Podcast Host (2:21)

Can we talk about that that first day? Because obviously that's like what everyone talked about. The stock IPO'd at $33. Then it jumps up to over a hundred dollars in the first day. People were writing like essays on Twitter about how the IPO process is broken. What do you feel about that? Because do you feel like that the process might be a little bit broken? That it favors bankers versus, you know, figma? Maybe you guys left too much money on the table.

Praveer Melvani (2:46)

No, I mean, look, I mean our, basically the majority of the transaction was secondary. So the figma balance sheet didn't necessarily move too much other than the, you know, the synthetic secondary that we raised to pay down the tax bill on the RSUs that came due. You know, so from, from our perspective, it was the function of a whole bunch of interest in the stock in a pretty constrained float. And so, you know, we get, we get excited to continue to educate the public on our story and narrative. I think, you know, that that's going to take some time to bake. And that's kind of exactly what we told our employees is like, you know, we have to kind of keep heads down and keep building because, you know, it's, you know, the stock market is more of a, is more of a weighing machine than a, than, than, you know, than a short term voting machine that we saw that day.

Podcast Host (3:32)

Yeah, that's true and that's a very good answer. But I'm also thinking like, imagine being an employee there that first week. You're probably like, oh, what, what's going on here? It's got to be like that roller coaster of the ups and downs. Like that's got to be nuts.

Praveer Melvani (3:46)

Yeah, I can only imagine. Well, I mean, I lived through it, so definitely felt it. But you know, again, there's only so many things that we can control. Shipping, great product, you know, listening to our customers, and that's kind of where our focus is today.

Podcast Host (3:59)

But now being a publicly traded company, I mean, you know, you do have quarterly earnings to worry about now, you know, investors to worry about. Do you think that puts extra pressure on the company though, to maybe focus more on chasing margins versus innovation or shipping certain types of certain kinds of products? Like, how do you keep that startup DNA while also keeping the investors in mind?

Praveer Melvani (4:20)

Yeah, I mean, one of the things that we were able to do over the course of, not just through the IPO process, but for, you know, years now, Is, you know, those long only investors, the folks that are going to be around the business for extended periods of time, we want them to understand how we think, how we make decisions and be along for this ride for not just what's happening in any one particular quarter, but what's going to happen, you know, years from now. And you know, that was an important thing for us as we went through that and we were selecting folks that were going to be part of the syndicate or rather that were going to be allocated shares and we wanted to be aligned there, that there are going to be moments in time where we're going to need to invest in the short term for the benefit of the long. And we're in one of those cycles today with our investments, with many of our AI investments and that's going to potentially create a headwind on our gross margin side. But if we do our job right, that means that there's more usage, more utilization on platform and more people are building, you know, the products of the future on Figma and that, you know, over time will translate to dollars for the business. But in the short term that, that may mean that we're, you know, eating some of the additional costs there.

Podcast Host (5:22)

I want to, I want to talk about some interesting things that, that, that I learned, you know, just studying the company. You know, what was surprising to me the Most was that 85% of Figma's users are outside of the US is that, is that correct?

Praveer Melvani (5:33)

That's right, yeah.

Podcast Host (5:35)

And that accounts for what, around 50% of the revenue?

Praveer Melvani (5:38)

Yeah, yeah.

Podcast Host (5:39)

So, so do you see like the international market as, as, like the growth engine to kind of close that gap between users and revenue?

Praveer Melvani (5:46)

You know, it's, it's been a consistent trend for us for some time. You know, I've been at the business now for about eight years and when I first joined, about 80% of our week, our weekly active users, or I think just actives in general or outside of the States and you know, that's climbed to 85 today. But yeah, I mean there's definitely room for us to continue to localize and meet our customers where they're at. I mean, even as recently as this past week, we localized the product in French and German and we're kind of going across a whole host of marketing activities across the world and we've opened up offices all across Europe in places like Paris, London and Berlin, in different parts of APAC and Singapore, Tokyo, Sydney, and we're looking to continue to expand that in the near future here and in large Part it is because design is the, it's a global phenomenon, you know, the way in which people are interacting with brands more often than not digitally. And you know, that's, that's not something that is only going to be felt here in the US but, but candidly it's, it's felt by, you know, folks across the world, across all sorts of industries.

