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As a current software engineer at Adobe, I was really disappointed when I got the internal email announcing this this morning. It's reminiscent of Microsoft's a

As a current software engineer at Adobe, I was really disappointed when I got the internal email announcing this this morning. It's reminiscent of Microsoft's anticompetitive behavior in the early 00s. Figma is the better product and Adobe knows it - but instead of using that to light a fire under them and work harder to create a better product, Adobe just used its deep pockets to make the problem go away. I was already planning on leaving the company for other reasons but this is the nail in the coffin for me.

isnhp 4y ago
Adobe loses the game with their skill and use money to win it. Figma won the game with their skill but lose the money game.
- deleted 4y ago
  [deleted]
- pcurve 4y ago
  Yep. Everybody has a price. It's not that Figma was worth $20 billion. It's that Adobe was likely seeing subscription revenue take hit from customers that realized there's no need for creative cloud subscription.
  - unstrategic 4y ago
    > It's that Adobe was likely seeing subscription revenue take hit from customers While being pummeled by public markets, and being forced to make a move that might keep shareholders from calling for blood. This is certainly not the first time that Adobe has presented a number to Figma's board — but it has to be the biggest number yet, by far. From Figma's position: take your chances on an IPO while the Fed is cracking skulls around inflation — or flip the bit on that liability, and cash out to a desperate Adobe?
    - majani 4y ago
      Another interesting layer to this is that Adobe only has $5b in cash according to their balance sheet, so the overwhelming majority of this deal is probably in Adobe stock with a long vesting period. Also the deal being done in a downturn means that the difference between this and an IPO is academic in my view
      - unstrategic 4y ago
        > the difference between this and an IPO is academic in my view More theatrical than academic — if both options have a risky short-term outlook, optimize for the story. Sold for $20B? Or lackluster IPO? As GP of a VC fund, which story is going to better-enable you to raise your next several funds?
      - wikfwikf 4y ago
        Why do you think there will be a long vesting period? Vesting periods are quite common in employee incentives but not at all common in mergers and acquisitions.
        majani 4y ago
        Because it's just common sense to not want close to $20 billion of stock flooding the market in a short period of time
- adventured 4y ago
  Adobe got the money in the first place via skill. Photoshop has been the leading photo editing software for a generation. Hundreds of companies over decades, some with deep pockets, have tried to knock them off and have failed. Figma didn't lose the money game, they sold out specifically to reap the money. The owners of Figma - where the profits tend to go in a business - are extracting at an epic scale. They sold out at a valuation far beyond anything sane. They won the money game big time.
  - HellDunkel 4y ago
    They have not failed because they couldn’t get a great product out. They have failed because so many people are trained on Adobe products an just use those.
    - clcaev 4y ago
      Yes. At an individual level, they ask the question: "Delay my deliverables a week or two in frustration as I retrain; or, pay $300". User by user, the decision is obvious: pay the ransom and move on with your life.
      - HellDunkel 4y ago
        I did not mean it this way. The user will always ask the question: „Can i use another software for less money/more value“. Those who can will turn their back on adobe as the company is greedy and lazy. Problem is: if your company/client is a large cooperation you dont have any choice. Never underestimate professional users.
  - unstrategic 4y ago
    Arguably, the money game is exactly what Figma was playing all along. Dylan's good at this game, as are the VCs he partnered with. Figma's flagship product was private equity. The design tool was secondary.
    - NavinF 4y ago
- brokencode 4y ago
  It’s hard to say they lost the money game when they ended up with $20B.
  - HelloNurse 4y ago
    They can definitely fund the development of a new good product with that kind of money.
tus666 4y ago
Isn't this how competition works? Big payoffs create massive incentives for people to create great products in the hope they will be bought out. Adobe may have "destroyed" one great product, but think of the hundreds of new ones they have incentivized to be created. People look at this all wrong and ignore the downstream effect.
- cowuser666 4y ago
  It seems like the model here is just a series of temporary alternatives (if we're lucky, creating value isn't easy). But people need software to be long-term viable to invest in learning and locking into the ecosystem. Seems good for the founders though.
- epolanski 4y ago
  I count more software that has been ruined and/or killed by acquisitions than the one bred by those.
  - jaxrtech 4y ago
    Would agree in large part. I think the ones that were successful, they're successful enough that you forget it was an acquisition. One off the top my head is Google Docs[1] which, for the longest time, I was pretty sure it was in-house tech. It's actually a number of acquisitions for the collaborative editor tech and then MS Office support. It seems now that most incumbents have enough cash to not care about being that strategic about acquisitions. [1]: https://en.m.wikipedia.org/wiki/Google_Docs#History https://en.m.wikipedia.org/wiki/Google_Docs#History
    - epolanski 4y ago
      I have not implied that all acquisitions are bad, but acquisitions to kill do not necessarily breed more better competition.
      - boltzmann-brain 4y ago
ulfw 4y ago
What a weird way of looking at things. Microsoft bought Powerpoint, bought Excel basically too. There wouldn't be an Office suite otherwise. Google bought Keyhole, there wouldn't be a Google Maps otherwise. Google bought Youtube. They couldn't win with Google Video. Google bought Android. etc etc etc This is how the industry works. In general.
- veritas20 4y ago
  In the examples that you site, the acquisitions were complementary additions. In this case, Adobe already has a competing product suite.
  - true_religion 4y ago
    In the YouTube example, Google already had in house tech. Google videos even continued to run for a few more years.
    - spiderice 4y ago
      Why are we just taking for granted that the Youtube acquisition wasn't anti-competitive? There is a reason that Youtube hasn't had any competitors in the 15 years that Google bought it. It's because video can't be done as cheaply as Youtube does it, unless you have an entirely separate industry propping it up. Selling on product at a massive loss and propping it up with a separate industry is anti-competitive. Nobody can compete on Youtube-style video unless they first create Google. If that isn't true, where are the competitors? TikTok is the first one to even resemble a competitor, but it took 17 years and even that isn't really the same thing.
- Ketchup901 4y ago
  Are these examples supposed to be arguing for the purchase? Lol.
- DecoPerson 4y ago
  PowerPoint, Excel, Keyhole, YouTube, Google Maps and Android could be significantly better. There’s no competition, which means they keep their users, which means they’re not incentivised to find those ways in which those products could be significantly better. Okay wait, Excel does have some competition now, with Google Sheets, and that can be seen in Microsoft’s recent push to distinguish Excel from Google Sheets with new features like the ‘LET’ and ‘XLOOKUP’ formula functions.

