(highlight:: Figma's Editor-Based Pricing & Collaboration-Based Growth Model: A Figma Case Study
Summary:
Figma recently launched 'dev mode' aimed at converting non-paying collaborators into paying editors, which aligns with their pricing model of charging per editor rather than per seat.
This pricing strategy enables Figma to encourage collaboration among various personas without adding friction to the growth model. The editor-based pricing model facilitates wall-to-wall usage within design teams, driving high customer retention despite monetizing only a small percentage of users.
By integrating dev mode, Figma aims to capture a large monetizable TAM comprising non-designer users like engineers, leveraging its widespread organizational adoption due to the collaboration-friendly pricing model.
This approach showcases how a well-aligned pricing and monetization strategy can significantly impact a company's growth model.
Transcript:
Speaker 3
The one that I want to talk about this week is big, so Figmo recently launched what's called, uh, dev mode and I will pull this up. So if you don't know, right, Figmo has history has been mostly around product designers, right? That's what the tool has been particularly used for. A new product that they launched, which is still in beta at the time of recording this is dev mode. Dev mode does a few different things. It's kind of like has this inspection tool similar to what a browser inspector would do or what a engineer would use it for, but it's directly in the design file. Um, it helps like generate relevant code in different forms, CSS with UI and other formats also just integrates, uh, some of the favorite dev tools, like get hubs and of course, Adam, Your favorite Jira. So, um, as well. Uh, and so, um, the thing I find interesting about this is actually not necessarily just from a product strategy, broad perspective, wanting a new product. But I actually think there are some really interesting deep lessons in here around pricing, monetization and TAM expansion. So Figmo was one of the first two, I think, use this per editor pricing model. I don't know exactly was the first on this, on this front. Um, but one of the things around this is that it used to be that these tools would just price per seat for any user using it, right? And what Figmo realized, I think early on is that pricing model creates so much friction in their growth model. One of the primary ways Figma expands us through this viral loop around collaboration. I come in, I might design something, I comment and take my product manager. They come into comment, collaborate, um, but they're not actually designing. And so most, most orks would look at that and say, well, do I really want to pay for that PM or engineer who is just commenting and doing a few light things? Like no. So either I won't add that person to the account, which drastically, like reduces its, uh, utility or it really starts to make me very conscious on like the users I'm adding and it creates A bunch of like churn around it. So instead what they went with is a per editor pricing model. Um, and what this does is an unconstrained that growth, charges, prices against the designer who's actually making the designs, but it also allows you to invite all of these other collaborator Personas into the product. And that initially led to all of this wall to wall usage within a product engine design team, obviously creating super sticky, high customer retention, even though they were only monetizing A small percentage of those users. And so I think an interesting lesson here is that your pricing model can kind of make or break that growth model. And one of those reasons that pricing and monetization changes are so complicated inside orgs is that it kind of affects and touches everything. So anyway, so how does dev mode play into this? Well, Figma is now in tons and tons of organizations because of that growth actually because of that pricing model. And like in reforge, it's almost everybody on the company is on it in some capacity, but we only pay for a small percentage of those users. And so what dev mode does is, uh, and that product is essentially starts to convert all these engineers who are non paying collaborators on Figma and converts them into paying editors. And now this isn't like some small ad like at HubSpot, we went through like all these add on products that helped kind of increase net expansion a little bit. But the genius thing about this is like, you got to remember that every organization, there's probably why like five, 10, 15 plus engineers to every single designer. So you're talking about a monetizable TAM that is like a huge multiple compared to their current designer user base. So altogether, I thought it was like a really compelling move by Figma.)
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