Figma Success Story: Design Platform to be acquired by Adobe for $20 Billion

Hello Everyone!

In this week’s newsletter, we will talk about the inspirational story of Dylan Field. How Dylan started Figma and how Adobe is acquiring it for a whopping $20 billion dollars.

Sheer determination, hard work, and persistence have made this possible. Let’s see how!

How 19-year-old Dylan Field started Figma & grew it to a $2 billion company

Figma is a California-based graphics editing platform that helps teams create, test, and share designs in a faster, more efficient, and fun way. It simplifies the entire designing process by combining tools, making workflows easier, or establishing cooperation across teams and time zones. There are currently four plans available:

  • Free: This gives access to 3 Figma files, 3 FigJam files, unlimited personal files, and much more.
  • Professional: At $12 per month for each editor, you can avail features like unlimited Figma files, unlimited version history, team libraries, audio conversations, etc.
  • Organization: You can purchase this plan at $45 per month per editor and get access to org-wide libraries, design system analytics, private plugins, and widgets.
  • Enterprise: This is useful for advanced security and flexible controls. This plan is available at $75 per month for each Figma editor and $5 per month for each FigJam editor.

It is useful for both UI and UX designs while working with a team. Designers get opportunities to build and prototype their artwork alongside their team members. Figma aims to ease designing for everyone through its API, which allows for sharing and cooperation using its cloud-based software.

Though it is common knowledge that there are several graphic editors which we can use, most of them give access to one person only, in spite of the fact that designing must be done collaboratively. Since collaboration technology are not yet present that can be considered revolutionary in terms of designing, it had become difficult for leaders to oversee and manage their corresponding teams.

The lack of an online collaboration tool makes a team spend too much time together designing. You cannot check up on your teammates as per your convenience. Figma solves this problem by allowing you to work in partnership with your teammates, just like in Google Drive, where it is possible to view and edit a design file online.

Figma is suited for students, freelancers, employees, designers, or anyone who want to demonstrate their creativity through virtual designing. However, it is more ideal for social media and website owners who need a platform to create designs and animations, so that they are able to obtain larger traffic. Figma is useful where collaboration is required, such as in team projects.

There is a need for a designing tool where the team can create designs. Also, big organizations have a need for platforms to enable their expert designers create striking and attractive presentations to promote their product. Figma has gained numerous freelancers and enterprises, small, medium-sized and large, as its customers. Some of these big names are Microsoft, Zoom, Deliveroo, Spotify, Uber, Dropbox, etc.

Figma has been named as the GitHub or Google Docs for designers and creators, having a strong loyal customer base who happily pay any price in the range of $12 to $45 per editor for its digital whiteboard product.

The founders, Dylan Field and Evan Wallace have turned into billionaires after Adobe, its erstwhile competitor announced its plan to acquire Figma for $20 billion using cash and shares. This transaction doubles the value of the company acquired in June 2021, when it received $200 million from multiple investors. According to the estimates of Forbes, each of the two founders have 10% share in the company.

Adobe acquires Figma for $20 billion.

This is Adobe’s largest acquisition, followed by the purchase of Marketo in September 2018, which is a marketing automation software company, for $4.75 billion. Adobe’s latest major acquisition was that of Frame.io in August 2021, a collaborative video editing and review software maker, for an amount of $1.2 billion.

Along with the income, the company officially announced $4.43 billion in third-quarter revenue. The value of Adobe shares plummeted by 8.43% in premarket trading after the forecast of Quarter 4 was revealed to be below speculation and expectations of experts.

Field will remain the CEO and co-founder and will lead the company when the deal closes in 2023. Adobe estimates a double annual recurring revenue (ARR) of $400 million in 2022.

Dylan Field, the founder was attracted to web design and development from high school itself. He built websites for his known ones, and becoming an intern at O’Reilly Media, an American learning company, expanded his curiosity and love for the vast world of technology.

When he entered Brown University, Field was still thinking of exploring other options other than those in tech — he tried out political science, considered building a career in law, and even thought of continuing to pursue acting. But he finalized his decision about his career after joining Flipboard as a summer intern after his sophomore year while being enrolled in the course for computer science. Field was fascinated by the in-built and innate design of the platform that tried to imitate reading an online magazine. The experience developed his senses that were accumulated by making websites, and he understood the importance and value of a design for solo and joint entities trying to make a name for themselves in the competitive world.