isnhp 4y ago

Adobe loses the game with their skill and use money to win it. Figma won the game with their skill but lose the money game.

deleted 4y ago
[deleted]
pcurve 4y ago
Yep. Everybody has a price. It's not that Figma was worth $20 billion. It's that Adobe was likely seeing subscription revenue take hit from customers that realized there's no need for creative cloud subscription.
- unstrategic 4y ago
  > It's that Adobe was likely seeing subscription revenue take hit from customers While being pummeled by public markets, and being forced to make a move that might keep shareholders from calling for blood. This is certainly not the first time that Adobe has presented a number to Figma's board — but it has to be the biggest number yet, by far. From Figma's position: take your chances on an IPO while the Fed is cracking skulls around inflation — or flip the bit on that liability, and cash out to a desperate Adobe?
  - majani 4y ago
    Another interesting layer to this is that Adobe only has $5b in cash according to their balance sheet, so the overwhelming majority of this deal is probably in Adobe stock with a long vesting period. Also the deal being done in a downturn means that the difference between this and an IPO is academic in my view
    - unstrategic 4y ago
      > the difference between this and an IPO is academic in my view More theatrical than academic — if both options have a risky short-term outlook, optimize for the story. Sold for $20B? Or lackluster IPO? As GP of a VC fund, which story is going to better-enable you to raise your next several funds?
    - wikfwikf 4y ago
      Why do you think there will be a long vesting period? Vesting periods are quite common in employee incentives but not at all common in mergers and acquisitions.
      - majani 4y ago
        Because it's just common sense to not want close to $20 billion of stock flooding the market in a short period of time
adventured 4y ago
Adobe got the money in the first place via skill. Photoshop has been the leading photo editing software for a generation. Hundreds of companies over decades, some with deep pockets, have tried to knock them off and have failed. Figma didn't lose the money game, they sold out specifically to reap the money. The owners of Figma - where the profits tend to go in a business - are extracting at an epic scale. They sold out at a valuation far beyond anything sane. They won the money game big time.
- HellDunkel 4y ago
  They have not failed because they couldn’t get a great product out. They have failed because so many people are trained on Adobe products an just use those.
  - clcaev 4y ago
    Yes. At an individual level, they ask the question: "Delay my deliverables a week or two in frustration as I retrain; or, pay $300". User by user, the decision is obvious: pay the ransom and move on with your life.
    - HellDunkel 4y ago
      I did not mean it this way. The user will always ask the question: „Can i use another software for less money/more value“. Those who can will turn their back on adobe as the company is greedy and lazy. Problem is: if your company/client is a large cooperation you dont have any choice. Never underestimate professional users.
- unstrategic 4y ago
  Arguably, the money game is exactly what Figma was playing all along. Dylan's good at this game, as are the VCs he partnered with. Figma's flagship product was private equity. The design tool was secondary.
  - NavinF 4y ago
brokencode 4y ago
It’s hard to say they lost the money game when they ended up with $20B.
- HelloNurse 4y ago
  They can definitely fund the development of a new good product with that kind of money.

