Craft Ventures
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Craft Ventures

Figma’s Early Days — How Patience & Discipline Fostered a Killer Product

Conversations with Figma’s Early Leaders Begin on November 16th

I joined Figma in 2018 as an early hire on the Finance & Biz Ops team when the company was ~40 employees. Adobe’s acquisition of Figma has me reminiscing on my unique experience and what I learned from the incredible people building the company at that time. As a “jack of all trades,” I saw the magic at work across finance, growth, sales, marketing, and product.

Since joining Craft to try my hand at investing, I find myself coming back to those early learnings and think others might benefit from them as well. Next week, I’ll kick off a casual conversation series with some of Figma’s early leaders — the first one is with Toni Gemayel, the first growth marketer. (Register here)

I’ll talk with guests about what we learned at Figma — things like PLG product strategy, funnel analysis & optimization, building a product-led sales team, and much more. To get us started, I went down memory lane on three things I learned at Figma that I refer to frequently as I evaluate which companies to invest in.

1. Vertically integrated products provide the best user experience, but are very hard to build

As a fledgling designer prior to joining Figma, the product-market fit was immediately obvious to me. It was shocking that product design hadn’t always been done collaboratively, but I quickly learned why: tools like Figma are incredibly hard to build. The best surface to deliver a collaborative design environment is the browser, but the technical capabilities (like WebGL) were in their nascency when Dylan & Evan began developing Figma’s first product in 2012. Dylan details a lot of this in this early Figma investor pitch.

The founding team was met with skepticism from VCs. When passing on the seed round, John Lilly from Greylock told Dylan, “I don’t think you know what you’re building yet.” But they stuck to their intuition to lean into WebGL. This ultimately set the product and business up for success — and John & Greylock ended up leading the Series A.

Figma didn’t just create a better user experience. It became so effective that it replaced entire suites of tools that designers, developers, and others used in their everyday work:

Figma became so effective that it replaced entire suites of tools that designers, developers, and others used in their everyday work.
This visual shows the suite of tools that Figma replaced — it extended well beyond just asset creation

By working within the browser, Figma introduced an astounding level of efficiency into the design process and drove organization-wide adoption, which resulted in large ACV enterprise opportunities. This required a period of complex product development prior to monetization — so being product-obsessed and patient were a big part of the company’s culture and ultimate success. Building a category-transforming product doesn’t happen quickly.

Transformational products are often R&D-intensive platforms that address a variety of users and solve a wide array of problems. For founding teams building these types of products, it’s important to grasp the complexity of the problem you are trying to solve and maintain patience as you build a vertically integrated platform. Investors must also maintain patience and encourage founders to swing for the fences.

2. PLG takes time, but compounds beautifully

Figma’s ARR vs Valuation over time

Much has been said about Figma’s astounding growth from $0 to $400M+ ARR in <5 years. In addition to being tough to build, developing a successful GTM motion took time and patience. Leadership was adamant that the product and pricing tiers be feature-complete before charging the customer. Product obsession and patience were ingrained in the culture from the top down — including investors.

To quickly sketch out the GTM trajectory, Figma launched its closed beta product in 2015. Two years later, monetization began with the “Pro” tier. It was almost two years before the “Org” tier was finally being sold and the sales function was in full swing, and roughly another two years after that when the second product, FigJam, and the third pricing tier, “Figma Enterprise,” launched.

Timeline of Figma’s pricing tier launches & fundraises

An example of Figma’s patient culture was the development of the Org tier and establishment of the Sales team. After gaining substantial usage at big names like Microsoft, Airbnb, Uber, Google, and others, the team fostered relationships with core customers — from CEOs to individual designers — and actually developed the Org tier with these key partners. Yes, this meant giving away the Org tier for free for a while, but the approach was never about capturing every dollar possible from customers. On the contrary, the focus was on building a feature-complete Enterprise tier and driving organization-wide adoption. The dollars came later.

This patience in product development and monetization resulted in the organic creation of Figma’s GTM motion:

Visualization of Figma’s PLG GTM motion

It’s surprising how often young startups push complex pricing tiers from the onset. At Figma, nurturing self-serve to develop the Enterprise tier was the right path. Once that proved itself, we layered on and scaled a sales org.

3. Great PLG businesses are data obsessed

Every functional area of Figma was data obsessed, and data-driven decision making was ingrained into the culture of the company. I quickly learned that to have an impact, I would need to learn SQL: overseeing the self-serve funnel meant I had to have a complete understanding of how users were moving through the funnel.

We cut users in every way you could imagine: role, job title, geo, operating system, source, generation, etc. The Finance team spent countless hours custom building our ARR reporting structure on top of Stripe’s APIs, with the help of engineers. Product & Growth followed a rigorous experimentation framework to introduce new features and improve our funnel. We bent and twisted Salesforce to handle the product data used to educate sales reps. Our Growth Product team spent an entire year examining, re-engineering and implementing our free tier to coincide with the launch of FigJam. Just about every decision was backed up by hours of data analysis. (Huge props to the Data team!)

Simplified visualization of Figma’s data tooling
*note this is dummy data and does not reflect actual Figma usage

We armed the Sales and Marketing teams with a complete picture of every user and organization, enabling best-in-class efficiency and resulting in super strong ARR growth from 2019 onward.

How Figma customers moved from Self-Serve (Pro) into Sales-Assist (Org)
*note this is dummy data and does not reflect actual Figma usage

Having the discipline to understand your customer data and to invest in accurate reporting is what powers the GTM flywheel, drives efficiency in a sales org, and educates product decisions. As an investor examining PLG companies, I look for teams that deeply understand their customers, have highly organized their data, and are set up for success in their GTM motion. These are the critical ingredients that frequently give investors confidence in a founding team.

What worked for Figma isn’t necessarily going to be right for every company. What made Figma special was patience and discipline. I’m proud to have been part of the magical journey at Figma and to have learned from some of the best in the business. I look forward to my conversation series with former Figma colleagues about what they learned. Join us!

Register here to join us on November 16th

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