He wanted to continue his internship at Flipboard for more time and thus took a semester off during his junior year. During this time, he met Evan Wallace, the co-founder and another student at Brown University, who had much experience in this field due to a software engineer internship at Microsoft and Pixar. They spent hours discussing how to build something that could be used for designing and can be appropriate for browsers. Based on their mutual interests, they decided to build a company together. Dylan opted out of his course and his university to become a member of the Thiel Fellowship in 2012. This was the first step toward building something that would become Figma in the future. He admits that his previous life as an actor is in correspondence with the essence of Figma, even though acting was not his inspiration when he and Evan Wallace set out to establish the company.

Field was highly inspired by Wallace’s demos related to WebGL, using which designers could furnish graphics in the browser without many faults—including a particular one known as Water (that worked with a sphere in a pool of water). WIRED claimed it as “one of the more impressive WebGL demos we’ve ever seen”—and assured him that he could reach greater heights by working in this field. Though it didn’t appear great, it was the first step towards real-time browser graphics. This technology could be used to design the entire creative suite. The potential for this new technology led both of them to think about the types of companies that could be built using this.

Dylan and Evan actually began with a Drone company. However, Evan was cautious about working in the drone space since there was no idea “that didn’t hurt people or violate their privacy.” Ultimately the idea transformed into that of Figma.

Several applications came to their mind, such as photo editing and computational photography. From the Thiel Fellowship they received $100,000 in a span of two years, which was used to support their new company – which originally planned to focus on these ideas. Interaction with other Thiel fellows made Dylan comprehend that he wanted to aim big – maybe even difficult at times. He could think of nothing more challenging than building a collaborative browser-supporting Photoshop platform.

While experiencing interface design, they discovered that most graphic tools were designed for a single offline user, although design inherently supported collaboration. Dylan and Wallace decided to use WebGL to imitate Google Docs and design tools that could be taken to the open market to make up for the lack of innovation for an extended time.

It’s not as easy as it sounds, however. In a world so fluent in Google Drive, everyone forgets that this idea appeared too ambitious back in 2013, and Field and Wallace took up a huge task upon themselves. Though Google Drive and other related apps were widely used, executing such a unique idea for Figma was a massive feat.

Figma wasn’t just a replication for Photoshop – it would change the entire process of designing by teams, big and small. At that time, designers were faced with the problem of sending files repeatedly and wasting hours by working with an old and redundant version.

Figma wanted to rectify and solve this problem. Designers who worked by themselves, without any interruption, would be highly affected by the idea.

Index Ventures, Greylock Partners and Phoenix Court were some of the initial backers of the startup. Finally, they started designing several disconnected projects that collectively came to be known as Photoshop in the browser. These included:

  • Poisson Blending on the CPU
  • Image Cutting
  • Color Lines
  • Photo Editor

They soon reached their worst moment, when they wasted about a week looking at meme generation – it was a way too embarrassing reason for leaving their university and was deemed as the worst week of Figma. There was no focus and unity – each person in the team differed with respect to their vision of the product. Investor John Lilly opted out in the Seed round itself. He honestly stated that they didn’t know what they were doing.

Figma was a direct challenge to the existing age-old models of decision-making, along with the distinct features of many designers. Many individuals had realized the worth of a browser software meant for designing, however, it also garnered negative reactions. Some even threatened to change careers if this was the ultimate future.

Initially, Dylan didn’t understand the negative feedback to Figma’s closed beta launch in front of the many advantages: single source for all files, cross-platform support, and editing enabled for multiple users. But soon, the comprehensive cultural aspect of the browser was clear to him. The browser is multiplayer and shifts the outlook on access, eliminating the requirement for expensive and complex hardware. Last but not the least, it highlights the need to work as a team, particularly when there are problems that cannot be solved by own selves.

Further, it is more than improved workflows and collaboration – it results in a multi-decade global shift from physical to digital spaces, due to the influence of the pandemic and the resulting lockdown. During these trying times, digital spaces connected people all over the world. In contrast to physical spaces, digital spaces are non-hierarchical – they don’t have to restrict anyone from thinking, innovating, and building together.

Figma is not just a virtual version of physical space — it provides an opportunity to become creative, learn from your failures and learn to work together as a team.

Figma wants to bring designing to everyone. Dylan has always wanted the flexibility to reach beyond product design and development, such that more and more people avail his platform. He doesn’t want hardware and other special tools to be an obstacle in his path. A browser is a perfect medium for achieving this goal and making society a better place. Figma as a skill should be as valuable and important as Google Docs proficiency. It should be able to support all kinds of roles in all parts of the design process — from making ideas to executing them – from imagination to reality. Dylan decided to make everyone in his team think and come to a conclusion about their focus. They removed several features such as:

  • animation
  • 3D design
  • photo editing
  • paint

The interface design was the most viable decision that they could decide upon – with a common vision and purpose. This enabled them to work at a faster pace. John Lilly, whom Dylan acknowledges as the key force in Figma, headed the Series A funding.

