Pricing Package unPacked - Figma, AI Credits, and the Future of SaaS Pricing

In this episode of Pricing Page unPacked, we break down Figma’s pricing page and explore what its pricing strategy reveals about how the company wants to grow. We talk through Figma’s evolution from a simple design tool into a broader product suite with FigJam, Dev Mode, Slides, Sites, Make, and more. We also dig into how Figma’s seat structure works across designers, developers, and collaborators, and why that approach may be better for expansion than for new customer acquisition.

We also get into one of the biggest pricing topics in SaaS right now: AI credits. We walk through how Figma is introducing AI-based packaging, why they are not fully enforcing limits yet, and what that means for cost control, user behavior, and the future of seat-based pricing. If you care about SaaS pricing, PLG, monetization, packaging strategy, or how AI is changing software business models, this episode is packed with practical insights.

For more information, catch us on https://www.willingnesstopay.com/

Transcript

Rob 0:03

Welcome to Pricing Page Unpacked. I am Rob Litterst and I'm joined by Ulrich Lurkoff Schmidt, pricing expert and CEO at Willingness to Pay. Each week we take a real company's pricing page and break it down the decisions behind it, the trade-offs, and what it tells us about how the company actually wants to grow. No slides, no scripts, just a real conversation between two friends who live and breathe pricing. Let's dive in. Ulrich, how's it going today?

Ulrik 0:28

Pretty good. As I just told you, I've been like knee deep into ATS systems, the couple let's call out. So uh so now we're gonna talk Figma. That's great.

Speaker 1 0:39

Good times. Yeah. We'll jump into Figma. Maybe we can jump into ATS systems on a future episode. Um Figma. Let's let's jump right into it. I'll give a little bit of background on Figma, and then I think we can jump into the pricing page, how it's evolved, and we can kind of talk about some of the finer points that we wanted to highlight. Um, so Figma was founded in 2012 um in San Francisco, founded by Dylan Field and Evan Wallace, and it really kind of centered around design. And if you hear any of kind of like the folklore around Figma, the big goal and their kind of mission is to make design more accessible to everybody and to make design almost like kind of a core fundamental skill for knowledge workers. So it's kind of this like democratizing design idea. And we'll come back to that because I think it really plays into their pricing and kind of how they think about their product and getting more people into the product. But Figma really started as a design product. And I think the easiest kind of way to talk about it is like whatever Google Docs is to Microsoft Word, Figma is to Adobe and the other design tools, right? It created this kind of collaborative, easy to use for Teams space around design and gives people this like kind of modern way to work together and make design really easy to work on as a team.

Ulrik 1:56

I mean, I'm older than you, so can you remember sitting through any kind of the meetings that you would sit through pre-Figma? Like, because I can't. I can sort of remember how design was like it felt clunky and slow. And and then with Thigma, it's like, hey, we're gonna have this, and like you zoom in and out, and you like everything sort of was instead of what it's on, like individual pages that you have to sort of imagine of how everything was sort of connected, you had this like like unlimitedly large space that you could sort of zoom in and out to, and then the designs were actually nice and not like almost like blocky mock-ups, which was before because it was so difficult to actually make anything nice. So you have to sort of imagine how it would look and how it would fit together. And then Figma came along, and it's like, oh yeah, okay, like that. And you could sort of immediately connect to the product and the decision making were well of course like based on how it was actually going to look. So, so I because I remember that, and it's like, oh, like that's it felt modern when it came out for sure. Now it's just the norm, right? Like nobody would go back to anything like remotely resembling World War IV.

Rob 3:08

Totally. And now I think their big mission is kind of like pushing around the edges of design, right? Like pushing to all of the kind of adjacent territory that fits into design, but is also kind of like on outskirts of it. And and and we'll see what that looks like with their products. So if you if you look at where they started, they had this kind of like design product. Now they have a whiteboarding product called um Fig Jam. They have uh a developer mode where basically developers can hand off um, like basically developers can handle code inspection specs and design to code workflows. They have Figma Slides, which is basically like their Google Slides or kind of like PowerPoint competitor. They have Figma sites, which is website publishing directly from designs. They have um AI features, kind of like vibe coding, which I think is called Figma Make, um, that kind of goes up against lovable and some of the other vibe coding tools. Um, and then they have a very vast kind of plug-in and integration ecosystem. And I think like one of their big goals is just to plug into everything that you work with and to become this kind of place where you funnel all of your design work um and everything that's kind of like touching design.

