Kleiner Perkins' Mamoon Hamid on Figma's Series B: the L28 engagement chart that clinched the investment

you have any updates from the timeline? What else is going on? We have Mimoon. Hello. Hello. Hello. Welcome to the streams. Thank you so much. I like that pin. That pin is fantastic. We're gonna have you hold this one. Yes. I'm so fired up to be here. It's so fun. Perfect timing.

Uh give us a little introduction uh on yourself and what you do. All right. Well, I'm a partner at Kleiner Perkins, early stage venture capitalist.

Cliner Perkins, the firm has been around for 50 plus years in amazing companies like Google and Amazon and Netscape and Figma of course and uh yeah, we invest in early stage companies, but we also have a growth fund. Yes. Uh that invests in some pretty cool later stage opportunities as well.

Uh, and what what is the the story of meeting Dylan and Figma? When did that come together? Yeah, I think I met You guys did the B. We did the B. Yeah. And that was in 2017. Yeah. I met Dylan probably in 2017, early in 17. Uh, I was on a board with John Lily who led the series A. Oh, yeah. We read his blog post today.

And John uh and I were involved with a company that didn't really work out. Okay. And he he he told me at the time, "Hey, this thing may not work out. So, I owe you one. I'm going to introduce you to this guy. Okay. Dylan. Yeah. And you're going to love him.

And by the way, like your background in Box and Yammer and Slack really could help. Yeah. And so spend time together, get to know each other, which we did over a bunch of month months. And uh we really hit it off and uh later that year, Dylan decided to raise a series B.

And uh this is around the time when the the product had just come out of beta and you could you'd hear people talking about Figma and you know the company had been around for 5 years so this was a long windup. Yep. Totally.

And it was coming out of beta, just started to monetize, a few customers, and you'd walk around actually South Park where we were based, and you see people in coffee shops, the designer type using Figma, just like three, four, five years prior, you'd see Slack on people's screens and so like, okay, there's something going on.

And then when I saw my my friend Josh Williams, who's a designer, incredible designer, it's like, oh, Josh is using it. That means that the designer community has really latched on to Figma. Yeah. And so took a few tidbits, data points, and uh and then I remember asking Dylan like, "Show me this one chart.

All I need to see is this one chart. It's called the L28. " Yeah. It's the the usage for the whole user base over a 28 day period of time. It's a histogram. It's kind of nerdy, but Dylan, just go go look at this data and tell me what it looks like.

So he sent it over and it had this little little smile and which effectively shows that at day 14, 15, 16 out of 28 days, many of the users were using it for like every day of the work week, which meant that effectively if you're a designer, you were using Figma to get your work done. Yeah.

And there's just no question about it. By the way, I'm a non-designer and I I kind of came online in the work in the work world startup startup game in 2017 and I was very quickly a DAU. Like I use it all the time as a as somebody that didn't consider myself a designer.

I was just invited to Figma and I was like wait this is a pretty good way to just do a lot of different types of work whether you're making a deck or marketing assets or website or any anything. So totally and and that's you saw that you know I think the the first board deck I think I ever got was actually in Figma.

So, and Figma slides wasn't a product that that we just launched actually. Yeah. So, uh so yeah, you saw this like in incredible depth of engagement with the product that uh I I'd seen with products like Slack and obviously like Slack we all use and uh we love some hate but mostly love, right?

And uh and you saw that how people feel about it. They still use it. So yeah, L L28 that's effectively like a churn uh analysis but short-term it's usage usage over the first 28 days because you should see some usage over a 28 day period.

It's actually just a take any user like the the whole user base like let's say a thousand users. Okay. So a random slice they could have been installed months ago. Yeah. But you want to see how they use it.

Every person who who signed up, let's say a thousand users, and did they use it for that once a month, twice a month, three times a month or 28 times a 28 days out of the month. Okay, got it. So then you saw this tick up like the smile curve. It's like and only consumer companies typically look at that.

So to see that sort of behavior out of a enterp enterprise software product was incredible. Yeah. Uh one of the analyses I saw was rule of 40. People were talking about how Figma's in a great position right now. uh great margins but also great growth rate. Add that together, that's the rule of 40.

