In case you ever find yourself with as much leverage as Figma seemingly had… always negotiate a break up fee to compensate for exactly this.
T-Mobile famously got a $4B breakup fee after DOJ blocked ATT from acquiring them. That $4B was used to buy more spectrum and overhaul the brand, leading to huge growth to the point that T-Mobile is now a big 3 player (it used to be big 2 only).
If Figma wrangles $2-3B cash out of this, they could probably take down the entire adobe ecosystem.
> If Figma wrangles $2-3B cash out of this, they could probably take down the entire adobe ecosystem
Do you think that just $2-3B would be enough to push for developing alternatives to at least Photoshop and Illustrator and Lightroom and After Effects and successfully going after their markets? During what timeframe? Doesn’t feel like it tbh.
Substituting one Goliath for another is not the future we should be interested in. I'd like to see a competitive landscape where we, the users of these tools, enjoy the benefits of healthy competition.
> If Figma wrangles $2-3B cash out of this, they could probably take down the entire adobe ecosystem.
I think you highly underestimates how much lock-in adobe has (and intentionally pushed, e.g. by doing what they can to prevent other programs from parsing their file formats, similar to what Microsoft used to do but fortunately no longer does).
I would not be surprised if Adobe intentionally added monopolistic terms to their deal with Figma or acted that the deal was monopolistic in front of antitrust officials in the hope that they might block the deal, considering that they are paying $20B for something that, in today's market, is worth way less than that.
If I am not mistaken, the fact that DOJ is preparing a suit means that the deal will not go through for at least a year or more, so Adobe can delay paying. They can also, intentionally, perform poorly in court to let DOJ get an easy win and avoid paying Figma.
In my opinion, the only losing party in this story is Figma. Adobe gets a chance to back out and DOJ gets a chance at an easy win. I am surprised FTC didn't jump on this, considering they are looking for wins, after their weak lawsuit against Meta's acquisition of Within.
Or even more sinister - they planned all of the above before doing the deal in an attempt to weaken Figma. Valuations were already way down when the deal was announced; this is one thing that stood out so much about the deal when it was announced.
Adobe pays a high valuation in an inflated market for Figma, to continue showing growth that has mostly stalled. Also helps them cross-sell their other products once they get into smaller companies where Figma has a strong foothold.
Market Tanks, valuations tank (to reasonable levels or perhaps still slightly inflated levels but not as crazy as before)
Generative AI brings a new threat (and new potential acquisition targets in the near future)
Adobe: How do we get out of this (now) bad deal? .....Oh wait..
DOJ: Preps anti-trust suit
... now Speculating....
Adobe doesn't really contend strongly the anti trust charge.
Pays $1B or so (saves $19B for future acquisitions)
Figma......some dreams crushed, but I guess $1B is not too shabby
Why don’t such companies just create a venture fund with 49% ownership to buy all the small actors? They could even call it “funding the competition so that there is some”.
This would be an interesting play, but Adobe likely agreed to use "best efforts" to complete the transaction as part of the deal. This would include putting up a strong defense to any anti-trust lawsuits Any sort of shenanigans in this area would almost certainly leave a paper trail.
That would be incredible, please do! Figma is the only design tool that actually approaches design from an engineering standpoint, which can be seen in their feature set of things like having reusable components, variants, inheritance etc, which then maps very cleanly onto the code side.
I'm not a fan of Figma at all and I am forced to use it since there is no better alternative. I found Adobe XD was better but it's getting discontinued (EDIT: last time I heard - I might be wrong? Can't find info on this anymore) and it doesn't run on Linux.
My biggest gripe with Figma is the fact that you can only use components from the same file, unless you're paying (and even then you have to use a team, even if you are the only member, then create a project and add the file with the components in the project, enable sharing of the components, and make sure your second file is in the same project... not exactly a seamless experience, in a UX prototyping software of all places).
Shall you decide not to pay and give up to only using components from the same file, good luck organizing it neatly, since you only get 3 pages.
I don't agree on the Blizzard stuff but in this instance I agree with what the US government is doing. Adobe is a stronger hold on the design tools market than any other company and Figma was good competition
What separates the two cases for you? Does it come down to there being more gaming companies compared to Microsoft than there are application-design companies compared to Adobe?
I have read more than once Adobe might secretly be ok with this. Price agreed to before valuations fully cratered.
I am sure Musk wished the DOJ could have helped him out as well.
They might be hoping to sue competitors like penpot for being similar to Figma, since Figma's IP would become Adobe's. Or maybe patent troll with some WASM patents, if Figma got them (they sure pioneered with WASM). I don't think suing competitors for having similar designs to Figma will work because penpot could change their design a bit, but it will slow it down.
my heart goes out to the employees. startup money ain't real til its in your bank account. Personally, it felt really bad when Plaid/Visa was blocked (I was at Plaid), but the anticompetition evidence was a tad too on the nose from Visa's end for the DOJ to let it go through.
This may ultimately be a positive outcome for those involved with Figma.
Consider Facebook's acquisition of WhatsApp and Instagram, which were acquired at what proved to be bargain prices. The founders came to regret the transaction, while Mr. Zuckerberg appeared prescient.
Although it may appear to be a challenging and lengthy path for Figma to achieve the acquisition premium on its own, I am of the belief that it is a more attainable goal than it may seem.
Moreover, it is worth noting that Adobe not only has the potential to be disrupted, but it is in fact in need of it. The company has been met with widespread criticism for various reasons, and as such, it presents an opportune market for Figma to capitalize upon.
To anyone who studies law in this area, is the DOJ at least consistent with regard to the deals they decide to block or allow to go through? I’m not asking whether they are making the right decision, but rather if whatever approach they use is applied the same way across cases each time.
- bigtechco buys smalltechco
- merger happens for a few months, drama, layoffs, etc.
