Weekly Recap: Figma’s IPO, Ramp Reaches $22.5B, Gwyneth Paltrow Saves Astronomer, Top AI Researchers Ranked

28:38Talk to somebody who did a$55 million seed round. Yeah. And then you'll talk to somebody. And we pressed them. We were like, is this for marketing? like, you know, you're still going to get the expectation, like the expectation will be that you perform at the Series B level based on this. If I walk around that company, it's going to feel like a Series B company. Like, I almost think like calling things by letters is totally silly. All it actually meant was we had a set of documents that we use whenever financing happens. There's hundreds of pages of documents that go back and forth between company and investor.

29:05Calling it an E2 just meant that we use the exact same documents. Save time and money. Save money on loan. No, it was really just that. And so so look, it it was very efficient to get the financing done. And I also believe a lot in this concept of marking to market. Yeah, totally. Of in real time, what are companies ultimately worth? And, you know, when you look at the fund raise from about a month, a month and a half ago, I think is when it was announced done earlier. You know, we raised, I think in exchange for about 200 million dollars, approximately one percent more shares came onto the cap table.

29:43So it was a very small amount of dilution. With this raise of$500 million at 22.5, it's like 2-ish percent. See, these are not that diluted. Yeah, it's not completely restructuring the company, but it's giving you a more modern mark. Adding to the war chest. Adding to the war chest. And I think it's a good thing because one, you know, allows people to invest at the right point in time. But two, because you're not raising far ahead of where metrics are, it means that the company is not that distracted. You know, for the actual organization, like we've just been obsessed with going. And you're not in a position where everyone's like, oh, like at this valuation, like ramp doesn't just need an act two, but they need an act three, four, and five.

30:25Like they got to, you know, create super intelligence and all this crazy stuff because like, like it's like based on the actual progress of the company. 100 % right. Makes sense. I want to talk about the product. I want to talk about the AI agent thing. The interesting, my experience with Ramp was that it was in many ways an AI agent before AI agents was a buzzword. And I know that obviously when you scan a receipt, it goes through an OCR process and the data, the text is extracted from the image. And then I would assume that you were an early adopter of LLMs to help clean that up. And that was, in many ways, a more like a super magical AI agent experience.

31:09But I'm not prompting it. It's just something that's happening in the background. It's invisible. It's invisible. And you're using some deterministic code, some probabilistic code, some older machine learning algorithms for OCR, some newer LLMs to clean up the data and tag things and say, this is a restaurant. That's a flight. and do all the magic that helps categorize expenses. The question is, it feels like a big shift to put the agent in the hands of the user. And so you said that you're seeing incredible adoption. What are people actually using for? What's the feedback? And I mean, what else are the learnings of where that goes?

31:50Do people want that? Or do people ultimately want to be able to prompt a few times and then have things baked into the core behind the scenes workflows. Yeah. So I feel like so let's talk a little bit like what are like AI assistants? What are AI agents? What's the distinction? Because I actually think people are like pretty, pretty sloppy with the two. And so I feel well, to be clear, if you want to raise money right now, you just build SAS and call it an agent. Boom. But let's talk a lot of people who are building, who are listening to this podcast. So I think first for, you know, assistants or co pilots, the idea is a person prompts the co-pilot will review it will make a recommendation but then ultimately it's on the human to go do the work i get a recommendation i input it's back and forth this is maybe similar to experience that you might have on a chat gpt or that kind of a thing an agent is a bit different what you do is you give it instructions and access to tools and you say under certain conditions if you see an outcome that i've instructed you to drive just go do it Forever, essentially.

32:52Forever. I'm going to modify things from time to time. But it's a little bit more similar to, let's say you hire an intern or a new hire, you teach them how to do the job, you watch a bunch of times. They do that on an ongoing basis. Then they go on and you periodically check the work. That's a bit of the distinction. If you think about what we're actually optimizing for, one of the core metrics is we look at what was the amount of work that a ramp customer was able to do in a single, let's say in an hour or a minute. Right. And so as we look over over the years, that's gone up a lot. And if if you joined in 2023, you know, mathematically, we can show that you are categorizing three times more transactions, pulling in three times as many receipts, whatever the metric is, as you did just two years ago for every minute you're spending on the site.

33:40So it's all to say like every minute is counting for three times more. I think that ratio should be 30 times more. And if you look at what happened, so we launched, we made this announcement about three, four weeks ago for this first AI agent. And we had early adopters, Notion, Webflow, Quora. The stats just absolutely shocked us when we looked at this. Functionally, these companies were able to get 15 times more work done, transactions categorized. But the more interesting part is these agents were way more accurate. These agents all day, like they know the expense policy better than any manager at the company.

34:18And so it was 99 percent accurate. It got a lot more tasks done. And suddenly, like for many people who've worked at large companies, you spend like an hour just reviewing expenses. And you're like, well, I'm spending an hour reviewing like someone's Uber or their purchase. And that's just gone. And you're focusing on actually interesting exceptions. And so where I think this kind of adds up to is for a lot of years, people had to be forced to like learn how does software work and how do I think like software? How do I learn to use Salesforce? How do I learn to use Google? How do I learn to use Excel?

34:50Now we're teaching these software programs to think like people. And that means you can teach software functionally the same way you would an intern to go and figure out what expenses are in and out of policy. and that very avid software that doesn't take breaks, doesn't take holidays, that is obsessed over every deal of your expense policy, can catch when your policy is incomplete. It's online if you need to talk to it at a, you're on a work trip and you need to, yeah, or yeah, therapy. But I was going to say like, you don't, if you can avoid messaging somebody on the weekend to ask if something's in or out of policy, it's like, it benefits everybody.