Uh when did the rule of 40 come into your world? What did it factor into the series B or was it something you started tracking later? Uh what can you tell me? Just the cafe analysis go real uh later actually funny enough uh I think about 10 years ago I came up with this thing called a quick ratio. Okay.

Which was more interesting to me because for early stage companies it showed uh a quick ratio is effectively in a given month how much how many users did you add? Yep. And how many users did you churn? Okay. So let's say you added 400 users and you churned 100 your quick ratio is four. Yeah.

And that was actually like a good number. Sure. But if you're adding 200 and losing 150, not good. Yep. Right. That's a leaky bucket. It's a leaky bucket.

So for an early stage person the the quick ratio was just way better than looking at growth rate and then looking at the margins which could be all over the place based on what they did that month or that quarter. Makes sense. One question I have I'm curious uh how you see it.

So it was index greylock koa a6z were were the leads. If this company if figma had been started in 2020 do you think there would have been one or two funds just like going back and forth?

Was it was it was it um you know I feel like today you'll see these like fast fast fast follow rounds seems to be a real focus for a lot of fun and and was that something you think that like Dylan was just pushing for it wanted a a diverse board or or was it more um just the state of venture at that time?

I think Dylan is just very nuanced and detail- oriented and very methodical and every round he had in his mind who was the investor the right investor for me at this point in time which is how I think he even sought out this our relationship where uh John Lily and um Dylan was just telling me downstairs you know you know we sought you out for that series B it was like a you know a beline yeah and I think Dylan had that same sentiment towards the series C with Andrew Reed who was just on, right?

Yeah. And then even the round thereafter. So he was always in his mind had is this is the the the person the firm that I really want to work with based on their skill set, their capabilities and he went after it and he got it. Yeah. Every single time. Great. Uh how do you think the board evolved?

It seems like there's a lot of uh different investors, different firms joining. How do you think the board will evolve going forward? And it already has evolved. Can you talk to some of the additions and what the rationale was behind those? Yeah.

So, we in just in the last month, we've we've added three incredible people. Bill McDermad. OG, right? Like OG. You have you have to have Bill on the show if you haven't. Oh, no. We'd love to hear. Oh my god. Bill is the man. I mean, obviously he runs Service Now. Before that, he ran SAP.

Uh, so he he's just the the CEO of all like the goat in terms of like running an enterprise software business. Yep. U and uh we added Mike Kger, founder of Instagram. Come on guys. And and a very interesting people wouldn't think about it focused. Yeah. Anthropic too.

Anthropic and now chief product officer at Enthropic. He was downstairs and uh and then we added Louis Vanon. Luis Vanon I think is from Dualingo and he's a founder a CEO went early in on AI and u you know running a public company. Y uh also a KP company.

So just like three folks who really bring different skill sets but are just like A+ top-notch and I think that's sort of how Dylan has really built the company from you know setting the tone the culture amongst the team his executive team the board uh and it's you know you couldn't be more proud of what's been built there.

It's fantastic. When did uh last question uh then we'll I'm sure you'll have a busy evening. One uh when did the kind of Gen AI opportunity click with you and Figma? Was it was it instantly?

Was there a specific moment that you realize what an opportunity Figma would have in terms of if you're already helping people turn ideas into real things and products? Genai has an obvious, you know, immediate application there. Yeah.

I think there's the uh more the features that allow you to do things with AI inside of the the canvas of Figma. Yeah.

And then there's the what do you what can you do from from prompting to code to design and I think there's both elements of AI to integrate into the Figma product which we we've done but I think uh Dylan just being such a so early on technology but also timing it really right as well. Yeah.

Uh was early but you know more recently as you know we've launched four products and one product is very heavy on AI the Figma make which goes from prompt to code. Yep.

So, uh, really just timing matters and I think, you know, Dylan and the team are all over it and you just had Chris on and and you have millions and millions of DA weekly active users that are ready saying, "Please give us more. We're ready. " So, amazing. Well, thank you so much. Fantastic. Back on sometime soon.