Analyzing Figma’s growth and monetization strategies.
After over five years on Figma, I saw my first monetisation prompt last week.
There I was creating a Figjam board with some paywall inspo when I noticed a little free-text module crop up:
This is your last free file
This is the first time — that I’ve noticed — I’ve been asked to upgrade.
And once I saw this, I started to see it everywhere.
In the sidebar. In the top navigation. Inside and outside my files.
I thought:
Why now? And why so much?
So, curious as I am, I decided to grab some screenshots and take a closer look.
In the next 2000 words, we’ll have a look at how Figma uses various entry points, UI prompts, payment flows and product-led growth to help convert user from free to paid.
And, by the end I’ll explain why I still haven’t ended up paying for it after using is for 5 years free.
Before getting into the analysis, it’s worth looking at how Figma came to be and why they (might) be pushing monetisation at this stage in 2024.
Figma’s impressive yet bumpy history
Just as Google Docs has replaced word, and Slack has displaced email, Figma has completely disrupted traditional design tools like Photoshop and Sketch.
After three (long) years of developing in stealth, Figma launched in beta in 2015.
It took the team a whopping 5 years to reach Product Market Fit (PMF) — longer than other popular Saas tools like Miro, Slack and Loom.
But the PMF they did find was incredible.
Their founding vision was to “eliminate the gap between imagination and reality”. And the product does just that.
Instead of the ‘old way’ of siloed teams and annoying file versions, Figma brought live collaboration, a whiteboard-based experience and accessible design files.
After hitting PMF, in 2017 Figma brought in their first monetisation tier ‘Pro’, and two years later ‘Team’ followed suit. After monetisation, Figma scaled revenue at an eye-watering pace;
2017 → 2018: 5.7X growth ($700K to $4M)2018 → 2019: 6.25X growth ($4M to $25M)2019 → 2020: 2.6X growth ($25M to $75M)
And it wasn’t just scaling that Figma did well, the company showed strong efficiency and retention metrics:
150% net dollar retention (i.e. every $100 spent results in $150 later)90% gross margins (i.e. after direct expenses like salary are subtracted from revenue, they’re still left with 90% — super efficient)$425 million ARR in 2022 (predictable, recurring income each year from subscription plans)
From a business perspective, these are incredibly attractive numbers.
And, unsurprisingly, in 2022 Adobe tried to buy Figma for a whopping $20 billion.
15 months later, the deal fell through due to regulatory problems in the UK and US. In Dec ‘23, Dylan Field, Co-Founder and CEO of Figma said:
Figma and Adobe no longer see a path toward regulatory approval of our proposed acquisition…. We leave that future behind and continue on as an independent company.
Safe to say many of the design community were happy with the breakup.
And, Figma is still showing impressive growth.
ARR was up 24% in from 2022, at over $600 million in 2023.
Word on the street Figma is looking to IPO in 2025. Meaning now is a crucial moment to continue revenue growth to make sure an entry onto the stock market goes swimmingly.
🐠 🐠 🐠
Now, with this context set, let’s look at how UI, UX and PLG are used to drive conversion.
Entry Points
First up, entry points — i.e. where in the product experience are the places that we’re asked to upgrade?
The main thing I noticed is how many different places Figma uses to get eyeballs on their call-to-actions (CTAs) to upgrade.
I saw them on home (2–3 times), in my draft files (2 times) and in my team files (3 times).
All in all, I had more than 8 views of different ‘upgrade now’ CTAs in the space of a week.
Impressively, I didn’t feel bombarded.
How?
Let’s look at each one by one.
Top Navigation
The first place I saw a monetisation push was within in a draft file I was working on.
I was mid UX review and saw an interesting module — almost tooltip in style — pop down from the black top navigation bar.
Voting gets everyone on the same pageEveryone gets a say, and projects move forward
It was small, cute and visual. So small that it didn’t get in the way of what I was doing. On desktop it was probably 5% of the whole screen.
I love the UI, specifically:
The purple bolded keyword in the header to call out the featureA matching purple CTA ‘upgrade now’An attractive visual that matches the core message and shows off the feature
Alas, I was busy, so I carried on with my work and ignored it.
I also already have the ability to vote with the stamps in Figma freemium, so the messaging didn’t really click with me — ‘I can do this already’ I thought.
A while later, I see another module in the same file:
Talk things out with audio chatKeep the conversation going without ever leaving the file
And again, it was pretty but I was busy, so I ignored it. I also use slack huddles for quick chats and Figma comments for feedback, so the feature promo didn’t really click for me.
However, what I did pay attention to was the third and final variant of this module.
Now, with Figma freemium you have unlimited drafts. However, you only have three boards in a project.
So, when I was working in a non-draft file in my project, I saw this:
This is your last free fileGet unlimited files, and better ways to jam together
I’d hit the usage limit. Which is wild, as this is the first time I knew that:
A: There was a limit.B: I’d hit said limit.
In my mind, I thought: ‘I’m going to need more files’.
I need to be able to send work to clients and collaborate with them to deliver projects.
So I tapped ‘upgrade now’ and was taken to a pricing comparison page.
I then decided to delete some old files instead as I was on a deadline and it felt quicker, so exited the plan page.
What’s interesting, is that this was the third module I saw. And only after this module did I realise that the other two were promoting premium features in my drafts, as there are no usage limitations there to catch me out.
If there’s one key lesson here:
Not all features in your premium tier will drive conversions. Only the painkillers — not vitamins — drive conversions.
I imagine Figma are tracking clicks and conversions from each feature to help prioritise features and see what converts. For me, it was unlimited files.
