[dabedee]

I think the Figma IPO proves Khan was right. $60B market cap today vs the $20B Adobe offered in 2023. There was some criticism about regulatory overreach when the deal got blocked. Now Figma employees are rich, the design tools market stays competitive, and we have another major independent tech company instead of just another Adobe product line. This is exactly why we need regulators willing to tell Big Tech "no" sometimes. Competition creates more value than consolidation.

[benreesman]

It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right.

The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and made everyone rich is twilight zone shit. It makes no sense according to the stated values in the fucking masthead.

[dabedee]

I think you're hitting the real divide here. Some people are so ideologically opposed to any regulatory intervention that they can't admit when it works, even when the evidence is staring them in the face. Also notable [0]: "[...] in any given year, we see up to 3,000 merger filings that get reported to us. Around 2% of those actually get a second look by the government, so you have 98% of all deals that, for the most part, are going through. Around 2% of those actually get a second look by the government, so you have 98% of all deals that, for the most part, are going through." The FTC wasn't blocking everything, just the deals that would entrench monopolies.

[0] https://techcrunch.com/2024/06/15/ftc-chair-lina-khan-on-sta...

[aetherson]

Suppose that you have an opportunity to play a game. The game is you roll a fair normal six sided die. If it comes up a 6, you get $60B. If it comes up a 5 or 4 you get $30B. If it comes up 3 or less, you get $0.

This is clearly a valuable game! It is worth in expectation $20B. But it also has a 50% chance of being worthless to you.

Someone offers to buy it from you for $20B. You agree, giving up some upside for some downside protection.

But then someone else says that's not allowed. So you play the game and you roll a six and get $60B.

Does that prove the person who made you play it rather than sell it was "right," ex ante?

[api]

There’s a lot of people I’ve talked to who didn’t like Lina Khan not because of the Figma thing but because they thought she was having a chilling effect on acquisitions broadly.

The vast majority of startups will never IPO. Acquisition is the only viable exit. That’s because the bar for IPO has risen so high that only massive already incumbent unicorns can reach it. IPO isn’t a way to raise capital to compete. It’s a victory lap if you’ve won already.

Don’t know if this is actually true, that she was having this chilling effect. I am relaying a sentiment I’ve encountered.

Of course the other reason is tech-right echo chamber brain rot. People need to get off Xhitter. (Not a fan of doomer left anti tech brain rot either. There’s more than one kind of brain rot around.)

[DannyBee]

Having criticized a lot of her tenure (and still do!), Lina's problem was never whether she was right or not.

It's that she was incredibly ineffective.

Of course she was right. That's what made her practical ineffectiveness so problematic.

She was often 100% right on what should be done but could only achieve 0-10% of it.

I'd rather have someone who is 70% right on what should be done, but can achieve almost all of it, as some previous FTC chairs were.

[Dylan16807]

> The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and made everyone rich is twilight zone shit. It makes no sense according to the stated values in the fucking masthead.

Blocking the merger was good. But I'm not convinced the IPO was good. I think trying to be a company that's worth tens of billions of dollars is only going to make Figma worse. I care about the users more than the people that got rich.

[2OEH8eoCRo0]

The lashing she gets around here is disturbing.

[terminalshort]

> If you care about market cap? She was right.

None of the FTC's business

> If you care about employee comp? She was right.

None of the FTC's business

> Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right.

None of the FTC's business x3

> If you care about consumer choice, she was right.

Ok, so this is the FTC's business. But does Figma compete with Adobe in any major areas? I'm not aware of any major Adobe products like that.

[DonHopkins]

But what if you care about Adobe? Booooo Hooooo!!! ;( /s

[missedthecue]

It doesn't prove it. Khan attempted very fiercely to block Amazon's purchase of iRobot and she, along with the EU authorities, succeeded in preventing it and now iRobot is about to file bankruptcy. We don't have the counterfactual and founders (nor regulatory agencies) can see the future.

Someone made a good analogy on twitter that Khan essentially cut off a genius pianist's right hand, the pianist persevered and somehow succeeded in retaining their talent in spite of having one hand, and now Khan is taking credit for the feat. In the same way, the fact that Figma still exists is not proof that she was right.

[respondo2134]

IPOs are a really tough path, and can significantly alter the business. I'd hesitate to hold up the big one for this year as vindication for her entire approach. The vast majority of growth tech companies are not going to go public, but need to release value for investors and employees, and PE or acquisition is the only path open to them. If you've ever had experience with PE you might not want to deal with that, and getting bought is all that's left if you owe people a big return soon.

[MattDamonSpace]

It wasn’t the outcome, it was the bad reasoning and the overall desire for interference

Does it really matter if Figma was bought vs IPO? No of course not. Khan just needs a poster child for her overall intervention philosophy.

Pointing at Figma as a success for her overall world view is like the religious who say “oh god saved me from that flood” while ignoring the hundreds who did die. The Almighty wanted them to die? Or…?

If you’re gonna claim the successes you have to claim the failures

[holmesworcester]

One way to settle the question of whether Khan is right would be for the government to simply make competing offers in these situations, buy the companies, and shepherd them to IPO, or a buyer with fewer antitrust issues if that's not possible.

If the government is net ahead after a decade or so, then we'd know.