Ulrik 4:16

It's obviously worked, right? So so as a I think it's like it's not without competition, right? So so it's one of these where Miro and also some of the legacy players have like got up to speed. So it's not like they're owning the space uh solely, but uh, but I think I think it's also one of these where where they're still known for their core product. Like it's not like Google was known for search, and now like sheets and docs and everything else that Google does is like like equally well known. But I think Figma is like they're known for their well, the Figma design board and then everything else. Like I didn't know to be honest, like half of what you just said, like, oh, like you've actually I have no idea, right? So so so I think it's it's it's it's one of these, I don't want to say it's like a like a one-hit wonder, uh, but but maybe it is a little bit white, right? Where it hasn't been able to sort of establish like other or adjacent categories around it, right? So, but it's still very strong at that sort of fundamental um yeah design product that that it has. Totally.

Rob 5:20

I think what you're kind of highlighting and zooming in on is like they're a very, very strong single product, but they're not quite a platform. And it seems like they want to be a platform where they have like a bunch of different things going on and like this kind of constellation of software tools that people can use, but it doesn't seem like they're quite there yet. Um to add a couple more kind of details before we dive into their pricing. They have millions of users, they have hundreds of thousands of organizations, including large enterprises. Um, they IPO'd last July. The stock has not done very well uh since the IPO, which we can save for another podcast. I think I don't necessarily think that that's um that that has anything to do with their their performance. That their revenue, I think, was up about 40% um year over year in their last earnings call. So they're growing. I think they just got over a billion dollars in um in annual revenue for 2025. So obviously doing a lot of business and and looking to grow that. And everything that we just talked about with their product, um, I think is really, really interesting through the context of pricing. So I wanted to highlight a few things um that we can talk about. The first thing is I just want to share one of my favorite podcasts is Patrick O'Shaughnessy's Invest Like the Best. I've been listening to this for years, and I never forgot this. I was working at ProfitWell when I heard this uh podcast with Dylan Field from Figma. And Patrick asked him, What have you learned about pricing? And I think this answer is just great. He says, Pricing is such a big topic. We could spend hours on this. I think the simple advice I'll give for people that are designing the first pricing strategy is not to get too detail-oriented on it. I think the natural inclination of people who are technical is to go after super fancy conjoint analysis and try to create this really rigorous process through which you can figure out what your perfect pricing should be or engaging with a consulting firm or something. I think if you can design a few plans that you can show people and get their feedback on, you'll learn so much from just talking to a few users about potential pricing and reading their body language. Make sure you do it either in person or over video. Given COVID, again, this is in 2020, seeing how they just viscerally react to something, I think is a good first step. Um, he goes on um to kind of talk about how they started with the pretty simple pricing and packing model. And I think like if you look back at the history of Figmas pricing, they started with this like $12 per user per month model and they didn't change it for a really long time. Like they they held that pricing firm for I think like five or six years. It wasn't really until last year when they really made a meaningful change to their pricing. And so what I'm pulling up now is a change that they made um in Q2 of 2025. And I think this this kind of comments on how they went multi-product. You can see in January of 2025, they had kind of like this multi-product toggle, right? At that point, their only two products were Figma and Fig Jam. And they had a very simple um like cost per user um seat-based model um where you would pay a certain amount per user per month based on whatever product you use. I think, like as we were talking about, they they had a bunch of other products in development that they were working on. And I think they kind of like came to this crossroads where it was like, well, are we gonna have like seven toggles up here for all the different products that we're trying to launch? Or can we do something different? And so I think they chose something different, obviously. And what they landed on is this really, really interesting kind of seat-based filtering where the type of seat that you have gives you access to different types of tools. So when this they've since expanded further and added more products, but when they when this change took place, um, they basically had a full seat, which gives you access to everything, a dev seat, which gives you access to everything except for Figma design, and then a collab seat, which just gives you access to Fig Jam and Figma slides. And um, I have talked to a few people about this pricing and packaging model. Um, and I am so curious to get your thoughts on it because I I think it's a really, really interesting and novel way to do a multi-product, but I think it also can get insanely complicated. So I'm I'm curious what you think, Ulrich.

