Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Figma Won Collaborative Design by Targeting Engineers
Transcript
- Lucas: So you know how every product team has that one tool that everyone loves, but nobody can quite explain why it works so well? Luna: You mean like Figma, before it was obvious? Lucas: Exactly. Back in 2016, if you were a designer, you were probably using Sketch on a Mac, with a mess of plugins to share files. And then here comes this browser-based tool from a tiny startup with maybe a dozen employees. The conventional wisdom was that a web app could never be fast enough for real design work. But Figma's co-founder Dylan Field bet the whole company on that being wrong. Luna: He actually started Figma as a way to make design more accessible, right? I remember reading that he was inspired by how Google Docs made collaboration seamless. Lucas: That's the origin story. Field studied computer science at Brown, did an internship at LinkedIn, then got a Thiel Fellowship — that's the two-year, hundred thousand dollar grant to drop out of college and build something. He initially wanted to create a tool that let anyone design, not just professionals. But the real breakthrough came when he realized the problem wasn't the feature set — it was the sharing layer. Design files were being emailed around like attachments from 1999. Luna: And that's where the multiplayer idea clicked. He thought, what if multiple people could edit the same design file at the same time, like Google Docs for design? Lucas: Right. But building a real-time collaborative vector editor in the browser was insanely hard. Most engineers said it was impossible. Field spent years just on the rendering engine — they built their own from scratch using WebGL, which is normally used for 3D graphics, not 2D design. The early version was buggy and slow. But they kept iterating, and by 2018, they had something that worked better than native apps in some ways. Luna: I remember the first time I used it — I was working at a startup and our designer sent me a link. I could click around, leave comments, even tweak a color. I didn't need to install anything. That was the magic. Lucas: That link-sharing turned out to be the killer feature. Because Figma was web-native, you could share a design with a developer, a product manager, the CEO — anyone with a browser. Suddenly, design wasn't locked inside the designer's laptop. It became a conversation. And that shifted Figma from a design tool to a collaboration platform. Luna: So the product itself had network effects. The more people used it, the more valuable it became, because everyone could see and comment on the same file. Lucas: Exactly. And that's something Adobe never really cracked. Adobe XD, their competitor, was a native app. It had collaboration features eventually, but it was bolted on. Figma was built for the web from day one. That architectural choice made all the difference. By 2020, Figma had over 2 million users, and during the pandemic, when everyone went remote, usage exploded. Luna: Give me a sense of the scale. What was their revenue by then? Lucas: In 2020, Figma had about 4 million users and annual recurring revenue of around 75 million dollars. By 2022, that number had shot to 400 million. They were growing faster than any other software as a service company at that scale. And they did it without a traditional sales team — almost entirely product-led growth. People just tried it for free, shared a link, and their team got hooked. Luna: That's the dream for any startup. But I remember in 2022, Adobe made a huge offer — 20 billion dollars. That would have been the end of the story. Lucas: It almost was. In September 2022, Adobe announced they were acquiring Figma for roughly 20 billion, half cash, half stock. It was a massive premium — Figma had raised about 330 million total, and the deal valued it at around 50 times its 2022 ARR. For context, Adobe's own market cap was about 130 billion at the time. They were betting that Figma was the future of design. Luna: But regulators didn't see it that way. Lucas: Right. The UK's Competition and Markets Authority, and later the European Commission, started investigating. Their concern was that Adobe already dominated creative software with Photoshop and Illustrator, and buying Figma would give them a monopoly on collaborative design. After about a year of scrutiny, in December 2023, the deal fell apart. Adobe had to pay Figma a reverse termination fee — reported at around a billion dollars. Luna: So Figma stayed independent, with a billion dollars in the bank. That's a pretty good outcome for a company that almost got acquired. Lucas: It's almost better than being acquired. They got a massive cash infusion without giving up control, and they had the validation that the biggest player in the space wanted them badly. Since then, Figma has continued to expand — they launched FigJam, a whiteboarding tool, and they've been pushing into developer tools, like Dev Mode, which lets engineers inspect designs and get code snippets directly. Luna: And that's actually a smart move. Because the real competition now isn't Adobe — it's the whole workflow from design to code. Figma wants to own that bridge. Lucas: Exactly. And the strategy goes back to that original insight: the biggest pain point in product development isn't designing — it's handoff. Designers finish a mockup, then developers have to re-create it in code. Figma's Dev Mode reduces that friction. Early data suggests teams using Dev Mode cut design to development time by up to 80 percent. That's huge. Luna: So the lesson for other startups might be: build for the people who are underserved by the incumbents. Adobe's core customer was the professional designer. Figma's core customer was the whole team. Lucas: And that's a classic disruption playbook. You start by serving a segment the incumbent ignores — in this case, engineers and product managers who needed to see designs but couldn't install heavy software. Then you improve until you're good enough for the professionals too. By the time Adobe noticed, Figma had already built a network effect that was hard to replicate. Luna: It reminds me of how Stripe won by targeting developers instead of finance teams. Or how Slack won by making communication feel like a consumer app. There's a pattern there. Lucas: Totally. And speaking of patterns, if you're listening to this and you're building something — or just trying to think more strategically about your own work — that's exactly the kind of insight we try to bring every week. And the reason we can keep doing that without ads is listeners who find value in it and decide to support it. Luna: Yeah, it's a small thing but it makes a big difference. If today was useful to you, you can help keep these conversations going by visiting buy me a coffee dot com slash fexingo. Lucas: No pressure, obviously. Just if you feel like it. Because honestly, the fact that people listen and learn from these stories is what keeps us going. But the direct support really does let us stay independent and focus on the content. Luna: Alright, back to Figma. So where do you see the company going from here? They've got this billion-dollar war chest, a growing product suite, and a clear mission. Lucas: I think the next frontier is turning Figma into a platform, not just a tool. They've already started with plugins and integrations. But the bigger opportunity is in design systems — making it so that companies can build their own design tokens, components, and guidelines inside Figma and then push them directly into code. That's the holy grail: design and development using the same language. Luna: And that would make Figma even stickier. Once your whole design system lives in Figma, switching costs become enormous. Lucas: Right. And that's the kind of defensibility that Adobe never managed to build. Adobe's strength was in individual creativity tools. Figma's strength is in collaborative infrastructure. It's a different business model — more like GitHub for design than like Photoshop. And that's why, even after the Adobe deal failed, Figma's valuation hasn't cratered. Private market transactions still value it around 10 to 12 billion. Luna: So the company is worth half of what Adobe offered, but still a massive outcome for a startup that started with a Thiel Fellowship. Lucas: And it's a reminder that sometimes the best thing that can happen to a startup is a failed acquisition. You keep your independence, you get a massive check, and you have a chip on your shoulder. Dylan Field is still only in his early thirties. He's got decades to build this into something even bigger. Luna: Alright, that's Figma. Thanks for listening, and we'll be back next week with another story.