Podcast Host (6:52)

Yeah, I mean, just my personal experience, I remember just trying Figma for the first time. A buddy put me onto it, sent me a link and I'm like, I can, we can work together at the same time. Like it was like the, it was like a flashbulb moment. I'm like, this is like Google Docs but like for design. And it was just so cool. And then it's cool to see that like people all over the world resonate with that totally.

Praveer Melvani (7:11)

And it's kind of what we all come to expect though, right? It's this really rapid way of working. It's this multiplayer collaboration that we've grown up on. And I think that's what Dylan and Evans, you know, what they stumbled on when they started figma, is that there's just a unique way that felt a little bit different at the time to how designers were going to come and work together, not just amongst themselves, but with the broader set of folks that are going to interact with the product development process. Your PMs, your marketers, your engineers and design truly has a seat at the table at this point. It's the key set of interfaces that are going to be the front door to your customers and that's got to be really thoughtfully curated. And it's what's going to then create those points of differentiation that allow you to win.

Podcast Host (7:58)

I think Praveer people don't realize before a tool like figma, it was a pain having to like save a design file, right? And then like have it to like email it to somebody. They look at it, they make changes, they send it back to you with like V3 and then you're on V26. And it's just, it was a pain. This is like what this is, this was, this was a game changing tool.

Praveer Melvani (8:20)

Yeah, yeah. No, I mean I think it's, it's also just the start for where we're going in the future. We, you know, earlier this year doubled our product portfolio. We rolled out, you know, four new, four new products. One called Figma Buzz, which is a purpose built surface area for marketers and brand designers. We rolled out a product called Sites, which allows you to go single Click to publish and you then have a static site that you can then ship and we'll host on your behalf. We rolled out a product called Figma make, which allows you to prompt your way into an actual application right out of the gate. And then there's a product called Figma Draw, which is an elevated way for you to, an elevated vector drawing tool for folks that are really, really focused on, you know, craft and have, and want to have the ability to go deeper within the product as well.

Podcast Host (9:07)

I'm all about those mind maps. That's what I use Figma for mostly. It's awesome. The whiteboard stuff, it's just, it's awesome. Are you sick of talking about AI yet or do you, or is that still like, are you still loving it? Because I feel like every conversation has to be about AI.

Praveer Melvani (9:21)

Well, it's almost like this platform layer, it's just part of who we are and who we've been, how many companies build now. So, you know, I totally, totally appreciate and understand the, the, you know, the sentiment and the excitement around it. For us, it is just, just the way that, you know, we expect, we all expect our products to, to be built in, in this kind of new age and new future.

Podcast Host (9:41)

I mean, I think the, the words that I saw being thrown around was like figma is AI first design platform. But what I always think about whenever I hear that is like, how do you monetize it? Right. I think that's still something that is unclear for a lot of investors. Like how do you see Figma maximizing the monetization of AI somewhere down the line?

Praveer Melvani (10:06)

Yeah, I think right now we're still focused on finding use cases and workflows that are really resonating with our end users. And as we continue to identify what are the HERO workflows and really drive incremental improvement to those, we'll be able to figure out the monetization piece thereafter. But you're entirely right in that, you know, the questions around modernization are rising because there are elevated costs to running these new models, new products and you know, we're not, it's not lost on us that that's true. And you know, I think there's going to be a way where we could marry both embedded usage on our existing, existing seat types, while also then a consumption model that we can overlay on top that allows power users, folks are getting extreme amounts of value from the platform to be able to do so. And then we, we as figma can share in some of that value along the way. But I, you know, I think, you know, for, for us it's right now about growth. It's, it's driving ubiquity of our new solutions and we very much believe that, you know, that that is the path to then the future monetization that we.

Podcast Host (11:09)

All are excited about was, was the partnership with OpenAI. I think it was announced a couple weeks ago where you can use figma within chatgpt. I haven't tried it myself, but I'm excited to try that. Why was it important for figma to be a part of the Chat GPT ecosystem? Are you seeing that as something to be a revenue generator or more of, of a pipeline for, for, for new users?

