tl;dr: The article reports on Figma's challenges after a $20 billion deal with Adobe fell through due to regulatory scrutiny. Figma had to halve its internal valuation to $10 billion, affecting employee morale and leading to severance offers for those wishing to leave. The situation illustrates broader regulatory impacts on tech industry mergers, with similar actions affecting other companies and reshaping expectations around acquisitions and employee compensation.
I'm a big Grab user as a resident of Thailand so I've always thought about Grab/Line or Gojek but the compensation has never lined up with what I can get elsewhere.
How is working at Grab and are you based in SEA or elsewhere?
Based in the USA office. They laid everyone off except for a handful of people last year. For the USA employees, the compensation is competitive with Tier 2 big tech depending on when you joined.
I agree those corporate constructs are awful, but things like this are why HN has this guideline:
"Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead."
Yes, this sucks for employees in the short term who thought their equity was potentially worth 2x what it is (and more importantly, liquid!). But also, if their numbers are good enough to plausibly command that price, it’s probably better for everyone, employees included in the long run, to go public? And not via SPAC, but via a real IPO.
Looking back, I think this ZIRP phenomenon of PE and VC was unhealthy (remember crypto??), unrealistic, and ultimately only benefitted a few founders, some employees, and mostly VC firms making paper gains by marking up SoftBank-esque valuations that no one actually believed.
We’re forgetting that all of FAANG IPOd when they too were much less than $20 billion. Maybe it’s time for the next generation of software companies to take control of their own destiny rather than wait for a golden parachute to buy them out.
Very little, but the marketing game is strong. Salesforce started as just sales, does more of a complete solution now, I always thought... wow, what a stupid thing to make so much money, but here it is.
I think Figma is the same, it captures a large part of the market and makes a lot of people reliant and pay for it.
Is it any different than DataDog, Splunk, NewRelic, Gitlab, DigitalOcean, or any of the other publicly traded saas companies?
I mean Figma seems more sticky than something like DataDog. I worked at a company that would hop from DataDog to NewRelic back and forth. It was exhausting but in the end it didn’t take much time TO switch.
According to Harvard Business school (2017): the median market cap of a publicly traded company is $832m. Even at half its valuation, Figma is way, way, way above that.
"Isn't slashing ten billion dollars in market value a good thing for the people we are taking the money away from?"
Be honest, at least. It's terrible for the employees. They went from having a guaranteed payday to gambling primarily so that "the public" can have a share they did nothing to deserve.
An IPO allows every employee and shareholder to be as liquid as they like, and optimize to your individual tax and risk situation.
An exit is a one time thing. At most, you get to elect how much cash and how much converted stock you want. More likely, the company decides what that breakdown is.
The IPO isn't a guaranteed thing, look at WeWork. Further, an IPO isn't immediate.
This nonsense took people from millionaires to "I don't know, let's Let The Market Decide (but not any relevant participants, only speculators)."
An exit is a one-and-done. You can do whatever you want with the money, it's yours.
An IPO means you're locked into a potentially-doomed company for three months after, solely for the good of people who did nothing to deserve anything.
Look at the VA Linux IPO; it took people from on-paper millionaires to completely broke in just the window of not being allowed to part with shares. Six months for Facebook RSUs.
This putting aside the potential privacy risks inherent to the IPO process. Have 5%? Guess what's now public knowledge? Some S-1s even list shareholders with fewer than 5%.
Regardless, given the fact they were close / within the same order of magnitude as Figma, it's interesting that the prospect of them IPOing is apparently considered a nuclear option.
I personally don't believe the valuation is far off or unreachable, but someone giving you a valuation that you have the potential for in the future today with zero risk and low pain is still quite different than having to work your way through justifying it.
In addition, once you announce to employees that the company is getting bought, the culture changes drastically in ways that are not favorable to independent continuation, for better or worse.
That said, the $1B cash infusion must be nice enough to soothe most of the pain. I wish and expect them all the best should they deploy that cash wisely.
If I put myself in the position of an employee, yeah, that the deal didn't went through does sucks, but at the same time, am I supposed to feel sorry for Adobe and their world domination goals being thwarted by regulatory agencies? it seems to me that if big tech had their way, they would follow the old MS path of buy and kill and just be the sole providers of whatever product they are selling.
Monopoly is good for business but it sucks for customers!
I feel bad that the employees didn't get to go from a cool startup to a huge payday, but they still get to work at the cool startup and us customers don't have to deal with Adobe's awful behavior in our UI design program.
The merger with Adobe may be gone, but the rent-seeking is still there. The plans are generous – if you work all by yourself. If you get hooked on it and want to work with one other person, it jumps to $24/mo ($480/yr) for the two of you if you need more than 3 boards.
I don't know of any software that does regional pricing, except Netflix. The reason I've heard is because of fraud, people using VPNs to get it cheaper.
I don't really think that qualifies as rent-seeking... it's just that they have a good product that is expensive. You are free to use a product that is cheaper and worse.
That's the logic behind Adobe Creative Cloud. A lot of people want something they could purchase outright, and I'll just grab the text:
> Can I buy Photoshop outright? No. Photoshop is available only through a Creative Cloud subscription that you pay for either monthly or annually. You can subscribe to Photoshop alone or choose a plan with multiple apps.