Ulrik 9:20

So it doesn't sell well as a pricing page. Like if I go here, I have I'm already like I'm spending like if I started a timer, I would go well past a couple of minutes before I would start to feel like I had an overview, right? So um I'll go back here. Yeah, so so so what it probably does is it sells ri pretty pretty well from a PLG motion. Like once people are inside the product and we're just adding stuff or we know the model, that might work better, right? So I think I think what they're trying to do is they're saying, okay, so we had Figman, Fig Jam, and apparently it's really hard to, especially if you have an original PLG led motion, to start to cross-sell additional products. So they're not the first company to realize this. So it's like, okay, so we have a good product, everybody lost that, and now we want them to also buy the other product, and then nobody does. And the attached rate of the second product is like two percent, right? And that's like yeah, and then everybody's struggling with it because it it it made such uh like good sense when they were like thinking about Fig Jam that, hey, like we're just gonna do this, and then everybody in the organization can be a designer on this sort of whiteboard functionality. Yeah, but then nobody cares. So it's like, okay, so that sucks. And then and then so what they're trying to do is they're like, okay, so we have this organization where it's like a pyramid structure where where at the top you have, let's say, the fewest people, which are the designers. Yeah. Out of a thousand people, you you don't have a thousand designers, you have like a couple handfuls, right? Yeah, and then underneath that you have a little bit more developers, like technical people, like people that need access to code, and then at the bottom you have everybody else. So if it's a white-collar business like that, everybody needs access to some slice and so forth, right? So basically, the one they're trying to do is they're trying to take the org chart and say, okay, so the few valuable like guys at the top that we already sold to are over here, and then we want sort of the other slices of the pyramid to sort of enter into our product as well. So, and that's also why they're saying, hey, the designer is like 16 bucks and you have maybe five of those, but you have 200 regular people, so why not add those for yeah, 600 bucks as well? So that's kind of the idea. And with I'm betting that with something like this, because you already have the uh designers internally, and what you're doing is with the designers, and that's sort of I think what what is what is making this possibly actually work is that the collaboration, so the view functionality. So when I am a designer, I need sort of the business person or the product manager or whoever to actually take a look at the designs, I need to pay three bucks to get her to actually take a look at it because that's what the collaboration costs, right? So right. So by pulling them in, I get that. But I think I think I don't know how well this actually does the real adoption, meaning am I actually getting those collaboration uh users to actually use some of those products? Are they actually using the slide product? Are they actually using the Thick Jam product? That I'm unsure of. I think I think people are just paying three bucks to get to see what the designer's working on, to be honest, right? And that might also be uh the case for the dev seed, where where I think I think what they're gonna see is that they're gonna see a lot of the full seat by sign seeds, because that's the core product of ThickMe. And then they're gonna see everybody that needs to sort of work with the designers, they're paying three bucks for. And then if they have adoption of specific sort of dev functionality like dev mode, they're gonna see a few of those seats as well. But I think I think this still creates a very like Figma classic heavy monetization model where 90% of the money or more comes from that core Figma product with the $16 users, and then you have a long table of like essentially what is view-only users on the on the design product. So I think it doesn't necessarily create a problem, but I add them in the product, there's a little paywall. Okay, Tim and Sarah needs to take a look at this as well. I need to pay six bucks, that's fine. It's approved, and then it sort of moves on. Um it's it's yeah, yeah. So but but but it doesn't really sort of solve the the the multi-product issue that they have here, right? Yeah, that's it. That's that's my thing. What do you think?

Rob 13:51

No, I think it's great. I I I have like a few things that I think of when I look at this like kind of seat structuring that they're doing. One of them is kind of like going back to the original mission of like democratizing design and making it kind of like a core skill for everybody. I kind of view this pricing as like the the physical manifestation of that mission, right? It's like we have this full seat for designers, and then we have this partial seat for devs. And then like as you get further and further away from like core design, you pay less and less. But like this is our way of kind of like getting the entire org to hone their design skills and be involved in design, right? Because you can view, you can imagine that like product teams, maybe marketing teams are using the collab seats, that sort of thing. And so it's like anybody who is kind of like gravitating or kind of like in the orbit of design um has their way of using it. Another thing that um I immediately think about is actually one of your ideas, which is wallet structuring, this idea that you can pull from different departments um from your pricing to help um to help kind of like grow your accounts and and basically enable more people on your customer's team to access the tools and actually get value from it. And I wonder, I wonder if you think that that is actually like happening here. Cause another side thought that I have is that objectively, this makes PLG harder to me. So like I think like you commented on something where like it seems like this is much more a strategy for expansion than net new customer acquisition. Like I would imagine that like from a PLG standpoint, very few companies are like selecting a plan and then like picking a few full seats and then a bunch of collab seats. Like, I just wouldn't imagine that that would really like happen organically. I would think that that would happen more on the enterprise side when um their sales reps are kind of like putting together a proposal. So that's it, that's a few thoughts. Like ties back to the mission. Um, this idea of kind of like net new versus expansion and this idea of wallet structuring. I'd be curious if you have any thoughts on any of that.

