Figma had their cake and ate it?

What happened?

Unless you are interested in design it’s unlikely you’ll know what Figma is, but it’s quite likely that you will know who Adobe are, or at least will have heard of one of their flagship products like Photoshop. 

Adobe has been the Titan of the design software space for decades, so when Figma popped up they probably weren’t too concerned. But Figma’s popularity began to skyrocket and by {year} they overtook Adobe as the leading design tool. 

For Adobe this only meant one thing - they had to buy them before they had their ‘Kodak’ moment. This is exactly what they did but Figma knew they were in the driving seat with a far more popular product and an adoring user base so Adobe had to make them an offer they couldn’t resist. They came up with a nice round number: $20 billion…🤯🤯.  An offer Figma shareholders graciously accepted (obviously, I mean $20 billion come on!)

All was well in the world (of product design software - as literally everything else in the world was not well) and Figma shareholders and employees were probably wondering about deciding between the ski chalet in Aspen or a Lake House in Michigan until the pesky authorities got involved. The UK Competition and Markets Authority and EU Commission both didn’t look too fondly on Monopolies forming and began investigating the acquisition pretty promptly. 

Much to the disappointment of the estate agents - sorry ‘Realtors’ - for the overly priced San Francisco property last week Adobe decided to drop the acquisition as it had become clear that at least the UK and if not all 3 jurisdictions were going to prohibit the acquisition.

So you’re probably feeling pretty bad for the Figma shareholders right - or maybe shareholders don’t get sympathy these days, who knows? Well, I wouldn’t. They retain control of the company, so can reap its impressive profitability, and more surprisingly get a $1 billion termination fee paid by Adobe. So don’t complain when AirBnB tries to charge you a late checkout fee - at least it’s not a billion quid.

So all in all Figma shareholders keep the company and get $1 billion in cash, while Adobe gets nothing.

But the real winners in my view? The lawyers brokering the entire thing which amounted to literally nothing and now have the chance to take Figma public for another fat payday—well played.

Will

Did Coca-Cola invent Santa Claus?

What happened?

No, Coca-Cola technically didn’t invent Santa Claus. Santa Claus is famously based on Saint Nicholas who has German origins. However, Coca-Cola did make an awesome amount of money off Santa, but how?

In the 1930s, The Coca-Cola Company commissioned an artist called Haddon Sundblom to develop their new advertising campaign, and they wanted Santa Claus at the heart of it.

Sundblom took inspiration from Clement Clark Moore's 1822 poem Twas the Night Before Christmas (which hopefully means something to someone reading this).

Why does this matter?

When I looked into this, I wasn’t all that interested in the history of Saint Nicholas but more in how one brand used one fictional man to make so much money.

In the last post, I wrote about how Christmas music is a gold mine because the same songs are replayed yearly. Well now imagine what happens when your company becomes synonymous with Santa Claus.

According to Nasdaq, The Coca-Cola Company went public in 1919 at $40 a share. The first Sundblom Santa Claus advert came out around 1931 when the company had reached $107 per share.

By the end of the 1930s, adjusting for a stock split, the share price was $365 per share. If you had invested $1000 when it launched its Santa Claus campaign in 1931, it would be worth almost $2mil today.

Over the next 30 years, Sunblom made a series of Ads for Coca-Cola and by the time they finished working together in 1964, the original $1000 they had spent on the advert was returned by orders of magnitude.

Coca-Cola is now a $200bn company spending $4bn a year on advertising and this company has benefited from years of compounding Sanata-based advertising.

My take is this shows you a) how valuable compounding is. Coca-Cola has done many a Santa Claus ad campaign since 1931 and they continue to reap the rewards. Try and think of something else that has had compounding business value since 1931.

b) Finding something recurring and attaching your brand to it is an incredible source of said compounding business value. Santa Claus comes around every year, and anything short of the complete collapse of Western civilization means that will be true for a while longer.

So I am going to start a well-branded turkey farm.

Jack

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