The ultimate goal was to make Figma so good that everyone, even the earlier critics, would appreciate it wholeheartedly.

These great challenges were taken up by Field, or Wallace had anticipated, who started to build a platform that came to be known as Figma in June 2013. They launched their closed beta in December 2015, and charged the first price in the summer of 2017. This entire period was dedicated to development, improvement, and intensive technological challenges, and Field became the CEO who had to keep his team together. After the launch of the closed beta version in December 2015, all the doubt and anxiety from the building and development process transformed into excitement. There were waitlists, and there was no turning back once the first price was charged in 2017.

“I was just not a very good manager when I started Figma,” Field states. “I mean, I was an intern before that. So I had a lot to learn. I was always very optimistic; I thought that shipping was right around the corner, so I wasn’t setting expectations correctly. I was always trying to go for the home run on everything, and I was pushing super-hard on the team, but also giving them not a lot of empowerment. If you hire smart people, you want to empower them to go do what they do best, and I was not doing a good job of that.”

The situation got so much out of control that the senior members had to resort to managerial intervention. “It wasn’t like, ‘You need to leave,’” Field remembers. “It was like, ‘You need to get some help.’ Afterward, I took a few days away from the office. It was just hard.”

After two years, Adobe veteran Sho Kuwamoto was brought on board as the director of the product. Kuwamoto immediately understood the tension and the pressure-cooker dynamic due to spending so much time in vain – there was no product that could be sold. He also understood the administrative problems faced by Field.

Field admits that Kuwamoto has worked like a late co-founder, helping him realize managerial and leadership qualities to make his team more efficient and productive. Sho taught him to stop stressing over minor issues and let his team work as they are doing already, only interfering during desperate times and crisis – his presence would be enough motivation for them.

Sho’s lessons actually proved useful as they changed him and made him a better leader: “Sho really changed my mindset around how to set guardrails correctly so that you’re clear upfront about, ‘Here’s a space to explore in and here’s the strategy or ‘here are the things you should know going into it, but then go explore on your own and come back with a solution and let’s talk about it.’”

In the initial phase, though Field was skeptical that the designing market was small in size, large-scale hiring by IBM showed him that there was a demand constraint. Nowadays, users have become habituated with modern apps like Instagram, TikTok, etc., which are both more graphically alluring and user-friendly than the apps found in the old days. In a perfectly competitive market, these are the apps that win hands down, he said. And this is the best opportunity that Figma can get.

“It’s not enough to build something anymore,” Field said. “We have to make sure the design is great. The entire world is becoming more digital now. As we’re going through that transformation, the companies that are going to win are the ones that are best designed and have the best design practices.”

Figma had achieved the goal of giving its users the facility of collaborating online through its API system, and that too with efficiency and eloquence. It has been updated more than 1000 times in a period of 4.5 years, with additional features like Smart Animate. The process of adding such new features is ongoing, which would make its customers happy.

One of the modern trends which Figma is a part of is a change in design thinking with time. From fluency in speaking in the 19th century to writing eloquence in the 20th century, to the power of intuition and presence of mind in your responses – the way you present yourself and your acceptability have changed gradually with rise in literacy rate and digitalization. Due to our life being modernized and transformed into virtual ones, we have become habituated to sophisticated and decent designs. However, we have become equally intolerant with respect to the opposite – design of bad quality.

Realizing this change a long time ago, Figma has been a major force that drives this shift. It is important for all digital things, including major outputs displayed on screens. Dylan and Evan have always dedicated themselves to redefining the relationship between creativity, teamwork, and efficiency. When designers were using backdated methods to transfer files through email, the duo realized that both the designers and their clients required faster loops and space for smoother communication and feedback in real-time, which would generate the most beautiful and efficient products possible.

Not only has Figma revolutionized the entire class of designing, but it has also enabled the creative class to come up and establish a creator economy, with the help of advanced tools meant for the creation of digital content and earning money from them. It became so popular and profitable that 75% of the newer generation are now motivated to become creators.

Figma has been highly successful all around the world, with 80% of users belonging to countries other than the USA. This has been possible only due to the company culture, which has ticked all the boxes required to please the customers. Having gone straight from intern to founder, Dylan has faced adverse conditions regarding administration and management after becoming CEO directly from an intern, but they have taught him important life lessons and guided him towards humbleness, clear sight, and humility. The products of Figma are mirrors of all these qualities and much more, reflecting flexibility, teamwork, and utility.

