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Ed Sim's (@boldstartvc) weekly readings and notes on enterprise VC, software, and scaling startups

What's 🔥 in Enterprise IT/VC #234

You can't sell platforms - nail the initial product first - Figma masterclass in product execution, listening to customers, earlier entry point in workflow

Apr 24, 2021

The big news this week was UiPath’s massive IPO which raised $1.3B of new financing and ended up with a closing market cap of $35.8 billion. It’s a huge accomplishment especially considering how choppy the markets have been as of late (more from CNBC).

While UiPath joins a long roster of high-growth cloud software companies to go public in the last three years, its debut comes amid a shift in investor sentiment. After more than doubling in value last year, the WisdomTree Cloud Computing Fund, consisting of 58 publicly traded cloud software vendors, has dropped 6.7% this year, while the Dow Jones Industrial Average has climbed 11%, as of Tuesday’s close.
One of UiPath’s greatest strengths is its ability to keep customers and encourage them to increase spending over time. In its last fiscal year, UiPath reported net revenue retention of 145%, meaning the average existing customer increased spending by 45% from the prior year.

On the product side, many of you know I’m a huge fan of Figma as I believe they are a walking master class in product led growth. This week Figma did not disappoint as it released its second product, Figjam, an online whiteboard to ideate and brainstorm together (uh oh Miro!). While this looks like another whiteboarding tool, why am I so excited and what lessons can founders learn?

Figma at #Config2021 @figmadesign

🚀 Just announced at #Config2021: FigJam. FigJam is a new online whiteboard for teams to ideate and brainstorm together. Check it out: figma.com/figjam

Figma was founded in 2012 and launched its core product in 2015 with a belief that design tools had to be all in one, online, and collaborative from day one as design is not just for designers but other stakeholders as well. So while the initial entry/insertion point to a workflow was around getting designers to use the product, what Figma got right (well covered in Kevin Kwok’s essay) is that design is not just for designers but for teams. So Figma nailed its initial wedge of designers, owned that market, raised $130M+, and ONLY after that, 6 years later, it launched a new product, Figjam, a collaborative whiteboard which is 🔥.

Dylan Field at #Config2021 @zoink

Since Figma was first launched in December, 2015, we’ve seen people use it not just for interface design but also for a multitude of other use cases, including whiteboarding and diagramming (3/26)

In one fell swoop, Figma just exponentially increased its TAM as any one can use Figjam to collaborate and share ideas. More importantly though, Figma has created an earlier entry point in the design process, the whiteboarding and ideation phase before you actually design.

“Our point of view here was focusing on how to make FigJam work as the first step in the design process, before you go into actually doing design work,” said Figma founder and CEO Dylan Field. “We see people looking for a better, more fluid experience, but we also wanted to make it simple enough to bring other people into the tool.”

Figma has now moved earlier into the design workflow and also expanded its TAM as Figjam can be used for just about any creative, ideation process.

Dylan Field at #Config2021 @zoink

In multiplayer mode, FigJam is great for the messy ideation early in the design process. Along with contributing your own ideas, building on the ideas of others is also super important. (8/26)

Figjam is also a natural extension as they listened to their users.

Dylan Field at #Config2021 @zoink

Since Figma was first launched in December, 2015, we’ve seen people use it not just for interface design but also for a multitude of other use cases, including whiteboarding and diagramming (3/26)

Figma also doubled down on the collaboration element by adding voice chat into all of their products.

Dylan Field at #Config2021 @zoink

But what if there are ideas to discuss live? Our SECOND announcement is voice chat, a new way to join an audio channel in both Figma and FigJam. (12/26)

And now it’s a full end to end platform for the entire design process, 6 years after launching its first product. As mentioned in last week’s newsletter, too many companies are focused on TAM and expanding into new markets too quickly before dominating their own. Figma is another example of nailing its initial market first before expanding too quickly.

Dylan Field at #Config2021 @zoink

At Figma, our next chapter is embracing these use cases as we work towards providing an end to end platform for the design lifecycle: brainstorm → design → production. (2/26)

Lessons learned from Figma include you can’t sell a platform, nail an initial product first and own the market, listen to your users, entry/insertion point in workflows matter, double down on your strengths (collaboration), and many business use cases involve cross functional teams versus siloed groups.

More to come next week as my firm @boldstartvc held an online discussion yesterday with Kyle Parrish, head of sales at Figma, about the PLG GTM and playbook.

As always, 🙏🏼 for reading and please share with your friends and colleagues!

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Scaling Startups

👇🏼💯 So many truths here from Paul Graham’s essay in February, resurfacing h/t Farnam Street Newsletter. For enterprise founders, a reminder that big customers suck in the beginning as they can drain you and low end eats high end or in our lingo if it can go bottoms up/PLG/dev first, then try it.
I learned some useful things ... though they were mostly about what not to do. I learned that it's better for technology companies to be run by product people than sales people (though sales is a real skill and people who are good at it are really good at it), that it leads to bugs when code is edited by too many people, that cheap office space is no bargain if it's depressing, that planned meetings are inferior to corridor conversations, that big, bureaucratic customers are a dangerous source of money, and that there's not much overlap between conventional office hours and the optimal time for hacking, or conventional offices and the optimal place for it. But the most important thing I learned ... is that the low end eats the high end: that it's good to be the "entry level" option, even though that will be less prestigious, because if you're not, someone else will be, and will squash you against the ceiling. Which in turn means that prestige is a danger sign.
🔥 learning from what works for best in class consumer startups always a great start for enterprise PLG cos
Lenny Rachitsky @lennysan
The 7 distinct types of product virality (aka how your product can spread): 1. Online WOM: Learning about products through mentions on social media (e.g. @joinClubhouse) 2. Offline WOM: Learning about products while talking to friends or colleagues (e.g. @Airbnb) Read on 🧵
11:18 PM ∙ Apr 17, 2021
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Want TechCrunch coverage - just the facts, no flowery language
Ron Miller @ron_miller
I've had startups giving me fact sheets lately instead of formal press releases and I really like that approach. It summarizes who they are, the funding, the investors and so forth in a bulleted list.
11:34 AM ∙ Apr 21, 2021
110Likes8Retweets