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A Figma long position reportedly drew pushback from a limited partner

The investor says nearly everyone had a negative Figma take and lists AI and valuation among bear-case concerns.

1 Source, 24m ago, first seen 24m ago

TLDR

An investor says their October 10 update disclosed a Figma long alongside a Pinterest long. A limited partner effectively called the Figma bet “probably stupid,” and the investor says negative Figma takes were nearly unanimous. In a follow-up addressing DMs and replies, they outlined bear-case arguments: AI labs could commoditize design, an agent-centric world could shrink the design market, and executive churn and valuation were also concerns.

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1 Source, first seen 24m ago

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1 Source, first seen 24m ago

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1 Source

Michael Dempsey@mhdempseyjust to respond to some % of the DMs and replies, it is very clear the bear case for Figma. A few things I'm aware of: - AI labs destroy design. Nobody does pure design anymore, they just code and these things must sit together and the labs have the best coding models and thus will then optimize their models to be great at design (Claude Design is good!). Design will thus be a commodity just like code, so why would it sit in separate UI/UX? We saw Figma hurt Sketch and with each new paradigm perhaps new products win design. - Design could have meaningfully smaller TAM in an agent-centric world. - Figma has fumbled a head start in collaboration + design + software and is unrecoverable / has not shown propensity for being more bold/risky in product path. - The exec team churn is scary and signals a sense of apathy in the org/lack of belief in the product. - Figma is not actually cheap from a multiple basis and people are way over-anchored on an absurd post-IPO valuation, when in reality a lot of software should trade 2-4x NTM revs. - Canva is an illustrative example which saw slowed growth and when these things start to slow as public companies it is far harder to recover versus private.24m
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    1 Source

    Michael Dempsey@mhdempseyjust to respond to some % of the DMs and replies, it is very clear the bear case for Figma. A few things I'm aware of: - AI labs destroy design. Nobody does pure design anymore, they just code and these things must sit together and the labs have the best coding models and thus will then optimize their models to be great at design (Claude Design is good!). Design will thus be a commodity just like code, so why would it sit in separate UI/UX? We saw Figma hurt Sketch and with each new paradigm perhaps new products win design. - Design could have meaningfully smaller TAM in an agent-centric world. - Figma has fumbled a head start in collaboration + design + software and is unrecoverable / has not shown propensity for being more bold/risky in product path. - The exec team churn is scary and signals a sense of apathy in the org/lack of belief in the product. - Figma is not actually cheap from a multiple basis and people are way over-anchored on an absurd post-IPO valuation, when in reality a lot of software should trade 2-4x NTM revs. - Canva is an illustrative example which saw slowed growth and when these things start to slow as public companies it is far harder to recover versus private.24m
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