Ulrik 15:48

I think there's gonna wallet structure, but again, I think most of the bill is gonna be picked up by whoever owns the budget for the design team, right? Yeah. Because that's our product and so forth. So you're gonna have this where is it product that owns the design team, or is it marketing, or is it a little bit of both, and maybe they have sort of individual seats and that's fine. Um, I think, I think one thing that Figma might consider, especially for an enterprise tier, would be to would be to to offer a platform fee and then still offer seats for designers. Maybe they have a number of design seats included, and then uh then offer like unlimited collab seats or other types of seats. So basically you you shift to for some of the smaller products to a um like an employee-based pricing model where you say, hey, you know, all of your thousand people have access to this product. Because I think I think one what they're underestimating is that the the products like the fig game and the fig slides are only really valuable if everyone in the organization starts to use it. And then I think that's that doesn't happen incrementally, it happens sort of binary, like like we make the decision to do so. And I think it's easier if you just like push that on them in a sense by saying, hey, the enterprise version takes that as a given that that you want this kind of thing. Um so so so that might be it. And then then you could push something like the platform fiances or core ops, um, and then push or pull some of the of the um of the budget out of the design team, whether that is from marketing or um I think it does have like a wallet structure approach, but it's just very heavily loaded on the on the original sort of design budget.

Rob 17:23

Yeah. Yeah, I think you're 100% right. Um did you have anything else you wanted to comment on here, Oric? Or do you are you cool with moving on to like AI pricing?

Ulrik 17:34

No, let's move on to AI.

Rob 17:35

Okay, I'll cue that up. Yeah. Okay, cool. So I I think you're 100% right there. And I think um to your point around a platform fee, like I actually think that could be particularly useful as their pricing expands. Um, because they're they're now kind of venturing into AI pricing. Here, let me just pull this up. There you go. Um, because of what they're doing now with AI pricing. Um, so the the we already mentioned their pricing and packaging got a lot more complicated as they added different C types. Um, the big second move that they made last year is they added AI credits to each plan. And if you look, um this is from Q4 of last year. So when on the last slide that we were looking at, they had four different products. They had FigGem, Figma Slides, Dev Mode, Figma Design. In Q4, they launched four more. So Figma Draw, Figma Buzz, Figma Sites, and Figma Make. Um, I think Figma Make is their, that's like their lovable competitor. And then um we mentioned the other ones earlier, but I think it's Figma Make and Figma Draw that are primarily eating up AI credits, but they they have these AI credits. And let me just zoom in here. You can see the kind of allocation. What I think is um really interesting here, like a lot of these legacy SaaS companies that have license-based models are starting to use AI credits. And what we're typically seeing is that they have like a different credit threshold for each plan, and that like becomes a new upgrade lever, it becomes kind of a new differentiator. Um, but most of them are tied to seats, at least they're marketed as per seat, but they actually pool to the full account. But most of them are pretty strict with their credit operations policy. So, like most of them don't allow rollovers, don't allow top-ups, they're just not that sophisticated yet. The interesting thing about Figma is they are not really enforcing AI credit limits right now. They literally say it in their FAQ. So, this is their allotment for full seats. All other seats um currently receive 500 AI credits. But basically, they say in 2026, we're introducing new ways to purchase additional credits. Until then, we won't be strictly enforcing credit limits for full seats. Um, so that's pretty interesting. So a lot to unpack here, Ulrich. I guess like starting out with offering credits for kind of what people can do in here. And then the second piece would be having this policy where you don't really enforce it. I'm curious what you think about that.