35:25Yeah, yeah. That's exactly right. No, and I think you're bringing up like another point of like a lot of work is sort of if this and that like if you get a if you get a you want to buy a new piece of software and that vendor sends you like a quote then procurement negotiates it once per procurements negotiate it then legal takes a look at it once legal says it's fine then you know finances is there an invoice and we go and pay it out and then it goes into accounting but if you have lots of digital agents functionally all the time online and responsive these things can occur simultaneously and so it means actually instead of waiting days to go and onboard a new vendor, it can be done in minutes.

36:05And so it just means it's much easier to do work. And I think the big picture of like, why are we here at all? It's actually just to save time and money to make it easier for more companies to operate. And that's what this stuff adds up to. It's really nice when you don't have to update your mission. I know, as new technology, I mean, this is we've talked about, you know, Google's original mission statement which is loosely like you know organize and and make the world's information like valuable right and it's like okay well generative ai like does that very efficiently uh agentic workflows applied to finance saves people time and money it's the same same mission uh i want to take a post about a post from keith roboi he said five out of six board meetings he had in the last couple months were about how to design a company's organization for AI.

36:57I'm interested in, and we've been debating this in the context of meta super intelligence, is artificial intelligence an app like Facebook, Instagram, WhatsApp, or is it like their finance team, like their infrastructure team, like their database team that sits across all of the apps as like a service layer? And I'm interested to know um like you have a product now and i imagine that there is a team that is working on building that product and that product has ai in the name um but then i imagine that every single person from designers to engineers to you know the the ops people are using artificial intelligence in their day-to-day and i'm wondering if you're seeing a new like cross-functional team develop or how you're thinking through that trade-off of like horizontal versus vertical, maybe both teams in just terms of running a high-performance organization.

37:51I love his post. And I think it's actually like, I'll put it this way. I don't think most people have really come to terms with the reality that computers can see and hear and think now. Yeah, it's crazy. It's so different. And like if you're like just going and repeating the same organizational structure that like was in place when anything were possible, like it's a little bit of like, are you are you awake? Like this actually is the right question. And one, I think people should be spending a lot more time in earnest. We need more business. We need some new business management textbooks. It's true.

38:30For sure. It's a joke, but there's no like enduring. And so if you have a whole piece of your org chart that doesn't have any AI on it, you're going to ship that in the product. And then people are going to be like, wait, this piece of the product feels very manual and web 1.0 almost. Yeah. I mean, one thing that happened yesterday was Zuck basically saying you can now use AI in your coding interviews, which sounds insane. Wouldn't you want to still hire for people that might just naturally be good at engineering and then get better? but he's basically making the statement of, no, we're so committed to this new paradigm that, yeah, you should use every tool you have available to do the best possible work.

39:11And I think it's totally right. And I'll admit something, even for people who are interviewing soon, there are some job functions at RAMP where it is actually not possible to pass an interview or a coding interview without using an LLM. Wow. And that's intentional. It's actually intentional to figure out, like, are you curious about that? Are you using these tools or not? It's not a question of IQ. I think there's brilliant people who, you know, don't need an LLM to think. But I think that the capabilities of being able to access an extraordinary amount of compute as well as specialized, you know, knowledge.

39:47Why wouldn't you? Yeah, it's like just because Scott Wu could do a problem in his head doesn't mean he shouldn't use a calculator. Yeah, yeah. Yeah, yeah. It's really putting it. One of the old, like, coding challenges was this thing called FizzBuzz where you try and write out numbers from zero to one. and if it's odd or if it's divisible by three, you write fizz. And if it's divisible by seven, you write buzz. And then if it's divisible by both, you write fizzbuzz. And it's like a very basic coding challenge, but it always assumes that you have access to Python. And it's not saying, okay, you have to go and fab your own semiconductor to do it.

40:15And so it makes sense that we are in the age of LLMs. That's going to be a tool that we expect you to pull off the shelf. Don't give Eric ideas. Kareem might start requiring the engineering team. You're going to have to be able to set up your own semi-fab in order to... Write it out in binary with a pen and paper. You should be engineering with your own silicon. Yeah. One interesting thing, we've talked a lot about this, like, Move 37 concept. Lisa Dahl, the Google DeepMind challenge. They beat Lisa Dahl. And in Move 37, it was like this moment of, like, true inspiration where AlphaGo put a piece on the board that was so unexpected.

40:50Lisa Dahl stood up, went outside, smoked a cigarette, and was like, had his mind blown, right? And we've had moments like that. Maybe the Studio Ghibli moment is this, like, we've had passing the touring test. But there's also been plenty of areas that feel more intractable in terms of artificial intelligence. And it feels like if you are like with the latest IMO, problem six was this combinatorics problem that I don't understand. But neither does OpenAI or Google, apparently. So, you know, we're basically the same. But my question is like, with the AI agent product, are there things that you see CFOs, modern CFOs do?

41:26like what is the the humanities last exam the intractable problem the most elegant beautiful thing that a cfo can do that feels like oh this is going to be something that's happening and requires like the human touch for a very very long time i think i think my my immediate thought it's give you give you some time to think uh is it feels like ai today is really good at doing the work that like a management consultant could do so you can like tell them like i run this type of business, like make me a marketing plan or come up with five ideas for marketing strategies and Q4. And it will create like a great report.

