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.
A lot of designers are already abandoning Adobe because they are tired of their garbage. Many of my peers have turned to Serif Affinity apps as Photoshop/Illustrator/InDesign replacements and they do an incredible job. Nobody cares about Adobe on iPads, most artists are reaching for Procreate. Most of the issues involve sharing of files since Adobe has such a large share and their file types are proprietary.
There are alternatives out there and Figma has a huge grip on web design among other things. Adobe has nothing good for web design. Nobody wants to use XD.
So you can see that there is already strong push away from Adobe. I don't know if Figma is going to eat Adobe's lunch in the next couple years, but they will be poised to be competitive.
I tried using the Adobe iPad apps, they are so far behind the desktop versions its unreal. I got so frustrated with Illustrator i stopped using it and have been trying Inkscape on my desktop instead. I don't want monthly fees for design software. Procreate is amazing but lacks the vector needs I have. I've given up using my iPad Pro as anything more than a sketchpad at this point, not the Macbook replacement i wanted it to be with the lack of control over the OS and being stuck in the App Store eco system.
Affinity is looking pretty attractive now too after hearing about it today.
I cut my teeth on Macromedia Fireworks and Dreamweaver but all Adobe did was run them into the ground.
Agreed. I'm not a professional, but I'm willing to spend money like a pro and I have gone out of my way to avoid Adobe products due to their business practices. So far the main place that is hurting me is Lightroom. None of the equivalents I've tried are as good (still need to try Capture One one of these days, except they are also starting to be...not great with their business).
Affinity Photo is a pretty good Photoshop replacement, but I'm still waiting for them to release a Lightroom replacement.
Lord knows someone needs to start eating Adobe's lunch. They've had a stranglehold for too long.
Capture One Pro is AMAZING for photography and managing large catalogs of RAW images. It's great for nondestructive editing and is a killer combo with Luminar/Luminar Neo. Also, I'm not sure why, but stock (no 3rd party plug-ins) Capture One Pro seems to somehow make colors pop a bit more than stock Lightroom
It's funny you say that, because if you look at Adobe's financials, you'll find that yoy revenue has continued to only increase and is continually hitting new records.
That's because they switched to a subscription model and are practically forcing companies to switch from their legacy perpetual licensing model. I can assure you that it's pissing a lot of people off and a lot of people are trying to find alternatives.
Where I work we dropped Adobe Pro because of the subscription model and switched over to FoxIT
Not only do they have a subscription model, but if you get their biggest single user package, which is ~$54/mo, they charge you ~$300 early cancellation fee. This is insane to me and is the main reason why I personally dumped them for my professional use.
Agree. Installing one adobe app requires the installation of their app manager which sits in the background. Also the one app installed, installs and creates about 10 different directories, excess junk, pretty much what adobe has become. Now they try to buy out brilliant apps like figma which will only kill the life of it IMO.
I remember when Dreamweaver was Allaire Homesite, and was then purchased by Macromedia for their suite. Macromedia didn't do such a great job with it either in my opinion.
Yeah, I do some design work for our organization and my time is more valuable than the tool. Figma makes creating a feedback loop easier with a group so it’s worth learning but most of the time adobe products still reign supreme.
Adobe Suite is always going to be around, no doubt, but you also have viable alternatives for the day to day work, and then you use Adobe stuff when you have to, for a client that requires it for instance.
Prior to moving to Figma 100% of the time, my current agency, and prior agency, were using Sketch. Adobe products were secondary. Others in my field have reported largely the same. Most of the time people simply don't want to change what's familiar and works, regardless of how much they are paying or who they are paying.
Disagree. Figma should be competing with Adobe on the open market and winning. Seeing them displace CC in the enterprise in ways Sketch never did. $2-3B would be an insane propellent to them. This deal is great for Adobe, Figma, Greylock, and others, but not consumers or the majority of Figma users in my opinion. Glad to see the antitrust resurgence in this country. The rollup play is going away. Adobe's leaders are going to have to get more creative to compete :)
and substance suite. I think people on hacker news mostly interact with adobe via photoshop and illustrator and don't realize how many hooks they have under their belt.
Yes, if we didn't have software patents. All of these products can be replaced by a team in a year or less. Overwhelmingly the features are basic image manipulation. One guy made photopea, an effective Photoshop replacement in javascript.
Post-merger/acquisition of Sprint, yes (initiated in 2018 and finally allowed by regulators in 2020).
Interesting detail about the prior 2014 Softbank/Sprint bid to acquire T-Mobile:
> "It was reported that... Sprint had insisted on a low termination fee to prevent regulators from being given an incentive to block the deal, as had occurred with AT&T's failed attempt to purchase T-Mobile."
Total guess on my part but the smaller party is “made whole” which is less politically problematic than if a large company put in a bid, regulators block it, and the insufficient fee harming the company is blamed on the regulatory activity instead of the insufficiency of the fee.
Unless you’re asking why a small fee would hurt a small company. In that case my understanding is that acquisition talks really stall the business and defocus the company for a non trivial amount of time, not to mention that you’ve given a rival deep insights into your business that they can then use to go after you.
It gives the regulators more leverage to demand concessions. Then the regulator ends up playing brinkmanship with the acquiring company.
The US now only has three nationwide cellphone networks so there are lots of concessions that can reasonably be demanded. (They should have never allowed the number of carriers to be consolidated down to three, but that's another story).
Because it causes a large amount of money to go to underdog with basically no strings attached. It’s essentially free money to the smaller party which they could use to increase competition.
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.
Well, I guess it depends on your goals as Figma employee. So yes, but probably a net negative but the situation for the Figman employees and company is muddier than it is for the VCs.
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.
They need subscriptions to make money, and paywalling shared asset libraries is how they make sure that you can effectively have a full feature free trial permanently. I really don’t see the problem here. A subscription is what, $12? You need to pay for an adobe CC license to have XD.
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?
In my case at least it is just pure spite against blizzard
Just today they announced that they won't be funding SC2 esports anymore, and it is just yet another chip on their long defaced corporate image from my side of view
Not to mention Nintendo and Valve/Steam in the mix. Of all the issues that the video game industry has at the moment, a lack of platform competition isn't the issue.
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.
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.