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Figma and Adobe abandon proposed merger

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Re: Figma and Adobe abandon proposed merger

#631

Post by hn_throwaway_99 »

endtime wrote: post #578
hn_throwaway_99 wrote: post #497

Earlier quoted context omitted.

I think this is my favorite comment of the year. We've all become so inured to the idea, especially in startup land, that the purpose of building a business is just the exit (and hopefully we can get out soon enough with someone else "holding the bag"). As you point out, if Figma can build a growing, profitable business, there is no reason they can't IPO at some point. But still, this shows how even the purpose of an…

> that the purpose of building a business is just the exit The majority of those affected negatively by this are not the founders, but the employees. Many of them may have turned down FAANG positions that come with predictable liquid RSUs. Some may have kids (in fact, I know someone at Figma who had a kid in the past year). Liquidity's not necessarily about opportunistically passing on risk...sometimes it's just abou…

I don't disagree with what you're saying, at all, but the implication is still basically "And employees want someone else to be a bag holder, too!"

And having been in that position several times, I definitely don't blame them! Employees also have the much tougher constraints that they can't diversify their employment like VCs can diversify their investments.

But still, it's the same dynamic that people want to get rich, and the downstream consequences be damned.

Re: Figma and Adobe abandon proposed merger

#632

Post by [deleted] »

Matticus_Rex wrote: post #579
callalex wrote: post #482

Earlier quoted context omitted.

Keep in mind that you are reading a corporate press release/propaganda piece, not journalism. It is going to be inherently one sided and will not tell the whole truth. Never take these kinds of statements at face value.

No one disputes that regulators basically killed this merger.

[deleted]

Re: Figma and Adobe abandon proposed merger

#633

Post by ska »

RickS wrote: post #622
tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

(ex-Adobe, on a team highly related to an area where Figma out-executed XD, less knowledge about genAI stuff) > Adobe has probably captured back both mental and market share from Figma GenAI/Firefly's success is in a totally different domain to what Figma's doing. Figma's equivalent at Adobe is XD, which has never held a candle to Figma. The existential problem Adobe tried to buy their way out of still exists in the…

Curious: would you say that's reflective of Adobe's dev culture as a whole? I heard some similar comments coming out of a (claimed?) Lightroom developer about the motivations for that project...

Re: Figma and Adobe abandon proposed merger

#634

Post by vmatsiiako »

zamadatix wrote: post #617
tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

> So paying the 1B breakup fee is probably the cheapest and best option for Adobe at this time. Do they still have to pay the fee if the reason was regulatory in nature?

Yes. They do

Re: Figma and Adobe abandon proposed merger

#635

Post by vmatsiiako »

jahewson wrote: post #630
tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

Adobe’s market cap is $272bn. They’re not sweating about $10bn

Almost 5% of market cap is a very significant amount.

Re: Figma and Adobe abandon proposed merger

#636

Post by ska »

tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

> Gen AI and Adobe Firefly are the new rage

Gen AI isn't going to solve a number of the problems a system like Figma are used for today - not in this generation or foreseeable next ones. It may be a shiny new ball to chase but it's not going to make Adobe's problem in the area go away (if they still care).

Re: Figma and Adobe abandon proposed merger

#637

Post by mrandish »

fairity wrote: post #392

> Fifteen months into the regulatory review process, Figma and Adobe no longer see a path toward regulatory approval How in the world did it take fifteen months for regulators to reject this? That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. I don’t have an opinion on whether or not t…

> How in the world did it take fifteen months for regulators to reject this?

I agree with your overall point that the current regulatory process related to anti-trust M&A very much needs to be improved. While the delay may be the proximate cause, focusing on that risks failing to address the fundamental root cause of the problem, which is A) lack of clarity in regulatory policies and the underlying laws authorizing them, and B) their inconsistent application across different industry contexts and between different international jurisdictions.

The lack of clarity can be improved by regulators adopting clearer public guidelines about how they will interpret and apply the rules (and then establish credibility by actually sticking with those guidelines over time). Improving consistency across jurisdictions is more challenging but still possible if regulators in the largest domains (US and EU) collaborate to harmonize their policies (as is done in many other regulatory contexts).

Recently, Lina Khan in the US has made this problem far worse by aggressively pursuing quite extreme interpretations of anti-trust law, and worse, doing so without establishing any corresponding framework or justification. As a result, this bungling has caused her agency to lose several high-profile cases. So far, much of this bungling seems to be "just for show" (ie political posturing) since it's not working.

Unfortunately, it also has the effect of nerfing the market for entrepreneurial exits via acquisition. While it's true that acquisitions large enough to attract anti-trust scrutiny are outliers, much of the money invested in earlier stage startups (which drives most new job creation in the US), is justified by average returns substantially propped up by a few such >100x acquisitions. Half the extreme high-end outliers being lopped off by regulatory uncertainty around large acquisitions is one reason capital for new business creation and growth is getting scarcer and more expensive. The point being, this matters to our industry and jobs.

Re: Figma and Adobe abandon proposed merger

#638

Post by sklargh »

hn_throwaway_99 wrote: post #492
fairity wrote: post #392

> Fifteen months into the regulatory review process, Figma and Adobe no longer see a path toward regulatory approval How in the world did it take fifteen months for regulators to reject this? That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. I don’t have an opinion on whether or not t…

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give…

The regulators moved fast. I had detailed conversations with regulators about this merger weeks after it was filed. They moved extremely quickly to signal that they were going to block it.

Re: Figma and Adobe abandon proposed merger

#639

Post by matthewowen »

jamiek88 wrote: post #625
matthewowen wrote: post #554

Earlier quoted context omitted.

This is just straight up factually incorrect: the DOJ never filed a lawsuit to block this deal.

Have you mentioned at all in this thread where you are vociferously and borderline disingenuously defending your employer that you are in fact a figma employee? Kinda relevant don’t you think?

Speaking for myself and not for Figma and I wouldn’t want to muddy that fact or imply that I have meaningful non-public information. I don’t think anything I’ve said is either vociferous or disingenuous.

I actually haven’t even said whether or not I agree with the decision or whether or not I think the timeline is reasonable (in the sense of whether the benefits and needs of the timeline justify the cost of it), so that doesn’t seem vociferous to me.

If I was being disingenuous I’d post on a throwaway, not an account that you can trivially connect to my identity.

Re: Figma and Adobe abandon proposed merger

#640

Post by chiefalchemist »

ethanbond wrote: post #504
chiefalchemist wrote: post #315

Earlier quoted context omitted.

One very simply question: What defines value better than an exit? Or the offer to exit? (Hint: Nothing.) You might not like the definition, but that doesn't mean it's wrong.

So that value just magically appears at the moment of offer to exit?

Yup. Something is only worth what someone else (i.e., The Market) is willing to pay for it. You can stack up a ton of customers and revenue but if no one else wants it...sorry...no value.

At the extreme, imagine all these social media "creators". In some cases, tons of revenue. But their revenue-producing-hobby is such that no one could take the torch and carry on. If that person is abducted by aliens, the company also disappears. No one else can buy it and carry on. That is, no value created.

I'll keep repeating this:

Revenue !== value

Entrepreneurs create value. Not revenue. Value.

The problem with this thread seems to be that people are confusing revenue with value. If it was about revenue, then the definition would say that. It specifically says value.

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