42:03It'll look great. It'll have some maybe some decent ideas. And yet it still feels like to do truly exceptional work. Like we like Monday, like the three of us spent like a couple hours talking about some some campaign and like debating it and all these different points. And it's like we could have had AI in the mix there. But you could imagine to be tossing in ideas that uh that were kind of maybe random and and maybe something helpful but it was still like you just like people needed to just like sit there and just like hash it out and it feels like that's that's like you know do the work to like do analysis create reports you know when it comes to like actual knowledge work yeah but anyways i don't know what your thought is i i love this line of questioning and i think it's going to get super interesting especially as um And AI is going from a primarily academic tool.

42:51And also in some ways, I feel like it's jumped into software engineering in part because, you know, software engineers know what it is to code. And, you know, they're working with AI. And so they have good taste. And there's these great feedback loops. And so it's happening there sooner, but it's starting to make it into general business logic, finance, everything. I think a good place to start if you just want to decompose the problem is like, what is the job of finance actually? What is it? And I think if you were to just really simplifying it down, it's, in my view, some subset of you're going to define a set of rules that govern who is able to spend what, under what circumstances, what are the controls you have in place.

43:35Once activity has occurred, you've spent money, things are coming in. How do you record that activity accurately? Yeah. Close your books. And then based on what occurred, how do you goal seek to more profitability, more growth, more cash flow, whatever thing you're going to go try to go do? That's about it. And if you really kind of simplify it, it's just a set of rules and algorithms. These systems, one, they're incredibly complicated to do each of those things. And so I actually think like brilliant people have over the last 50, 100 years been reduced to like, I don't know, in some cases, like tabulators just calculating things or like downloading the same spreadsheet over and over or matching the receipts and doing like very low level tasks and only doing a little bit, you know, after you finally look.

44:24A great example is like when any, any like, uh, like TV show about business. Yeah. It's like, like, uh, you look at like the office, all of this was any real work done. Like you didn't, you don't, you don't really, do you remember a time when they were maybe once or twice, they called the customer or they did a customer meeting, but outside of that, it's like thousands of hours of just like doing, they they're doing business, but they're not like, are they really getting anything done? And so I think, I think the point you're making is like how much of the work that we do is should be the work that we're doing.

44:56I think that's, you nailed it. Like, I think so much of work is very mechanical and it's, you know, we want finance to be forward thinking and strategic, but the reality of a lot of finance is looking backward. I think that's, yeah, I think that the strategic thing is really key. Like, Tyler Cowen would say that like relationships are very Lindy and going to stick around for a long time. Trust building, that type of stuff. But Ben Thompson dumped some sort of, you know, 10Q into ChatGPT and said, like, make me a Ben Thompson style article. And it did some of it, but it didn't have the actual strategic insights in the storytelling that can actually marshal the proper resources.

45:38And I feel like that's, in many ways, the job of CFO. It's risk-taking. It's deciding the right strategy for the situation. And it seems like the frontier models are not quite there yet. You nailed it. And I think that when I think about the next set of years, with the fundraisers, we tried to lay out of like, we're seeing glimmers of like this whole industry is going to get rewritten. What do we think the industry looks like over the next three to five years? What does the org like look like? And we laid that out in the post. But I think the biggest transformation is like really, really, I think most of the finance function today, unfortunately, is very backward looking.

46:16But I think as automation, agentic workflows are coming to the forefront in platforms like Ramp, actually more people can be looking forward, can be spending time, you know, on like for Ben Thompson, like what are the really interesting breakthrough theories and how do you go and make things better? And when I think of like what is that last exam ultimately for a finance organization is, you know, I think there are companies that have taken these tests. So I think one of the interesting studies I think about is Amazon in its early days there. So they were very early and they would send email follow ups to customers.

46:53You just bought this in the old way of doing email marketing to customers was someone would write like if you've seen like the Trader Joe's newsletter where someone writes like these poetic things about the new ingredients. and cool stuff. Come try this and whatever. Amazon did that in the 90s. There was an editorial team talking about the great new products that were coming online on amazon.com. And then there was this personalization team. It's like, I don't know, P12N or whatever it is. And they said, we're going to A-B test it. This personalization team, you're going to get 10 % of the send volume.

47:24And your job is to just go and try to find these weird connections, these move 37s of like, you just bought this, you may be interested in this product. And for a long time, humans crushed the personalization team. There was something kind of in the example of how these marketers thought that was better. And get better and better and better till one day the personalization team, the volume started winning. And it kept winning. And there is no team that is sending like newsletters around. And so, you know, it turns out algorithmically on single products, you might be able to go and have a better algorithmic recommendations, I still think for quite a while, there was a role for creative CFOs and thinking about these unexpected strategies.

48:05It's sort of in some ways, like, I don't know, make it about you guys for a second. The media industry has been at it for a long time. You know, there's live streaming, you know, TV has been around for a while. No one saw this. And suddenly, like, this is one of the most, I think, important things happening, you know, in broadcasting, it's your show. Thank you. You guys saw it. Yeah. And I think there's room for people of great taste who are great marketers, who are great leaders, CFOs. And so, no, I'm bullish, actually, when you have time to think about the interesting work. A hundred percent.

48:37Yeah. Like, there's one world where you see the expense policy as like a set of if statements, and there's a different world where you start thinking about expenses as like bets and risk taking and actual like, what is the net present value of buying that particular thing? will this pay off for the business? Does this actually increase shareholder value when you buy even just those pencils versus those pens? Like that's really also, I mean, I mean, yeah, there's so much, uh, you know, finance historically is, you know, looking backwards and you can make decisions based on that and be like, Whoa, we spent this on this.

