Figma’s CEO on moving on after failed Adobe merger

Happy Friday. Earlier this week, I spoke with Figma CEO Dylan Field for his first extended interview since regulators forced Adobe to abandon its $20 billion acquisition of his company — a deal that would have been one of the largest ever for a software company.

You can read the Q&A below, plus my notes on the latest AI news, an exec departure at X, and more…

Very few people get to sell their startup for billions of dollars. Even fewer have the opportunity taken away.

With his blockbuster sale to Adobe having been blocked by regulators, Figma CEO Dylan Field finds himself in that unique position. It hasn’t been an easy reset, especially for the early Figma employees who believed they were about to get paid out. He recently offered anyone who wanted to leave Figma severance, which 4 percent of employees took him up on. And he has lowered Figma’s internal valuation to $10 billion, the same number it was in 2021.

At the same time, Figma appears to be in a stronger position than when it first agreed to sell to Adobe in September 2022. The business has been cash-flow positive for a while, I’m told, and it finished 2023 with about $600 million in annual recurring revenue — a roughly 40 percent increase from the year before. Its chief rival, InVision, has decided to shut down. And Figma is now flush with even more cash, thanks to Adobe having to pay it a hefty $1 billion breakup fee.

Field tells me he wants to use that money to be the acquirer this time, and that he’s looking at new areas for Figma to expand into after the recent debut of Dev Mode, the company’s first product specifically for software developers. “Figma was never just meant to be a design tool,” he says. He is also, naturally, a big believer in generative AI and the role it will increasingly play in the design process.

“We were really limited by the technology at the time back in 2012, 2013,” he tells me. “And now those limitations have faded away.”

The following conversation has been edited for length and clarity:

The moment you find out the Adobe deal isn’t going to happen, and you have to communicate this to your employees and the world, what goes through your head? 

I think that the mental context for me is that regulatory processes are stressful. [Laughs] So, when we finally had the clarity coming out of it after 16 months of not having that clarity, not knowing exactly what the future of Figma was going to be, it was a huge relief.

We had, to the degree we legally could, been updating the team throughout the process as well. And so, honestly, the all-hands [after the deal was called off] felt more like Figma than ever. I was asking people to join me on the first day of [companywide PTO] break, but a ton of the company joined us. It felt lighter. It felt really energized. People were cracking jokes in the chat and, just in general, there’s this feeling of optimism about our future as an independent company.

You could have decided to put the business on autopilot during the deal review process, but you didn’t. You hired over 500 people, held a big conference, and shipped a bunch of stuff. 

The New York Times recently had this story where they were saying, after last year’s Config conference, a Figma employee survey “showed a spike in feelings of burnout and of being overwhelmed by deadlines.” I’m wondering where the urgency that the company had during this time came from and how you managed through that? Was there a lot of pressure to essentially prove your worth more because of what was hanging over you?

It’s pretty simple. I just thought through it, and I’m like, “Okay, first of all, you want to maintain the culture we’ve already built,” which is a startup culture, one of urgency, one of running with it and moving quickly and making sure that we get things done. But also, one of the values I mentioned, “run with it,” is this idea of, if you see something that needs to be done and no one’s doing it, pick it up and go.

I think that first of all, maintaining that culture was really important to me. But secondly, whatever happened with the deal, whether we ended up at Adobe or we ended up an independent company, it was super important that we came through this process stronger than ever and were moving quickly and executing and shipping.

The idea behind doing the deal in the first place was this will allow us to accomplish our vision and do things faster than we would otherwise, right? You want to make sure that’s actually true. If you slow down the pace, that wouldn’t be true. And of course, in the case where we’re an independent company, you want to make sure that you do that.

Then, last month, you updated everyone’s comp packages to try to account for the lost value from the deal not happening. You also announced this severance program called Detach for anyone who wanted to leave. What was the goal of doing that? 

I want to make sure that people who are at Figma are committed. You can’t blame people who might be tired after many, many years of working at Figma or joined the company thinking it would be Adobe, but then, actually, it’s a startup. Perhaps they didn’t feel that was the right fit for them. That’s okay.

I made it clear to everyone who was considering that they’re still a friend of Figma. You’re welcome to reapply in six months if you want to. But I wanted to make sure that there was clarity on who was in and also the expectations going forward. We’re a startup, and we’ve got a lot to do, a lot to prove.

How many people took that severance offer? 

It was about 4 percent of our employees. A little over 50 people.

Did that number surprise you? I’m sure you were hoping for fewer.

Yeah. I told the team that if no one takes this, I’ll be thrilled. I didn’t really know what to expect, to be honest with you. I think that at the end of the day, it was positive that people who did detach and decide to leave, they did it in a way that held a really strong relationship with the company. I think it was a positive way to work through that challenge.

For a lot of people, I’ve had a chance to talk with them and at least say hello and thank them for their work at Figma. I feel really good about the way that was left. We just had our all-hands a few minutes ago. There’s so much excitement in the building.

You got that $1 billion breakup fee from Adobe. What are you going to do with that cash? 

Adobe is an amazing company. We were very lucky to get to interact with them through this period. We want to still be an efficient business, so we’re focused on making sure that continues.

I think there is an opportunity now to do more strategic M&A in the future. We’re still thinking through what that could mean. It’s not like we’ve got a solidified point of view on what that means yet. But yeah, it does unlock the opportunity to go make even bigger bets.

As we think about Figma as a company, as a platform, Figma was never just meant to be a design tool. The original founding vision of Figma from the early days was to eliminate the gap between imagination and reality. And at some point, people were like, “Hey, that sounds nice and all, but I don’t really know what that means. Can we make it more clear so we can go hire people? Because we’re telling them this, and their eyes glaze over.” And so we made our North Star to make design accessible to all.