Praveer Melvani (11:32)

Yeah, I think we'll see. I mean right now, you know, they got what, 800 million monthly active users or something. So you want to be where, where folks are. And I think, you know, as people are discovering tools in different ways, starting in ChatGPT is going to be an interesting way for our users to find figma in the future. And the way that integration works today is if you're describing a diagram or a workflow or mind map, it sounds like you do that in figjam already today. You could start that in the context of a chat with ChatGPT and we'll render those for you in line. And should you then want the ability to go and save it down, make edits or changes, you can click, click through and open up a Figjam file directly within the ChatGPT interface. You know, there's, there's obviously different ways that we can, we can think about evolving that today. It's, it's primarily surrounding, you know, an open with partnership where you can then land in figjam. But you can imagine a world where, you know, maybe you want to be able to start a figma slides journey within the context of a chat application or maybe it's, you're actually, you're actually going and describing an application you'd like to create and we render a figma make there for you, which you can then go and take in, you know, the next sort of leg there. And I think there's going to be an interesting way for us to play with, you know, different sort of chat providers over time. I think, you know, it's a, it's going to be an interesting, interesting journey for us to figure out how we continue to optimize this. But you know, when they, when they come knocking and there's just so many users there, we want to make sure that, you know, we're meeting, we're meeting the, you know, the opportunity with haste.

Podcast Host (13:07)

Are you worried at all that these tools might be getting a little too good? Like Nano Banana, when that came out a couple months ago, at this point it's like, man, this is starting to get really, really good to where maybe it turns into a competitor of figma. Of figma.

Praveer Melvani (13:22)

Yeah. You know, for us, what we've been focused on is we think that we are, you know, the system of record for folks that are building any sort of digital product or experience. And you know, that's not necessarily one part of. That's not, it's not. It doesn't necessarily take just one tool, one prompt in order to get there. You really have to be able to serve every part from ideation all the way through build. And so, you know, there's a whole, whole set of workflows that have to happen along the way where you have to build alignment with your team members. You then want to be able to actually visualize it and potentially visualize it in multiple different ways, test it, prototype it, be able to hand it off to a developer who actually can then go build it. Or in some cases we can work with whatever new age agentic that you're already living within and through an MCP server that we've created, pull in the design context that can live side by side with you in VS Code or Cursor or Windsurf right away. And so, you know, I think that what we very much believe in this new world, that there's going to be more software, not less. You know, AI is definitely going to help that that to happen. But it's well crafted, well designed pieces of software that have, you know, already already had the muscle of internal alignment already built through it that are going to be the pieces of software and we think that we can be that platform, that system of record that supports that over time.

Podcast Host (14:43)

Yeah, I tend to agree with you. I don't think that these tools are like people are going to need something on top of just these tools. I mean, I've stopped using Photoshop. I know it's a bad word for you guys, but I stopped using Photoshop in exchange for some of these AI tools. But like Figma is hard to replace everything you guys do. But sticking with the AI AI line of questioning, when you hear the term bubble and circular, circular financing, does that, do you, do you roll your eyes at that or do you take it seriously and just kind of like monitor the situation? I'm kind of curious to see as someone in Your position, how do you approach that?

Praveer Melvani (15:22)

Yeah, I mean right now I'm squarely focused on what can we build, what can we control and what are our customers asking for. And I think what we're finding is our customers are looking for new ways that they can build more efficiently, more product and be more productive with the set of resources that they can. And they're looking at us at times for inspiration on how to do that. And so, you know, now that we have so many more different experiences that we can take to them, it's a, it's actually a pretty, it's actually pretty compelling platform pitch that we take back to them over time. And I know, you know, over what we're attempting to do even more so on the go to market side is take a little bit more of a solutions oriented console data sales approach to that process to be able to take the learnings of, you know, some of our early customers who are actually, who are actually deploying a set of our AI solutions end to end and be able to replicate that in different ways. And so I think that many customers, many companies are still searching to understand exactly how their workflows will change. And we at Figma too are feeling that today. So by no means do I feel like folks have figured it out completely, but there's definitely a willingness to experiment, to learn and try things differently as more opportunities present themselves.