49:07We shouldn't do that again. But there's also so much that you can bring in of like even helping understand projecting out. Did you know if you adopted this tool and then you grow headcount 20 % or 30 % or a hundred percent, You know, this is going to be in a year. If you keep this existing, you know, plan, contract, you're going to be spending, you know, some crazy multiple of what you're paying today. So, and there's so much. So what's next for the company? Is the job finished? Yeah. Everybody, everybody in the chat is asking job finish. Is the job finished? The job is not finished, guys. I'm still, we're still, we can't believe it.

49:42Let's go. Job not finished, confirmed. No, guys, this is, I love this thing. No, it's like it's like we're pleased, we're happy. But like this is the crazy thing about our industry is that any business that spends money could be a ramp customer. And we've come a long way. They will be. They must be. They must be. Shoulds and musts. I don't know. We're working hard on it. But guys, most people, you know, pour one out for our friends, like expenses, closing the books. It is the worst hour of their month. It doesn't have to be. We're going to change that. Fantastic. Incredible. Well, thanks so much for stopping by.

50:21Thanks a ton. A ton of fun. We'll see you later, hopefully. Yeah, we'll see you later. And please recommend your tailor to me. I got to get one of these things. No, we'll put you in touch. Let's read through Ben Thompson's analysis of the Figma S1, the Figma OS, and Figma's AI potential. Finally. Of course, in Manhattan for Figma's IPO tomorrow. We're very excited about that. We will be live from NYSE, the New York Stock Exchange. Yes. Cannot wait. So Bloomberg has a story here. Figma's initial public offering is approaching 40 times oversubscribed, according to people familiar with the matter.

50:53Is that good? The design and collaboration software. We'll have to ask everyone tomorrow if it's good. Should they get the same revenue multiple as how oversubscribed they are? Could be the year's most in-demand listing. The company is guiding prospective investors at its IPO, which could raise as much as$1.2 billion, is expected to price above the marketed range. The people said the San Francisco based firm and some investors are offering 36.9 million shares at 30 to 32 dollars per share after increasing the range Monday from 25 to 28 dollars each. Order taking is expected to end at noon on Tuesday in New York.

51:31Bloomberg News has reported oversubscription refers to when the number of orders for shares in the IPO exceeds shares that were originally offered. And so a lot of demand for Figma shares, which makes sense. it has been one of the most in-demand secondary secondaries for a long time. It helps you think bigger and build faster. That's right. It helps design and development teams build great products together. What's not to like? Nothing like mixing an ad into, at least this is Ben Thompson's analysis, right? Ben Thompson is not sponsored by Figma. No, he's not. We had a friend of the show come on and break down the S1 when the numbers dropped and it was kind of like the dream case for SaaS, right?

52:09Coming out and immediately being the top, you know, from a purely metrics-based look, the top SaaS company in public SaaS company. And of course, a lot of people point to the rule of 40. You add the growth rate to the burn rate, how much money you're losing. If you're losing a lot of money, but you're growing really fast, that's fine. If you're making a ton of money, but growing slower, either way, they should add up to at least 40%, higher the better. And if you add Figma's up, they're in the 70%. So well beyond 40%, according to the rule of 40, which is, of course, exciting to the venture capitalists who popularized the rule of 40.

52:46They basically created profitability. So he says, I think you can make the case that an$18 billion valuation is, in fact, too low. Indeed, I think you could make the case that the company is worth more than$20 billion. Adobe agreed to buy it for$20 billion back in 2022. That, of course, is despite the rise of generative AI, which at first glance appear to be a threat to Figma because you just go to ChatGPT and say, hey, build me a collaborative software tool and maybe it just works. Don't make mistakes. Don't make mistakes. But he says, I would go in the other direction, generative AI and the opportunity it represents is exactly why Figma should go public, as Field strongly suggests, and get ready to be acquisitive.

53:29Get ready to get bought. Do some deals. We love it, Dylan Field. deal the figma os ben says the reason why i'm optimistic about figma comes from my belief that figma is not simply design software rather it's something much more fundamental and valuable an operating system with a collaboration built in here is how i explained figma back when adobe tried to acquire them forgive the long excerpt he says but it really is the point as far as my optimism about figma is concerned he says here it is important to note that figma's most prominent victim to date has not been Adobe, but rather Sketch. The explosion in apps led to a growing market for product design and development as designers needed to lay out a whole host of different app views and developers needed to know what exactly the designers wanted them to build.

54:15Photoshop and Illustrator, which were primarily focused on the creation and editing of single files, were the completely wrong tools for the job. Sketch, which was released in 2010 as a macOS app and is still macOS only, although it now includes the ability to view files on the web. completely took the category by storm. Adobe eventually responded with Adobe XD, but not until 2015. And the product is still in third place. Sketch though, is now only in second. Really quickly, let me tell you about adquick.com. Out of home advertising made easy and measurable. Continue, Jordy. Chris, the CEO of Adquick is in New York as well.

54:52We're going to try to meet up with him in a little bit. Sketch was not a disruptive product. It was like Adobe's products, a desktop app it just delivered a solution to an emerging product category that adobe was a slow to respond to and that was like the designing of web and mobile products figma though was something completely new the company which was founded in 2012 made a bet on the browser and spent a full four years building v1 of the product this included which is just so funny because normally if you talk to a founder building a software company and they said yeah i'm three years in and I haven't shipped an MVP, you would just immediately write the company off because like, you know, why haven't you shipped?