And now we’re in this really interesting moment in time where I feel like those two visions are converging, in particular for the product design process, which is the one that we are most focused on.

There are a lot of opportunities to think about how you cross those abstraction boundaries now in ways that you just couldn’t before without AI. In the early days of Figma, we explored how to make it so that you can manifest those ideas faster. We were really limited by the technology at the time back in 2012, 2013. And now those limitations have faded away.

Do you see Figma moving into more general productivity software? That can be as rudimentary as a notes app, right? What areas are you looking to expand into?

I really think of it as, “Let’s figure out the value chain of what it takes to think about, get buy-in for, design, code, ship, and measure software. How do we complete that value chain?” That could be through partnerships as well. I don’t think that we’re going to go into the note space, for example, just because that’s something that you asked me about. I would love to deepen our partnerships and relationships with companies that are doing that.

Would you partner with Adobe now? What’s your vibe like with the people over there after all of this? 

It’s good. I’m a big fan of the folks there. We spent a lot of time with them. It is weird because there’s so much I wanted to learn from them in terms of the way they run their business and have been able to build products at scale and serve their market. A strange dynamic during the process [was that] because, you know, for various and good reasons, there’s only so much you can share between parties. That was the first conversation that started to take place was, “What can we do to partner together?” No plans yet but very eager to explore further there.

Is the future now that Figma becomes a public company? That seems like the natural evolution of all of this, that you tack on some companies to you now and maybe Figma is public in two to three years. 

I think there’s so much we can build as well. I don’t want to say that strategic M&A is the only way we can grow. We’ve got no shortage of ideas and adjacencies that we can explore.

But yeah, there are two paths that venture-funded startups go down. You either get acquired or you go public. And we explored thoroughly the acquisition route.

When I was with you recently, you showed some of the generative AI stuff in the product. I think AI may replace some kinds of work but maybe not jobs. How does AI over time replace designers, if at all, or at least very big parts of the design process? 

My point of view here is that AI provides an opportunity to lower the floor but raise the ceiling. Make it so that more people can come into the design process. More people can contribute their ideas and transform them into visuals, even if they don’t know all the ins and outs of Figma. We’re very much a company that cares about democratization. So how do you bring more people into that process? There should be ways for AI also to create efficiency so that designers are able to do more with less time. We’re looking into both of those areas right now.

If I was to zoom out even further to knowledge work, we’re very much in a paradigm of AI as a tool and AI helping people get work done, but it’s not necessarily a replacement. I really think that there’s a human in the loop going forward in that AI might be a useful tool, but we all know its limits in terms of hallucinations, in terms of potential inaccuracies. Even if you apply it to rote tasks, it’s important to check the work. And you know better than anyone as a writer that the current models do not match your ability to write, let alone gain context in a conversation to ask the right questions or show the intelligence that you have as a journalist.

If you think about what it takes to create great design, there’s so much in that context window that’s emotional or thinking temporally about a brand experience or a user flow. I just don’t see how, in the near term, AI is able to have that as part of its context, which means that humans are providing that.

Is there a business for you with your user data being valuable for training? I imagine having your own corpus of multimodal data means that you could do something interesting there. 

Designers’ data is certainly interesting. But it’s an area that’s still underexplored for us because, in order to do it at scale, we want to do that in collaboration with our user community and do it in a way that aligns with the values of our user community, too. There’s so much you can do by just relying on things like GPT-4. Right now, we’re still in almost low-hanging fruit territory. Of course, there’s an opportunity to think about data and scaling laws over time. I wouldn’t say it’s where we’re at yet.

One last quick question: as CEO, what’s the biggest lesson you will take from the whole Adobe saga?

Keep your foot on the gas.

My thoughts on what else is happening in tech right now:

– Sam Altman wants trillions: The reporting that Altman wants to raise trillions of dollars to build AI chips raises so many questions. I know he has been talking to big investors in the Middle East about a “Tigris” chip project for a while now. OpenAI is apparently going to be a customer of this new chip entity, which suggests it will be a separate company. Does Altman, who has also quietly owned OpenAI’s venture fund this whole time, run this new Tigris company and own a chunk of it? How does that affect his role at OpenAI? He is set to appear for a fireside chat with Intel CEO Pat Gelsinger next week in San Jose, CA. Perhaps we’ll learn more then.

– Dueling announcements from Google and OpenAI: I’m sure it was a coincidence that OpenAI previewed its Sora text-to-video model on the same day that Google announced Gemini 1.5. Putting the tech itself aside, Google doesn’t actually have a way for non-enterprise customers to play with the latest Gemini model yet, and Sora is not accessible to the general public either. Both of these stories are clearly about optics and recruiting. In that respect, I have to give this round to Altman for taking requests for Sora videos and posting them live on X. OpenAI has an energy and clarity to how it talks about new products that continues to suck up all the oxygen in the industry.

Some interesting career moves I’ve noticed recently:

• Scoop: Tim Perzyk, X’s VP of marketing and analytics — and one of the only senior leaders Elon Musk didn’t flush out when he took over Twitter — is leaving the company.
• Andrej Karpathy has suddenly left OpenAI for reasons he seemingly doesn’t want to explain and also wants to downplay. (Also, where in the world is Ilya Sutskever?)
• Meta added two new board members: Broadcom CEO Hock Tan and John Arnold.
• Nadim Hossain, VP of product for Databricks, is leaving and has posted an interesting thread about what he learned there.
• Bart Andre, Apple’s longest-tenured industrial designer, is retiring after 32 years.

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