Learning from Figma’s success story: Lesson for founders & investors

1. Sensation

A $20 billion Adobe deal to buy San Francisco design software company Figma has rocked the local tech industry. The purchase ranks among the largest-ever acquisitions of a private venture-backed tech company in the U.S. A true Silicon Valley story and the largest in history M&A of a startup.?

A 30-year-old Figma’s founder and CEO, Dylan Field has become the tech world’s newest titan — and is poised to become one of the world’s youngest billionaires.

Everybody in the tech community got so excited by this massive exit.? This is every startup and every investor's dream coming true.

Adobe as we know sells software for creating, publishing, and promoting content, and managing documents.

Online design company Figma aims to help those who design interactive mobile and web applications to collaborate through multi-player workflows, sophisticated design systems, and a rich developer ecosystem.

As Figma’s founder's statement says: With Adobe's amazing innovation and expertise, especially in 3D, video, vector, imaging, and fonts, we can further reimagine end-to-end product design in the browser, while building new tools and spaces to empower customers to design products faster and more easily”.

This partnership will give Figma users access to Adobe's photography, illustration, and video technology, all in one place. And, Figma in return can offer its deep expertise in building in the browse.

As a result of this acquisition, some of the early investors have made more than 1300x Return. This is an unprecedented event for the global startup and investors community.

Figma's total investment raised equals 332,9 M in the course of 6 rounds (Seed - Series E from 2013 to 2021). Among some of the early Figma’s investors Index Ventres, Greylock, Iconiq Capital,? Founders Fund, Kleiner Perkins, Next Play Ventures, Coatue, Sequoia Capital.?

Among the biggest winners are Index Ventures, Greylock Partners and Kleiner Perkins, all of whom have a more than 10% stake in the company (valued at around $2 billion), and some of the individual angel investors, who are now proudly writing their blogs about how they met the greatest founder while he was still an intern.

2. The Story of Figma?

Figma was founded in 2012 and is based in San Francisco, California.?

Figma is a design platform for teams who build products together. Born in the browser, Figma helps the entire product team create, test, and ship better designs, faster. Whether you’re trying to consolidate tools, get more eyes on your work, or collaborate across time zones. Figma boosts creative productivity while keeping everyone on the same page. On a mission to make design accessible to all, Figma is helping companies like Airbnb, Slack, and Microsoft redesign how they design” - says the company’s mission statement.?

In 10 years Figma was able to change the way we all design — and radically. Today design happens more together with others rather than solo. It’s an incredible contribution to the field of software design. Throughout the years Figma’s established culture, community, and platform to build from.

in 10 years of building his startup, Figma's founder? Dylan Field went from being an intern to a billionaire. While Field clearly showed promise early as a teenage founder, even those who had faith in him probably couldn’t have predicted his recent trajectory.

The founder’s journey was a so-called “nonobvious success” and a typical “Silicon Valley style” career path:? before founding Figma, its CEO was a product design intern at Microsoft, Linkedin, and Flipboard, he did not finish his University degree at Brown University (another Ivy League dropout) at the age of 19, was selected to be a Thiel fellow, (a $100,000 grant from PayPal co-founder Peter Thiel). After interning for 3 years at big Silicon Valley tech firms Dylan Field together with his co-founder and CTO Evan Wallace decided to build something revolutionary, to create “the future of product design” as he envisioned it.

I decided to track back the fascinating story of Figma’s success and decompose it into key learning insights that can be useful for other founders and investors.

Learning from Figma’s success story:? Lesson for investors and founders.

Learning from Figma’s success story:? Lesson for investors and founders.

Lesson 1: Be able to spot the trend

Looking back, Investors all agree that Figma spotted the trend: “We believed that the history of desktop software contained clues to which types of software would be converted first: productivity applications (the late 70s/early 80s), then enterprise applications, graphic design & desktop publishing”? Figma’s ability to spot and envision the future trends in design became one of its success factors.?

Lesson 2: Be able to infect investors with your vision and change their opinion on something.?

In the course of a casual walk on the streets of Palo Alto, the inspired teenage founder of Figma (who was 19 at that time)? was able to change his future investor’s opinion on the future of graphic design.? He convinced the investor that graphic design wasn’t just going to move to the web – eventually, it was going to be better, faster, and cheaper online. On top of that, collaboration would be the main feature that the desktop couldn’t match.