Field and Wallace utilized four years to improve and launch the first public version of a virtual design sketch board. Today, Netflix, Airbnb, and Zoom are some of their clients – they have come such a long way.

The pandemic has been a blessing in disguise for Figma since all dealings are done online using the tools. Field admits that people are using their platform for all purposes, from important presentations to art projects.

Figma had an initial seed funding of $3.8 million in 2013, that advanced to Series A funding of $14 million in 2015. In 2018, Figma reached Series B funding and received $25 million, and then Series C funding of $40 million in 2019. A year later, it got a Series D funding of $50 million in a round led by Andreessen Horowitz, even overcoming the full force of the pandemic that hit the US hard. Companies like GitHub, Square, Microsoft, Zoom, Airbnb, and Uber were highly impressed with its revenue figures and growth rates.

Figma earned a revenue of $75 million in 2020. Dylan Field was also listed in Business Insider as one of the 10 people transforming the enterprise technology industry in 2020. Currently, the company has a massive valuation of $2 billion. By 2021, Figma had a valuation of $2.05 billion and had raised $132.87 million, in spite of stiff competition from Adobe and its Creative Cloud suite leading in this field. It had earned a revenue of $81.1 million this year, with a massive $10 billion valuation.

Figma earned a revenue of $81.1 million in 2022.

Though it may appear that the company took a pretty long time for development to become successful, Reed disagrees. According to him, all the time spent in making Figma better had paid off in the form of an incredible product.

“This company is considered to be so unique in its market [because] it’s not like there is a second-tier company,” Reed states. “They’re the ones who make the product that works.”

Dylan Field had managed to reduce the distance between the CEO and his team of creators. This can be attributed to his knowledge of acting, even though it took some time and external help. Work and the team responsible for it should correspond with each other. A product designed by a team can show the mentality of all the people involved, similar to how it can be understood whether the actors of a cast respect each other.

With such high levels of funding and a good amount of traffic, growing the expanding the business should be the next focus. It involves:

  • Increasing the number of tools for designers.
  • Developing design systems, a term standing for components like buttons and sliders that can be reused for different purposes by different teams to maintain consistency in app design.
  • New tools should be made to help designers explain their projects to the software development team.
  • The Figma community should be expanded where customers can interact, and share features and templates.
  • Figma is also looking to expand its team and become self-sufficient to acquire smaller startups, like acqui-hires, that will fasten the process of hiring more designers and other staff. All these are aimed at inflating the business.

“[An] app would have six different styles of buttons,” Field said. “We’re now seeing people trying to standardize more.”

“We’re looking for people who are excited about Figma’s mission and want to make a big impact,” Field said. “It’s much more on the talent side and can be across any sector.”

These features helped Figma compete with Adobe, which was spending time and resources on improving designer collaboration. “Customers have already been switching over from other design platforms like Abstract and InVision to Figma,” said Forrester Principal Analyst Andrew Hogan.

However, Adobe has some fair advantages as the incumbent, such as an AI more advanced than the newer platforms and features that help marketers create campaigns and measure their worth. Despite all this, Figma has attracted the attention of its competitors, including Adobe, which released a similar XD tool. According to Hogan, Figma is more dedicated towards making interfaces using app designers, and this is what differentiates its product from others. Field is certain that their strength lies in the collaboration features that make Figma a heterogeneous product.

Field regrets not knowing more about leading and encouraging his team. According to him, his fault lies in not identifying his weaknesses and faults, such as the fact that he didn’t know the importance of management as a skill. He is trying to improve every day through various means, and though he has learned a lot, he is still far away from being an expert.

Dylan was apprehensive about the growth. Whenever a team grows at a rapid pace, the existing processes will start to break. He wants his team to come to work with a fresh mind and devote equal time towards personal and professional life. But this is what scares him most – the thought that there will be additional pressure on someone due to miscommunication or a broken process that may result in him/her missing out on leisure time.

Fortunately, such an efficient and considerate team understands the negative effects of growth for a startup. But they choose to concentrate on the good things related to decision-making, documentation of information, and communication in the best way with maximum utility and least cost. The acquisition is a new phase for Figma and its development. Adobe is suitable for boosting the development of the company and standardizing the realm of designing. The two platforms can act together to create an advanced and useful version of a platform that can give tough competition to some major tech companies in terms of creativity and collaboration. This will be an exciting thing to see and hopefully will be a milestone event in the world of design and technology.

Such is the end result when you choose not to give up. Hard work and patience are sure to have the sweet fruits of success, no matter how long it takes!

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