Podcast Host (16:35)

And. Right, and right now the markets are encouraging that. Right, that probably helps too where people are like, you know, investors are looking for companies trying solutions for AI and some sort of business model around it.

Praveer Melvani (16:47)

Yeah. And it's not, I mean for us, even as we just going through our 26 planning, it's very much embedded in the way in which that we're talking about planning. So you lay out your headcount proposal, your org chart and as I'm sitting down with each leader across the company and with Dylan, our CEO, we're not just saying okay, well X number of people need to be required to do y job. It's like, hey, do you have the right system? Do you have the right process? Are you using the right tools in order to make it happen? I think, you know, it's, it's harder today to say, hey, I, I need an additional person to go and do this task. You have to actually prove that you've, you know, you've tried the other sets of solves before, before, you know, we go and add an incremental person over time.

Podcast Host (17:31)

So not only is it like a solution that you guys sell, but you're also looking at AI tools internally to help improve productivity and cut down costs.

Praveer Melvani (17:40)

Yeah, I mean the ways in which people are working are changing and I think, you know, if you're, if you're closed off to that, that could potentially leave you behind. And I think, you know, as a, you know, as someone who has to be a steward of, you know, Figma's capital, I want to make sure that we're putting it in the right places and we're creating opportunities for us to be efficient over time. Awesome.

Podcast Host (17:58)

Awesome. Going back to zooming out a little bit and going back to like Figma overall as a business. What do you think about like the tam? Obviously design is everything now. What are the upcoming areas that you see as like the most, the highest areas of growth right now?

Praveer Melvani (18:16)

Yeah, yeah. So I mean when we're going through the go public process, we identified a Tam of about $33 billion and we started there by saying, okay, well what are the Personas that are in and around the product development process that we can serve with the tools that we've created? And that's already changing. You know, about 2/3 of our users today are non designers. About a of our users are designers and then about 30% are developers. So we sit today with about a one to one split between designers and developers on platform. But we know that there's way more developers out there in the world to everyone designer. And right now we're very much focused on through products like dev mode, through our MCP server where we can meet folks exactly in the tools that they're operating. How can we do a better job of serving a wider range of that developer suite? You then take a product like Figma make where in a prior life a PM would need to work with a designer and developer at their hands to say, hey, take this idea that I have and let's prototype something. But in the context of Figma, what we're seeing is folks are being able to save time. What would have taken a couple weeks or weeks could actually be now done in days and that PM can actually go and express their ideas in new ways. Our focus right now is very much going deep within the existing customers that we have and showcasing to them. There's a much more broader set of things that we can solve for them. And as roles continue to blur between a pm, a designer, a developer and all sorts of folks, we think that we can be that tool of ubiquity that brings them all together. In the same way that Excel is not just a tool that's used by finance professionals or accountants. It's anyone who's trying to make a list or manage the household budget. We think that there's going to be use cases with Figma where you're going to want to be able to communicate visually, design an experience, craft a UI and that's just going to be part of the, you know, the visual language that we all are going to want to communicate around.

Podcast Host (20:16)

I mean, you bring up the Excel point. I've seen people use Excel in the most insanely creative ways. It's crazy. So I can see what you, if people can do that with Figma, like the TAM is just astronomical.

Praveer Melvani (20:27)

You should definitely play around or take a look at some of the community plugins and community files that people have built. And you know, we actually even ran like a make hackathon recently where we said, okay, anyone and everyone has the ability to go and create something in Figma and we'll come back and say okay, what are some unique things that people have put together that were handwritten poems that people were handwritten poem creator that someone built? There was a whole variety of games that people were able to create games. Yeah, yeah. I mean the Figma platform is extremely powerful and I think the more that folks are able to visualize and see what they can do, it's pretty creative what people are able to come up with.

