Designers Rejoice: The $20 Billion Adobe + Figma Acquisition is Dead
Why Everyone Hated the Acquisition in the First Place
In tech, there are really only three outcomes - you close up shop, get bought out, or survive long enough to stop innovating and start buying.
At least, that's always been my first take when massive companies make acquisition plays. My gut tells me this is a controversial take, so before I get too far, I want to point out that larger companies can still innovate. Still, they often find that just buying a competitor or adjacent tool is easier.
Such was the case with the Adobe-Figma acquisition, a deal that, had it gone through, might have been the death knell for Figma's innovation and growth. However, after pressure from regulators in the UK and EU, the deal fell through, and the design community couldn't be happier.
An Odd Couple from the Beginning
Adobe has long reigned as the giant in the creative software space with a powerful legacy going back decades. Figma, on the other hand, is viewed as a beacon of flexible, modern, and collaborative design.
From a business perspective, it's clear why Adobe wanted to bring in a new innovative brand into its product suite. However, to say the least, the design community was not happy. Some even viewed it as a betrayal, a move away from Figma's original vision and commitment to revolutionizing the design world. Even Figma's own CEO had Tweets resurface.
A large part of the concern was that Figma's pace of innovation would be drastically slowed down. With Adobe's corporate structure, it was unclear how Figma's modern startup culture would translate, and designers were concerned that the acquisition would dilute Figma's responsive and user-focused philosophy. **
Not to mention, Adobe's track record with acquisitions like the Macromedia could have gone better. So, there was a pattern of absorbing features and then phasing out the acquired products.
Finally, an acquisition of this size would have increased Adobe's already significant market share, potentially creating a monopoly that could stifle competition and innovation. Concerns like this one from regulators ultimately led to the deal failing.
Through the Lens of Product & Product Marketing
From a PM and PMM perspective, the failed acquisition is a case study in understanding market dynamics and user sentiment. Although that wasn't the core reason this failed, it's worth exploring - what exactly was Adobe's plan to reconcile these conflicting cultures?
Had the acquisition been successful, the product and product marketing teams would have had their hands full trying to find the balance and navigate:
Market Sentiments: The strong reaction from the design community highlighted the importance of respecting Figma's core values. Adobe would have needed to somehow make that translation without completely sacrificing Figma's original ethos.
Strategic Positioning: Repositioning Figma within Adobe's suite would have been challenging, requiring a delicate balance between innovation and integration. Would this have been split up, integrated, or kept as a separate product to target a more modern customer segment?
Product Vision and User Trust: Maintaining Figma's unique innovations while integrating into Adobe's ecosystem potentially risked user trust and loyalty. If Adobe couldn't keep pace with the innovation its user base loved, they might have struggled with retention.
Innovation vs. Integration: Balancing Figma's innovative features with Adobe's existing products would have required careful planning to ensure continued growth and relevance.
This was not just about a business transaction but about two contrasting cultures and philosophies. With its established, comprehensive, and somewhat traditional approach, Adobe contrasted sharply with Figma's agile, user-centric, and innovative nature. The potential merger posed a significant question: How would these two vastly different entities coexist without compromising what made Figma unique and beloved?
Lesson for the Future
With the acquisition now off the table, Figma remains independent, and the design world retains its diversity in tools and approaches. This failed acquisition serves as a reminder that sometimes, the best move for a company – and its passionate user base – is to maintain independence, even in the face of tempting offers.
For other companies watching this unfold, there's a lesson to be learned about the value of understanding your core positioning and building effective customer feedback loops. It's not always about getting bigger. Sometimes, it's about staying true to your core values and continuing to push the boundaries of what your product can do.