55:29In this case, it was necessary. Quit your job, raise$10 million, vibreel, launch video, slump like product in two seconds. Like that's the flow. And then a ton of bugs and then sort it out and then maybe it works. Don't worry about securing personally identifiable information at all. Just get to the top of the charts and figure it out later. So this included writing the editor in C++, cross compiling it to JavaScript using the ASM.js subset that let it achieve desktop like control of memory and performance and building its own rendering engine from scratch using WebGL, which had only been released in 2011.

56:08WebGL was the why now for the business. And Dylan was very early to recognizing that it was the epitome of leveraging new technologies to compete on a new vector, which in this case was collaboration. and uh you know anybody anybody under the age of 25 like probably doesn't remember the pre uh pre-figma era but like having different files and sending them back and forth and like sending comments by email it's just like it it um uh even even personally i i only briefly was was working without having access to uh figma so uh ben says think about my brief description for this product design and development segment.

56:46Multiple app views created by design and implemented by engineering imply at least two different people working on a project, a designer and a developer. In reality, the huge number of views and increased functionality in apps meant that there was an increasingly large teams on both sides. Sketch definitely made it easier to design an app in one place, but it did nothing to make it easier for teams to work on the app together. Figma, because it was native to the web, effectively got collaboration for free from the beginning. yeah this is a crazy screenshot i don't know if we can show this but uh on on figma's website the company compares itself to adobe xd but i use photoshop and illustrator don't stop we believe you should use the best tool for the job if you're photo editing choose adobe photoshop if you're doing detailed illustrations adobe illustrator is a no-brainer but if you're looking for the best tool for ux design figma is here for you plus you can easily import images and svg code into Figma and have your cake and eat it too.

57:42And so putting the competitor's products right there. So eventually Photoshop and Adobe did launch a competitor called XD and XD wound up is getting killed by Figma, but no one ever subscribed to Creative Cloud for XD. You just used it because it was here, says Ben Thompson. Here's the problem though, to the extent that Adobe's products were being used as part of Figma's workflow was the extent to which Adobe was slowly but surely losing control of its long-term relevance. Figma could, for example, start investing much more heavily into its photo editing or illustration capabilities, rendering Adobe's products increasingly unnecessary.

58:12What is more threatening is Figma's cross-platform capabilities. Third-party developers can build plugins for Figma that make it possible to easily add the sort of editing capabilities. So regulators blocked the Adobe deal and Ben Thompson says he thinks it was correct. The regulators got it correct that time. And based on the run that Figma has been on ever since, it seems like it could be a win for them as well. Yeah. And it's interesting because a lot of people - Insane rollercoaster for the team. Yeah. And Figma, I think during the acquisition process, clearly didn't have the insane urgency to launch new products because they thought they were going to Adobe and would be part of an organization with a bunch of different individual apps.

58:56And watching how they reacted after it was blocked and then came and just started shipping like crazy. And so the FTC has gone after some mergers that have made no sense. like they i believe they blocked like rumba the rumba one yeah that one didn't make sense the worst example i can think of is meta bought a vr fitness app and they said that meta was trying to create a monopoly in the vr fitness market which is just not a market at all it doesn't even exist and i don't know anyone that does vr fitness and it's very rare and so it totally makes sense to let that team get an exit and go hang out at meta and try and work on this until creating the market for the market and then as soon as it takes off there's going to be a ton of competitors immediately and so it seems like totally fine to let that one go through um and then there are there are other sides where uh where like truly there are like two players and they're merging and there's going to be a lot of a lot of uh competitive dynamics that come from that anyway uh let me tell you about uh bezel pre-owned luxury watches authenticated in-house bezel is the top marketplace in the world for authenticated luxury watches um yeah and again just more context so Amazon's acquisition of iRobot, the maker of Roomba, was blocked due to antitrust concerns, which was primarily from the European Commission.

1:00:08They were worried about a monopoly in home robotics, I guess. And the CEO ended up just resigning. What's interesting is like the robotic vacuum market is extremely competitive because of a lot of the Chinese companies, UFI and there's a few others. like it is definitely not as much of like it's it feels like a lot less of a sticky product product because yes it maps your home and it's supposed to learn but really if you move to a new place and you get a different robot vacuum cleaner like you're pretty much good after a day you're not like oh i can't get out of the rumba ecosystem yeah there's like even sonos is stickier than that and so i never had a problem and i robot uh shares are down 95 percent uh over the last uh looking over the...

1:00:54Oh, it actually got blocked and then they just got cooked. Yeah, they actually went public July 31st, 2020. No way. Stock popped to$133 a share by early 2021. It's now sitting at$4.28. What's the market cap? $130 million. $130 million. So a little bit of value destruction from the European... Imagine how frustrating that'd be. You're like, I think I'm getting out to the most logical acquirer possible. So Figma's position and the AI potential. Consider the position Figma has in the software design process. First, Figma enables collaboration, their original differentiator from Adobe and Sketch. Second, Figma creates one canvas for app creation, everything based on the same URL, instead of files that are passed around with increasingly absurd file name appendages.

1:01:40You know, final, final, final, v3, v4, v1, final, final. Third, Figma serves as a source of truth for an app's design. These capabilities seamlessly translate into AI-enabled workflows. And these capabilities seamlessly translate to AI-enabled workflows. Collaboration today between a host of humans could very well mean coordination and orchestration of AI. Critically, Figma isn't assuming or relying on an AI doing everything. Granted, that is a theoretical threat to the company. But the problem with AI-only development processes is that they are extremely difficult to debug or decompose. Figma gives a natural canvas to add in AI.

