Index Ventures' Danny Rimer on leading Figma's seed round: 'It was a feature, not a bug that it was gonna take that long'

soon. And we are ready for our next guest on this Figma stream. TBPN is live from the New York Stock Exchange. Welcome to the stream. How you doing, Danny? Pleasure to meet you. Nice to meet you. I've always heard great things. It's such a pleasure to meet you in person.

Uh would you mind just doing a quick introduction for the folks who might not be familiar? Yeah, so I'm Danny Rhyr. I'm with index ventures and um we're a firm that's based in London, San Francisco and New York. We are invest in early and growth stage and uh we invested in Figma. We led the seed round in Figma.

So met met Dylan when he was 18 for the first time which is pretty amazing. I'm I'm now going down you know melancholy hill as I'm nostalgia hill as I'm hearing this. What what I I have to ask right away, what how did you react early on to to to their kind of launch timeline, right?

Like the thing that keeps coming up today and we talked with Andrew Reid about this earlier.

Personally, as an angel, if somebody tells me they're building a software company for other businesses and they say that it's going to we're going to launch in two years, I almost immediately think like, okay, this person probably needs to like update their thinking.

But and I think people generally use a Figma example of like this fat MVP and it can be a trap because you can work on something for a long time and have it not not really be that valuable. But I I wonder what your immediate reaction was given that this was, you know, well before the launch. Yeah.

I mean, believe it or not, it's sort of in line with our contrarian approach. Like we we're contrarian on a bunch of stuff. We've been really, you know, bearish on crypto. We didn't do any crypto investments. So for us it was a feature, not a bug that it was going to take that long.

You've been contrarian about being loud too on Figma. A lot of people I think they saw like you know index's ownership uh at at the IPO and and didn't you know you guys haven't been posting threads every single day. That's part of the culture. I mean you're bearish on crypto.

How do you react to Dylan's NFT profile picture? I think it's God. He's got the pass for this. He's got Doesn't mean that he can't be.

But but you know really at the time you know um all of the technology all the software was sort of like in that meta spirit that Facebook spirit of like throw it against a wall you know ship quickly doesn't matter if it's broken break fast and break things build fast break things and this was so contrary it's like the the two guys were contrarian and they were committed to actually developing things for 2 years before we were going to have any sense as to whether it was going to be good or not.

And it really had to compete against Sketch was the primary competitor and Sketch was damn good. Love the product. Exactly. Exactly. Which is like the hard you know, even even you know, most investors if they're looking at a new investment in a category with a very well-loved product that has massive saturation.

I mean, I don't I think it would be hard to find a product designer in San Francisco prefigma that wasn't using Sketch. Yeah, you're absolutely right. Do you remember what the other comps were from that era of companies that had figured out how to do something utilitarian but then bolted on a multiplayer aspect?

We were kind of kicking around the obvious example of like Instagram. There were a few other photo filtering apps but Instagram started with a social network out of the box kind of bootstrapped it in the background and wound up being very successful product obviously.

But were there other companies that were coming to mind at that time? I mean so we're big game investors, right? So first of all multiplayer was a term that we were very familiar with and then we were Dropbox investors. That makes sense.

So like the notion of sort of the product the consumerization of the enterprise starting small growing through you know gorilla tactics and just mainstream adoption within the organization we felt really comfortable with. Sure. Sure.

Is that is that broadly productled growth or is productled growth in your mind uh a broader term? No that's it's it is PLG. Absolutely. And um it was it it was clear back to the you're I totally agree with you.

The line share of folks were using Dropbox and Sketch and so for us the we knew what the problem was like the first time I met Dylan was at Flipboard when he was 18 and they had amazing designers at Flipboard and I just remember the confusion. Yeah. Beautiful product.

Beautiful like the and also I don't know if it was WebGL but the 3D animation of the page flipping. Fantastic. And you can see that that comes through with like okay just the just the technical challenge of like how would I implement that?

I remember playing with it on the iPad and being like okay this is a different thing this is exactly right. I mean they they launched it before the iPad was launched. Yeah. Yeah. That's right. But the the versioning headaches that they were getting through like you know they had all these amazing designers.

One ended up leading design at Uber. Another one and is one of the senior designers at Apple for for like eight years. and the design problems that they would get into of like sending the wrong version, sending the wrong asset. Totally. You know, through Dropbox, it was clear that you needed a better solution. Yeah.

