The big news that dropped last Thursday was Adobe buying Figma for 20 billion dollars. As Winston Zeddemore would say, that’s a big Twinkie. Adobe is paying such a large amount because they missed the collaborative cloud software boat. Adobe XD sucks. You know it and I know it.
For the first 16 years of my design career — 1999 to 2015 — I used Photoshop to create design layouts for websites and mobile apps. As my friend and design colleague Craig and I like to joke, our careers were hijacked by a photo editor for a long time. Then Sketch came along and lifted a huge production weight off most of our shoulders. I say ‘most’ because when I was working at Apple in 2017, the the visual design teams were still working in Photoshop and I had to design in 9-12 gigabyte PSB files (PSB files were large-format PSDs). I had to request (borderline demand) that they give me a Mac Pro to work on since it could literally take 3 minutes for a MacBook Pro to simply open a 10GB PSB. Hitting Command+S could take another 3 minutes. So much fun.
So Adobe concluded it was too late to catch up to Figma and create their own collaborative design tool, despite having billions of dollars, so they bought the competition. I remember when they did the same thing when they bought Macromedia in 2005.
There’s two sides to every story, and as Eugene at Figmalion points out, Figma has investors and this might be time to sell:
First, why would Figma sell? After raising $332.9M in six funding rounds, the company is no longer truly “independent”. Investors want to get a return on their capital, so there is pressure for a liquidity event — either get acquired or go public. Considering the current market state, the IPO may not be in the cards and many companies postpone it. So the only two real options are to sell now or delay the decision while continuing growing the business. I won’t be surprised if the “unpredictable, inflationary environment” mentioned in Dylan Field’s announcement played a role in this decision.
Know when to hold em, know when to fold em.
So what’s the moral of this acquisition? Stay vigilant about trends in your business. Don’t get lazy or too comfortable. Don’t surround yourself with Yes People. Like all things in life this is easier said than done.
Adobe is still raking in billions of dollars a year, what’s the problem? The problem is you just had to spend 20 billion dollars on a software company that has only been around for 6 years.