This is M&A 101 and the innovator's dilemma 101.

Adode is a great company because they generate 15B+ in revenue per year, not because it has unicorn developers. Large organizations are notorious for how slow they move.

> Heck, with about a million and a talented team you could build a pretty decent Figma alternative, so why did Adobe pay an extra 19,999(!) million?

I always love these comments on HN. If it's really "that easy!" then I will happily give you a million to do so. The returns are clearly quite juicy.

facts ^

It’s nuts to think Adobe could clone Figma for $1M. That’s a headcount of 2-4, working on it for a single year. That’s off by several orders of magnitude.

I agree, but even if it cost Adobe $1B to build something like Figma, why spend the extra $19B?

Because what if it wasn’t as good, and nobody bought it? Then they are where they are today minus 1B spent. This seems to be what happened with their XD product.

We're actually watching this in real time at Facebook. They're doing exactly as the grandparent comment suggests:

https://www.pcgamer.com/mark-zuckerberg-spent-dollar10b-on-t...

> This seems to be what happened with their XD product

Hmm I don't know.

I mean, yeah XD absolutely failed, but when Adobe released it in 2016 Figma wasn't nearly as popular as it is today.

My guess is when Adobe decided to build XD (a couple of years before 2016) they were trying to compete with Sketch. So they probably missed the collaborative web-based aspect that made Figma popular.

And maybe XD was just an underbudgeted experiment to test the waters, not a serious product like Photoshop.

Edit:

I just realized Figma was released in 2016. I was probably thinking of InVision.

because they literally can't. ignoring the $1B budgeted cost, they are also facing massive execution risk. adobe is signaling their confidence in their ability to innovate/execute with the acquisition price - zero confidence.

even in the very unlikely event they were able to build a product with feature parity, with little operational blunder, on budget/on time, they still need to market it and get enough paying users to match the $400 million in revenue per year which Figma currently makes.

they're paying for customers, not just a product.

While I agree with the headcount and budget, I do think a behemoth company like Adobe would be well-positioned to take on such a task, simply because they already have things like:

- infrastructure

- talent

- tech

- capital

at hand, compared to a startup.

I haven't used Figma, but I'd be amazed if Adobe doesn't already have a ton of the same features and tools somewhere in the codebase. They're not exactly starting from scratch.

You would be surprised, honestly. A small dev studio from Eastern Europe would do miracles with that 1M. It wouldn't be a full-featured Figma, and of course there's quality issues and blah blah blah but ...

The point I wanted to convey is that Adobe could've developed that for way less money. So what else is there in the 20B?

>It would cost them much less than 20B to develop a Figma clone and just offer it as part of their suite, they wouldn't have an issue positioning it in the market.

But they are buying existing market share, existing tech and existing talent. It makes sense on multiple levels. It's always easier to buy something than to build it yourself from the ground up.

For example Zuck could've built Facebook's standalone mobile photo sharing app but Instagram was already much ahead with technology, market share(userbase) and mobile photo sharing brand.

Adobe actually beat Figma out of the gate. XD was introduced prior to Figma even existing. XD was a response to Sketch who at the time was eating their UX market share.

XD actually had some pretty great ideas, even though it was very limited at first. Unfortunately, new features in XD kept being less and less over time. It felt like after the first year, Adobe just didn't really care much about XD any more. That allowed Sketch to continue to be a threat and Figma to eventually take off.

So it's not like Adobe didn't try to enter this space. They did so and they did it prior to Figma. They just never really seemed to take it seriously for whatever reason and we are where we are now.

Yes. Having worked with designers many who use Adobe suite for everything aren't even aware that XD exists.

XD makes sense compared to Sketch -- build something in Illustrator and make it accessible to others -- and lacking compared to Figma -- Illustrator already in the cloud with multiplayer mode.

> with about a million and a talented team you could build a pretty decent Figma alternative

This seems like a scaled-up version of "I could build a working clone of X in a weekend". It's possible Adobe overpaid, but most likely not by 19.999 million dollars.

Adobe already had xD - a direct competitor to Figma. Adobe purchased Figma for many reasons; if you want a single reason why Adobe purchased Figma it's because Figma was successful: all the things that go into executing a vision at scale.

I think you underestimate the complexity of figma, greatly. Just one small example is their browser based plugin environment: https://www.figma.com/blog/how-we-built-the-figma-plugin-sys...

Multiply that innovation by a factor of 19,999 and you can see that it’d be hard to clone figma in a way that would pull users from figma to their own product. And while Adobe was copying, Figma would still be innovating.

Isn't this what Microsoft did with Teams? Copy Discord and compete. How worse off would we be if Microsoft had just bought Discord?

Not really, Microsoft wanted to buy Slack but the deal was nixed by the board in favor of improving Skype for business (previously called Lync) which already had a large user base. Later teams was rolled out as the replacement for S4B. Slack was of course ultimately sold to Salesforce.

Discord focuses on a totally different market vertical than Slack and Teams.

Adobe had a computing product.. Adobe xd, but it's dead i think.