Uh what are you seeing broadly in terms of artificial intelligence as a sustaining or disruptive innovation uh to companies that have established a market and then there's a whole bunch of companies that are coming in and saying like we're going to be the AI version of that.

It feels like in some ways you could say oh well that's just like the multiplayer version, but in some ways it's more of a sustaining innovation. What's your broad take? I would say the latter. Sustaining innovation. I mean, I'm super bullish about AI. I I mean, sure, it's hard not to be, right?

Like, you probably have to qualify that like bullish on AI doesn't necessarily mean you're like upset about what's happening at, you know, the Foundation Model Labs or in terms of capex or Nvidia.

Like there's a million different places, but you know, our our our job is to see a trend and then to analyze a trend and then to go pretty deep. Okay. Yeah. And we are very bullish on AI. Well, it seems like every other time I see a billion dollar M&A headline, it's another index always ends up with the most. Thank you.

Um, the thing that strikes me about Figma that I think is still powerful to this day is the the the simultaneously like the complexity of the product and the simplicity of the product. If you land if you get invited to Figma and you've never used the product before, you just get dropped in to the canvas. You're there.

you can see the other people and despite all that you can do with the product, it's still I just found it like somehow intuitive even for somebody uh and and I think that's yeah very very difficult. Yeah.

And and you know the the co-founder you know Dylan was brilliant enough to hire his co-founder the best computer scientist he had ever met who was you know his TA at Brown right like convinced him to stop doing a PhD and to code. Wow. That guy had such an understanding of that. Yeah. Uh or still does.

Evan still has a such a clear understanding of how to create the lowest common denominator and make it inclusive with everyone while also because it's design and design is going to become central to everything have enough sophistication so that you can differentiate from anyone else. Yeah.

Um, no, it's really it's really amazing to me the magic of Figma and the thing that I I from the very first Figma that I was invited to uh and that that was obviously why that the growth was so insane early is it's like natural productled growth versus force productled growth. Yeah.

Was this abil you know as a user if you can if if the thing that you provide a customer or user is the ability to take the thing that's in their mind and make it real so they can see it. That's like the most magic thing ever.

And the the other thing I would comp kind of this moment to is, you know, we we cover uh Alphabet and Google a lot and we talk about how Google's initial mission to like organize the world's information and, you know, make it useful. I I forget exactly uh how they position it.

Um and how that's so aligned to Genai in the sense that a lot of what LM do today is just make organizing information for you and making it useful, right? That's like the core of the value.

And it feels like Figma of this core of like taking a spark of an idea and making it into a thing is so aligned with generative AI because it's like oh you want to make a website like describe it. You want to make an app describe it. You want to change the details you want to change this color.

You want to you want to build like an entire you know uh app uh uh underneath the the website. It's just all there and reducing that time from spark of an idea to like real product. That's right.

It's just and I think it it is a really important component at making sure that the human intervention is critical for differentiation, right?

Like you need that in order like the idea has to first manifest, but you can do that with AI tools, but then it has to have a human differentiation like a human intervention that makes it way better to use. And this is the same this is the same way that making things in an organization work.

You might have the smartest person on a team have an amazing idea and get it get it here and then and then the intern might throw in hey by the way what if we did it like this and everybody's like oh that's a good idea and even with like super intelligence or whatever we're hurling towards.

It's like you know you can you might be able to create a V1 but it's it's this combination of ideas and experiences that makes it truly special. Uh last question uh give me the update on index. It's a huge fund growing. What's the contrarian strategy? We're hearing rumors, but we're going to see you out there soon.

Public funds. I mean, I guess our contrarian element has been not to grow enormously. So, you know, we've had a billion dollar venture fund and $2 billion growth fund for a decade now and we haven't expanded our size.

So like the idea is that from our perspective, investing is a craft and if we get bigger, we might lose the focus and we're not going to be able to have the same relationship with the founders that we that we adore having. So we just have to generate the return.

So that's what we're focused on like keeping it small and and hopefully I mean you know I have I have some amazing partners who you haven't met um we're we are we're seven investing partners and um yeah and what's cool is that you know like Chardul is behind Whiz for us and um we have Dream Games and we have Service Titan and it's a mentorship business.

Oh yeah. Yeah. That's that's that's that's what excites us is that the next generation you already are better are better than the current generation. It's great. Well, thank you so much for coming. Fantastic. We'd love to have you back on the show soon. Pleasure. Great.

I'll take the microphone and we will bring in our next guest, Jordy. Do