This has nothing to do with rent seeking. You just don't like subscription models.
Maybe you think they don't deliver enough new value through the thousands of engineers they employ to justify a subscription model, and that they should cut costs and pull a Musk and lay off 90% of them (and other employees) and simply offer what they offer today for way less money. Or that they should cater to the very small portion of the market that's willing to pay $10k for a standalone version of photoshop. But obviously enough of their customers disagree with you that it doesn't make sense for them to go that route. It's not like they're using regulatory capture to force people to only use Adobe products. There are network effects but compared to social networks they are pretty weak -- if a truly better product came along people would start using that instead (see Figma vs XD). And on top of that the barriers to entry are very low -- you could literally start to copy their products pixel by pixel starting right this instant.
It's a bit of a crazy point we're at that a tool for mocking up digital interfaces would be so valuable. Creating blueprints for buildings is useful because construction is slow and expensive. It embarrassing that we can't make a mockup interface in our GUI editors as fast as we can make them in a separate tool.
This will be great for customers. Figma is going to have to innovate and compete more to justify their valuation in an IPO, like they have been doing with previous work on Figjam (competing with whiteboard tools like Miro, etc.) and dev mode (i.e. a reason to pay for engineering seats). This will probably also push them to work faster on generative AI design tools.
55 comments
[ 5.4 ms ] story [ 409 ms ] threadThis may take the cake as the worst one yet. I suppose they could have gone with Figments.
Our annual sexual harassment train goes like this:
"Hi Grabbers, Please remember not to grab"
I'm a big Grab user as a resident of Thailand so I've always thought about Grab/Line or Gojek but the compensation has never lined up with what I can get elsewhere.
How is working at Grab and are you based in SEA or elsewhere?
Disclaimer: former Uber/Postmates employee
"Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead."
https://news.ycombinator.com/newsguidelines.html
Looking back, I think this ZIRP phenomenon of PE and VC was unhealthy (remember crypto??), unrealistic, and ultimately only benefitted a few founders, some employees, and mostly VC firms making paper gains by marking up SoftBank-esque valuations that no one actually believed.
We’re forgetting that all of FAANG IPOd when they too were much less than $20 billion. Maybe it’s time for the next generation of software companies to take control of their own destiny rather than wait for a golden parachute to buy them out.
I think Figma is the same, it captures a large part of the market and makes a lot of people reliant and pay for it.
Leaning into that with a new feature right now, actually.
I mean Figma seems more sticky than something like DataDog. I worked at a company that would hop from DataDog to NewRelic back and forth. It was exhausting but in the end it didn’t take much time TO switch.
https://corpgov.law.harvard.edu/2017/05/18/looking-behind-th...
Be honest, at least. It's terrible for the employees. They went from having a guaranteed payday to gambling primarily so that "the public" can have a share they did nothing to deserve.
An IPO allows every employee and shareholder to be as liquid as they like, and optimize to your individual tax and risk situation.
An exit is a one time thing. At most, you get to elect how much cash and how much converted stock you want. More likely, the company decides what that breakdown is.
This nonsense took people from millionaires to "I don't know, let's Let The Market Decide (but not any relevant participants, only speculators)."
An exit is a one-and-done. You can do whatever you want with the money, it's yours.
An IPO means you're locked into a potentially-doomed company for three months after, solely for the good of people who did nothing to deserve anything.
Look at the VA Linux IPO; it took people from on-paper millionaires to completely broke in just the window of not being allowed to part with shares. Six months for Facebook RSUs.
This putting aside the potential privacy risks inherent to the IPO process. Have 5%? Guess what's now public knowledge? Some S-1s even list shareholders with fewer than 5%.
We are forgetting that because... well, it ain't true. Facebook was way over $20B at IPO. Google was close but still higher.
Regardless, given the fact they were close / within the same order of magnitude as Figma, it's interesting that the prospect of them IPOing is apparently considered a nuclear option.
In addition, once you announce to employees that the company is getting bought, the culture changes drastically in ways that are not favorable to independent continuation, for better or worse.
That said, the $1B cash infusion must be nice enough to soothe most of the pain. I wish and expect them all the best should they deploy that cash wisely.
Monopoly is good for business but it sucks for customers!
Adobe I’m not sure, but between Portugal and the UK it’s the same price, even though Portugal is at 40% of UK income.
That sucks. Thanks for showing me!
> Can I buy Photoshop outright? No. Photoshop is available only through a Creative Cloud subscription that you pay for either monthly or annually. You can subscribe to Photoshop alone or choose a plan with multiple apps.
https://www.adobe.com/products/photoshop/plans.html (bottom of the page)
Maybe you think they don't deliver enough new value through the thousands of engineers they employ to justify a subscription model, and that they should cut costs and pull a Musk and lay off 90% of them (and other employees) and simply offer what they offer today for way less money. Or that they should cater to the very small portion of the market that's willing to pay $10k for a standalone version of photoshop. But obviously enough of their customers disagree with you that it doesn't make sense for them to go that route. It's not like they're using regulatory capture to force people to only use Adobe products. There are network effects but compared to social networks they are pretty weak -- if a truly better product came along people would start using that instead (see Figma vs XD). And on top of that the barriers to entry are very low -- you could literally start to copy their products pixel by pixel starting right this instant.