1:02:15Yeah. So Ben Thompson kind of closes out talking about Figma as the OS of design being important. What operating systems have is coordination and orchestration abilities, one canvas where all the work happens. So the source of truth. And then for now, Figma gets its nascent AI, it gates the capabilities behind a full seat license, i.e. the most expensive plans. They also have usage based model. But Ben Thompson is advocating for Figma to move towards some sort of usage based or task based monetization model. This is what it's selling work for. Yeah, Salesforce. Selling the end product. Exactly.

1:02:54As opposed to seat based. And so that will be a business model transition. And he says that the transition will be tricky. and it's arguably the best argument against Figma going public because if all of a sudden you shift to, hey, we don't charge per seat, we charge per finished design or finished website or shipped website, then all of a sudden you could see that you wind up with a much better business model four quarters out, but you have two rough quarters, and the public markets don't like that, and people always talk about that being one of the reasons, one of the drawbacks of being public is that you have a lot of investors that are a little bit more short-term oriented, But he says, I think, however, that it is notable that Field mentioned M &A in his argument for going public.

1:03:36Figma would do well to start acquiring AI companies to plug into every aspect of its stack, particularly now when AI capability is nascent and not yet a threat to Figma as a whole. Above, I was skeptical about AI replacing Figma, but that is a skepticism that is relevant for the short term. Figma's task is to replace itself before anyone else has the chance in the long term. Looks like we have our first guest. Let's bring him in. We have Andrew Reid coming in. Andrew Reid. In a beautiful suit, looking great. Somebody confused me for Andrew Reid earlier. You guys do look somewhat similar. They said, hey, you're Andrew, right?

1:04:10I said, I am not, but he is close by. What's going on? Andrew, welcome to the stream. You're live. How are you doing? You are live. Here's Mike. Welcome to the New York Stock Exchange. Thank you for having us. You guys look like you were made to be here. Yes, yes. We're very happy to be here. My decision to put on the seats six months ago has paid off flawlessly because we don't have to dress up for something like this. Is this my microphone? That's your microphone. How are you doing? Give us your reactions. How's this day been for you? Let's see. Well, first off, congrats to your initial public appearance at the New York Stock Exchange.

1:04:39Thank you. Thank you. It's really exciting. Today has been, it's been a good day. You know, you open, Dylan rang the bell at 930 and it's 2.11 p.m. Eastern right now. Sure. So we've been milling around for many hours. It's a little exhausting. It opened and yeah, it's amazing seeing the team here. Yeah. And just the excitement of everyone chanting Figma and seeing all the traders in their swagged out Figma jackets. The jackets are fantastic. The jackets are amazing. I'm going to go and start market bidding jackets after this because those are totally iconic. The thing that stood out to me is all the little, like they really made NICI their home.

1:05:16Like every single place you look, there's something Figma and it's just so incredibly well done. Yeah, and this is one of my, one of the experiences I've had with Figma, you know, dating back to when we first invested seven years ago was, it's a company that's always had extraordinary attention to detail. And, you know, it shows up when you do an all hands at their office. and the way to do that. The board slides, the S1, config the conference. And how they applied that attention to detail to the NYSE is incredible because there's applying the attention to detail and then realizing all the things you can do in terms of the signs on the ground and the party outside.

1:05:56They just did an unbelievable job. They have to be doing things that haven't been done before. Yeah, I mean, I think the takeover outside was like breathtaking. And I'm obviously very biased because NYSE with the people logo, I get very excited. Did you see the roadshow? Did you go to any of the roadshow? I heard there was like a long product demo there. Yeah. It's kind of uncommon. Yeah. So I think it's I think this is true for, you know, many CEOs, but especially for Dylan. Like Dylan cares a lot about the product. Yeah. And it's important that everybody who is considering investing in the company really knows what figment, not just what figment stands for and design and creativity and all the things you see, but really how the product works.

1:06:33and it was not a five minute flyby, you know, look at the cool, you know, shiny features. The product demo was, you know, they were in the weeds. It was, yeah, I was, I in fact uncovered parts of the product I didn't know existed. But it was good. I think it's important, again, like part of, you know, that's who Dylan is, right? He like actually cares so deeply about every single pixel and every single feature and then that shows through. How early did you actually meet Dylan? Sarah, Sarah Guo was posting earlier that pre-launch they were burning eight hundred thousand dollars a month. Which just sounds like that's the most nerve wracking scenario for any, you know, a lot of founders will go through that at some point.

1:07:14But when did you realize what a special foundry was? Well, Dylan and Evan, by the way, I think just I think it's a nice moment to take a pause and just give a shout out to Evan Wallace. Yes, like an absolute legend. Yeah, I think the stories that people here tell about Evan are just you know, they'll go on Yeah, Chris who's gonna come on next, you know, is the thing with CTO He'll I think have a lot of he'll tell you actually all the stuff Evan did in the code base, but allegedly it's insane And you know well and just going like taking another step back Like people have like people love to use Figma as an example that it's okay to take a long time to ship your products.

1:07:55And I think most like almost always when I hear a founder say, well, Figma took four years. I go, well, you're not Evan Wallace. And you're not like fundamentally changing, you know, the way that like software works online. Yeah. You're just you're building enterprise workflow workflows. You should probably ship like next month. Yeah. The other thing about the, you know, you can take take as long as you need. you know, Figma, there's this, there's something that Roloff talks a lot about for our business, which is the red queen dynamic. You have to run faster and faster just to stay in the same place.