Ulrik 19:59

And so I think credits can make sense. Let's say with the additional whatever four products or let's say functionality clusters, whatever we want to call them, and the credits that arrive, you're starting to have a relatively complex model, right? So yeah. So I think uh back to sort of um Dylan's uh like podcast quote, where he says, Okay, I think this is definitely still something that you can show customers, see how they viscerally react to it in a call and sort of and then go from there. So so I mean, it doesn't really sort of break the original idea of how you should do pricing, but I think it's one of these where it starts to only make sense if the customers already know the product, where there starts to be this divide between new customers that would, I think, mostly fail to orient themselves in a good way in this. So the whole which means that they now need to be sales assisted. It needs to be something that I'm onboarded with and so forth. And they might still have a good funnel from the free plan, but more and more this starts to look like a sales assisted play. And then so that's that. And then, but and for for for customers that are already like navigating the product and they've been customers for years, they start to say, okay, we'll get a new functionality, and and maybe that's fine, maybe it's not. Depends on the bet. I think it this looks a little bit like I mean, ThinkMap has just the whole category of design is is like front and center of what AI can disrupt and and where it can have like tremendous amounts of value or something. So I think it makes sense that they lean into it fully. And the credit model makes sense from an uh from an internal point of view, in that all of the AI functionality has real compute costs associated with it. And I think ThinkMan, like so many others in this space, have found out that uh you have an extremely like 80 20 hockey stick dispersion of usage amongst your user base, right? So if you have a million users in It is almost certain that thousands of those users, so point one percent of them are consuming more than 30% of the cracks, something like that. Yeah. Because you're gonna have these like extreme power users that do nothing but AI, like whatever, and they might even have found ways to sort of share the login and so forth. So that means that if you offer AI for free, hey, it's just like included in the product, suddenly you have like suddenly you have a significant portion of your user base, which one is loss making, and two is actually not priced compared to the value that these users have. Another layer of complexity, right? On two levels, both uh externally towards the customer, and I need to understand what a credit is, how I'm using it, does it roll over, like etc. And internally with the billing system. So I think what we're seeing here is that Figma says, hey, we need to do something, so we're just gonna roll it out, and we're gonna we're gonna focus on the external part first, where the market gets to sort of react and we get to sort of educate our customer face while we then internally get ready from a billing perspective, because we don't have all the piping and tubes in place to actually run this like operationally. So so that would be my best guess. So my my guess is that they are going to run this almost like a big market test while they build up the operations internally, and then we might see another change in how many credits they give to who and how, and what the terms and conditions around credits are when they then have the operations in place to actually do something about it. Yeah.

Rob 23:43

That's super interesting. I think like you you mentioned one thing around credits and like, you know, if you're not enforcing, like I think credits in general, like you know, you're gonna have that power law of customers and usage. And so you're gonna have some customers that you're losing money on to begin with. To exacerbate that further, Figma is not enforcing credit limits right now for full seats. And to exacerbate that even further, they you can tell from between these two pricing pages, like they didn't add any like additional cost for their new products, right? Like the per seat price is the same as it was before. And so they're basically giving away these new features for free. And they actually have a precedent of doing this. Like I remember when they launched Fig Jam, they gave it away for free for a year before monetizing it. And then when they finally did monetize it, I think they were only charging like five bucks a month, or it was like before the collab seat. I think they were charging like three to five bucks a month or something like that. So basically they have this precedent of like giving away these products for free for a certain amount of time so that people can play around with them, see if they like them, see if they find value. And then they kind of like throttle, like basically push the monetization lever on and turn that on. So it'll be interesting to see what they do next year as these products mature. Because it to your point, like there's definitely some um, there's definitely some customers I would imagine that are that they're losing money on. But I think they're probably willing to do that right now just because of how important it is that they actually have an AI narrative and get customers into their AI products and using them. Because to your point, I think like generative AI is kind of like an existential threat to a company like Figma, where people can, you know, if if people can create their designs perfectly and lovable, um, you know, just by prompting, then it takes a lot of the the investment needed in design away.

