If one of Verb’s kids told us investor Peter Thiel offered them $100k to drop out of Brown University, which has a 7.7% acceptance rate and costs $80k a year, we would offer them $200k to make us a company instead and send Thiel a $5 gift card for the tip. But Dylan Field took Thiel’s money and last week sold his company Figma to software stalwart Adobe for $20 billion.
Ten years elapsed between Thiel’s offer and the sale to Adobe. Figma is Field’s second company, and it was valued at $115 million in 2018, so its rise has been even faster than his leaving Brown would imply. It’s booked to make $400 million of revenue per year at 90 percent profit, which can only mean one thing: Figma is a software company, because not even drug deals are that profitable. Second, Figma has a product good enough to sell as it is now without a lot of expensive R&D or marketing on top.
Yet investors divided the $20 billion in Adobe’s offer by the $400 million in Figma annual revenue and thought pricing the startup at 50 times revenue seemed steep. Adobe’s stock went down on the deal news. Adobe executives hurried to remind investors they quadrupled Adobe’s revenues with their move to the cloud, so the market should give them credit.
Field didn’t even bother assuaging investors. “If this deal fell apart tomorrow, I’ll feel just fine,” he told The Wall Street Journal. Which makes sense if you are minting $360 million per year in profits but makes Figma even more intriguing. What is this magic software they sell anyway?
Turns out Figma makes design software. But instead of designing posters or brochures, you use Figma to design mobile apps and other software. Whereas design applications such as market leader Adobe’s lets you put your design down on (virtual) paper, Figma helps software engineers sort out any kind of virtual interaction. Figma has a loyal following. Chances are they used it to design at least some of your favorite new apps and websites, especially the friendlier ones.
A friendly app takes a lot of collaboration across different disciplines which are often at odds. Software engineers would give every app a million options and user interface designers would make beautiful apps with no options. It seems Figma makes it easy for them to collaborate in the creation of a balanced design.
Investors must have heard about Figma’s collaboration features and compared them to a new generation of Adobe’s competitors like Canva, which offer the same kind of online collaboration for desktop publishing. They assumed the Figma purchase is about catching up to competitors of notoriously hard to use Adobe products like Photoshop and Illustrator.
According to Adobe, the Figma deal is not about that, but about reaching a new target segment. It seems they want to turn the page (pun!) on desktop publishing and instead reach a new generation of app publishers. As odd as it sounds to any of us who use the word “photoshopped” to refer to any edited image, planning for a future beyond paper seems like a sensible bet.
You’re learning to code in high school, kiddo
Field started programming computers in his high school’s robotics team, one of the ways in which teachers lure students into science, technology, engineering, and math (STEM) courses. Like Steve Jobs and Bill Gates before him, Field turned his high school hobby into an impressive business. Now all these companies, their competitors and their customers in every industry need millions of students to take an interest in technology too, to help create the products they need to stay ahead.
Educators know there are lots of jobs available for students who can program computers and are trying to help. Last week, they met for the annual computer science education conference (CSEdCon) by Code.org, and Verb sneaked in to hear the news. Twelve U.S. state education chiefs were present to discuss the next stage in computer science education: making coding a high-school graduation requirement together with math and English. States where they have already taken that step, like South Carolina, shared that women and students of color are now better represented in coding class, giving them a shot at lucrative tech jobs.
Latin America also needs coders
CSEdCon is a global conference with representatives for over thirty countries beyond the US, in all of which there is a need for more computer science students. On Tuesday in Sao Paulo, Julio Vasconcellos of Atlantico VC presented the third edition of their regional digital transformation report, which shows the trillion-dollar opportunity waiting for coding students in Latin America. Today technology companies represent 1.5 percent of the region’s economy, growing fast, compared to 52 percent in the U.S. When they catch up to China, where technology represents 20 percent of the economy, that would mean they created $974 billion. Vasconcellos think that could happen over the next seven years. Meantime, he said startups in the region need to practice a “cautious optimism.” This year’s report is again excellent, download it for more insights and analysis.