Homepage Side bar
Next, I was prompted to upgrade in my Figma Homepage.
On the left sidebar of my Figma desktop app, there’s a neat little module that almost blends in with the rest.
The UI uses a not-very-in-your-face mix of subdued grey colours, small icons and a small font. Very different from the snazzy modules I saw in my Figjam file.
Whilst this module uses prime real estate, the subtle UI doesn’t distract from any core actions (like create board).
The subtle UI and small module size means this entry point does not get in the way of the user experience or feel spammy in any way.
Moreover, I like how the question is asked in an active sentence:
Ready to go beyond this free plan?
Which leaves me thinking:
Oh wait, what’s beyond the free plan?
The phrasing of the copy creates a curiosity gap that is intriguing.
Nevertheless, I’ve got stuff to do, so I ignore it.
Create New Board
A while later, I needed a new board. So from the home screen, I tapped ‘FigJam board’ and hit a pop up asking me to upgrade.
This pop up is a lot larger than the other upsells. That is because I have hit a genuine roadblock in the UX where I cannot proceed without paying. I’d used up my free files again despite deleting some old ones.
The previous pop ups and modules were interrupting my task at hand, therefore they were smaller and more subtle. Figma didn’t want to get in the way of my creation experience.
Whereas here, the pop up is almost full screen. It is a colourful, in-your-face and attention grabbing. Kind of like those signs on the motorway where you really need to change lanes now as the roadworks are imminent.
There’s a few things that I think Figma do really well here:
Priming: Priming is where earlier cues are used to make later decisions easier. Given this isn’t my first time seeing something monetisation-related, it felt like a softer ask.Contextual upsell: The copy, design and everything on this screen is tailored to what progress I’m trying to make and the feature I am trying to access. The best products will make all their paywalls contextual.Transparency: I can see how much this ask is going to cost me clearly on the screen. 5 EUR per month (as I was in France at the time). Feels like a no-brainer.
Then I realise:
Why am I in my team project and not drafts? I can create unlimited drafts. Let’s go there instead.
(As you can tell, I’m not entirely sure how drafts and projects work, which we’ll come back to later).
Another contextual paywall: Version history
A few days later, I’m looking for a screen I deleted.
I go into version history from the top nav bar, scroll down, and find that I can’t go back further than 30 days.
Tapping ‘learn more’ takes me to a web page comparison the prices on web. Curious as to why this directs to web and not the pricing comparison page on desktop.
What’s great about the contextual upsells Figma uses is the fact that this reduces banner blindness.
In user psychology, banner blindness describes the fact that users will ignore content that looks like an ad, or is in the place where an ad usually is located.
When you have too many of the same upsells or paywalls, they become like ad banners. Over time, it can develop into spam.
What Figma do is vary the messaging, vary the locations and vary the visuals to reduce the chance of banner blindness, and ultimately increase conversion.
But, the big question remains: after all the prompts, pretty UI pop ups and 8+ CTAs I saw, did I end up converting?
No.
And here’s why.
The problem I have with Figma’s Payment flow
When I reached my file limit I tapped ‘Upgrade now’ and saw this pricing comparison.
I see each plan: starter professional and organisation.
To be honest, it was a lot of tiny text at once. Especially when tiers have up to 3 options: Figma Design, FigJam & Dev Mode.
The format gave me too much at once and also didn’t really help me see what was best for me. I am one individual freelancer working for myself, so the messaging around professional didn’t vibe with my personal situation:
For you and your team, with unlimited files and all the pro features
In any case, because I’m curious, I click ‘Upgrade to Professional’.
So here I see myself, and….one of my clients?
Feels odd, especially given that I am in collaborative files with many clients. I’m left wondering why just one is listed here, and why they are listed in the first place.
In any case, I won’t be paying for his seat (sorry Max).
So I untick Max and head to the next page, where I see the total of £168 GBP / year.
Now I’m wondering whether I really need Figma. I actually only use Figjam to share resaerch with clients (so much easier and less technical than layers and all that) and work on their Figma design files that they already pay for.
By now, my decision-making energy is depleted.
So I leave the page, and press ‘cancel’ top right.
What happened next was reaaaally sweet.
A wonderful one-question survey awaits
I head back to home, and I see a small, subtle module bottom right:
Is there anything preventing you from upgrading your Figma plan?We’d love to know
It is super hard to research why people don’t buy. But it is the question on every Founder’s mind.
This one-question survey does it perfectly. They’ll be able to read what’s going through the mind of those who exited their payment page.
And, hopefully work out how to solved those hurdles, pains, frustrations, anxieties that stop people from buying. For me, it was:
I’m not sure if I need all thisI don’t have a team, should I still pay?What’s the minimum I need?I’m stuck. I’m going to make this decision later
And so, dear Figma, I will come back later.
And now, instead of doing it in the moment, it is on my never-ending admin to-do list (underneath my expenses and invoices).
So, upgrading will have to wait till I hit another usage limit. Probably sometime soon.
Till then, happy building!
Afterword
Just as I hit publish, I headed back into Figma to find yet more new things.
A module on my home screen with my usage limits — solving the ‘I didn’t know there were limits’ problem.
And, well would you look at that — my sidebar module has updated to the more ‘urgent’ message:
There’s also some added clarity around drafts (!)
Love it. Continuous discovery and continuous improvement.
If you’ve seen anything else, hit me up in the comments ✨
Is Figma pushing too hard to get free users to premium? was originally published in UX Collective on Medium, where people are continuing the conversation by highlighting and responding to this story.