Ulrik 25:26

Yeah, and and you might so as as design becomes more and more AI heavy, you might consider whether it would make sense to just give all the seats away for free and just charge for the crit. Because I think I think one of the ideas is that, well, you know, we used to have five designers, but now we have two designers with AI tools, and they get like the same stuff done. So so I think I think they're going to see a compression on growth from the seat-based pricing part simply by the fact that designers, I think, here, sort of like my impression, are getting way more productive, right? And I think you're gonna have a lot more, I don't know how they hook that up, but I think a lot more also design is now being produced without human intervention. So so there's a lot more sort of ad design, there's a lot more sort of uh social media design stuff that is just being sort of, and also even sort of for like landing pages and so forth that being spun up by AI, never touching a human. And I think for them to sort of get into those flows, you would start to see something else. So I think if if you eat I think there's a lot of companies that will move in that direction, and it's one of these where whoever gets it right first, both from like a product perspective, but also from this pricing model perspective, is gonna win. And if you try to get it right first but get it wrong, you're gonna die. Like so, so, so, so from Figma's perspective, publicly listed company, they have to hit your hit revenue every quarter. They have a billion of revenue they can protect, like at a big market position. I think they're going to try and be like make sure they know what's going on and then not be the first mover, but kind of the second mover. Like, whenever a model appears in the market, I think they're gonna go for it. And I think maybe seats isn't sort of as big a part of their future as it was a big part of their past.

Rob 27:09

Yeah. I think that's really well put. And I think you're right. I think like what what you advocated or what you're saying is kind of pushing towards more of like a lovable type pricing model, right? Where you take the seats away and it's all credit-based. Um, but for Figma to flip the switch right now would be probably catastrophic to their uh to their to their recurring revenue.

Ulrik 27:30

So I I think uh you're 100% right. And also, yeah, like from the off side of just being able to charge in that way and monitor the credit usage and and educate their user base a little bit in that is is like it's a good bridge. Like that's what they spend 2026, 2027 on before they might do something more radical. Awesome.

Rob 27:48

So on the topic of credits and if credits are gonna going to eventually become kind of like the overarching model for Figma. We already talked about how they're very clearly going to make some changes in 2026. So they're gonna introduce new ways to purchase credits. Um, they, I believe, are going to start um enforcing limits on credits. I think I read that somewhere. I also think that they mentioned somewhere, and it might actually be in here. This right here is their kind of credit. Um, here, let me see if I can get this bigger. There we go. Um, this is like the kind of credit section on their website where you can kind of like review all the questions you can tell. Like this is the challenge of a credit model. They put together a section of their site where they define their credits and it takes 15 minutes to get through it. So, like, this is what we talk about when we talk about like even for like a relatively simple product like Figma, getting through the literature on their credit model takes you 15 minutes. So it's it's for the companies that are thinking about credits, like there are a lot of benefits. But one of the one of the things that we're already seeing is kind of fatigue from customers around how complicated credits are. And um, that's just something that you got to think about. So Figma, um, I do believe is going to make a few changes in in the new year. I think they are like that, yeah, it says right here, admins will be able to purchase a shared pool of additional credits through the AI credit subscription. These credits reset monthly and can be pre can be approved by users if they exceed AI credits included on their seats. So they're getting a little bit more flexible with kind of like the operational side. Um, they're obviously going to create kind of like a very simple dashboard where everybody can see team-wide credit allotment and make sure that they have um they understand their credit usage. What I'm interested in, and what I think is kind of interesting right now, is looking at actual credit tables and the kind of value of credits and like what people can do in there. Um you see, you see in here they have a bunch of different things you could do: AI search, rename layers, summarize stickies. These are all free. Um generating templates and diagrams obviously are going to be a little bit more removing background, image resolution, make image. So, like this is uh they're kind of like lovable competitors, like creating an image and make, editing an image. Then obviously, uh Figma, Figma make varies based on complexity, um, first drafts, prototypes. So we're we're starting to kind of get an understanding. I think, like from my perspective, real quick before I turn it over to you, Ulrich, what I think is interesting is they kind of have this blend of like free and then kind of like flattish, like flattish, um, kind of like value-oriented credit values. And then they have these kind of like cost-based value, or these like cost-based credit values that are like pinned to the actual model. And so they're really blending a lot of these. And like when we look at credit models, I typically feel like it's one or the other. Like they're either kind of value-oriented around the outcomes that the credits can help you produce, or they're kind of cost focused and basically articulate like, yeah, we are a layer on top of the LLMs, and like this is how much we charge for like generating something with each LLM. So curious what you think when you look at this and what you think it means for Sigma.

