Context
Sketch launched in 2010 and by 2015 had become the dominant UI design tool. It displaced Adobe's Photoshop and Illustrator for interface work by being simpler, faster, and built specifically for digital design. Adobe owned design tools — and was losing the category to a small Mac-only app.
Figma launched in 2016 with a different bet: design tools should work in a browser, be collaborative by default, and not require expensive software licenses.
By 2022, Figma had $400M ARR, the fastest-growing B2B SaaS product in history at that scale, and had displaced Sketch the same way Sketch displaced Photoshop. Adobe announced a $20B acquisition. EU regulators blocked it in 2023. Figma IPO'd instead.
Strategy
Figma's strategy had three phases:
Phase 1 (2016–2018): Win on multiplayer. Figma's technical breakthrough was real-time multiplayer design — multiple people editing the same file simultaneously, in a browser, with no sync issues. This sounds simple. Technically, it was years of work. No other design tool had this.
Phase 2 (2018–2020): Win on distribution. Because Figma was browser-based, sharing a design file was a URL. No export, no attachment, no "install Sketch to view this." Anyone could open a Figma file — developer, PM, client, stakeholder — without any software. The viewer experience was free and frictionless. This made Figma the default for design handoff even in teams where designers still used Sketch.
Phase 3 (2020–2022): Win on community. Figma Community launched in 2020, allowing designers to publish templates, UI kits, and plugins publicly. This was Notion's template strategy applied to design: user-generated content created a massive SEO and discovery surface area. The best design resources on the internet started living in Figma.
Breakdown
What worked:
The multiplayer bet was the right technical bet at the right time. Remote work was already growing before COVID; COVID made it mandatory. Figma's collaboration model — already built, already working — became the obvious choice for design teams that could no longer be in the same room.
The browser-based delivery model was both a technical moat and a distribution advantage. Sketch required a Mac install. Figma required a URL. In enterprise sales, the ability to get a design tool into the hands of developers, PMs, and clients without an IT ticket is enormous.
The community flywheel worked identically to Notion's: designers published Figma resources, those resources ranked in Google, people found them and discovered Figma. The content loop created continuous organic acquisition.
What's complicated:
The Adobe acquisition saga is instructive. Adobe offered $20B because they recognized that Figma had won. Not just the design tool market — but the design collaboration market, which Adobe didn't have a credible product for. The acquisition was a competitive defensive move, not a financial one.
EU regulators blocked the deal on the grounds that it would eliminate a significant competitive threat to Adobe's Creative Cloud. This was an unusual outcome: regulators essentially ruled that Figma was too good at competing to be allowed to be acquired by the company it was competing with.
Insight
Figma's growth followed a pattern visible in many category-defining products: they identified the specific structural weakness of the incumbent (Sketch's desktop-only, single-player model), built the version with that weakness eliminated (browser-based multiplayer), and then used the distribution advantage to become the default choice for the entire ecosystem, not just designers.
The community play was the lock-in. Once the best resources and templates lived in Figma, switching had a real cost. Designers who moved to a competitor lost access to the ecosystem they'd built and depended on.
The Adobe acquisition attempt validated the strategy by demonstrating that the incumbent found Figma's position genuinely threatening at a $20B valuation.
Takeaways
Find the structural weakness of the incumbent. Sketch's weakness was Mac-only, single-player. Figma's entire product was built around eliminating that weakness.
Browser-based = zero distribution friction. For tools that need to spread beyond a single persona (designers need to share with developers, clients, PMs), browser-based delivery is a compounding distribution advantage.
Community as SEO and lock-in simultaneously. User-generated content creates discovery (SEO) and switching costs (if the best resources live in your ecosystem, leaving is more expensive).
Build the collaboration layer before you need it. Figma's multiplayer was years of technical work before remote work made it the killer feature. The teams that invested in collaboration infrastructure pre-COVID were positioned when COVID made it the deciding factor.
Written by
Ross
Founder & Strategy Lead, Greta Agency
Ross has spent 10+ years building growth engines for companies from seed to Series C. He founded Greta Agency to prove that great software can ship in days, not months.