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Figma didn't kill Sketch

Posted on:February 14, 2024

In the wake of Figma and Adobe’s decision to abandon their merger and the discontinuation of XD, along with Invision’s shutdown, many people believe Figma has emerged victorious, defeating all its competitors. One of those competitors I’ve heard people say that Figma has “killed” is Sketch. But Figma has not killed Sketch, and in this post I’ll tell you why.

Now to be clear, has Figma captured significant market share? Definitely. Contributed to other brands’ decline? Of course. But it’s rare for a company to completely annihilate another simply by having a superior product. A company going under is a combination of a lot of factors, some that a they can control, and some that they cannot. The competition is one factor. But ultimately, a company’s end of life happens when they give up, sell, or run out of money.

Let’s talk about running out of money. That’s what happened to Invision. What brought about its demise? You can read how their founder and former CEO sums it up. But IMO it’s a pretty familiar story: raising too much venture capital, needing a huge outcome, growing too quickly, and failing to establish solid financial footing. This is a similar trajectory for all sorts of “scale-ups” that burned through cash in pursuit of market share during the years of zero interest rate policy (ZIRP). These companies believed they were in winner-take-all markets, and so this was the logical playbook. I don’t agree with that, because I think most markets can support beyond just a couple winners. You just have to be OK with the distributions, and not necessarily being the billion-dollar anomoly. And VCs, and many founders, as we all know, are not!

As usual, Jason Fried’s opinion on this matter resonates with me. It’s not about celebrating failure; I genuinely liked Invision’s product in its prime and empathize with founders who witness their companies collapse. However, with $356 million raised and almost 1,000 employees at its peak, it’s easy to see how Invision became bloated and struggled to find the right fit.

Now consider Sketch. Figma hasn’t “killed” Sketch because Sketch operates independently and has grown slowly and steadily after raising a modest $20 million following years of profitability. While Figma might have taken a lot of market share from Sketch, the latter remains in business – and as long as they’re still operating, a comeback is possible. Or they can just continue running a humble, profitable busineess serving a smaller set of loyal customers.

I have great respect for Figma – their team, founders, engineers, designers, marketers, and product. I even switched from Sketch to Figma for my own designs. However, let’s not get carried away by the present moment. There are others who have raised substantial amounts of money and may face similar challenges down the line.

Figma is one of those scale-ups. They’ve raised $333 million. Right now, times are good. They’re quite profitable, so maybe their economics are solid. And maybe they aren’t facing the same challenges as other companies. But we’ve all seen market positions rise, fall, and switch back again.

Sketch is down at the moment, perhaps in terms of market share. But this isn’t the end. There could be a future where Figma faces the same fate as InVision. Market positions can change, and nobody’s immune to that reality.