Ulrik 31:00

So I think actually, I know you skipped that part, but but I think like I the the census was resets monthly, right? So in my book, that means that it's not roll it doesn't roll over. So yeah, so so it's almost like so they have a credit model, but actually it's actually a license system. Like you have the right to edit however many images in a month, and if you don't, it resets, and then the next month you have the same type of white. So and then so this is bound to create some some uh some friction, especially if people start to buy credit. Like right now, the credits are included, so you can't really get too sort of pissed off that something that is included is is somehow limited. Um but when people start to pay money for it because they need additional credits, if they reset every month, there is going to be a lot of friction in the sales process with this. But if we then go down to the actual sort of credit prices, um I think this is the as you said, this is very sort of cost focused. So there's been some sort of, you know, the CFO office like called the dev team and said, like, how much are we actually gonna spend on this? And they they created some sort of like currency mechanism between their token spend and the sort of the credit system, and sort of we're covering it here. And so what happens is that a user or buyer would sort of read this and say, okay, so I guess I I get sort of there seems to be like a relatively good like um correlation between okay, so the Gemini 3 Pro image thing is more expensive than the GPT image one mini thing that makes sense as a heavier model. So there's nothing that is unfair about this. But what's gonna happen is that people will say, there wasn't nothing unfair about this, but also I can't possibly remember all this, so I'm just gonna go into the product and start using it. Yeah. And then this creates this divide inside the customer organization between user and buyer, because the the designers are now just gonna use the product, not care too much about the credits, they're not gonna hit a limit, and then depends on who actually can approve the additional purchase. Either they're like, okay, Figma just stopped working for me because I can't do the thing that I am supposed to do anymore. Uh so that's a problem. And then either they just say, Okay, any more credits, and then now they're buying, so that means that the user becomes the buyer. That is a huge financial risk inside the organization because now you can have designers that just they spend money that is outside of the procurement control of the company. So CFOffice wants to like clam down on this and say, no, like we need to sort of like cost control how you use Figma, and then that is that is an internal problem. So FIFA can I don't know how good they are with their internal and let's say um credit overview, measurability, cost control, like who has the roles and permissions to approve more critics? Where do I see them? Is there a notification system? Is there a forecasting tool where I can see how many credits I'm going to spend in my billing period and all these things? Yeah, they have none of that, which they might not have because they're not ready to even charge for overages. That is uh also a potential problem. So, so so so what you will see is is all of these sort of internal friction points. They'll start internally the organization first, and then they will sort of boomerang back into sales and procurement conversations when with FigMet when something like this happens. And I think it's actually not gonna be uh materially better even if they uh unified all these prices, right? So if let's say that every uh action was 10 credits, whatever the average is here, or five, something like that. It would be easier for me to understand this page, but it wouldn't actually alter my behavior inside of the product. Right. So so I don't think that there is a that there's not a clear, yeah, there's not not a clear sort of benefit to do something like that for something like Figma, other than you just say, hey, any of these actions is five and it's easier to read and it feels safer or more understandable in a way, but I don't think it has sort of a material change to it. I also yeah, however, would say that I think something like this is unnecessary for Figma because they're not going to they could have an average price correction and then across all of the different use cases make that work also from a cost covering side, and then make this part of their model, like the page would only read on seven minutes, um and they would be fine, right? So because the variance side is in the actions is so small. So I think it's while understandable, it's unnecessary, and it's also not really going to matter whether they do the one thing or the other, even from a user. The real issue is is between sort of the buyer-user profile inside the customer organization, that this system doesn't seem to really try to address it all.

Rob 36:06

Yeah, that's super well put and and really, really interesting. I mean, I think like you brought up what I think is going to become like a really important point with these credit models, which is like helping your actual customers with cost control. And like you brought up a couple of approaches to it. I think like, first of all, they could just simplify their pricing table and have kind of like a blended cost per outcome, right? And that'll like help them get rid of this complexity and basically eliminate like that conversation for the most part, because instead of having five different prices to make an image, you're you have one price to make an image. And so there's like nothing for the user to talk to the um, you know, CFO about, basically. It's like, well, this like we either need to like throttle our usage down or um like do something else. An alternative to that, like if they're gonna keep this kind of like complexity, I think, and and other companies that do this, I think like there's gonna be a need for kind of like cost control tooling. So like helping facilitate those conversations with your users and the kind of financial side and like giving them insight into here's how you could actually lower your costs or lower your usage. The challenge is like that's obviously like there are perverse incentives there because that's obviously like not good for Figma if the company is like cutting back their usage. But like that, I think is like the level of customer friendliness that these companies need to be thinking about when they're launching credit models because of that complexity and that tension and friction that you talked about between the user and the actual um decision maker on the finance side.