Podcast Host (21:12)

Yeah, I'm a noob. I'm using it for just basic stuff but now I'm inspired to try utilizing it for other stuff. I'm going to check it out for sure. I want to ask a quick question about the M and A you guys announced. Figma announced that, that M and A is going to be a critical part of the growth strategy. And I think there was a couple of big acquisitions recently. Modify, which is a vector graphics startup and A and Payload, which is a content management system. Just curious to get your take on how you guys approach M and A. If there's like a checklist of, of certain things you guys want to see before you approach a company for acquisition.

Praveer Melvani (21:48)

Yeah, you know, I mean I think there's, there's got to be a variety of things that are true for us. One, it's, it's got to be a fantastic team, fantastic product. Like that's a fantastic business. That's kind of like a no brainer. Two, they've got to be culturally additive for us in some way, you know, or you know, there's got to be some alignment so that we're not going to have organ rejection when Push comes to shove there and then three, it's got to be something that can be a top priority for us. It doesn't necessarily need to have been the top priority but it's got to be the top, one of the top priorities of our team moving forward in order to ensure its success. And if those criteria aren't met then, you know, we got to think a little bit harder about, you know, is this the right thing for the business to do at this time? Because you know, the anecdotes are is most M and A actually doesn't necessarily work out the way that you had originally planned. And so I'd say that we're learning on that right now. We're making sure that we've built the teams and the infrastructure to be able to digest, you know, digest stuff in a more thoughtful way. But I think it's an interesting time to be in the position where are because there are a bunch of really interesting businesses that are are catching flight and we want to make sure that there's an opportunity for us to capture lightning in the bottle in some way or leverage the large scale distribution motion that we have. About 95% of the Fortune 500 are using the platform already today. We should do that and I think we benefit from a strong balance sheet from the core fundamentals of our business that give us the flexibility to do this and we don't take that lightly.

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Podcast Host (24:16)

Speaking of the strong balance sheet, I have to ask. So I was creeping on your LinkedIn to prepare for this interview and I saw that you became CFO of FIGMA in the summer of 2022 I think shortly after a company called Adobe made a $20 billion acquisition offer to buy the company famously fell through. We don't have to get into that. What was going on as you were handling all that and my main question is how does it work when it comes to collecting the breakup feed? You just like email over a wire information or do you get that in installments? I'm really curious how it works from the outside. Like, how does that work?

Praveer Melvani (24:53)

Yeah, well, I mean, on the breakthrough point, yes it is. It's at the end of the day, there's a legal agreement. You sign that legal agreement, it's binding and if all the things are checked and money's owed in the right ways. And so, you know, yeah, I mean I, I remember getting a ping from someone on our accounting team being like, hey, the number hit and here's a screenshot and I was like, oh, wow, that's a big number. The. But yeah, no, jokes aside, it was an interesting, interesting sort of, you know, experience to work through. I, you know, I learned a ton, I think extremely highly of that Adobe team there. I mean they've built a world class, world class business and you know, the executives there are just, you know, extremely, extremely bright and thoughtful and for the, you know, whatever it 16 odd months that we spent together, I grew a lot of respect for what they put together and what they built. And I think one of the things that was true for us is we knew that the way that we were structuring this acquisition, we were going to continue to be figma. There was excitement around the brand and the vision and the direction that we were going within. And so we were able to communicate that transparently to our team. And so a lot of stuff didn't necessarily change. We kept our foot on the gas throughout and deal or no deal, we had to continue to run. And coming out of that, we launched Dev Mode. We go through a, we continue to grow our team and a year and a half later we end up as a public business. And so I look back at the time fondly because I learned a lot. But I'm very much excited to have clarity today and the ability to control our own destiny right now must have.

Podcast Host (26:32)

Been a roller coaster, but I think it worked out pretty well for, for everyone. We only got a couple more minutes left. I just want to end with a, with a couple lightning round questions. What was, what was more stressful, the IPO week or your first earnings call? IPO week is, is there like a certain cadence you have to practice for the earnings call? Because I feel like they just like purposely dull it down like the tone just so, because they just want to get through it like executives. Is that like on purpose or Is that just. Am I just crazy?