1:08:29And I think in a world of accelerating technology change, like in order to win in your markets, you just have to run the company faster and do more. And obviously like AI is allowing companies to do a lot more. Isn't the red queen race usually an anecdote of something you want to avoid getting into it. Yeah, yeah, yeah. Well, that's just the truth of technology, I think. It's the truth of venture capital and the truth of enterprise software, business to business software. And if you look at how, you know, when Figma went from four products to eight products like Config, right, like the pace, and I think everyone who uses the product feels it.

1:08:59Like the pace is just picking up. Yeah, we got a little preview of Config, and I messaged Nairi, and I was like, wait, you're announcing all of this at Config? Like all four of these, it was like four major announcements. And that's what picking up the pace looks like and finding that new gear. Yeah. How are you thinking about org design changing in the age of AI? This is something I've been talking to a lot of folks about. There's taking designers and giving them the ability to ship code. They're kind of this flip from going from a 0x engineer, a designer, to a 1x engineer. And that gain can sometimes be better than taking a 10x engineer and making them a little bit better.

1:09:40because you just unlock this new capability. How are you thinking about companies just broadly thinking about AI as a product vertical that is its own silo versus something that infuses the whole company? What are you hearing? What are you seeing? I've been thinking about that question a lot. The way I kind of craft the archetype would be the creative technologist. And I think in the same way that all of us are capable of scribbling something on a piece of paper when we're bored in a meeting, I think similarly all of us are going to be capable of creating something on the internet. It's actually interactive.

1:10:12Exactly. And I think that has been happening for a while. I think it's picking up steam at an incredible pace. And I think this role of creative technologist, I think in big companies, you'll still probably have siloed engineering, product design, marketing teams. I think in our small companies, like the founding, the founding engineers, founding teams, people are wearing a lot of hats, right? and using tools like Figma to do everything from ideation to prompt something, to iterate, get in the hands of users, and to actually publish code. I think that the small copies, I bet will leave the way.

1:10:45Even my buddy at Andreessen said that when I was first pitching them, we weren't actually raising it. I didn't have a deck, and so I just was in Figma screen sharing, showing them the product and showing them all the different ways that we were going to take it and things like that. And it's just and again, that that's just like evidence of Figma not being for designers. No, I never thought I thought it was a tool for building things. Yeah, exactly. Yeah. One dynamic Ben Thompson has been talking about is that as a public company, sometimes it can be easier to do M &A. Have you ever run into that in your career just broadly of a company that where that is an important factor in kind of their long term strategy?

1:11:25I've always generally the meme has been like stay private as long as possible. But, you know, there's a reason companies go public. There are obviously tons of benefits. But what are the what is the M &A dynamic in public and private markets right now? Yeah, I think the you know, there's what you learn when you start out at Goldman Sachs. And it's, you know, it's you have access to the capital markets. You can use a public currency for M &A, you know, blah, blah, blah. Tell your story. For me, the reason why I'm so happy with the IPO timing today is coming off of Config a few months ago and just like feeling the energy.

1:12:00You guys were there and felt the energy amongst the community, like the incredible community surrounding Figma. And then being able to tell that story and all the stuff we're doing with our new product initiatives with AI and tell it to the broader world. In the S1, we reported 13 million monthly active users, two-thirds of which are not designers.

1:12:24Was that your guess early on? Did you fully see that the TAM for this was not how many designers are there and just add it up and multiply it? I imagine you believe that it could be used across the TAM expander. It's similar to what I was saying with the, you know, I think the creative technologist archetype who's going to do a lot of things. And eventually in 10 years, the way that companies run their product engineering teams will probably look very different. I think similarly, like they're worse. They were even, you know, predating our investment. There were definitely examples of teams that went all in on the Figma way, collaborative way of building products.

1:13:02And you had, you know, full product engineering design teams at small companies or even at midsize companies. I remember Airbnb and Square were in our portfolio and we talked to them before we invested and they were you know early at Pioneering this, you know, we're getting off of the drop-back links being sent around. We're you know, we're going all in on on you know working in Figma and It turns out it was a much better way of shipping products if you wanted to ship really good products quickly and therefore the entire world seemingly Changed its mind in a few years. I think similarly some small companies are gonna find their new ways of doing things They're gonna move really fast.

1:13:37It's gonna be obvious that this like a new archetype emerging I think many of those people are gonna live in figma. I think the most creative community on the internet today already exists in figma I always it it felt even I remember using it as a Like a social app In the sense that like I would get I would it'd be late at night I would open my laptop and I'd be like, oh Brandon's up Go over to wherever he was designing. I'd be like hey, what's up, dude? I would just type a comment. And it was almost like a lot of people built these in these virtual offices, but Figma was our virtual office. Oh, that's interesting, yeah.

1:14:14Where I'd just be like, hey, what's up? Or I'd just mess with them and change a button color. Yeah, the only thing I'm really excited about with the new products is they're both raising the ceiling of what it is possible to do for the most creative people in Figma. Like Figma Draw, for instance, right? Like the ability to do like really interesting artistic creative work inside of Figma files and also massively racing the floor for those of us who are more Excel inclined in our creative abilities. Cell coded. Yeah, exactly. Exactly. And I think it's so rare to find like technology shifts that allow companies to capture both of those things.