- doj sues
- judge/supremes block
well, i see some articles talking about some "recent DOJ victories after a string of losses", so hopefully i'm wrong.
i don't understand why things work like this -- seems strange.
i did read how the supremes decided a long time ago that mergers/acquisitions were always good and right as long as prices went down or stayed low-ish temporarily -- that was the fiction they created, anyways.
and what's the pre-suit meeting about.
DOJ: hey, stop this.
ADO: no.
DOJ: ok, then we filing suit.
ADO: ok.
DOJ: that's it?
ADO: yes.
DOJ: u sure? we really gonna do it..!!???
ADO: yeah, we know, thanks.
[+] [-] obblekk|3 years ago|reply
T-Mobile famously got a $4B breakup fee after DOJ blocked ATT from acquiring them. That $4B was used to buy more spectrum and overhaul the brand, leading to huge growth to the point that T-Mobile is now a big 3 player (it used to be big 2 only).
If Figma wrangles $2-3B cash out of this, they could probably take down the entire adobe ecosystem.
[+] [-] j_crick|3 years ago|reply
Do you think that just $2-3B would be enough to push for developing alternatives to at least Photoshop and Illustrator and Lightroom and After Effects and successfully going after their markets? During what timeframe? Doesn’t feel like it tbh.
[+] [-] lotsofpulp|3 years ago|reply
[+] [-] maroonblazer|3 years ago|reply
[+] [-] roflyear|3 years ago|reply
[+] [-] ido|3 years ago|reply
I think you highly underestimates how much lock-in adobe has (and intentionally pushed, e.g. by doing what they can to prevent other programs from parsing their file formats, similar to what Microsoft used to do but fortunately no longer does).
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] AlexanderTheGr8|3 years ago|reply
If I am not mistaken, the fact that DOJ is preparing a suit means that the deal will not go through for at least a year or more, so Adobe can delay paying. They can also, intentionally, perform poorly in court to let DOJ get an easy win and avoid paying Figma.
In my opinion, the only losing party in this story is Figma. Adobe gets a chance to back out and DOJ gets a chance at an easy win. I am surprised FTC didn't jump on this, considering they are looking for wins, after their weak lawsuit against Meta's acquisition of Within.
[+] [-] outside1234|3 years ago|reply
[+] [-] twhntwhntwhn|3 years ago|reply
[+] [-] neosat|3 years ago|reply
Market Tanks, valuations tank (to reasonable levels or perhaps still slightly inflated levels but not as crazy as before)
Generative AI brings a new threat (and new potential acquisition targets in the near future)
Adobe: How do we get out of this (now) bad deal? .....Oh wait..
DOJ: Preps anti-trust suit
... now Speculating....
Adobe doesn't really contend strongly the anti trust charge. Pays $1B or so (saves $19B for future acquisitions)
Figma......some dreams crushed, but I guess $1B is not too shabby
[+] [-] eastbound|3 years ago|reply
[+] [-] ohmanjjj|3 years ago|reply
[+] [-] danielfoster|3 years ago|reply
[+] [-] satvikpendem|3 years ago|reply
[+] [-] gliiics|3 years ago|reply
My biggest gripe with Figma is the fact that you can only use components from the same file, unless you're paying (and even then you have to use a team, even if you are the only member, then create a project and add the file with the components in the project, enable sharing of the components, and make sure your second file is in the same project... not exactly a seamless experience, in a UX prototyping software of all places).
Shall you decide not to pay and give up to only using components from the same file, good luck organizing it neatly, since you only get 3 pages.
[+] [-] andybak|3 years ago|reply
(I can't reel off a list as I don't do design day to day any more but I used to and I was a fan of apps that had exactly this approach.
[+] [-] wdb|3 years ago|reply
[+] [-] twright|3 years ago|reply
[+] [-] bruceb|3 years ago|reply
[+] [-] 93po|3 years ago|reply
[+] [-] benatkin|3 years ago|reply
[+] [-] senttoschool|3 years ago|reply
[+] [-] andsoitis|3 years ago|reply
In what way? None of his existing businesses operate in even remotely the same market as Twitter.
[+] [-] omeze|3 years ago|reply
[+] [-] pc_edwin|3 years ago|reply
Consider Facebook's acquisition of WhatsApp and Instagram, which were acquired at what proved to be bargain prices. The founders came to regret the transaction, while Mr. Zuckerberg appeared prescient.
Although it may appear to be a challenging and lengthy path for Figma to achieve the acquisition premium on its own, I am of the belief that it is a more attainable goal than it may seem.
Moreover, it is worth noting that Adobe not only has the potential to be disrupted, but it is in fact in need of it. The company has been met with widespread criticism for various reasons, and as such, it presents an opportune market for Figma to capitalize upon.
[+] [-] Clubber|3 years ago|reply
https://www.wired.com/2005/04/adobe-acquires-macromedia/
[+] [-] Xcelerate|3 years ago|reply
[+] [-] readonthegoapp|3 years ago|reply
isn't the way this works as follows?
well, i see some articles talking about some "recent DOJ victories after a string of losses", so hopefully i'm wrong.i don't understand why things work like this -- seems strange.
i did read how the supremes decided a long time ago that mergers/acquisitions were always good and right as long as prices went down or stayed low-ish temporarily -- that was the fiction they created, anyways.
and what's the pre-suit meeting about.
[+] [-] saos|3 years ago|reply
[+] [-] CyanBird|3 years ago|reply
I won't forgive them for all the lies that they spun with the allegorithmic acquisition
[+] [-] user3939382|3 years ago|reply
[deleted]
[+] [-] jgalt212|3 years ago|reply
[+] [-] benatkin|3 years ago|reply
[+] [-] notpushkin|3 years ago|reply