How startups like Figma thrive in a market dominated by giant companies like Adobe


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Adobe has been the market leader in the design industry for decades now but there are a few segment of design where they are no longer the market leader. Comapnies ike Figma, Sketch and Canva are examples of products have become the defacto choice for many despite Adobe's ubiquity in all things deign.

It's becoming very important to understand the market transition and why these young companies are able to thrive even againt strong incumbents like Adobe.

These companies are built upon distinct atomic concepts and primitives which help them thrive in a new market. And these market transitions are driven by the new use cases and types of users. Understanding the phases of market transition and what drives them is universal process worth examining.

Changing customer needs drives market entropy!

There are often new & growing segments of customers with different use cases. Existing products may work for them but aren't ideal. The features they care about and how they value them are very different from the legacy products. Companies tend to resist core parts of their product for every new use cases since it's costly in work, money, and attention. But these small use cases become large enough to support its own company.

Market entropy is good for new entrants and changing customer needs are the largest source of entropy in markets.

When customer needs rapidly change, there is less advantage in being an icumbent as they are no longer the product that customers want.

Emerging use cases and user behaviours

It's often observed that the core functions of a tool remains the same but the type of user changes. These new users have different things they care about which results in product needs.

Photoshop was built for editing photos and images. But with time, the needs of the users shifted. It's becoming more about designing digital products and less about just image manipulation. Vectors became more important than raster graphics. These new types of users are working with teams with other designers and non-designers. Their designs are now part of a larger product development process and what they care more about is the ease of collaboration and better handoffs.

Products like Figma and Framer are now tapping into the new workflows and are mocking the way digital products are being built. The need to have a higher level of understanding of the nuances of components and variants is increasing. It's also useful for designs to understand the concepts and abstraction levels as the HTML & CSS of the resulting product.

Tapping into new workflows and right level of abstraction

Best products map to how customers think about their workflow and match their abstraction level.

Products are built around the right atomic concepts. Similar companies often have slightly different atomic concepts that end up making them meaningfully distinct.

  • Photoshop is focused on pixels & images and how they are manipulated. Photoshop is great for modifying images.

  • Illustrator is similar, but it operates on vectors, not pixels. And it shines when scale-free vectors are best.

  • Sketch is vector based (just like Illustrator) but is designed for building digital products. It focuses more on crafting entire products or user interfaces at a project level and not individual designs.

  • Figma is similar but it focuses more on the entire collaborative process and not just projects. Their browser based nature helps teams collaboarte much easier as their is less friction. It's also designed to mock the exact product development process that small & large teams follow.

  • Canva is similar to Photoshop & Illustrator, but it's major users aren't designers. Canva's core atomic concepts are around various templates and components that help them easily accomplish their design tasks.

Emergent use cases and new customer types lead to new ideal atomic concepts. And these atomic concepts are what make startups thrive in a market dominated by large incumbents.

Figma's bet on collaborative product design.

Sketch was the first company to realise the market opportunity in designing digital products. Sketch's best feature against Adobe was that it dropped everything that wasn't best for making digital products. This is what allowed it them to create the best experience for vector based digital design.

However, Sketch didn't quite realise the kind of collaboartion that digital products now need. Teams are not working in isolation rather with other designers, product managers and even non designers.

Sketch's technical architecture, it's desktop based product, even it's pricing model were a poor fit for this collaboration.

Figma noticed this opportunity and started working on technologies like WebGL, CRDTs which made it ready for true collaboration.

Canva's bet on marketing design by non-designers

Marketing and advertising have increasingly shifted online. It's much faster paced and often more targeted. But these campaigns requires pace as each version is adjusted quickly to test what works and what don't.

Marketing teams don't often need whole design teams working on each campaign rather they need tools that make it easy for them to adjust their marketing designs. As these designs require only a minor variations, most of the work can be done by non designers.

Photoshop can do everything they want but it's too low level while Canva operates at a higher abstraction level. It has templates and layouts built for easy composability while making it easy for users to add their own creativity on top.

This is what attracted most SMBs and teams who can't have a full design team for each mundane design task and made it their ideal choice for design work.

Becoming a platform provides defensibility!

Canva has expanded their ecosystem by creating marketplaces and communities around templates, layouts, fonts, and more. Most users don't want to build from scratch. With Canva's marketplaces there is an entire ecosystem of pre-built components they can use both free and paid.

This not just increases the value of the product but also drives network effect for Canva.

Figma is beginning to expand it's platform scope with new initiatives like plugins and communities.

Even for these companies with early success, many have yet to precisely define the atomic concepts they are betting on and to position themsleves accordingly.

Navigating with questions like: 1) Who are the right kind of customers, 2) Which use cases are most important workflows to build around, are becoming much more important for these products. The best companies who introduce better atomic concepts will attract more new customers.

Time to say Good Bye! 👋

Thanks for reading this so far. I hope you got some key insights & ideas from this article. If you have any feedback or want to discuss any ideas just send me a Tweet to my handle. Always happy to meet like minded people! :-)

© 2020 Sourav Kumar Nanda