1:14:52Usually there's a tradeoff. Yeah. And yeah, it's really exciting. I mean, Excel kind of served the same purpose. Totally. But just decades ago, right? Totally. Yeah. Yeah, and similarly to the idea of Figma slides came out of this intuition, or not intuition, just the reality that many people were torquing Figma files into slide decks. Yeah, yeah, yeah. I had a file called deck formatting that I've shared with probably hundreds of people at this point. Like, this is how I build decks. This is how I build fundraising decks. Here's like 50 examples for each page. And I would just send it out to everyone.

1:15:27They could just copy it and start working off of it. Can you have any of that, Bo? That sounds great. It's great. We don't have to make many decks at TBDN. We should make one. We should start making board decks just for each other. We should, yeah. It would be great. Last question. I think we'll let you go. I want to talk about the culture and hiring changes and just how going public changes any of that. How do you describe the culture of someone who's a good fit to become a figmate? Ooh, that's a really good question. you know when I was reflecting when I was reflecting on what I was going to tweet today you know because there's always a fine balance right like how do I tweet something to say congrats without doing the you know can you believe this amazing I kind of went into a very paranoid headspace of how do I get you know not end up in the wrong quadrant we just go too far just you're welcome you said congrats to the incredible figment team the most creative determined imaginative and positive group of people.

1:16:24I'm just so happy for all of your success. There we go. And I almost responded, our success. So those four adjectives, I think they are creative. I think I tried to pull off an analogy when I was talking to you guys at Config about how everybody who was at Config would be a good tattoo artist for my face painting artist, for my daughter, and my brother said that analogy did not land. They're very creative. I think they're extremely determined. I think this is a company that, you know, when the early days of burning however much money they were burning a month and not having product market fit and grinding your way to product market fit.

1:17:01And all the twists and turns over the last seven, eight years since they really started their ascent. But you still have like the hardcore WebGL crew. Yeah. And that's like, oh, it's not like quite like foundation model level research, but it's like serious engineering. It's a company that does hard things. They are not afraid of doing really hard things. I think they're imaginative. I think that's like, you know, the make believe billboard you see in San Francisco. It's a company that really does think out there. And I think Dylan, obviously, Dylan is on the bleeding edge of technology. And they're positive.

1:17:30Like, they are just good human beings. And, you know, looking at, obviously, the reaction to the IPO is just, look around. These are awesome people who are so cool. The valedictorian of my high school works at Figma. Her name's Katie Zito. She's a legend. A PM here. She's literally like the smartest person I knew in high school. and how she builds products of Figma. That's cool. I'm just so happy with it. I really am happy for their success and your success. We're happy for your success. I didn't put it out, but yesterday we did the, we did it meme with Ramp. Oh, yeah. Every person involved. I sent you that.

1:18:05Yeah, that was great. But now Ramp's congratulating Figma with the big billboard today. That was a banner. You know they had that idea Monday. They were on the phone with them and they were like, yeah, we think we might get a banner and like, because our office is right across the street from Figma's New York office. We should just hang it out. And it's like this 40 by 40. It's unbelievable. It's crazy. It looks like it's a Figma canvas. I didn't even know you could get something like that made in two days. I will say the ramp thinking Figma with TBP and the New York Stock Exchange, today's a big day.

1:18:31Yeah, it's a big day for you guys. It's a big day. Yeah, it's awesome. Well, it's lovely having you. Yeah, thanks for being here. Enjoy talking to everyone else. And obviously, I hope to see you later. That would be great. Congratulations on your success, too. Congratulations. Let's give a little bit of coverage of updates on the Figma IPO. Of course, there was a funny post in here from Jawan. Okay. Jawan apparently got a offer back in 2019. Okay. Ooh, 3C territory. And he was going to get a base of 165K a year and 300 ,000 in Figma RSUs. 300 ,000 shares. and I guess by his calculation it would have turned into 30 million but the important thing Juwan is now getting the the ability to spend his time automating finance yes and certainly didn't pick a bad company to join on that right Gary Tan says if you stick around in tech and you're good sooner or later you start collecting these stories I think remember Gary designed the palantir logo back in the day and i wonder if he held on uh i don't know yeah it's a trillion dollar more uh siki ran some numbers uh siki chen so there's 10x returners there's fund returners and there's figma figma alone returned 10x the entire fund of not one not two but three vc funds so um he pulls up index ventures which made their initial investment out of a seed fund It was a$4 million investment or$3.9 million out of a$400 million fund.

1:20:18And it is a 1 ,850x multiple. Was the multiple a fund on that? The fund multiple is 18x. Greylock, who did the Series A, is sitting on an 11x fund. They did the Series A out of a$600 million fund. KP, which did the Series B.

1:20:43is sitting on a 10x fund out of a$700 million fund, which is just wild. And then Sequoia will have returned one and a half X on a$2.5 billion fund. That's crazy. Just from that one deal. And then there's other stuff. And Gary chimes in, says, Grand Slam home run business. Yep, yep. It's not just a home run business. It's a Grand Slam home run business. This is good advice for all the VCs out there. and just get one figment i noted this on the timeline yesterday but we are retiring the gong uh that we had at nicey yesterday it's a game hit gong uh by none other than dylan field so we still need to get him to uh sign it uh and date it of course but um pretty pretty pretty wild um delian says greatest capital markets on earth greatest country on earth and throws up not one but three american flags uh quoting signals uh signals post he said nothing hits like an ipo in america it's the most iconic cultural moment that's relatively infrequent the most beautiful part about it is that not only here does a company going public trigger a national feedback loop of inspiration kids watch it builders feel it and the next gen catches fire nowhere else turns liquidity into legacy.

1:22:06Signal is such a funny posting style. Very, very unique. Good job. And yeah, pretty, pretty insane.