This approach to antitrust wouldn't work in cases like the Apple case, where the power is worth it to the company only because they can misuse it, but it would be a very fair and accounting-transparent remedy for the "startup gets bought by competitor" case.

[ichik]

> design tools market stays competitive

Adobe killed their Figma competitor (XD), so the reality of the UI design tools niche in the design tools market is that Figma actually has a near monopoly. Sketch still chugs along, but its market share is negligible. Penpot is a neat idealistic community effort that is lightyears behind.

This is one of the reasons why Figma continues to tighten the screws on their userbase, who doesn't like it one bit, but continues to pay.

Now, this is all not to say, that it would've been any better with Adobe's involvement, more like lamenting the fact that Figma lived long enough to become a villain.

[madeofpalk]

Figma has a near monopoly because it built the better product. This is the preferred outcome compared to Adobe broadening their monopoly not by building a better product, but just by acquiring/squashing their competition.

Monopolies aren't illegal. Preventing competition is the thing we want to stop. As far as I can see, Figma doesn't do anything to give themselves an unfair advantage or prevent other players from entering the market.

[shortrounddev2]

Adobe is in maintenance mode. They aren't willing to compete with figma because they have basically never had to compete with anyone since the 90s. They forgot how

[dkarl]

Adobe would have killed one product regardless. If they had been allowed to acquire Figma, they might have killed the better one.

[usaar333]

I don't see why the market cap proves whether she is correct or not. You'd have to compare it to the counter-factual of what the value of a Figma subsidiary would be under Adobe today.

This is not obvious at all to me. Instagram (bought for $1B) is probably worth ~700 B of Meta's market cap.

[yard2010]

PSA that no regulator simply means the sharkest shark regulates. There is no such thing as no regulator. People will regulate. The question is who and how

[bko]

What does this mean? If there is no regulator, someone else will use force to prevent voluntary mutually beneficial deals from taking place?

[ferfumarma]

I cannot understanding your argument at all.

[amelius]

> This is exactly why we need regulators willing to tell Big Tech "no" sometimes.

At some point, "Big Tech" is really "Big Finance" in disguise.

[aianus]

If I suggest putting your net worth on black at roulette and it lands on black, does that make my advice right?

Khan forced the employees and investors to continue working and gambling on a company they might not have wanted to continue working for or gambling on. It doesn't really matter that the gamble succeeded in this case.

[rhet0rica]

I'm pretty sure no employee wants to work for Adobe.

[holmesworcester]

I'm sympathetic to a prohibition on big companies buying their competitors, but a 3x difference over two years seems too low to suggest that antitrust creates more pure business value.

First this is all hindsight now. We don't know the probabilities of this outcome vs. others. Figma's shareholders didn't at the time, which is why they chose to sell. Khan didn't either.

Second, 3x over two years isn't that much. There must be many opportunities in SV for all of Figma's employees and investors that could have given them a much higher return than that with much less risk.

I don't have this data, but one could look at secondary sales in the past two years as a measure of the increased risk and opportunity cost, right?

Any delay of people getting liquid impacts the creation of other startups, both by the Figma people who can now leave and do their own thing and for the companies Figma stakeholders would have invested in . This is super hard to measure but it is the kind of thing markets are good at measuring when they ask shareholders "sell now to Adobe or wait to IPO?"

This seems really good for Figma users, most of all. Most of the value destroyed by the acquisition would have been in the distortion and likely ultimate destruction of a company culture that made an insanely good product.

But those people are capable of going and making new products, and maybe Figma at its current phase is now too boring a thing for their talents, and should be managed by a more boring organization staffed by people who are slightly less able to make another Figma.

Who knows, but I doubt Khan (or any one individual or organization) is in a better position to assess the optimal delivery of what people want than the incentivized distributed intelligence of all the stakeholders and the people and markets around them.

Again, there are other reasons to do this that markets wouldn't quantify.

[benreesman]

The lengths people will go to to avoid the facts on this are fucking remarkable. I'll let Opus explain:

"The Bottom Line

A 73% annualized return would:

    Easily rank in the top 10-20 best-documented investment returns of all time if sustained for multiple years
    Significantly outperform virtually all professional fund managers and legendary investors
    Be 7x higher than the long-term stock market average
    Turn $10,000 into $30,000 in just 2 years (your 3x example)

Such returns are typically only achieved during:

    Early-stage growth of revolutionary companies (like early Apple, Amazon, or Netflix)
    Cryptocurrency bull runs
    Highly leveraged trades
    Exceptional market timing during recovery periods
    Small/micro-cap stocks experiencing explosive growth

While spectacular, returns of this magnitude are extremely difficult to sustain and often involve significant risk."

[smoser]

On the flip side Khan was wrong about iRobot. The results were layoffs at iRobot and now Roombas are made by a Chinese ODM.

[AraceliHarker]

As is the case with many startups, especially those with a limited product portfolio, it's rare for them to exceed their IPO valuation in the future. So, I think we'll have to wait and see if Figma can continue its growth.

[dzonga]

the only thing I will refute is the $60Bn market cap is due to IPO. Once they start reporting earnings, in a year or two once the hype dies down we will find the true value.

a lot of tech darlings have been decimated by the stock market. & Adobe can still buy them once they're public, maybe even cheaper than $20bn.

[SergeAx]

It's 43 already. Let's look at their first quarterly call.