The founder was sure that now was the time to move graphic design to the cloud.?

But a skeptical investor was someone who had studied computer graphics and was confident that graphic design was incredibly compute-intensive and this required optimized workstations and data storage to perform well.?

The founder debated that this is exactly why moving to the cloud made sense. In the end investor had to agree: “I had to admit that multiplayer gaming had already solved problems of low latency, collaborative UI and that it might be possible to extend that to the web now.”

The learning experience is to not take No for an answer and always try to change an investor's perspective because, in the long term, it can be you who would be right, and the investor can get it wrong.

Lesson 3. Mind the Timing?

The timing is important. As one of Figma’s investors says:? “The best solution for a problem five years ago may not be the best solution today, and it very likely won’t be the best solution five years from now. As a result, young engineers approaching problems for the first time can sometimes see opportunities that the most experienced can’t.”?

The lesson for investors here is: if something was right a decade ago, that doesn’t mean it will still be valid today. Stay open-minded.

Lesson 4. Have a clear Exit Strategy from the very beginning?

Figma was able to develop a solution that all tech giants would need to use: Microsoft, Apple, and Adobe, it was obvious to them that one of those big tech companies will eventually need to acquire them. Plus a founder must know how to answer investors' favorite question: "Why can't a big tech - like Uber, Meta, Amazon build what you are building"? In Figma’s case, the startup was moving so fast and was far more agile, than the big tech company was easier to buy it than to copy what it is doing.?

Lesson 5. Know Your Customer’s Problems well:?

Before founding a company, Figma’s founder was an intern at big tech firms: Microsoft, Linkedin, and Flipboard - where he was able to learn about the problems big tech companies have with product design when getting multiple teams collaborating on building one product.?

“Training yourself to use Photoshop is a long, arduous process,” - says the founder. “What we’re trying to do is make it so anyone can be creative by making free, simple creative tools in the browser. So, if you’re a designer and I’m an engineer, no longer do we have to exchange files back and forth… We can make edits together. We can riff off each other’s ideas. That collaboration mattered to many of our customers.” - says the founder.

Lesson 6: Be ready to Pivot?

This wasn't Figma's first iteration of the product, the product has changed a lot since Figma’s first pitch.. That is why it is often said, that investors invest not in a product, but in a team, that is able to successfully make a pivot, sometimes multiple times in order to find that optimal product or business model.?

Lesson 7: Personality Matters?

Looking back and answering the question of why they’ve chosen to invest in Figma, one of the investors mentions the founder’s love for design and the design community, “his ambition to change the way that we design things together, and his confidence that he could change the way the world designs”.

“I tend to look for a strong, authentic connection between a founder and the product they are building. For me to invest, I have to believe the founder is not only tackling a problem big enough to generate venture returns, but also is someone who is intelligent, trustworthy, and ambitious” - says Figma’s investor.??

The founder made friends with first Figma’s investors, he was nice enough for them to be willing to casually “hang out with him” and chat about the future of design..?

The learning insight for the founders here is: to build relationships with your future investors - this is how you can build trust, share your vision and make them buy into it and want to support you.?

Lesson 8: Be available

Make yourself available and when the opportunity comes, do not underestimate the potential of “non-obvious” Unicorns

“Never thought he and his cofounder were unbelievably smart and were able to build a tiny, astonishingly talented team working by the train tracks in Palo Alto. It wasn’t obvious they could get anyone to want to design in a web browser or that it was even very possible to get it working“ - says one of Figma’s early investors.?

While some investors are now proudly telling stories about “how they first met the founder while he was still an intern and believed in him” others are shocked by the historic 20 billion acquisition - and 1000x return on investment others have made.?

Success in Silicon Valley is a dizzying combination of skill and luck, execution, and timing. But first and foremost, it is about people.

The learning lesson here is to stay open-minded to "nonobvious" talent and companies - make sure you make yourself available to them while they are still interns, because if you are nice to them when they become billionaires... even if you missed that boat, they still might want to co-invest with you in your next venture.?

Tatiana Indina

(www.tatiana-indina.com / www.indina-consulting.com / www.mission2mars.academy)

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