Praveer Melvani (27:03)

Yeah, I mean, it's, it's one set of conversations that end up happening. You end up having, you know, deeper callbacks, not just with the analysts, but a whole set of investors as well. So it's the beginning of a, you know, a marathon in, in the, in the call itself.

Podcast Host (27:18)

They should just be some sort of like, podcast instead of earnings calls, like, because you could just spice, you know, spruce it up a little bit, make it more exciting.

Praveer Melvani (27:26)

All right, well, we're trying to take your feedback anytime, so take a look. Take a look at what we did last time. We'd love any feedback you have.

Podcast Host (27:34)

I'll definitely email you. What do you think is the figma's most underrated feature?

Praveer Melvani (27:42)

Oh, interesting. Well, some of the ones that my team uses quite a bit as we use figjam in the same way that you're describing, to run all of our meetings, all of our cadences. And I'm someone who doesn't really do well with a blank canvas. And so being able to describe to, to, you know, we have like a basic AI tool that can go and create a template for you or design the experience that you want as you're kind of working through something. I find that extremely helpful. And then we have an ability to, you know, summarize and categorize all the stickies and thoughts from the conversation. So that's always been really a really helpful tool for me.

Podcast Host (28:19)

Yeah, figjam is awesome. I meant to ask you this just a second ago. Would you be in favor of moving to a semiannual earnings reporting versus the quarterly that we have right now? I know the SEC is looking into it. Do you have any opinions on that?

Praveer Melvani (28:33)

I mean, I have no issues with that. There is a lot of work that goes through preparing for a quarterly earnings call. At the end of the day, it's about being able to continue to showcase progress to the investor community and be able to be transparent where's possible. And so I'm all for the right amount of transparency, but living on the side of preparing for it, there is a fair amount of work that goes into it.

Podcast Host (29:00)

Listen, man, if you guys move to a semi annual podcast like, like us, we're going to be in trouble. So I might be emailing you for a job if we move to semiannual. Last question, Last question. We were chatting before the, before the interview that you were from Toronto Raptors fan. So if you're watching the video version, he has the, the famous shot of Kawhi Leonard in 2019, Game 7 against the 76ers. The Philly fans, please turn off the feed. Oh, are you a Blue Jays fan?

Praveer Melvani (29:27)

I am. I got. I got until what, a couple more hours?

Podcast Host (29:30)

Okay, Perfect.

Praveer Melvani (29:30)

Perfect.

Podcast Host (29:31)

Well, good luck to the Blue Jays. And do you think the Raptors will make the playoffs this year?

Praveer Melvani (29:36)

They're looking good. I mean, have you watched a couple of the preseason games?

Podcast Host (29:39)

I haven't watched the preseason yet.

Praveer Melvani (29:41)

I don't know if I should care about it, but. Or you should care about it, rather. But I think they're looking good. They're looking hot.

Podcast Host (29:48)

I mean, a couple. Last couple years haven't been so great, but they got some good talent now. I'm a Rockets fan, so I'm just. I'm super hyped for the upcoming season, so I can't wait. Privy, thank you so much for your time. This was a. This was a fun conversation and hopefully you can hop on again soon and maybe we can talk about how to. How to make the earnings call a little bit more lively, you know?

Praveer Melvani (30:06)

Love it. This is a lot of fun. Good to see you.

Podcast Host (30:08)

Appreciate it.

Praveer Melvani (30:09)

Thank you.

Podcast Host (30:10)

Well, all right, guys, hope you enjoyed that conversation with Figma CFO Praveer Melvani. You know, I'm going to be keeping my eye on Figma to see where they go now that some of the post IPO hype has worn off. Let me know in the comments of what you guys thought about the interview and if there was a question that you wish that I had asked in case we get Privyr back on in the future. Now, we've had some great guests come on the podcast recently, and that wouldn't be possible without you guys listening to the podcast and engaging with the podcast. So thank you guys so much for all the support. And if this is your first time listening, just an FYI, we post a new episode every day during the week, breaking down the stock market crypto and corporate drama. And with earnings season kicking into gear, it's a great time to subscribe to the podcast if you haven't already. Thank you guys again for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here on Monday.