been mind-boggling is how companies ARE made out of people... people who may well be your friends; and yet, what you said remains true, that the company wont be your friend.

I agree so hard that I rage posted the same idea with less polite wording. Sorry for not reading your comment first.

If a company fires all human customer service and leaves you only with bots to interact with, it's a great saving for them, it's the worst case scenario for human customers.

Perfect summary. Nothing to add.

I find it odd that sometimes, founders want only one thing, to be number 1. At first its a good thing, but if that doesn't work their goal is destroying their company. When you can sell your company for X billions instead of XX billions ... you succeeded in life.

Show me one real thing that you can do with XX billions, that is not possible with X billions. Excluding a star destroyer ;-)

Buying Figma, apparently

> a star destroyer

Come on. Twitter is bad, but not that bad.

Same with Nginx being acquired by F5 Networks. Nginx really ate their lunch and were rewarded handsomely for that

How was Nginx affecting F5’s business?

nginx is widely used as a free and opensource load balancer for web apps, which is bread and butter of F5's BIG-IP business..

why buy big hardware appliance as a load balancer, if a VM with nginx can do the same trick?

This type of multiples is only possible when rates are low. Likely their last infusion of capital made their valuations possible but I reckon it is reduced as rates are ticking up fast.

Would valuations not be discounted on interest rate futures, not overnight? Or am I missing a piece?

> So smart for both Adobe

The market aggressively disagrees with this assessment.

How can you tell what the market thinks about this decision when a company's stock price is a function of what is happening publicly at the company AND externally in the economy? How do you separate the 2 drivers?

Compare stocks with the highest correlated log returns. Anything that's economic should impact the correlated group the same, if it's company specific then that company will stand out.

Most correlated with ADBE (all have > 0.8 correlation) that I see with there price change today are:

ANSS (-0.77%)

INTU (-1.94%)

CRM (-1.73%)

MSFT (-1.77%)

ADSK (-2.61%)

As you can see none of these stocks are experiencing anywhere near the drop today that ADBE is, so you can pretty reasonably explain the drop as company specific.

Adobe posted earnings today.

Yea, again how can you separate the market's reaction to 1) earnings from 2) the acquisition?

Acquisitions from the acquirer side always tank the stock, the acquired always get a bump. The down market and the $20B spend is why it is down.

From an ADBE perspective, this actually is a good long term move and shouldn't be such a hit.

From Figmas perspective, I am sure this was one of their hopeful outcomes.

If people here don't like the outcome, then I wonder if they know what type of game they support. This is the game with VC/growth/exits.

I had a similar thought..

I figured the dynamic here is market gets a checkpoint where the acquirer has admitted they're moving into maturity and so switching from build to buy.

But my first check was MSFT acquisition of GutHub.. was up on the day. Nadella had been turning the ship for a while and MS was certainly looking revived by that point.

So, not always down. There are win-win acquisitions

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