Ulrik 37:39

Yeah, and and I think one of the sort of the next levels of interesting aspects of something like this is is the next user even going to be a human? Or are you gonna have Jason users that just tap into the product and then do this? Because I think if you if you only have human users for something like Figma, um you there there's there's only so many times a human can click a button during like a work day, right? So you you could argue that for for companies the size of Figma, you could you could separate you could like probably like bucket users into like super users, super heavy users, uh medium users, and like sporadic users, whatever, right? And then create some sort of like you know, do you want to use a little bit of AI, some AI or AI all the time, and then there are different price points on it. But inside of those plans, it will be kind of on the like you just go ahead. So you actually could get rid of the credit system. And then you have this because the uh the spikes in the hockey stick are not going to be like millions of times higher than the median, right? So, but when you add agency users or computer like like synthetic users, suddenly you can have these spikes, which is so a lot of sort of infrastructure software and dev tools have these problems where you literally can have one usage node do a million times the volume of the median, right? So so I I've had I've had customers in this design space doing uh 100 million plus. So, so when you look at the AI functionality usage across large user bases in tools like this, you definitely have like an 80-20 split on some customers using a lot more AI than others. But it isn't that that you're gonna have like a very, very few, like five users suddenly using half of the platform, as opposed to another project that did, which was more sort of infrastructure later. We also had tens of thousands of customers, and we had one customer that was using a full third of the platform, like from an infrastructure point of view. Because that's just how they had set up their system, right? I think you're gonna see companies in this space that test credits out and then actually go back to a C-based model with all included, but now differentiated on different types of let's say AI functionality. And then the agentic synthetic users, like the computer users that are not human, are gonna have usage-based plans that are specifically made for them. That's super interesting. I think the fundamental thing is that that that the Figma has a good product and they understand how they how they deliver value to their primary user and use case, right? And they and and they have a they have a good enough monetization model for that. I don't think they've really figured out how to how to sort of truly have like as good of a success or outstanding product experience for all the other products they have. Other use cases, other use types. It's not that that those things are irrelevant, it's just not as as significant. Like if you take Figma design out of it and you just have the Fig Jam product and these things, it wouldn't have the name brand recognition it has, right? It would just be say another text out doing whatever 50 million or whatever the the radio numbers are for for those sort of like non-primary parts. I think in that in that as long as they can sort of keep that core design use case competitive and compelling while adding AI and sort of riding the cost waves and and so forth that comes with that, I think they're they're gonna do fine. And they're in a very good position to do so. So I think with that, it's it's also, I think they're doing the right thing in that they're going in the right direction, they're making the right kind of experiments, they are they're preparing for credits, they're they're moving and so forth, but without trying to panic. Like they're not suddenly like doing a 180 on everything um in anticipation of how AI might change the space. So it's so I think this yeah, this uh this approach for a listed billion dollar revenue company is is probably like the right approach overall. And then you can discuss so the particulars of the execution. Um, but um, but yeah, they're probably gonna be fine.

Rob 41:59

So if you were like we are not equity analysts, but if we were to give this kind of like an equity analyst type grade of like buy, hold, or sell, it sounds like you're kind of holding Figma's pricing strategy right now. They're going in the right direction. They can't make anything. They're they're obviously not like at their as close to kind of like the final state of where their pricing will end up. Um, but they're also like moving in the right direction. They're not going backwards. They are actively trying to evolve their pricing and packaging to meet the market's needs and and kind of meet the age of AI. Is that an accurate characterization of of how you would describe them?

Ulrik 42:38

Yeah, for sure. So so they're not exciting on the business model side or the manifestation side at all. And you you could you could argue that they need to sort of like stay in the game with this, but they're not getting a fame grade at all. So yeah, if if you want to use the equity analyst, it's a whole.

Rob 42:53

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