tus666 4y ago

Isn't this how competition works? Big payoffs create massive incentives for people to create great products in the hope they will be bought out. Adobe may have "destroyed" one great product, but think of the hundreds of new ones they have incentivized to be created. People look at this all wrong and ignore the downstream effect.

cowuser666 4y ago
It seems like the model here is just a series of temporary alternatives (if we're lucky, creating value isn't easy). But people need software to be long-term viable to invest in learning and locking into the ecosystem. Seems good for the founders though.
epolanski 4y ago
I count more software that has been ruined and/or killed by acquisitions than the one bred by those.
- jaxrtech 4y ago
  Would agree in large part. I think the ones that were successful, they're successful enough that you forget it was an acquisition. One off the top my head is Google Docs[1] which, for the longest time, I was pretty sure it was in-house tech. It's actually a number of acquisitions for the collaborative editor tech and then MS Office support. It seems now that most incumbents have enough cash to not care about being that strategic about acquisitions. [1]: https://en.m.wikipedia.org/wiki/Google_Docs#History https://en.m.wikipedia.org/wiki/Google_Docs#History
  - epolanski 4y ago
    I have not implied that all acquisitions are bad, but acquisitions to kill do not necessarily breed more better competition.
    - boltzmann-brain 4y ago

ulfw 4y ago

What a weird way of looking at things. Microsoft bought Powerpoint, bought Excel basically too. There wouldn't be an Office suite otherwise. Google bought Keyhole, there wouldn't be a Google Maps otherwise. Google bought Youtube. They couldn't win with Google Video. Google bought Android. etc etc etc This is how the industry works. In general.

veritas20 4y ago
In the examples that you site, the acquisitions were complementary additions. In this case, Adobe already has a competing product suite.
- true_religion 4y ago
  In the YouTube example, Google already had in house tech. Google videos even continued to run for a few more years.
  - spiderice 4y ago
    Why are we just taking for granted that the Youtube acquisition wasn't anti-competitive? There is a reason that Youtube hasn't had any competitors in the 15 years that Google bought it. It's because video can't be done as cheaply as Youtube does it, unless you have an entirely separate industry propping it up. Selling on product at a massive loss and propping it up with a separate industry is anti-competitive. Nobody can compete on Youtube-style video unless they first create Google. If that isn't true, where are the competitors? TikTok is the first one to even resemble a competitor, but it took 17 years and even that isn't really the same thing.
Ketchup901 4y ago
Are these examples supposed to be arguing for the purchase? Lol.
DecoPerson 4y ago
PowerPoint, Excel, Keyhole, YouTube, Google Maps and Android could be significantly better. There’s no competition, which means they keep their users, which means they’re not incentivised to find those ways in which those products could be significantly better. Okay wait, Excel does have some competition now, with Google Sheets, and that can be seen in Microsoft’s recent push to distinguish Excel from Google Sheets with new features like the ‘LET’ and ‘XLOOKUP’ formula functions.