The Six Five team discusses Adobe Pulls Figma Plug.
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Transcript:
Daniel Newman: I pretty much gave my entire dissertation on this in the beginning of the show. I’m pretty sure the CMA and the EU Competition Committee only exists for one purpose. And that’s, well two, tax and kill innovation. As I’ve always said, if you want to, the fastest way to kill any deal is get a lawyer involved. Well, the fastest way to slow down innovation, especially US innovation, is to ask the EU or the CMA for their approval of a deal. Why am I being so sardonic about this?
Well, the truth is, what we’re getting right now from Europe is the AI Act. We’re getting continued privacy. We’re seeing endless fines, fees, taxes, and levies against technology companies. Let me be clear, I’m not saying the tech companies don’t do anything wrong, I think they definitely will push the limits of how they can use data. I just am suspect of how much the European Commission and the CMA are doing to enable their own tech companies to be innovators. And if they’re only taxing our companies, the US-based companies and other companies, they’re going to make it very hard for companies on their own soil to be competitive. I mean, let’s look across the space of social media. Let’s look across the space of silicon. Let’s look across the space of ISVs, there’s a very small number of leading innovators coming out of Europe right now. And so this is why I always get a little bit feisty when it comes to this topic, Pat.
The Figma acquisition itself, there was no reason that I think it really needed to be killed. Of all the deals out there, of all the competition and antitrust issues, I just don’t think this was the biggest one. You’re talking about a collaborative work environment. There are many of these, they have a lot that overlap in some ways. There are some that are more direct competition, some that are pseudo competition. Adobe had its own product that it was willing to basically eliminate. It might take all that ends up happening here is a company like Adobe just builds their own now, or they’re going to go their own route, they’ll build their own and they’ll take the market the way they see fit. That’s what a company like Adobe can do.
And the one other thing that I see, feel very strongly about here, Pat, is that we want a strong VC environment. And when a good deal like this, that shows lots and lots of value to the market, that a company can build something with a big recurring revenue and get a huge exit, this entices investments, this entices public markets, private markets, and it makes founders more likely to want to continue to build things. When founders feel like they can’t build and succeed and exit at great premiums, you discourage them from wanting to play the game. Now, does this one deal change that trajectory forever? I would say probably not. But Figma built a very impressive product, sold it to a very impressive company for a very impressive price, and for no real reason that I could see fit after 18 months, the CMA just came in almost like, “Hey, we just want everyone to know we’re still here. We’re going to kill this deal.” I don’t know, it seems like we’re going backwards.
Patrick Moorhead: I mean, the worst part about the CMA thing is that they didn’t show up for 18 months, and that is just unfair against commerce, against innovation that it takes you 18 months to show up and do something. And I do think it could be a little bit of the EC versus the CMA, which is CMA wants to flex and show the entire world. Adobe and Figma weren’t even in the same business. Yeah, I can do wireframes with PowerPoint, and I can edit photographs and videos with what’s already free inside of Microsoft Windows, but there’s nobody using Figma to edit photos, add creativity or make videos look amazing. I know Adobe does a lot more than that, okay. But that’s just complete crazy. And I’ve heard some people say, “Hey, I saw a developer once use Figma to do,” this, that and the other. And it’s like, that’s just as nonsensical. I can get Word to do anything that I want. Is it smart? Probably not.
And then there’s nobody using, or very few people using Adobe to do anything real time and with others because they shut that service down. It was called XD, they tried. So this was all about the theoretical what if, that we saw this with the Qualcomm suit. We’re starting to see it now. And it’s levied down by people who last time I checked, hadn’t actually been in the business. Hadn’t been a product manager, hadn’t been in technology, but they have big, big university degrees and they study a lot and they read about it a lot and that’s an issue.
I’ll admit I didn’t steal this from the All-In pod, but it did get you wondering, do you even set up in the EU or do you set up in the UK anything? If you’re a startup, do you need that if you know you’re going to get stopped from selling your hard work and investments. And then you had mentioned this already, I’ll just say it in Pat words, which is what’s your cost of capital look like and what’s your valuations look like if you’re a startup? Is your only option to hammer it out for 10 years and hope to be a big company someday and no longer can you be acquired by a larger company? Kind of makes you think.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
