Product Manager Interviews (Figma — A Product Use Case — Part 1)

8 min readApr 8, 2022

Figma value proposition and total addressable market

In this two parts series, I’ll try to walk you through a product use case that you can use as a guide for your PM interview product questions. “Tell me about a product you love and How to improve it?”

The pain point(s) Figma solves for

Long Iterations and broken feedback cycles between product design and the rest of the product team. There is a lot of time wasted uploading or syncing screens, creating share links, and messaging people seeking feedback. This is specifically important for remote and different time-zone teams
The inconsistent transition from design to code. The friction developers find to transition the designs shared by the designers into code and not being able to exactly meet the design requirements
Lousy performant web-based design solutions. Most of the design software is native apps and not in the cloud which comes with the need for software update and installation, not to mention the rigorous license purchase process, especially for large enterprises.
The lack of a powerful and performant design and prototyping (low-to-high fidelity) solution.
Hard and not very intuitive design solutions for non-designers which in return increases barriers and silos between the team members.

Evidence that the pain points Figma addresses are widespread enough to make it viable

If we think of software design tools and their adoption in almost every small, mid-size and large tech company and how such tools are essential to the final delivery of almost every user-facing product.

Main Highlights of the software industry in 2022(1):

Revenue in the Software market is projected to reach $626.5B in 2022.
The market’s largest segment is Enterprise Software with a projected market volume of $250B in 2022.
Revenue is expected to show an annual growth rate (CAGR 2022–2026) of 7.12%, resulting in a market volume of $824.8B by 2026.
In global comparison, most revenue will be generated in the U.S. ($313.7B in 2022).

I will try to simulate TAM (Total Addressable Market) calculation for Figma

My assumptions:
For simplification, I am only calculating it for the US market
I will link the used resources below

Given that the target customers for professional design tools can vary from (freelance designers, startups, unicorns, and enterprise companies). There are at least a total of 585,000 tech companies in the U.S.(2)

If we look at the distribution of different size tech companies in the U.S. we see that 97.9% of firms are small (< 100 employees), 1.9% are medium (100–999 employees) and only 0.2% are large (1,000+ employees)(3).
Figma sells its core product using a freemium model, with a starter free plan for up to 3 editors. Enterprises can opt-in for the professional plan pilled at $12 /editor/month or $15 month-to-month plan for smaller companies for a more pay-as-you-go model or critical business corporates can pay $45 /editor/month for a more secure option.
I will assume that small and medium companies would subscribe to the $12 /editor/month as it has more value to price compared to the from month-to-month which I see matches more freelancer and independent designers

= (97.9% + 1.9%) x 585,000 x 12 month/yr x $12 /editor/month x (Avg. of 5–10 designers in a small or mid-size company) = 583830 x 12 x 12 x (5 to 10) = $420,357,600 to $840,715,200 = $420M to $480M possible market

Side Note: In 2020, Figma generated a revenue of $35.1M. Having raised a total of $332.9M in funding over six rounds, the company was last valued at $10 billion after it raised $200 million in July 2021(4).

What makes Figma value unique and difficult to replicate?

Figma has all the features and capabilities of Sketch + Abstract + InVision + Craft + Liveshare + Freehand + Zeplin + Dropbox all in one.
Figma is a web-based design tool, which gives it a very good edge as there is no software needed to be downloaded while also giving you the option to work offline by downloading any of the different platform supported native apps
Figma has Live share: When you share your prototype with colleagues or customers you get to see what they’re seeing on their screen and follow their cursor around.
Built in-app commenting, anyone with the link can add comments anywhere on the design, you can tag people for better collaboration and an effective feedback cycle
Version Control. Figma includes version history for all collaborators. You can roll back to or fork from a previous state.
Easier transition from design to code, Figma displays code snippets on any selected frame or object in CSS, iOS, or Android formats for developers to use when reviewing a design file. No need for a 3rd party tool with the ability to use Zeplin to do more than simple measurement and CSS display
Figma developer APIs provide 3rd tool integration that allows true integration with any browser-based app.
A web-based performant app backed by a powerful 2D WebGL rendering engine that supports very large documents.
Powerful and various plugins that support designers to add new functionalities, power up their design workflow with these small and mighty apps
Figma helps system designers remove the guesswork in building designs by providing analytics on library usage and adoption between different teams and departments which, helps with more informative decisions.
FigJam which a new offering from Figma that replaces miro and MURAL-like tools for brainstorming, Ideation, collaboration, and high-level planning.

You can find the growth of Figma as a UI design, brainstorming, user flow, and interaction design tool over the years also we can see how Figma is dominating in almost every UI design process aspect including UI design, prototyping, handoff, design systems, and versioning(5).

Figma’s purchasing funnel

I believe that a company like Figma, which has a vision of “making design accessible to everyone.” and people who even started back in 2011 to experiment with the possibility of building web-based design tools and making it free and readily accessible to any beginner designer by 2015 to test and adopt and people never looked back. (6)

Figma is a company impacting the future where design is even more collaborative, borderless, transparent, community-driven, and open-sourced. If we try to outline the purchasing funnel for a product like Figma. (7)

Awareness: Figma strategy to reach potential customers including independent designers, startups, mid-size and corporate companies They have defined the bounds of its total addressable market (TAM) and is widely used not just by designers but also by non-designers (engineers, product managers, marketers, etc.). Figma started by opening up to all the tech community back in 2015 attracting thousands of early adopters who fit its ideal customer persona. Using the PLG (product-led growth) philosophies of free and ungated access to core functionality, frictionless self-serve onboarding, coupled with user delight that the superior product offered, Figma was able to successfully activate its early adopters.

Interest: A focused community and content marketing program further fueled this and a loyal user base, positive word of mouth and network effects were now brewing. After holding off on monetization till value was established, Figma introduced a self-serve teams product — Figma Professional, providing users a greater scale of collaboration for a monthly subscription fee. The growth in users was compounded by a combination of direct network effects amongst designers and cross-group network effects through non-designers. The early adopter designers championed the change in their direct and indirect teams introducing the new enhanced web-based tool way for a design-focused tech company.

Consideration: The product as expected was received warmly, generating huge inbound demand. However, the self-serve onboarding system that drove Figma’s bottom-up growth proved insufficient for the buyers to navigate their internal red tapes, and a gap developed for pre and post-sale support.

Intent: As teams within large enterprises adopted Figma, the platform virally found its way onto most screens within the tech and product org. As with all SaaS categories, the move to enterprise comes with, well, the need for enterprise features. Figma addressed this need by rolling out Figma Organization — a powerful enterprise solution for all corporate needs (billing, security, user management). This was also accompanied by stronger collaboration tools in the form of organization-wide design systems.

Evaluation: Figma realized that the key to undertaking this was to leverage user information and signals across product usage, billing, and communications in a single view, allowing their account executives and account managers to prioritize and customize their approach. What followed was a multi-quarter engineering effort. Figma’s engineers helped the sales team create a data warehouse, pipe in information from multiple siloed databases, group users by organizations, mark high priority accounts using Clearbit data, deprioritized closed-won accounts using stripe data, and lastly, score leads to reflect the likelihood of sales conversion based on:

Purchase: Figma is investing heavily in the community as it tries to position itself as a platform with top users sharing designs and tutorials (in true GitHub fashion) and by facilitating easy build & stable plug-ins. This investment is pegged to usher in a new phase of growth driven by global network effects. Also, with their new launch of FigJam, the whiteboard tool embraced every step of the product development process.

UPDATE: Figma — A Product Use Case — Part 2